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  <P STYLE="font: 13.5pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B>UNITED STATES </B></P>
  
  <P STYLE="font: 13.5pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B>SECURITIES AND EXCHANGE COMMISSION
  </B></P>
  
  <P STYLE="font: 12pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B>Washington, D.C. 20549 </B></P>
  
  <P STYLE="font: 18pt/normal Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center"><B>FORM 10-Q </B></P>
  
  <P STYLE="font: 7.5pt/normal Times New Roman, Times, Serif; margin: 9pt 0 0">(Mark One)</P>
  
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      <td style="width: 0px; font: 12pt/115% Calibri, Helvetica, Sans-Serif">&nbsp;</td>
      <td style="width: 33px; font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt MS Gothic, Helvetica, Sans-Serif">&#9746;</font></td>
      <td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif"><b>QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 </b></font></td></tr>
  </table>
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center">For the quarterly period ended
  June 30, 2015</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center">or</P>
  
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      <td style="width: 0px; font-size: 12pt; line-height: 115%">&nbsp;</td>
      <td style="width: 33px; padding-top: 9pt; font-size: 10pt; line-height: 115%"><font style="font: 10pt MS Mincho">&#9744;</font></td>
      <td style="padding-top: 9pt; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 </b></font></td></tr>
  </table>
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center">For the transition period to</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center">Commission File Number 814-00098</P>
  
  <P STYLE="font: 24pt/normal Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center"><B>EQUUS TOTAL RETURN, INC. </B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B>(Exact name of registrant as specified
  in its charter) </B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in">&nbsp;</P>
  
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      <td style="width: 50%; font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Delaware</b></font></td>
      <td style="width: 50%; font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>76-0345915</b></font></td></tr>
  <tr style="vertical-align: top">
      <td>
          <P STYLE="font: 7.5pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>(State or other jurisdiction of</b></P>
          <P STYLE="font: 7.5pt/normal Times New Roman, Times, Serif; margin: 0 0 0.75pt; text-align: center"><b>incorporation or organization)</b></P></td>
      <td>
          <P STYLE="font: 7.5pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>(I.R.S. Employer</b></P>
          <P STYLE="font: 7.5pt/normal Times New Roman, Times, Serif; margin: 0 0 0.75pt; text-align: center"><b>Identification No.)</b></P></td></tr>
  <tr>
      <td style="font: 12pt/115% Calibri, Helvetica, Sans-Serif">&nbsp;</td>
      <td style="font: 12pt/115% Calibri, Helvetica, Sans-Serif">&nbsp;</td></tr>
  <tr style="vertical-align: top">
      <td>
          <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>700 Louisiana St., 48<sup>th</sup>
          Floor</b></P>
          <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Houston, Texas</b></P></td>
      <td>
          <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in"><b>&nbsp;</b></P>
          <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>77002</b></P></td></tr>
  <tr style="vertical-align: top">
      <td style="font: 7.5pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 7.5pt Times New Roman, Times, Serif"><b>(Address of principal executive offices)</b></font></td>
      <td style="font: 7.5pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 7.5pt Times New Roman, Times, Serif"><b>(Zip Code)</b></font></td></tr>
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  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 7.5pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B>(Former Name, Former Address and
  Former Fiscal Year, if Changed Since Last Report)</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center; text-indent: 0.5in"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center"><B>Registrant&rsquo;s telephone
  number, including area code: (713) 529-0900 </B></P>
  
  <P STYLE="font: 10pt/normal Calibri, Helvetica, Sans-Serif; margin: 9pt 0 0; text-indent: 24.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Indicate
  by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
  Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and
  (2) has been subject to such filing requirements for the past 90 days. Yes </FONT><FONT STYLE="font-family: Wingdings">x</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif">
  No </FONT><FONT STYLE="font-family: Wingdings">&#168;</FONT></P>
  
  <P STYLE="font: 10pt/normal Calibri, Helvetica, Sans-Serif; margin: 9pt 0 0; text-indent: 24.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Indicate
  by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive
  Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (&sect;232.405 of this chapter) during the
  preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes </FONT><FONT STYLE="font-family: MS Mincho">&#9744;</FONT><FONT STYLE="font-family: Wingdings">
  </FONT><FONT STYLE="font-family: Times New Roman, Times, Serif">No </FONT><FONT STYLE="font-family: MS Mincho">&#9744;</FONT></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 9pt 0 0; text-indent: 24.5pt">Indicate by check mark whether
  the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of &ldquo;accelerated
  filer and large accelerated filer&rdquo; in Rule 12b-2 of the Exchange Act.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
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      <td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Large accelerated filer </font><font style="font: 10pt MS Mincho">&#9744;</font></td>
      <td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">Accelerated filer </font><font style="font: 10pt MS Mincho">&#9744;</font></td>
      <td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">Non-accelerated filer </font><font style="font: 10pt MS Mincho">&#9746;</font></td>
      <td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">Smaller Reporting Company </font><font style="font: 10pt MS Mincho">&#9744;</font><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
  </table>
  <P STYLE="font: 10pt/normal Calibri, Helvetica, Sans-Serif; margin: 9pt 0 0; text-indent: 24.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Indicate
  by check mark whether the registrant is a shell company. Yes </FONT><FONT STYLE="font-family: MS Mincho">&#9744;</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif">
  No </FONT><FONT STYLE="font-family: MS Mincho">&#9746;</FONT></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 9pt 0 0; text-indent: 24.5pt">There were 12,673,646 shares
  of the registrant&rsquo;s common stock, $.001 par value, outstanding, as of August 12, 2015.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 0.4in; text-indent: 0.5in">&nbsp;</P>
  
  
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  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 10pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">EQUUS TOTAL RETURN, INC.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">(A Delaware Corporation)</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><A NAME="TableOfContents"></A>INDEX</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 10pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
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      <td style="font-size: 12pt; line-height: 115%">&nbsp;</td>
      <td style="text-align: center; font-size: 7.5pt; line-height: 115%"><font style="font: 7.5pt Times New Roman, Times, Serif"><b>PAGE</b></font></td></tr>
  <tr>
      <td style="vertical-align: top; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><A HREF="#a_001">PART I. FINANCIAL INFORMATION</A></font></td>
      <td style="vertical-align: bottom; font-size: 12pt; line-height: 115%">&nbsp;</td></tr>
  <tr>
      <td style="vertical-align: top; text-indent: 0.5in; line-height: 115%"><A HREF="#a_002"><font style="font: 10pt Times New Roman, Times, Serif">Item 1. Financial Statements</font></A></td>
      <td style="vertical-align: bottom; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">3</font></td></tr>
  <tr>
      <td style="vertical-align: top; text-indent: 1in; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><A HREF="#a_003">Balance Sheets</A></font><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
      <td nowrap style="vertical-align: bottom; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">3</font></td></tr>
  <tr>
      <td style="vertical-align: top; text-indent: 1in; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><A HREF="#a_004">Statements of Operations</A></font><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
      <td nowrap style="vertical-align: bottom; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">4</font></td></tr>
  <tr>
      <td style="vertical-align: top; text-indent: 1in; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><A HREF="#a_005">Statements of Changes in Net Assets</A></font><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
      <td nowrap style="vertical-align: bottom; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">5</font></td></tr>
  <tr>
      <td style="vertical-align: top; text-indent: 1in; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><A HREF="#a_006">Statements of Cash Flows</A></font><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
      <td nowrap style="vertical-align: bottom; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">6</font></td></tr>
  <tr>
      <td style="vertical-align: top; text-indent: 1in; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><A HREF="#a_007">Supplemental Information&mdash;Selected Per Share Data and Ratios</A></font><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
      <td nowrap style="vertical-align: bottom; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">7</font></td></tr>
  <tr>
      <td style="vertical-align: top; text-indent: 1in; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><A HREF="#a_008">Schedules of Investments</A></font><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
      <td nowrap style="vertical-align: bottom; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">8</font></td></tr>
  <tr>
      <td style="vertical-align: top; text-indent: 1in; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><A HREF="#a_009">Notes to Financial Statements</A></font><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
      <td nowrap style="vertical-align: bottom; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">12</font></td></tr>
  <tr>
      <td style="vertical-align: top; text-indent: 0.5in; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><A HREF="#a_010">Item 2. Management&rsquo;s Discussion and Analysis of Financial Condition and Results of Operations</A></font><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
      <td nowrap style="vertical-align: bottom; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">26</font></td></tr>
  <tr>
      <td style="vertical-align: top; text-indent: 0.5in; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><A HREF="#a_011">Item 3. Quantitative and Qualitative Disclosure about Market Risk</A></font><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
      <td nowrap style="vertical-align: bottom; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">30</font></td></tr>
  <tr>
      <td style="vertical-align: top; text-indent: 0.5in; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><A HREF="#a_012">Item 4. Controls and Procedures</A></font><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
      <td nowrap style="vertical-align: bottom; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">30</font></td></tr>
  <tr>
      <td style="vertical-align: top; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><A HREF="#a_013">PART II. OTHER INFORMATION</A></font></td>
      <td style="vertical-align: bottom; font-size: 12pt; line-height: 115%">&nbsp;</td></tr>
  <tr>
      <td style="vertical-align: top; text-indent: 0.5in; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><A HREF="#a_014">Item 1. Legal Proceedings</A></font><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
      <td nowrap style="vertical-align: bottom; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">30</font></td></tr>
  <tr>
      <td style="vertical-align: top; text-indent: 0.5in; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><A HREF="#a_015">Item 1A. Risk Factors</A></font><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
      <td nowrap style="vertical-align: bottom; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">31</font></td></tr>
  <tr>
      <td style="vertical-align: top; text-indent: 0.5in; line-height: 115%"><A HREF="#a_016"><font style="font: 10pt Times New Roman, Times, Serif">Item 6. Exhibits</font><font style="font: 10pt Times New Roman, Times, Serif"> </font></A></td>
      <td nowrap style="vertical-align: bottom; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">32</FONT></td></tr>
  <tr>
      <td style="vertical-align: top; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><A HREF="#a_017">SIGNATURE</A></font><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
      <td nowrap style="vertical-align: bottom; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">33</font></td></tr>
  <tr>
      <td style="vertical-align: top; font-size: 12pt; line-height: 115%">&nbsp;</td>
      <td nowrap style="vertical-align: bottom; font-size: 12pt; line-height: 115%">&nbsp;</td></tr>
  </table>
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 6pt; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 6pt; text-indent: 0.5in">&nbsp;</P>
  
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  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 6pt; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 6pt; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 0.4in; text-indent: 0.5in">&nbsp;</P>
  
  
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  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 10pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><U>EQUUS TOTAL RETURN, INC. </U></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><U><A NAME="a_003"></A>BALANCE SHEETS </U></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><U>(Unaudited)</U></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B><U><A NAME="a_001"></A>Part I. Financial Information</U></B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><A NAME="a_002"></A><B><U>Item 1. Financial Statements </U></B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center"></P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">June 30, <BR> 2015</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">December 31,<BR> 2014</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font-weight: bold">(in thousands, except per share amounts)</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-weight: bold">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD>Assets</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
      <TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: right">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
      <TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: right">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">Investments in portfolio securities at fair value:</TD><TD STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Arial, Helvetica, Sans-Serif; text-align: right">&nbsp;</TD><TD STYLE="font: 10pt Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="width: 70%; text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Control investments (cost at $10,050 and $16,058 respectively)</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">8,715</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">13,173</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Affiliate investments (cost at $350 and $350 respectively)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,627</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">960</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-affiliate investments - related party (cost at $5,815 and $5,706 respectively)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,243</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,981</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-affiliate investments (cost at $915 and $1,097 respectively)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">915</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,532</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total investments in portfolio securities at fair value</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">19,500</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">19,646</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">Cash and cash equivalents</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">17,977</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">15,697</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">Restricted cash and temporary cash investments</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">15,149</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">Accounts receivable from investments</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">614</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">614</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">Accrued interest receivable</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">62</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">764</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">Accrued dividend receivable</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">54</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-bottom: 1pt">Accounts receivable and other</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">169</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">114</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total assets</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">38,322</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">52,038</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">Liabilities and net assets</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable and accrued liabilities</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">87</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">664</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable to related parties</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">250</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">174</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Borrowing under margin account</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">14,999</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">337</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">15,837</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">Commitments and contingencies (see Note 2)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-bottom: 2.5pt">Net assets</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">37,985</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">36,201</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">Net assets consist of:</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Common stock, par value</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">13</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">13</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Capital in excess of par value</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">54,227</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">56,049</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Undistributed net investment losses</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(18,625</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(16,956</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Undistributed net capital gains</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">660</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unrealized appreciation (depreciation) of portfolio securities, net</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,942</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,840</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unrealized depreciation of portfolio securities - related party, net</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(1,572</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(1,725</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total net assets</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">37,985</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">36,201</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="padding-bottom: 2.5pt">Shares of common stock issued and outstanding, $.001 par value, 50,000 shares authorized</TD><TD STYLE="font-size: 11.5pt; padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font-size: 11.5pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">12,674</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 11.5pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 11.5pt; padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font-size: 11.5pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">12,674</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 11.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="padding-bottom: 2.5pt">Shares of preferred stock issued and outstanding, $.001 par value, 5,000 shares authorized</TD><TD STYLE="font-size: 11.5pt; padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font-size: 11.5pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 11.5pt; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 11.5pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 11.5pt; padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font-size: 11.5pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 11.5pt; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 11.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="padding-bottom: 2.5pt">Net asset value per share</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">3.00</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">2.86</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
  </TABLE>
  
  
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center">The accompanying notes are an integral
  part of these financial statements.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center">&nbsp;</P>
  
  
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  <P STYLE="font: 10pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><U>EQUUS TOTAL RETURN, INC.</U></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><A NAME="a_004"></A><U>STATEMENTS OF OPERATIONS </U></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">(Unaudited)&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center"></P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 100%; font: 9pt Times New Roman, Times, Serif">
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="7" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Three months ended June 30,</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="7" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Six months ended June 30,</TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="font-weight: bold">(in thousands, except per share amounts)</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2015</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2015</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">Investment income:</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
      <TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: right">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
      <TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: right">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest and dividend income:</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
      <TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: right">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
      <TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: right">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="width: 48%; text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Control investments</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">198</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-affiliate investments - related party</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">55</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">55</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="padding-bottom: 1pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-affiliate investments</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">32</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">64</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">76</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">122</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total interest and dividend income</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">87</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">64</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">131</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">320</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest from temporary cash investments</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">2</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">2</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total investment income</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">89</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">64</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">133</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">320</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD>Expenses:</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Professional fees</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">109</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">237</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">436</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">528</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Compensation expense</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">239</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">225</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">863</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">437</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Director fees and expenses</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">116</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">161</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">211</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">257</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;General and administrative expense</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">135</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">69</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">176</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">169</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Mailing, printing and other expenses</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">66</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">77</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">89</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">98</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Taxes</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">18</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">25</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">14</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest expense</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total expenses</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">683</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">777</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,801</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,503</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">Net investment loss</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(594</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(713</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,668</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,183</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">Net realized gain (loss):</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
      <TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: right">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
      <TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: right">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Control investments</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,850</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-affiliate investments</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">660</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">372</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">660</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Temporary cash investments</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(5</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net realized gain (loss)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">660</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,483</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">660</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD>&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
      <TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: right">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
      <TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: right">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">Net unrealized appreciation (depreciation) of portfolio securities:</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
      <TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: right">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
      <TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: right">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;End of period</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,942</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,502</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,942</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,502</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="padding-bottom: 1pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Beginning of period</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,023</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(4,024</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(1,840</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(3,956</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-bottom: 1pt">Net change in unrealized appreciation (depreciation) of portfolio securities</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">2,919</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,522</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">5,782</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,454</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">Net unrealized depreciation of portfolio securities - related party:</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
      <TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: right">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
      <TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: right">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;End of period</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,572</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(458</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,572</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(458</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="padding-bottom: 1pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Beginning of period</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(1,870</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(1,725</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-bottom: 1pt">Net change in unrealized depreciation of portfolio securities - related party</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">298</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(458</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">153</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(458</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD>&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
      <TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: right">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
      <TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: right">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
      <TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: right">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
      <TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: right">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-bottom: 2.5pt">Net increase in net assets resulting from operations</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">2,623</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">1,011</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">1,784</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">473</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD>&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
      <TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: right">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
      <TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: right">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
      <TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: right">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
      <TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: right">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">Net increase in net assets resulting from operations per share:</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
      <TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: right">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
      <TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: right">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Basic and diluted</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">0.21</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">0.09</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">0.14</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">0.04</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD>Weighted average shares outstanding:</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
      <TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: right">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
      <TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: right">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Basic and diluted</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">12,674</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">11,676</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">12,674</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">11,122</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
  </TABLE>
  
  
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center">The accompanying notes are an integral
  part of these financial statements.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center">&nbsp;</P>
  
  
  <!-- Field: Page; Sequence: 4 -->
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  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 0.4in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><U>EQUUS TOTAL RETURN, INC. </U></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><A NAME="a_005"></A><U>STATEMENTS OF CHANGES IN NET ASSETS
  </U></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">(Unaudited)</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"></P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <TR STYLE="vertical-align: bottom">
      <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="7" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Six months ended June 30,</TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="font-weight: bold">(in thousands)</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2015</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="width: 56%; text-align: left">&nbsp;Net increase in net assets resulting from operations</TD><TD STYLE="width: 8%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">1,784</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">473</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;Shares issued for portfolio securities - related party</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">4,351</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">&nbsp;Increase in net assets</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,784</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,824</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;Net assets at beginning of period</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">36,201</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">33,217</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;Net assets at end of period</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">37,985</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">38,041</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
  </TABLE>
  
  
  
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  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center">&nbsp;</P>
  
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  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center">&nbsp;</P>
  
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  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center">The accompanying notes are an integral
  part of these financial statements.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center">&nbsp;</P>
  
  
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  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><U>EQUUS TOTAL RETURN, INC.</U></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><U><A NAME="a_006"></A>STATEMENTS OF CASH FLOWS </U></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">(Unaudited)</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"></P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <TR STYLE="vertical-align: bottom">
      <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="7" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Six months ended June 30,</TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="font-weight: bold">(in thousands)</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2015</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">Reconciliation of increase in net assets resulting from operations to net cash</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;provided by operating activities:</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="width: 70%; text-align: left">Net increase in net assets resulting from operations</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">1,784</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">473</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">Adjustments to reconcile net decrease in net assets resulting from operations to net cash</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;provided by operating activities:</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net realized loss (gain)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,483</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(660</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net change in unrealized appreciation (depreciation) of portfolio
      securities</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(5,782</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(458</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net change in unrealized depreciation of portfolio securities - related party</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(153</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(538</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">Changes in operating assets and liabilities:</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchase of portfolio securities</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(647</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net proceeds from dispositions of portfolio securities</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">372</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">62</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Principal payments received from portfolio securities</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,255</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Sales of temporary cash investments, net</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">15,144</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">15,149</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Increase in accounts receivable from investments</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(202</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;&nbsp; (Increase) decrease  in accrued interest receivable</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(268</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Increase in accounts receivable and other</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(55</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(280</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Decrease) increase&nbsp;in accounts payable and accrued liabilities</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(577</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">194</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Increase in accounts payable to related parties</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">76</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">36</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">Net cash provided by operating activities</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">17,279</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">13,133</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">Cash flows from financing activities:</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Repayments under margin account</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(14,999</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(15,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-bottom: 1pt">Net cash used in financing activities</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(14,999</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(15,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">Net increase (decrease) in cash and cash equivalents</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,280</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,867</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-bottom: 1pt">Cash and cash equivalents at beginning of period</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">15,697</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">19,065</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-bottom: 2.5pt">Cash and cash equivalents at end of period</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">17,977</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">17,198</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">Non-cash operating and financing activities:</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shares issued in lieu of cash for portfolio securities</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">4,351</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued interest or dividends exchanged for portfolio securities</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">915</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">117</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued interest or dividends exchanged for portfolio securities - related party</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">110</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">Supplemental disclosure of cash flow information:</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest paid</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">1</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income taxes paid</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">22</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">11</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
  </TABLE>
  
  
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center">The accompanying notes are an integral
  part of these financial statements.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 10pt; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 10pt; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 10pt">&nbsp;</P>
  
  
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  <P STYLE="font: 10pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><U>EQUUS TOTAL RETURN, INC. </U></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><A NAME="a_007"></A><U>SUPPLEMENTAL INFORMATION&mdash;SELECTED
  PER SHARE DATA AND RATIOS </U></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">(Unaudited)</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 9pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: center; text-indent: 0.5in; color: red"></P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="7" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Six months ended June 30,</TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid; vertical-align: bottom">2015</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid; vertical-align: bottom">2014</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="width: 70%; text-align: left">Investment income</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">0.01</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">0.03</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="padding-bottom: 1pt">Expenses</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">0.14</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(0.14</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">Net investment loss</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(0.13</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(0.11</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">Net realized (loss) gain</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(0.20</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.06</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">Net change in unrealized depreciation</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.46</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.13</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-bottom: 1pt">Net change in unrealized depreciation - related party</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">0.01</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(0.04</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-bottom: 1pt">Net increase in net assets&nbsp;&nbsp;from operations</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">0.14</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">0.04</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">Capital transactions:</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">&nbsp;&nbsp;Shares issued for portfolio securities</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.39</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="padding-bottom: 1pt">&nbsp;&nbsp;Dilutive effect of shares issued</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(0.57</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-bottom: 1pt">Decrease in net assets resulting from capital transactions</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(0.18</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-bottom: 1pt">Net increase (decrease) in net assets</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">0.14</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(0.14</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-bottom: 1pt">Net assets at beginning of period</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">2.86</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">3.14</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-bottom: 2.5pt">Net assets at end of period, basic and diluted</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">3.00</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">3.00</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD>Weighted average number of shares outstanding during period,</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;in thousands</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">12,674</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11,122</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD>Market price per share:</TD><TD STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Arial, Helvetica, Sans-Serif; text-align: right">&nbsp;</TD><TD STYLE="font: 10pt Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Arial, Helvetica, Sans-Serif; text-align: right">&nbsp;</TD><TD STYLE="font: 10pt Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Beginning of period</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">2.10</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1.92</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;End of period</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1.90</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">2.48</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">Selected information and ratios:</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Ratio of expenses to average net assets</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4.86</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4.56</TD><TD STYLE="text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Ratio of net investment loss to average net assets</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(4.50</TD><TD STYLE="text-align: left">%)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(3.58</TD><TD STYLE="text-align: left">%)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-left: 24px">Ratio of net increase in net assets resulting from operations to average net
      assets</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4.81</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1.30</TD><TD STYLE="text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total return on market price <font style="font: normal 10pt Times New Roman, Times, Serif"><sup>(1)</sup></font></TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(9.52</TD><TD STYLE="text-align: left">%)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">29.17</TD><TD STYLE="text-align: left">%</TD></TR>
  </TABLE>
  
  
  
  <P STYLE="font: 9pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: center; text-indent: 0.5in; color: red"></P>
  
  <P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 9pt 0 0"><FONT STYLE="font-size: 7pt"><SUP>(1)</SUP></FONT><FONT STYLE="font-size: 8pt">
  Total return = [(ending market price per share - beginning price per share) / beginning market price per share</FONT><FONT STYLE="font-size: 9pt">].</FONT></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center; text-indent: 0.5in">&nbsp;&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center">The accompanying notes are an integral
  part of these financial statement</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center">&nbsp;</P>
  
  
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  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 10pt"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B><U>EQUUS TOTAL RETURN, INC. </U></B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B><U><A NAME="a_008"></A>SCHEDULE OF INVESTMENTS </U></B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B><U>JUNE 30, 2015</U> </B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B>(Unaudited) </B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B><I>(in thousands, except share data)</I></B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B><I>&nbsp;</I></B></P>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0; text-align: center"></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in"><B><I></I></B></P>
  
  <TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 8pt Times New Roman, Times, Serif; width: 100%; background-color: white; border-collapse: collapse">
  <tr style="vertical-align: bottom">
      <TD STYLE="font-weight: bold; width: 31%; text-align: left; vertical-align: bottom">Name&nbsp;and&nbsp;Location&nbsp;of</td>
      <TD STYLE="font: 10pt Arial, Helvetica, Sans-Serif; text-align: center; width: 8%; vertical-align: top">&nbsp;</td>
      <TD STYLE="font-weight: bold; width: 10%; text-align: center; vertical-align: bottom">Date&nbsp;of&nbsp;Initial</td>
      <TD STYLE="font: 10pt Arial, Helvetica, Sans-Serif; text-align: center; width: 20%; vertical-align: top">&nbsp;</td>
      <TD STYLE="width: 1%; text-align: center; vertical-align: top">&nbsp;</TD>
      <TD STYLE="font: 10pt Arial, Helvetica, Sans-Serif; text-align: right; width: 8%">&nbsp;</td>
      <TD STYLE="width: 1%; text-align: center; vertical-align: top">&nbsp;</TD>
      <TD STYLE="font-weight: bold; text-align: center; width: 10%">Cost of&nbsp;</td>
      <TD STYLE="width: 1%; text-align: center; vertical-align: top">&nbsp;</TD>
      <TD STYLE="font-weight: bold; text-align: center; width: 10%">Fair&nbsp;</td></tr>
  <tr style="vertical-align: bottom">
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid; text-align: left; vertical-align: top">Portfolio&nbsp;Company</td>
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid; text-align: center; vertical-align: top">Industry</td>
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid; text-align: center; vertical-align: top">Investment</td>
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid; text-align: center; vertical-align: top">Investment</td>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: center; vertical-align: top">&nbsp;</TD>
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid; text-align: center; vertical-align: top">Principal</td>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: center; vertical-align: top">&nbsp;</TD>
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid; text-align: center; vertical-align: top">Investment</td>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: center; vertical-align: top">&nbsp;</TD>
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid; text-align: center; vertical-align: top"><U STYLE="text-decoration: none">Value<FONT STYLE="font: normal 7.5pt Times New Roman, Times, Serif"><B><SUP STYLE="text-decoration: none">(1)</SUP></B></FONT></U></td></tr>
  <tr style="vertical-align: bottom">
      <TD COLSPAN="2" STYLE="font-weight: bold; border-bottom: Black 1pt solid">Control Investments:&nbsp;&nbsp;Majority-owned <FONT STYLE="font: normal 8pt Times New Roman, Times, Serif"><B><SUP>(3)</SUP></B></FONT><FONT STYLE="font: normal 7.5pt Times New Roman, Times, Serif">:</FONT></td>
      <TD STYLE="font: bold 9pt Arial, Helvetica, Sans-Serif; border-bottom: Black 1pt solid; text-align: center; vertical-align: top">&nbsp;</td>
      <TD STYLE="font-size: 9pt; font-weight: bold; border-bottom: Black 1pt solid; text-align: center; vertical-align: top">&nbsp;</td>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: center; vertical-align: top">&nbsp;</TD>
      <TD STYLE="font-size: 9pt; font-weight: bold; border-bottom: Black 1pt solid; text-align: center">&nbsp;</td>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: center; vertical-align: top">&nbsp;</TD>
      <TD STYLE="font: bold 9pt Arial, Helvetica, Sans-Serif; border-bottom: Black 1pt solid; text-align: right">&nbsp;</td>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: center; vertical-align: top">&nbsp;</TD>
      <TD STYLE="font: bold 9pt Arial, Helvetica, Sans-Serif; border-bottom: Black 1pt solid; text-align: right">&nbsp;</td></tr>
  <TR STYLE="background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">Equus Energy, LLC<BR>
  Houston, TX</td>
      <TD STYLE="text-align: center; vertical-align: top">Energy&nbsp;</td>
      <TD STYLE="text-align: center; vertical-align: top">December 2011&nbsp;</td>
      <TD STYLE="text-align: center; vertical-align: top">Member interest (100%)&nbsp;</td>
      <TD STYLE="text-align: center; vertical-align: top"></TD>
      <TD STYLE="font-size: 4pt; text-align: right">&nbsp;</td>
      <TD STYLE="text-align: center; vertical-align: top">$</TD>
      <TD STYLE="text-align: right; border-top-color: Black; border-top-width: 0.5pt; vertical-align: top">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7,050&nbsp;&nbsp;</td>
      <TD STYLE="text-align: center; vertical-align: top">$</TD>
      <TD STYLE="text-align: right; border-top-color: Black; border-top-width: 0.5pt; vertical-align: top">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8,500</td></tr>
  <tr style="vertical-align: top">
      <TD STYLE="text-align: left">Equus Media Development Company, LLC<BR>
  Houston, TX</td>
      <TD STYLE="text-align: center; vertical-align: top">Media&nbsp;</td>
      <TD STYLE="text-align: center; vertical-align: top">January 2007&nbsp;</td>
      <TD STYLE="text-align: center; vertical-align: top">Member interest (100%)&nbsp;</td>
      <TD STYLE="text-align: center; vertical-align: top">&nbsp;</TD>
      <TD STYLE="font-size: 4pt; text-align: right">&nbsp;</td>
      <TD STYLE="text-align: center; vertical-align: top">&nbsp;</TD>
      <TD STYLE="text-align: right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3,000&nbsp;&nbsp;</td>
      <TD STYLE="text-align: center; vertical-align: top">&nbsp;</TD>
      <TD STYLE="text-align: right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;215</td></tr>
  <TR STYLE="background-color: rgb(204,238,255)">
      <TD COLSPAN="4" STYLE="font-weight: bold; vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: left">Total Control Investments: Majority-owned (represents 44.7% of total investments at fair value)</td>
      <TD STYLE="text-align: center; vertical-align: top; border-top: Black 1pt solid; border-bottom: Black 1pt solid">&nbsp;</TD>
      <TD STYLE="font-weight: bold; vertical-align: top; border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: right">&nbsp;</td>
      <TD STYLE="text-align: center; vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black 1pt solid"><B>$</B></TD>
      <TD STYLE="font-weight: bold; vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: right">&nbsp;&nbsp;10,050&nbsp;&nbsp;</td>
      <TD STYLE="text-align: center; vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black 1pt solid"><B>$</B></TD>
      <TD STYLE="font-weight: bold; vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8,715</td></tr>
  <tr style="vertical-align: bottom">
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid">Affiliate Investments <font style="font: normal 7.5pt Times New Roman, Times, Serif"><b><sup>(4)</sup>:</b></font></td>
      <TD STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid; vertical-align: top">&nbsp;</td>
      <TD STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid; vertical-align: top">&nbsp;</td>
      <TD STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid; vertical-align: top">&nbsp;</td>
      <TD STYLE="text-align: center; vertical-align: top; border-bottom: Black 1pt solid">&nbsp;</TD>
      <TD STYLE="font-weight: bold; text-align: right; border-bottom: Black 1pt solid">&nbsp;</td>
      <TD STYLE="text-align: center; vertical-align: top; border-bottom: Black 1pt solid">&nbsp;</TD>
      <TD STYLE="font-weight: bold; text-align: right; border-bottom: Black 1pt solid">&nbsp;&nbsp;&nbsp;</td>
      <TD STYLE="text-align: center; vertical-align: top; border-bottom: Black 1pt solid">&nbsp;</TD>
      <TD STYLE="font-weight: bold; text-align: right; border-bottom: Black 1pt solid">&nbsp;</td></tr>
  <TR STYLE="background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; vertical-align: top">PalletOne, Inc.<BR>
  Bartow, FL</td>
      <TD STYLE="text-align: center; vertical-align: top">Shipping products and services&nbsp;</td>
      <TD STYLE="text-align: center; vertical-align: top">&nbsp;October 2001&nbsp;</td>
      <TD STYLE="text-align: center; vertical-align: top">350,000&nbsp;shares&nbsp;of&nbsp;common stock (18.8%)&nbsp;</td>
      <TD STYLE="text-align: center; vertical-align: top">&nbsp;</TD>
      <TD STYLE="font-size: 4pt; text-align: right">&nbsp;</td>
      <TD STYLE="text-align: center; vertical-align: top">$</TD>
      <TD STYLE="text-align: right; border-top-color: Black; border-top-width: 0.5pt; vertical-align: top">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;350&nbsp;&nbsp;</td>
      <TD STYLE="text-align: center; vertical-align: top">$</TD>
      <TD STYLE="text-align: right; border-top-color: Black; border-top-width: 0.5pt; vertical-align: top">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5,627</td></tr>
  <tr style="vertical-align: bottom">
      <TD COLSPAN="4" STYLE="font-weight: bold; border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: left">Total Affiliate Investments (represents 28.8% of total investments at fair value)</td>
      <TD STYLE="text-align: center; vertical-align: top; border-top: Black 1pt solid; border-bottom: Black 1pt solid"><B>&nbsp;</B></TD>
      <TD STYLE="font-size: 4pt; border-bottom: Black 1pt solid; text-align: right; border-top: Black 1pt solid"><B>&nbsp;</B></td>
      <TD STYLE="text-align: center; vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black 1pt solid"><B>$</B></TD>
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid; text-align: right; border-top: Black 1pt solid"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;350&nbsp;&nbsp;</B></td>
      <TD STYLE="text-align: center; vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black 1pt solid"><B>$</B></TD>
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid; text-align: right; border-top: Black 1pt solid">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5,627</td></tr>
  <TR STYLE="background-color: rgb(204,238,255)">
      <TD COLSPAN="4" STYLE="font-weight: bold; border-bottom: Black 1pt solid">Non-Affiliate Investments - Related Party (less than 5% owned):</td>
      <TD STYLE="text-align: center; vertical-align: top; border-bottom: Black 1pt solid">&nbsp;</TD>
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid">&nbsp;</td>
      <TD STYLE="text-align: center; vertical-align: top; border-bottom: Black 1pt solid">&nbsp;</TD>
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid">&nbsp;</td>
      <TD STYLE="text-align: center; vertical-align: top; border-bottom: Black 1pt solid">&nbsp;</TD>
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid">&nbsp;</td></tr>
  <tr>
      <TD STYLE="vertical-align: top">MVC Capital, Inc.<BR>
  Purchase, NY</td>
      <TD STYLE="text-align: center; vertical-align: top">Financial services</td>
      <TD STYLE="vertical-align: top; text-align: center">September 2014</td>
      <TD STYLE="text-align: center; vertical-align: top">415,946 shares of common stock (1.7%) <font style="font: normal 7.5pt Times New Roman, Times, Serif"><sup>(5)</sup></font></td>
      <TD STYLE="text-align: center; vertical-align: top"></TD>
      <TD STYLE="font-weight: bold; vertical-align: bottom">&nbsp;</td>
      <TD STYLE="text-align: center; vertical-align: top">$</TD>
      <TD STYLE="vertical-align: top; text-align: right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5,815&nbsp;&nbsp;</td>
      <TD STYLE="text-align: center; vertical-align: top">$</TD>
      <TD STYLE="vertical-align: top; text-align: right">&nbsp;&nbsp;&nbsp;4,243</td></tr>
  <TR STYLE="background-color: rgb(204,238,255)">
      <TD COLSPAN="4" STYLE="font-weight: bold; border-top: Black 1pt solid; border-bottom: Black 1pt solid">Total Non-Affiliate Investments - Related Party (represents 21.8% of total investments at fair value)</td>
      <TD STYLE="text-align: center; vertical-align: top; border-top: Black 1pt solid; border-bottom: Black 1pt solid">&nbsp;</TD>
      <TD STYLE="font-weight: bold; border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: left"><B>&nbsp;</B></td>
      <TD STYLE="text-align: center; vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black 1pt solid"><B>$</B></TD>
      <TD STYLE="font-weight: bold; border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: right; vertical-align: bottom"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5,815&nbsp;&nbsp;</B></td>
      <TD STYLE="text-align: center; vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black 1pt solid"><B>$</B></TD>
      <TD STYLE="font-weight: bold; border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: right; vertical-align: bottom">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4,243</td></tr>
  <tr style="vertical-align: bottom">
      <TD COLSPAN="4" STYLE="font-weight: bold; border-bottom: Black 1pt solid">Non-Affiliate Investments (less than 5% owned):</td>
      <TD STYLE="text-align: center; vertical-align: top; border-bottom: Black 1pt solid">&nbsp;</TD>
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid">&nbsp;</td>
      <TD STYLE="text-align: center; vertical-align: top; border-bottom: Black 1pt solid">&nbsp;</TD>
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid">&nbsp;</td>
      <TD STYLE="text-align: center; vertical-align: top; border-bottom: Black 1pt solid">&nbsp;</TD>
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid">&nbsp;</td></tr>
  <TR STYLE="background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; vertical-align: top">5<font style="font: normal 7.5pt Times New Roman, Times, Serif"><sup>TH</sup> Element Tracking LLC<BR>
  Boston, MA</font></td>
      <TD STYLE="text-align: center; vertical-align: top">Business products and services</td>
      <TD STYLE="text-align: center; vertical-align: top">January 2015</td>
      <TD STYLE="text-align: center; vertical-align: top">14% promissory note due 1/16 <font style="font: normal 7.5pt Times New Roman, Times, Serif"><sup>(2)</sup></font></td>
      <TD STYLE="text-align: center; vertical-align: top">$</TD>
      <TD STYLE="text-align: right; vertical-align: top">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;915&nbsp;&nbsp; </td>
      <TD STYLE="text-align: center; vertical-align: top"></TD>
      <TD STYLE="text-align: right; vertical-align: top">&nbsp;&nbsp;&nbsp;915&nbsp;&nbsp;</td>
      <TD STYLE="text-align: center; vertical-align: top"></TD>
      <TD STYLE="text-align: right; vertical-align: top">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;915</td></tr>
  <tr style="vertical-align: bottom">
      <TD COLSPAN="4" STYLE="font-weight: bold; border-top: Black 1pt solid; border-bottom: Black 1pt solid">Total Non-Affiliate Investments (represents 4.7% of total investments at fair value)</td>
      <TD STYLE="text-align: center; vertical-align: top; border-top: Black 1pt solid; border-bottom: Black 1pt solid">&nbsp;</TD>
      <TD STYLE="font-weight: bold; border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: left"><B>&nbsp;</B></td>
      <TD STYLE="text-align: center; vertical-align: top; border-top: Black 1pt solid; border-bottom: Black 1pt solid"><B>$</B></TD>
      <TD STYLE="font-weight: bold; border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;915&nbsp;&nbsp;</td>
      <TD STYLE="text-align: center; vertical-align: top; border-top: Black 1pt solid; border-bottom: Black 1pt solid"><B>$</B></TD>
      <TD STYLE="font-weight: bold; border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;915</td></tr>
  <TR STYLE="background-color: rgb(204,238,255)">
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid">Total Investment in Portfolio Securities</td>
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid; text-align: center; vertical-align: top">&nbsp;</td>
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid; text-align: center; vertical-align: top">&nbsp;</td>
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid; text-align: center; vertical-align: top">&nbsp;</td>
      <TD STYLE="text-align: center; vertical-align: top; border-bottom: Black 1pt solid">&nbsp;</TD>
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid; text-align: left"><B>&nbsp;</B></td>
      <TD STYLE="text-align: center; vertical-align: bottom; border-bottom: Black 1pt solid"><B>$</B></TD>
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid; text-align: right; vertical-align: bottom">&nbsp;&nbsp;&nbsp;&nbsp;17,130&nbsp;&nbsp;</td>
      <TD STYLE="text-align: center; vertical-align: bottom; border-bottom: Black 1pt solid"><B>$</B></TD>
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid; text-align: right; vertical-align: bottom">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19,500</td></tr>
  </table>
  
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0; text-align: center; text-indent: 0.5in">&nbsp;</P>
  
  <TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <tr style="vertical-align: top">
      <TD STYLE="font-size: 7.5pt; line-height: 115%; width: 2%"><font style="font: 7.5pt Times New Roman, Times, Serif"><sup>(1) </sup></font></td>
      <TD STYLE="font-size: 7.5pt; line-height: 115%; width: 98%"><font style="font: 7.5pt Times New Roman, Times, Serif">See Note 3 to the financial statements, Valuation of Investments.</font></td></tr>
  <tr style="vertical-align: top">
      <TD STYLE="font-size: 7.5pt; line-height: 115%"><font style="font: 7.5pt Times New Roman, Times, Serif"><sup>(2) </sup></font></td>
      <TD STYLE="font-size: 7.5pt; line-height: 115%"><font style="font: 7.5pt Times New Roman, Times, Serif">Income-producing.</font></td></tr>
  <tr style="vertical-align: top">
      <TD STYLE="font-size: 7.5pt; line-height: 115%"><font style="font: 7.5pt Times New Roman, Times, Serif"><sup>(3) </sup></font></td>
      <TD STYLE="font-size: 7.5pt; line-height: 115%"><font style="font: 7.5pt Times New Roman, Times, Serif">Majority owned investments are generally defined under the Investment Company Act of 1940 as companies in which we own more than 50% of the voting securities of the company.</font></td></tr>
  <tr style="vertical-align: top">
      <TD STYLE="font-size: 7.5pt; line-height: 115%"><font style="font: 7.5pt Times New Roman, Times, Serif"><sup>(4) </sup></font></td>
      <TD STYLE="font-size: 7.5pt; line-height: 115%"><font style="font: 7.5pt Times New Roman, Times, Serif">Affiliate investments are generally defined under the Investment Company Act of 1940 as companies in which we own at least 5% but not more than 25% voting securities of the company.</font></td></tr>
  <tr style="vertical-align: top">
      <TD STYLE="font-size: 7.5pt; line-height: 115%"><font style="font: 7.5pt Times New Roman, Times, Serif"><sup>(5) </sup></font></td>
      <TD STYLE="font-size: 7.5pt; line-height: 115%"><font style="font: 7.5pt Times New Roman, Times, Serif">Pursuant to a Share Exchange Agreement between the Fund and MVC dated May 14, 2014, MVC has the right to rescind the Agreement and cancel the Share Exchange if Equus does not complete a &ldquo;reorganization&rdquo; (as defined under Section 2(a)(33) of the 1940 Act) within a 90-day period following the 1-year anniversary date of the Agreement.</font></td></tr>
  <tr style="vertical-align: top">
      <TD STYLE="font-size: 7.5pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="font-size: 7.5pt; line-height: 115%">&nbsp;</td></tr>
  <tr style="vertical-align: top">
      <TD STYLE="font-size: 7.5pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="font-size: 7.5pt; line-height: 115%">&nbsp;</td></tr>
  </table>
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">The accompanying notes are an integral
  part of these financial statements.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 0.4in; text-indent: 0.5in">&nbsp;</P>
  
  
  <!-- Field: Page; Sequence: 8 -->
      <DIV STYLE="margin-bottom: 6pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font-size: 10pt"><TR STYLE="vertical-align: top; text-align: left"><TD STYLE="width: 33%"><A HREF="#TableOfContents" TITLE="Table of Contents" STYLE="font-style: italic">Table of Contents</A>&nbsp;</TD><TD STYLE="width: 34%; text-align: center"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->8<!-- Field: /Sequence --></TD><TD STYLE="width: 33%; text-align: right">&nbsp;</TD></TR></TABLE></DIV>
      <DIV STYLE="page-break-before: always; margin-top: 6pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
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  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 10pt"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B><U>EQUUS TOTAL RETURN, INC. </U></B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B><U>SCHEDULE OF INVESTMENTS &ndash;
  (Continued) </U></B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B><U>JUNE 30, 2015 </U></B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B>(Unaudited) </B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Except for our holding of shares of
  MVC Capital, Inc. (&ldquo;MVC&rdquo;), substantially all of our portfolio securities are restricted from public sale without prior
  registration under the Securities Act of 1933 (hereafter, the &ldquo;Securities Act&rdquo;) or other relevant foreign regulatory
  authority. We negotiate certain aspects of the method and timing of the disposition of our investment in each portfolio company,
  including registration rights and related costs.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">We may invest up to 30% of our assets
  in non-qualifying portfolio investments, as permitted by the Investment Company Act of 1940 (hereafter, the &ldquo;1940 Act&rdquo;).
  Specifically, we may invest up to 30% of our assets in entities that are not considered &ldquo;eligible portfolio companies&rdquo;
  (as defined in the 1940 Act), including companies located outside of the United States, entities that are operating pursuant to
  certain exceptions under the 1940 Act, and publicly-traded entities with a market capitalization exceeding $250 million. As of
  June 30, 2015, except for our shares of MVC, all of our investments are in enterprises that are considered eligible portfolio companies
  under the 1940 Act. We provide significant managerial assistance to portfolio companies that comprise 44.7% of the total value
  of the investments in portfolio securities as of June 30, 2015.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Our investments in portfolio securities
  consist of the following types of securities as of June 30, 2015 (in thousands):</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 9pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-indent: 24.5pt; color: red"><B></B></P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 80%; font: 10pt Times New Roman, Times, Serif">
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Type of Securities</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Cost</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Fair Value</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><P STYLE="margin-top: 0; margin-bottom: 0">Fair Value as</P>
                                                                                  <P STYLE="margin-top: 0; margin-bottom: 0">Percentage of</P>
                                                                                  <P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font: normal 10pt Times New Roman, Times, Serif"><b><U STYLE="text-decoration: none">Net Assets</u></b></font></P></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="width: 58%; text-align: left">Limited liability company investments</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 11%; text-align: right">10,050</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 11%; text-align: right">8,715</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 11%; text-align: right">22.9</TD><TD STYLE="width: 1%; text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">Common stock</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,165</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9,870</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">26.0</TD><TD STYLE="text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-bottom: 1pt">Secured and subordinated debt</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">915</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">915</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">2.4</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: center; padding-bottom: 2.5pt">Total</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">17,130</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">19,500</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">51.3</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: left">%</TD></TR>
  </TABLE>
  
  
  
  <P STYLE="font: 9pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-indent: 24.5pt; color: red"><B>&nbsp;</B></P>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">The following is a summary by industry
  of the Fund&rsquo;s investments in portfolio securities as of June 30, 2015 (in thousands):</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"></P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 70%; font: 10pt Times New Roman, Times, Serif">
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Industry</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Fair Value</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><P STYLE="margin-top: 0; margin-bottom: 0">Fair Value as</P>
                                                                                  <P STYLE="margin-top: 0; margin-bottom: 0">Percentage of</P>
                                                                                  <P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font: normal 10pt Times New Roman, Times, Serif"><b><U STYLE="text-decoration: none">Net Assets</u></b></font></P></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="width: 70%">Energy</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">8,500</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">22.4</TD><TD STYLE="width: 1%; text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">Financial services</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,243</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11.2</TD><TD STYLE="text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">Shipping products and services</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,627</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">14.8</TD><TD STYLE="text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">Business products and services</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">915</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2.4</TD><TD STYLE="text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="padding-bottom: 1pt">Media</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">215</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">0.5</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="padding-bottom: 2.5pt">Total</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">19,500</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">51.3</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: left">%</TD></TR>
  </TABLE>
  
  
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"></P>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">The accompanying notes are an integral
  part of these financial statements.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  
  <!-- Field: Page; Sequence: 9 -->
      <DIV STYLE="margin-bottom: 6pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font-size: 10pt"><TR STYLE="vertical-align: top; text-align: left"><TD STYLE="width: 33%"><A HREF="#TableOfContents" TITLE="Table of Contents" STYLE="font-style: italic">Table of Contents</A>&nbsp;</TD><TD STYLE="width: 34%; text-align: center"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->9<!-- Field: /Sequence --></TD><TD STYLE="width: 33%; text-align: right">&nbsp;</TD></TR></TABLE></DIV>
      <DIV STYLE="page-break-before: always; margin-top: 6pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
      <!-- Field: /Page -->
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 10pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B><U>EQUUS TOTAL RETURN, INC.</U></B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B><U>SCHEDULE OF INVESTMENTS </U></B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B><U>DECEMBER 31, 2014</U></B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B><U>(Unaudited)</U></B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B><I>(in thousands, except share data)</I></B></P>
  
  <P STYLE="font: 7pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; background-color: white; border-collapse: collapse">
  <tr>
      <td style="vertical-align: bottom; width: 31%; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif"><b>Name&nbsp;and&nbsp;Location&nbsp;of</b></font></td>
      <td style="vertical-align: top; width: 8%; text-align: center; line-height: 115%">&nbsp;</td>
      <td style="vertical-align: bottom; width: 10%; text-align: center; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif"><b>&nbsp;Date&nbsp;of&nbsp;Initial&nbsp;</b></font></td>
      <td style="vertical-align: top; width: 20%; line-height: 115%">&nbsp;</td>
      <td style="vertical-align: top; width: 1%; text-align: right; line-height: 115%">&nbsp;</td>
      <td style="vertical-align: top; width: 8%; text-align: right; line-height: 115%">&nbsp;</td>
      <td style="vertical-align: top; width: 1%; text-align: right; line-height: 115%">&nbsp;</td>
      <td style="vertical-align: bottom; width: 10%; text-align: center; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif"><b>&nbsp;Cost of&nbsp;</b></font></td>
      <td style="vertical-align: top; width: 1%; text-align: right; line-height: 115%">&nbsp;</td>
      <td style="vertical-align: bottom; width: 10%; text-align: center; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif"><b>&nbsp;Fair&nbsp;</b></font></td></tr>
  <tr style="vertical-align: top">
      <td style="border-bottom: black 1pt solid; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif"><b>Portfolio&nbsp;Company</b></font></td>
      <td style="border-bottom: black 1pt solid; text-align: center; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif"><b>Industry</b></font></td>
      <td style="border-bottom: black 1pt solid; text-align: center; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif"><b>Investment</b></font></td>
      <td style="border-bottom: black 1pt solid; text-align: center; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif"><b>Investment</b></font></td>
      <td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%">&nbsp;</td>
      <td style="border-bottom: black 1pt solid; text-align: center; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif"><b>Principal</b></font></td>
      <td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%">&nbsp;</td>
      <td style="border-bottom: black 1pt solid; text-align: center; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif"><b>Investment</b></font></td>
      <td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%">&nbsp;</td>
      <td style="border-bottom: black 1pt solid; text-align: center; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif"><b>Value<sup>(1)</sup></b></font></td></tr>
  <tr style="vertical-align: top">
      <td style="line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif"><b>Control Investments:&nbsp;Majority-owned <sup>(4)</sup></b>:</font></td>
      <td style="text-align: center; line-height: 115%">&nbsp;</td>
      <td style="text-align: center; line-height: 115%">&nbsp;</td>
      <td style="line-height: 115%">&nbsp;</td>
      <td style="text-align: right; line-height: 115%">&nbsp;</td>
      <td style="text-align: right; line-height: 115%">&nbsp;</td>
      <td style="text-align: right; line-height: 115%">&nbsp;</td>
      <td style="text-align: right; line-height: 115%">&nbsp;</td>
      <td style="text-align: right; line-height: 115%">&nbsp;</td>
      <td style="text-align: right; line-height: 115%">&nbsp;</td></tr>
  <tr style="vertical-align: top; background-color: #CCEEFF">
      <td style="border-top: black 1pt solid; border-bottom: black 1pt solid">
          <P STYLE="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">Equus Energy, LLC</P>
          <P STYLE="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">Houston, TX</P></td>
      <td style="border-top: black 1pt solid; border-bottom: black 1pt solid; text-align: center; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif">&nbsp;Energy&nbsp;</font></td>
      <td style="border-top: black 1pt solid; border-bottom: black 1pt solid; text-align: center; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif">December 2011</font></td>
      <td style="border-top: black 1pt solid; border-bottom: black 1pt solid; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif">Member interest (100%)&nbsp;</font></td>
      <td style="border-top: black 1pt solid; border-bottom: black 1pt solid; text-align: right; line-height: 115%">&nbsp;</td>
      <td style="border-top: black 1pt solid; border-bottom: black 1pt solid; text-align: right; line-height: 115%">&nbsp;</td>
      <td style="border-top: black 1pt solid; border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif">$</font></td>
      <td style="border-top: black 1pt solid; border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7,050</font></td>
      <td style="border-top: black 1pt solid; border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif">$</font></td>
      <td style="border-top: black 1pt solid; border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9,800</font></td></tr>
  <tr style="vertical-align: top">
      <td style="border-bottom: black 1pt solid">
          <P STYLE="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">Equus Media Development Company, LLC</P>
          <P STYLE="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">Houston, TX</P></td>
      <td style="border-bottom: black 1pt solid; text-align: center; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif">&nbsp;Media&nbsp;</font></td>
      <td style="border-bottom: black 1pt solid; text-align: center; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif">&nbsp;January 2007&nbsp;</font></td>
      <td style="border-bottom: black 1pt solid; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif">Member interest (100%)&nbsp;</font></td>
      <td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%">&nbsp;</td>
      <td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%">&nbsp;</td>
      <td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%">&nbsp;</td>
      <td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3,000</font></td>
      <td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%">&nbsp;</td>
      <td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;215</font></td></tr>
  <tr style="vertical-align: top; background-color: #CCEEFF">
      <td>
          <P STYLE="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">Spectrum Management, LLC</P>
          <P STYLE="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">Carrolton, TX</P></td>
      <td style="text-align: center; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif">&nbsp;Business products and services&nbsp;</font></td>
      <td style="text-align: center; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif">&nbsp;December&nbsp;1999&nbsp;</font></td>
      <td style="line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif">285,000 units of Class&nbsp;A member interest (92.1%/82.5% fully diluted)&nbsp;</font></td>
      <td style="text-align: right; line-height: 115%">&nbsp;</td>
      <td style="text-align: right; line-height: 115%">&nbsp;</td>
      <td style="text-align: right; line-height: 115%">&nbsp;</td>
      <td style="text-align: right; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,850</font></td>
      <td style="text-align: right; line-height: 115%">&nbsp;</td>
      <td style="text-align: right; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-</font></td></tr>
  <tr style="vertical-align: top; background-color: #CCEEFF">
      <td style="line-height: 115%">&nbsp;</td>
      <td style="text-align: center; line-height: 115%">&nbsp;</td>
      <td style="text-align: center; line-height: 115%">&nbsp;</td>
      <td style="line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif">16% subordinated promissory note due 11/11 <sup>(3)</sup></font></td>
      <td style="text-align: right; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif">$</font></td>
      <td style="text-align: right; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3,158</font></td>
      <td style="text-align: right; line-height: 115%">&nbsp;</td>
      <td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3,158</font></td>
      <td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%">&nbsp;</td>
      <td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3,158</font></td></tr>
  <tr style="vertical-align: top; background-color: #CCEEFF">
      <td style="line-height: 115%">&nbsp;</td>
      <td style="text-align: center; line-height: 115%">&nbsp;</td>
      <td style="text-align: center; line-height: 115%">&nbsp;</td>
      <td style="line-height: 115%">&nbsp;</td>
      <td style="text-align: right; line-height: 115%">&nbsp;</td>
      <td style="text-align: right; line-height: 115%">&nbsp;</td>
      <td style="text-align: right; line-height: 115%">&nbsp;</td>
      <td style="text-align: right; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6,008</font></td>
      <td style="text-align: right; line-height: 115%">&nbsp;</td>
      <td style="text-align: right; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3,158</font></td></tr>
  <tr>
      <td colspan="4" style="vertical-align: bottom; border-top: black 1pt solid; border-bottom: black 1pt solid; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif"><b>Total Control Investments: Majority-owned (represents 38.0% of total investments at fair value)</b></font></td>
      <td style="vertical-align: top; border-top: black 1pt solid; border-bottom: black 1pt solid; text-align: right; line-height: 115%">&nbsp;</td>
      <td style="vertical-align: top; border-top: black 1pt solid; border-bottom: black 1pt solid; text-align: right; line-height: 115%">&nbsp;</td>
      <td style="vertical-align: top; border-top: black 1pt solid; border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif">$</font></td>
      <td style="vertical-align: top; border-top: black 1pt solid; border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif"><b>&nbsp;&nbsp;16,058</b></font></td>
      <td style="vertical-align: top; border-top: black 1pt solid; border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif">$</font></td>
      <td style="vertical-align: top; border-top: black 1pt solid; border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13,173</b></font></td></tr>
  <tr style="vertical-align: top; background-color: #CCEEFF">
      <td style="border-bottom: black 1pt solid; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif"><b>Affiliate Investments <sup>(5)</sup>:</b></font></td>
      <td style="border-bottom: black 1pt solid; text-align: center; line-height: 115%">&nbsp;</td>
      <td style="border-bottom: black 1pt solid; text-align: center; line-height: 115%">&nbsp;</td>
      <td style="border-bottom: black 1pt solid; line-height: 115%">&nbsp;</td>
      <td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%">&nbsp;</td>
      <td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%">&nbsp;</td>
      <td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%">&nbsp;</td>
      <td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%">&nbsp;</td>
      <td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%">&nbsp;</td>
      <td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%">&nbsp;</td></tr>
  <tr style="vertical-align: top">
      <td>
          <P STYLE="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">PalletOne, Inc.</P>
          <P STYLE="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">Bartow, FL</P></td>
      <td style="text-align: center; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif">&nbsp;Shipping products and services&nbsp;</font></td>
      <td style="text-align: center; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif">&nbsp;October 2001&nbsp;</font></td>
      <td style="line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif">350,000&nbsp;shares&nbsp;of&nbsp;common stock (18.8%)&nbsp;</font></td>
      <td style="text-align: right; line-height: 115%">&nbsp;</td>
      <td style="text-align: right; line-height: 115%">&nbsp;</td>
      <td style="text-align: right; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif">$</font></td>
      <td style="text-align: right; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;350</font></td>
      <td style="text-align: right; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif">$</font></td>
      <td style="text-align: right; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;960</font></td></tr>
  <tr style="background-color: #CCEEFF">
      <TD COLSPAN="4" STYLE="border-bottom: Black 1pt solid; line-height: 115%; border-top: Black 1pt solid"><font style="font: 8pt Times New Roman, Times, Serif"><b>Total Affiliate Investments (represents 2.8% of total investments at fair value)</b></font></td>
      <TD STYLE="vertical-align: top; border-bottom: Black 1pt solid; text-align: right; line-height: 115%; border-top: Black 1pt solid">&nbsp;</td>
      <TD STYLE="vertical-align: top; border-bottom: Black 1pt solid; text-align: right; line-height: 115%; border-top: Black 1pt solid">&nbsp;</td>
      <TD STYLE="vertical-align: top; border-bottom: Black 1pt solid; text-align: right; line-height: 115%; border-top: Black 1pt solid"><font style="font: 8pt Times New Roman, Times, Serif">$</font></td>
      <TD STYLE="vertical-align: top; border-bottom: Black 1pt solid; text-align: right; line-height: 115%; border-top: Black 1pt solid"><font style="font: 8pt Times New Roman, Times, Serif"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;350</b></font></td>
      <TD STYLE="vertical-align: top; border-bottom: Black 1pt solid; text-align: right; line-height: 115%; border-top: Black 1pt solid"><font style="font: 8pt Times New Roman, Times, Serif">$</font></td>
      <TD STYLE="vertical-align: top; border-bottom: Black 1pt solid; text-align: right; line-height: 115%; border-top: Black 1pt solid"><font style="font: 8pt Times New Roman, Times, Serif"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;960</b></font></td></tr>
  <tr>
      <td colspan="4" style="border-bottom: black 1pt solid; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif"><b>Non-Affiliate Investments - Related Party (less than 5% owned):</b></font></td>
      <td style="vertical-align: top; border-bottom: black 1pt solid; text-align: right; line-height: 115%">&nbsp;</td>
      <td style="vertical-align: top; border-bottom: black 1pt solid; text-align: right; line-height: 115%">&nbsp;</td>
      <td style="vertical-align: top; border-bottom: black 1pt solid; text-align: right; line-height: 115%">&nbsp;</td>
      <td style="vertical-align: top; border-bottom: black 1pt solid; text-align: right; line-height: 115%">&nbsp;</td>
      <td style="vertical-align: top; border-bottom: black 1pt solid; text-align: right; line-height: 115%">&nbsp;</td>
      <td style="vertical-align: top; border-bottom: black 1pt solid; text-align: right; line-height: 115%">&nbsp;</td></tr>
  <tr style="vertical-align: top; background-color: #CCEEFF">
      <td style="border-bottom: black 1pt solid">
          <P STYLE="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">MVC Capital, Inc.</P>
          <P STYLE="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">Purchase, NY</P></td>
      <td style="border-bottom: black 1pt solid; text-align: center; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif">Financial services</font></td>
      <td style="border-bottom: black 1pt solid; text-align: center; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif">September 2014</font></td>
      <td style="border-bottom: black 1pt solid; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif">404,968 shares of common stock (1.7%) <sup>(6)</sup></font></td>
      <td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%">&nbsp;</td>
      <td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%">&nbsp;</td>
      <td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif">$</font></td>
      <td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5,706</font></td>
      <td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif">$</font></td>
      <td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3,981</font></td></tr>
  <tr style="vertical-align: top">
      <td colspan="4" style="line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif"><b>Total Non-Affiliate Investments - Related Party (represents 11.5% of total investments at fair value)</b></font></td>
      <td style="text-align: right; line-height: 115%">&nbsp;</td>
      <td style="text-align: right; line-height: 115%">&nbsp;</td>
      <td style="text-align: right; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif"><b>$</b></font></td>
      <td style="text-align: right; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif"><b>5,706</b></font></td>
      <td style="text-align: right; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif"><b>$</b></font></td>
      <td style="text-align: right; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif"><b>3,981</b></font></td></tr>
  <tr style="background-color: #CCEEFF">
      <td colspan="4" style="border-top: black 1pt solid; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif"><b>Non-Affiliate Investments (less than 5% owned):</b></font></td>
      <td style="vertical-align: top; border-top: black 1pt solid; text-align: right; line-height: 115%">&nbsp;</td>
      <td style="vertical-align: top; border-top: black 1pt solid; text-align: right; line-height: 115%">&nbsp;</td>
      <td style="vertical-align: top; border-top: black 1pt solid; text-align: right; line-height: 115%">&nbsp;</td>
      <td style="vertical-align: top; border-top: black 1pt solid; text-align: right; line-height: 115%">&nbsp;</td>
      <td style="vertical-align: top; border-top: black 1pt solid; text-align: right; line-height: 115%">&nbsp;</td>
      <td style="vertical-align: top; border-top: black 1pt solid; text-align: right; line-height: 115%">&nbsp;</td></tr>
  <tr style="vertical-align: top">
      <td style="border-top: black 1pt solid">
          <P STYLE="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">Orco Property Group S. A.</P>
          <P STYLE="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">Paris, France</P></td>
      <td style="border-top: black 1pt solid; text-align: center; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif">Real estate</font></td>
      <td style="border-top: black 1pt solid; text-align: center; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif">April 2011</font></td>
      <td style="border-top: black 1pt solid; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif">10% promissory note due 2/18 <sup>(2)(7)</sup></font></td>
      <td style="border-top: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif">$</font></td>
      <td style="border-top: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;597</font></td>
      <td style="border-top: black 1pt solid; text-align: right; line-height: 115%">&nbsp;</td>
      <td style="border-top: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;597</font></td>
      <td style="border-top: black 1pt solid; text-align: right; line-height: 115%">&nbsp;</td>
      <td style="border-top: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,032</font></td></tr>
  <tr style="vertical-align: top; background-color: #CCEEFF">
      <td style="border-top: black 1pt solid">
          <P STYLE="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">Security Monitor Holdings, LLC</P>
          <P STYLE="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">Boston, MA</P></td>
      <td style="border-top: black 1pt solid; text-align: center; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif">&nbsp;Business products and services&nbsp;</font></td>
      <td style="border-top: black 1pt solid; text-align: center; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif">November 2013</font></td>
      <td style="border-top: black 1pt solid; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif">14% promissory note due 6/14 <sup>(2)</sup></font></td>
      <td style="border-top: black 1pt solid; text-align: right; line-height: 115%">&nbsp;</td>
      <td style="border-top: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;500</font></td>
      <td style="border-top: black 1pt solid; text-align: right; line-height: 115%">&nbsp;</td>
      <td style="border-top: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;500</font></td>
      <td style="border-top: black 1pt solid; text-align: right; line-height: 115%">&nbsp;</td>
      <td style="border-top: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;500</font></td></tr>
  <tr>
      <td colspan="4" style="vertical-align: bottom; border-top: black 1pt solid; border-bottom: black 1pt solid; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif"><b>Total Non-Affiliate Investments (represents 4.4% of total investments at fair value)</b></font></td>
      <td style="vertical-align: top; border-top: black 1pt solid; border-bottom: black 1pt solid; text-align: right; line-height: 115%">&nbsp;</td>
      <td style="vertical-align: top; border-top: black 1pt solid; border-bottom: black 1pt solid; text-align: right; line-height: 115%">&nbsp;</td>
      <td style="vertical-align: top; border-top: black 1pt solid; border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif">$</font></td>
      <td style="vertical-align: top; border-top: black 1pt solid; border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif"><b>&nbsp;&nbsp;&nbsp;&nbsp;1,097</b></font></td>
      <td style="vertical-align: top; border-top: black 1pt solid; border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif">$</font></td>
      <td style="vertical-align: top; border-top: black 1pt solid; border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,532</b></font></td></tr>
  <tr style="vertical-align: top; background-color: #CCEEFF">
      <td style="border-bottom: black 1pt solid; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif"><b>Total Investment in Portfolio Securities</b></font></td>
      <td style="border-bottom: black 1pt solid; text-align: center; line-height: 115%">&nbsp;</td>
      <td style="border-bottom: black 1pt solid; text-align: center; line-height: 115%">&nbsp;</td>
      <td style="border-bottom: black 1pt solid; line-height: 115%">&nbsp;</td>
      <td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%">&nbsp;</td>
      <td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%">&nbsp;</td>
      <td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif">$</font></td>
      <td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif"><b>&nbsp;&nbsp;&nbsp;23,211</b></font></td>
      <td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif">$</font></td>
      <td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19,646</b></font></td></tr>
  <tr style="vertical-align: top">
      <td style="border-bottom: black 1pt solid; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif"><b>Temporary Cash Investments</b></font></td>
      <td style="border-bottom: black 1pt solid; text-align: center; line-height: 115%">&nbsp;</td>
      <td style="border-bottom: black 1pt solid; text-align: center; line-height: 115%">&nbsp;</td>
      <td style="border-bottom: black 1pt solid; line-height: 115%">&nbsp;</td>
      <td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%">&nbsp;</td>
      <td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%">&nbsp;</td>
      <td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%">&nbsp;</td>
      <td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%">&nbsp;</td>
      <td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%">&nbsp;</td>
      <td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%">&nbsp;</td></tr>
  <tr style="vertical-align: top; background-color: #CCEEFF">
      <td style="line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif">U.S. Treasury Bill</font></td>
      <td style="text-align: center; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif">Government</font></td>
      <td style="text-align: center; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif">December 2014</font></td>
      <td style="line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif">UST 0% 6/15</font></td>
      <td style="text-align: right; line-height: 115%">&nbsp;</td>
      <td style="text-align: right; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif">&nbsp;&nbsp;14,999</font></td>
      <td style="text-align: right; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif">$</font></td>
      <td style="text-align: right; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif">14,999</font></td>
      <td style="text-align: right; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif">$</font></td>
      <td style="text-align: right; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif">14,996</font></td></tr>
  <tr>
      <td colspan="4" style="vertical-align: bottom; border-top: black 1pt solid; border-bottom: black 1pt solid; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif"><b>Total Temporary Cash Investments (represents 43.3% of total investments at fair value)</b></font></td>
      <td style="vertical-align: top; border-top: black 1pt solid; border-bottom: black 1pt solid; text-align: right; line-height: 115%">&nbsp;</td>
      <td style="vertical-align: top; border-top: black 1pt solid; border-bottom: black 1pt solid; text-align: right; line-height: 115%">&nbsp;</td>
      <td style="vertical-align: top; border-top: black 1pt solid; border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif">$</font></td>
      <td style="vertical-align: top; border-top: black 1pt solid; border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif"><b>14,999</b></font></td>
      <td style="vertical-align: top; border-top: black 1pt solid; border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif">$</font></td>
      <td style="vertical-align: top; border-top: black 1pt solid; border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif"><b>14,996</b></font></td></tr>
  <tr style="vertical-align: top; background-color: #CCEEFF">
      <td style="border-bottom: black 1pt solid; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif"><b>Total Investments</b></font></td>
      <td style="border-bottom: black 1pt solid; text-align: center; line-height: 115%">&nbsp;</td>
      <td style="border-bottom: black 1pt solid; text-align: center; line-height: 115%">&nbsp;</td>
      <td style="border-bottom: black 1pt solid; line-height: 115%">&nbsp;</td>
      <td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%">&nbsp;</td>
      <td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%">&nbsp;</td>
      <td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif">$</font></td>
      <td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif"><b>&nbsp;&nbsp;38,210</b></font></td>
      <td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif">$</font></td>
      <td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 8pt Times New Roman, Times, Serif"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;34,642</b></font></td></tr>
  </table>
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <tr style="vertical-align: top">
      <td style="font-size: 7.5pt; line-height: 115%"><font style="font: 7.5pt Times New Roman, Times, Serif"><sup>(1)</sup></font></td>
      <td style="font-size: 7.5pt; line-height: 115%"><font style="font: 7.5pt Times New Roman, Times, Serif">See Note 3 to the financial statements, Valuation of Investments.</font></td></tr>
  <tr style="vertical-align: top">
      <td style="width: 2%; font-size: 7.5pt; line-height: 115%"><font style="font: 7.5pt Times New Roman, Times, Serif"><sup>(2)</sup></font></td>
      <td style="width: 98%; font-size: 7.5pt; line-height: 115%"><font style="font: 7.5pt Times New Roman, Times, Serif">Income-producing.</font></td></tr>
  <tr style="vertical-align: top">
      <td style="font-size: 7.5pt; line-height: 115%"><font style="font: 7.5pt Times New Roman, Times, Serif"><sup>(3)</sup></font></td>
      <td style="font-size: 7.5pt; line-height: 115%"><font style="font: 7.5pt Times New Roman, Times, Serif">Non-income producing.</font></td></tr>
  <tr style="vertical-align: top">
      <td style="font-size: 7.5pt; line-height: 115%"><font style="font: 7.5pt Times New Roman, Times, Serif"><sup>(4)</sup></font></td>
      <td style="font-size: 7.5pt; line-height: 115%"><font style="font: 7.5pt Times New Roman, Times, Serif">Majority owned investments are generally defined under the Investment Company Act of 1940 as companies in which we own more than 50% of the voting securities of the company.</font></td></tr>
  <tr style="vertical-align: top">
      <td style="font-size: 7.5pt; line-height: 115%"><font style="font: 7.5pt Times New Roman, Times, Serif"><sup>(5)</sup></font></td>
      <td style="font-size: 7.5pt; line-height: 115%"><font style="font: 7.5pt Times New Roman, Times, Serif">Affiliate investments are generally defined under the Investment Company Act of 1940 as companies in which we own at least 5% but not more than 25% voting securities of the company.</font></td></tr>
  <tr style="vertical-align: top">
      <td style="font-size: 7.5pt; line-height: 115%"><font style="font: 7.5pt Times New Roman, Times, Serif"><sup>(6)</sup></font></td>
      <td style="font-size: 7.5pt; line-height: 115%"><font style="font: 7.5pt Times New Roman, Times, Serif">Pursuant to a Share Exchange Agreement between the Fund and MVC dated May 14, 2014, MVC has the right to rescind the Agreement and cancel the Share Exchange if Equus does not complete a &ldquo;reorganization&rdquo; (as defined under Section 2(a)(33) of the 1940 Act) within a 90-day period following the 1-year anniversary date of the Agreement.</font></td></tr>
  <tr style="vertical-align: top">
      <td style="font-size: 7.5pt; line-height: 115%"><font style="font: 7.5pt Times New Roman, Times, Serif"><sup>(7)</sup></font></td>
      <td style="font-size: 7.5pt; line-height: 115%"><font style="font: 7.5pt Times New Roman, Times, Serif">In October 2014, the terms of these notes were amended to provide, among other changes, an extension of the maturity date to October 2019, and a reduction in the interest rate applicable to the notes from a combination of 5% cash and 5% payment-in-kind securities, to 7% in cash. </font></td></tr>
  </table>
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">The accompanying notes are an integral
  part of these financial statements.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  
  <!-- Field: Page; Sequence: 10 -->
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  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 10pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B>EQUUS TOTAL RETURN, INC.</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B>SCHEDULE OF INVESTMENTS &ndash; (Continued)</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B>DECEMBER 31, 2014</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B>(Unaudited)</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Except for our holding of shares of
  MVC and our notes of Orco Property Group S.A. (&ldquo;OPG&rdquo;), substantially all of our portfolio securities are restricted
  from public sale without prior registration under the Securities Act. We negotiate certain aspects of the method and timing of
  the disposition of our investment in each portfolio company, including registration rights and related costs.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">As defined in the 1940 Act, all of our
  investments are in eligible portfolio companies. We provide significant managerial assistance to portfolio companies that comprise
  67.1% of the total value of the investments in portfolio securities as of December 31, 2014.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Our investments in portfolio securities
  consist of the following types of securities as of December 31, 2014 (in thousands):</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 80%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
      <TD STYLE="border-bottom: black 1pt solid; text-align: center; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Type of Securities</b></font></td>
      <TD STYLE="font-size: 10pt; line-height: 115%">&nbsp;</td>
      <td colspan="3" style="border-bottom: black 1pt solid; text-align: center; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Cost</b></font></td>
      <TD STYLE="font-size: 10pt; line-height: 115%">&nbsp;</td>
      <td colspan="3" style="border-bottom: black 1pt solid; text-align: center; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Fair Value</b></font></td>
      <TD STYLE="font-size: 10pt; line-height: 115%">&nbsp;</td>
      <td colspan="3" style="border-bottom: black 1pt solid">
          <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Fair Value as</b></P>
          <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Percentage of</b></P>
          <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Net Assets</b></P></td></tr>
  <tr style="vertical-align: bottom; background-color: #CCEEFF">
      <TD STYLE="width: 58%; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Limited liability company investments</font></td>
      <TD STYLE="width: 1%; font-size: 10pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="width: 1%; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
      <TD STYLE="width: 11%; text-align: right; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">12,900</font></td>
      <TD STYLE="width: 1%; font-size: 10pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="width: 1%; font-size: 10pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="width: 1%; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
      <TD STYLE="width: 11%; text-align: right; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">10,015</font></td>
      <TD STYLE="width: 1%; font-size: 10pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="width: 1%; font-size: 10pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="width: 1%; font-size: 10pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="width: 11%; text-align: right; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">27.7</font></td>
      <TD STYLE="width: 1%; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">%</font></td></tr>
  <tr style="vertical-align: bottom; background-color: white">
      <TD STYLE="font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Secured and subordinated debt</font></td>
      <TD STYLE="font-size: 10pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="font-size: 10pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="text-align: right; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">4,255</font></td>
      <TD STYLE="font-size: 10pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="font-size: 10pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="font-size: 10pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="text-align: right; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">4,690</font></td>
      <TD STYLE="font-size: 10pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="font-size: 10pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="font-size: 10pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="text-align: right; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">13.0</font></td>
      <TD STYLE="font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">%</font></td></tr>
  <tr style="vertical-align: bottom; background-color: #CCEEFF">
      <TD STYLE="font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Common stock</font></td>
      <TD STYLE="font-size: 10pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="border-bottom: black 1pt solid; font-size: 10pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="border-bottom: black 1pt solid; text-align: right; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">6,056</font></td>
      <TD STYLE="border-bottom: black 1pt solid; font-size: 10pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="font-size: 10pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="border-bottom: black 1pt solid; font-size: 10pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="border-bottom: black 1pt solid; text-align: right; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">4,941</font></td>
      <TD STYLE="border-bottom: black 1pt solid; font-size: 10pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="font-size: 10pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="font-size: 10pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="border-bottom: black 1pt solid; text-align: right; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">13.6</font></td>
      <TD STYLE="border-bottom: black 1pt solid; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">%</font></td></tr>
  <tr style="vertical-align: bottom; background-color: white">
      <TD STYLE="font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Total</font></td>
      <TD STYLE="font-size: 10pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="border-bottom: black 2.25pt double; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
      <TD STYLE="border-bottom: black 2.25pt double; text-align: right; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">23,211</font></td>
      <TD STYLE="border-bottom: black 2.25pt double; font-size: 10pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="font-size: 10pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="border-bottom: black 2.25pt double; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
      <TD STYLE="border-bottom: black 2.25pt double; text-align: right; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">19,646</font></td>
      <TD STYLE="border-bottom: black 2.25pt double; font-size: 10pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="font-size: 10pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="border-bottom: black 2.25pt double; font-size: 10pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="border-bottom: black 2.25pt double; text-align: right; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">54.3</font></td>
      <TD STYLE="border-bottom: black 2.25pt double; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">%</font></td></tr>
  </table>
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Interest payments are being received
  and/or accrued on notes with a fair value of $1.5 million, while accrued interest has been impaired on notes receivable included
  in secured and subordinated debt with a fair value of $3.2 million.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">The following is a summary by industry of our investments
  in portfolio securities as of December 31, 2014 (in thousands):</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 70%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
      <TD STYLE="border-bottom: black 1pt solid; text-align: center; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Industry</b></font></td>
      <TD STYLE="font-size: 10pt; line-height: 115%">&nbsp;</td>
      <td colspan="3" style="border-bottom: black 1pt solid; text-align: center; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Fair Value</b></font></td>
      <TD STYLE="font-size: 10pt; line-height: 115%">&nbsp;</td>
      <td colspan="3" style="border-bottom: black 1pt solid">
          <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Fair Value as</b></P>
          <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Percentage of</b></P>
          <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Net Assets</b></P></td></tr>
  <tr style="vertical-align: bottom; background-color: #CCEEFF">
      <TD STYLE="width: 70%; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Energy</font></td>
      <TD STYLE="width: 1%; font-size: 10pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="width: 1%; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
      <TD STYLE="width: 12%; text-align: right; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">9,800</font></td>
      <TD STYLE="width: 1%; font-size: 10pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="width: 1%; font-size: 10pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="width: 1%; font-size: 10pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="width: 12%; text-align: right; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">27.1</font></td>
      <TD STYLE="width: 1%; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">%</font></td></tr>
  <tr style="vertical-align: bottom; background-color: white">
      <TD STYLE="font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Financial services</font></td>
      <TD STYLE="font-size: 10pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="font-size: 10pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="text-align: right; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">3,981</font></td>
      <TD STYLE="font-size: 10pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="font-size: 10pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="font-size: 10pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="text-align: right; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">11.0</font></td>
      <TD STYLE="font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">%</font></td></tr>
  <tr style="vertical-align: bottom; background-color: #CCEEFF">
      <TD STYLE="font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Business products and services</font></td>
      <TD STYLE="font-size: 10pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="font-size: 10pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="text-align: right; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">3,658</font></td>
      <TD STYLE="font-size: 10pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="font-size: 10pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="font-size: 10pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="text-align: right; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">10.1</font></td>
      <TD STYLE="font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">%</font></td></tr>
  <tr style="vertical-align: bottom; background-color: white">
      <TD STYLE="font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Real estate</font></td>
      <TD STYLE="font-size: 10pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="font-size: 10pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="text-align: right; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">1,032</font></td>
      <TD STYLE="font-size: 10pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="font-size: 10pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="font-size: 10pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="text-align: right; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">2.9</font></td>
      <TD STYLE="font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">%</font></td></tr>
  <tr style="vertical-align: bottom; background-color: #CCEEFF">
      <TD STYLE="font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Shipping products and services</font></td>
      <TD STYLE="font-size: 10pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="font-size: 10pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="text-align: right; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">960</font></td>
      <TD STYLE="font-size: 10pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="font-size: 10pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="font-size: 10pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="text-align: right; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">2.7</font></td>
      <TD STYLE="font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">%</font></td></tr>
  <tr style="vertical-align: bottom; background-color: white">
      <TD STYLE="font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Media</font></td>
      <TD STYLE="font-size: 10pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="border-bottom: black 1pt solid; font-size: 10pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="border-bottom: black 1pt solid; text-align: right; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">215</font></td>
      <TD STYLE="border-bottom: black 1pt solid; font-size: 10pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="font-size: 10pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="font-size: 10pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="border-bottom: black 1pt solid; text-align: right; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">0.5</font></td>
      <TD STYLE="border-bottom: black 1pt solid; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">%</font></td></tr>
  <tr style="vertical-align: bottom; background-color: #CCEEFF">
      <TD STYLE="font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Total</font></td>
      <TD STYLE="font-size: 10pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="border-bottom: black 2.25pt double; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
      <TD STYLE="border-bottom: black 2.25pt double; text-align: right; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">19,646</font></td>
      <TD STYLE="border-bottom: black 2.25pt double; font-size: 10pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="font-size: 10pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="font-size: 10pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="border-bottom: black 2.25pt double; text-align: right; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">54.3</font></td>
      <TD STYLE="border-bottom: black 2.25pt double; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">%</font></td></tr>
  </table>
  <P STYLE="font: 9pt/normal Arial, Helvetica, Sans-Serif; margin: 0 0 0 1in; color: red; text-indent: 0.5in"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 0.4in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">The accompanying notes are an integral
  part of these financial statements.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 0.4in; text-indent: 0.5in"><B>&nbsp;</B></P>
  
  
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  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 10pt"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B><U>EQUUS TOTAL RETURN, INC.</U></B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B><U><A NAME="a_009"></A>NOTES TO FINANCIAL STATEMENTS </U></B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B><U>JUNE 30, 2015 </U></B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B>(Unaudited)</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <tr style="vertical-align: top">
      <td style="width: 24px; font-size: 12pt; line-height: 115%">&nbsp;</td>
      <td style="width: 24px; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>(1)</b></font></td>
      <td style="text-decoration: underline; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b><u>Description of Business and Basis of Presentation </u></b></font></td></tr>
  </table>
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>Description of Business</B>&mdash;
  Equus Total Return, Inc. (<I>&ldquo;we,&rdquo; &ldquo;us,&rdquo; &ldquo;our,&rdquo; &ldquo;Equus&rdquo; the &ldquo;Company&rdquo;
  and the &ldquo;Fund</I>&rdquo;), a Delaware corporation, was formed by Equus Investments II, L.P. (the &ldquo;Partnership&rdquo;)
  on August 16, 1991. On July 1, 1992, the Partnership was reorganized and all of the assets and liabilities of the Partnership were
  transferred to the Fund in exchange for shares of common stock of the Fund. Our shares trade on the New York Stock Exchange under
  the symbol EQS. On August 11, 2006, our shareholders approved the change of the Fund&rsquo;s investment strategy to a total return
  investment objective. This strategy seeks to provide the highest total return, consisting of capital appreciation and current income.
  In connection with this strategic investment change, the shareholders also approved the change of name from Equus II Incorporated
  to Equus Total Return, Inc.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">We attempt to maximize the return to
  stockholders in the form of current investment income and long-term capital gains by investing in the debt and equity securities
  of companies with a total enterprise value of between $5.0 million and $75.0 million, although we may engage in transactions with
  smaller or larger investee companies from time to time. We seek to invest primarily in companies pursuing growth either through
  acquisition or organically, leveraged buyouts, management buyouts and recapitalizations of existing businesses or special situations.
  Our income-producing investments consist principally of debt securities including subordinate debt, debt convertible into common
  or preferred stock, or debt combined with warrants and common and preferred stock. Debt and preferred equity financing may also
  be used to create long-term capital appreciation through the exercise and sale of warrants received in connection with the financing.
  We seek to achieve capital appreciation by making investments in equity and equity-oriented securities issued by privately-owned
  companies (or smaller public companies) in transactions negotiated directly with such companies. Given market conditions over the
  past several years and the performance of our portfolio, our Management and Board of Directors believe it prudent to continue to
  review alternatives to refine and further clarify the current strategies.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">We elected to be treated as a business
  development company (&ldquo;BDC&rdquo;) under the 1940 Act. We currently qualify as a regulated investment company (&ldquo;RIC&rdquo;)
  for federal income tax purposes and, therefore, are not required to pay corporate income taxes on any income or gains that we distribute
  to our stockholders. We have certain wholly owned taxable subsidiaries (&ldquo;Taxable Subsidiaries&rdquo;) each of which holds
  one or more portfolio investments listed on our Schedules of Investments. The purpose of these Taxable Subsidiaries is to permit
  us to hold certain income-producing investments or portfolio companies organized as limited liability companies, or LLCs, (or other
  forms of pass-through entities) and still satisfy the RIC tax requirement that at least 90% of our gross revenue for income tax
  purposes must consist of investment income. Absent the Taxable Subsidiaries, a portion of the gross income of these income-producing
  investments or of any LLC (or other pass-through entity) portfolio investment, as the case may be, would flow through directly
  to us for the 90% test. To the extent that such income did not consist of investment income, it could jeopardize our ability to
  qualify as a RIC and, therefore, cause us to incur significant federal income taxes. The income of the LLCs (or other pass-through
  entities) owned by Taxable Subsidiaries is taxed to the Taxable Subsidiaries and does not flow through to us, thereby helping us
  preserve our RIC status and resultant tax advantages. We do not consolidate the Taxable Subsidiaries for income tax purposes and
  they may generate income tax expense because of the Taxable Subsidiaries&rsquo; ownership of the portfolio companies. We reflect
  any such income tax expense on our Statements of Operations.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.35pt"><B>Basis of Presentation</B>&mdash;In
  accordance with Article 6 of Regulation S-X under the Securities Act of 1933 and the Securities Exchange Act of 1934, we do not
  consolidate portfolio company investments, including those in which we have a controlling interest. Our interim unaudited financial
  statements were prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP,
  for interim financial information and in accordance with the requirements of reporting on Form 10-Q and Article 10 of Regulation
  S-X, under the Securities Exchange Act of 1934, as amended. Accordingly, they are unaudited and exclude some disclosures required
  for annual financial statements. Management believes it has made all adjustments, consisting solely of normal recurring accruals,
  necessary for the fair presentation of these interim financial statements.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.35pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">The results of operations for the six
  months ended June 30, 2015 are not necessarily indicative of results that ultimately may be achieved for the remainder of the year.
  The interim unaudited financial statements and notes thereto should be read in conjunction with the financial statements and notes
  thereto included in the Fund&rsquo;s Annual Report on Form 10-K for the fiscal year ended December 31, 2014, as filed with the
  Securities and Exchange Commission (&ldquo;SEC&rdquo;). Certain previously reported June 30, 2014 amounts have been reclassified
  to conform with the current presentation.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 0 0.4in; text-indent: 0.5in">&nbsp;</P>
  
  
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  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 10pt">&nbsp;</P>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <tr style="vertical-align: top">
      <td style="width: 24px; font-size: 12pt; line-height: 115%">&nbsp;</td>
      <td style="width: 24px; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>(2)</b></font></td>
      <td style="text-decoration: underline; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b><u>Liquidity and Financing Arrangements </u></b></font></td></tr>
  </table>
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>Liquidity</B>&mdash;There are several
  factors that may materially affect our liquidity during the reasonably foreseeable future. We view this period as the twelve month
  period from the date of the financial statements in this Form 10-Q, <I>i.e</I>., the period through June 30, 2016. We are evaluating
  the impact of current market conditions on our portfolio company valuations and their ability to provide current income. We have
  followed valuation techniques in a consistent manner; however, we are cognizant of current market conditions that might affect
  future valuations of portfolio securities. We believe that our operating cash flow and cash on hand will be sufficient to meet
  operating requirements and to finance routine follow-on investments, if any, through the next twelve months.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>Cash and Cash Equivalents</B>&mdash;As
  of June 30, 2015, we had cash and cash equivalents of $18.0 million. We had $19.5 million of our net assets of $38.0 million invested
  in portfolio securities.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">As of December 31, 2014, we had cash
  and cash equivalents of $15.7 million. We had $19.7 million of our net assets of $36.2 million invested in portfolio securities.
  We also had $15.1 million of restricted cash and temporary cash investments, including primarily the proceeds of a quarter-end
  margin loan that we incurred to maintain the diversification requirements applicable to a RIC to maintain our pass-through tax
  treatment. Of this amount, $15.0 million was invested in U.S. Treasury bills and $0.1 million represented a required 1% brokerage
  margin deposit. These securities were held by a securities brokerage firm and pledged along with other assets to secure repayment
  of the margin loan. The U.S. Treasury bills were sold on January 2, 2015 and we subsequently repaid this margin loan. The margin
  loan and interest was paid on February 4, 2015.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>Dividends</B>&mdash; We will pay
  out net investment income and/or realized capital gains, if any, on an annual basis as required under the 1940 Act.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>Investment Commitments</B>&mdash;As
  of June 30, 2015, we had no outstanding commitments to our portfolio company investments.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Under certain circumstances, we may
  be called on to make follow-on investments in certain portfolio companies. If we do not have sufficient funds to make follow-on
  investments, the portfolio company in need of the investment may be negatively impacted. Also, our equity interest in the estimated
  fair value of the portfolio company could be reduced.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>RIC Borrowings, Restricted Cash and
  Temporary Cash Investments</B>&mdash;We may periodically borrow sufficient funds to maintain the Fund&rsquo;s RIC status by utilizing
  a margin account with a securities brokerage firm. There is no assurance that such arrangement will be available in the future.
  If we are unable to borrow funds to make qualifying investments, we may no longer qualify as a RIC. We would then be subject to
  corporate income tax on the Fund&rsquo;s net investment income and realized capital gains, and distributions to stockholders would
  be subject to income tax as ordinary dividends. Failure to continue to qualify as a RIC could be materially adverse to us and our
  stockholders.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">We had no RIC borrowings or restricted
  cash as of June 30, 2015.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">As of December 31, 2014, we borrowed
  $15.0 million to maintain our RIC status by utilizing a margin account with a securities brokerage firm. We collateralized such
  borrowings with restricted cash and temporary cash investments in U.S. Treasury bills of $15.1 million. The U.S. Treasury bills
  were sold on January 2, 2015 and the total amount borrowed was repaid at that time. The margin loan and interest was paid on February
  4, 2015.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>Certain Risks and Uncertainties</B>&mdash;
  Market and economic volatility which has become endemic in the past few years has resulted in a relatively limited amount of available
  debt financing for small and medium-sized companies such as Equus and its portfolio companies. Such debt financing generally has
  shorter maturities, higher interest rates and fees, and more restrictive terms than debt facilities available in the past. In addition,
  during these years and continuing into the first six months of 2015, the price of our common stock remained well below our net
  asset value, thereby making it undesirable to issue additional shares of our common stock below net asset value. Because of these
  challenges, our near-term strategies shifted from originating debt and equity investments to preserving liquidity necessary to
  meet our operational needs. Key initiatives that we have previously undertaken to provide necessary liquidity include monetizations,
  the suspension of dividends and the internalization of management. Although we cannot assure you that such initiatives will be
  sufficient, we believe we have sufficient liquidity to meet our operating requirements for the remainder of 2015 and the first
  six months of 2016.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  
  <!-- Field: Page; Sequence: 13 -->
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  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 10pt">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <tr style="vertical-align: top">
      <td style="width: 24px; font-size: 12pt; line-height: 115%">&nbsp;</td>
      <td style="width: 24px; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>(3)</b></font></td>
      <td style="text-decoration: underline; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b><u>Significant Accounting Policies </u></b></font></td></tr>
  </table>
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">The following is a summary of significant
  accounting policies followed by the Fund in the preparation of its financial statements:</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>Use of Estimates</B>&mdash;The preparation
  of financial statements in accordance with GAAP requires us to make estimates and assumptions that affect the reported amounts
  and disclosures in the financial statements. Although we believe the estimates and assumptions used in preparing these financial
  statements and related notes are reasonable in light of known facts and circumstances, actual results could differ from those estimates.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>Valuation of Investments&mdash;</B>We
  follow ASC Topic 820 for measuring fair value. Prior to our election to become a BDC, we also followed the guidance in ASC Topic
  820 in disclosing the fair value reported for all financial instruments that were either impaired or available for sale securities,
  using the definitions provided in Accounting Standards Codification Topic 320, &ldquo;Investments &ndash; Debt and Equity Securities&rdquo;
  (&ldquo;ASC Topic 320&rdquo;). Fair value is the price that would be received to sell an asset or paid to transfer a liability
  in an orderly transaction between market participants at the measurement date and sets out a fair value hierarchy. The fair value
  hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest
  priority to unobservable inputs (Level 3). Inputs are broadly defined under ASC Topic 820 as assumptions market participants would
  use in pricing an asset or liability. The three levels of the fair value hierarchy under ASC Topic 820 are described below:</P>
  
  <P STYLE="font: 10.5pt/normal Trebuchet MS, Times, Serif; margin: 0 0 0 0.5in; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Level 1&mdash;Unadjusted quoted prices
  in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Level 2&mdash;Inputs other than quoted
  prices within Level 1 that are observable for the asset or liability, either directly or indirectly; and fair value is determined
  through the use of models or other valuation methodologies.</P>
  
  <P STYLE="font: 10.5pt/normal Trebuchet MS, Times, Serif; margin: 0 0 0 0.5in; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Level 3&mdash;Inputs are unobservable
  for the asset or liability and include situations where there is little, if any, market activity for the asset or liability. The
  inputs into the determination of fair value are based upon the best information under the circumstances and may require significant
  management judgment or estimation.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">We consider a two-step process when
  appraising investments of privately held companies. The first step involves determining the enterprise value of the portfolio company.
  During this step, we consider three different valuation approaches: a market approach, an income approach, and a cost approach.
  The particular facts and circumstances of each portfolio company determine which approach, or combination of approaches, will be
  utilized. The second step when appraising equity investments of privately held companies involves allocating value to the various
  debt and equity securities of the company. We allocate value to these securities based on their relative priorities. For equity
  securities such as warrants, we may also incorporate alternative methodologies including the Black-Scholes Option Pricing Model.
  Yield analysis is also employed to determine if a debt security has been impaired.</P>
  
  <P STYLE="font: 10.5pt/normal Trebuchet MS, Times, Serif; margin: 0 0 0 0.5in; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">In certain cases, the inputs used to
  measure fair value may fall into different levels of the fair value hierarchy. In such cases, an investment&rsquo;s level within
  the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. Our assessment
  of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors
  specific to the investment.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Investments for which prices are not
  observable are generally private investments in the debt and equity securities of operating companies. The primary valuation method
  used to estimate the fair value of these Level 3 investments is the discounted cash flow method (although a liquidation analysis,
  option theoretical, or other methodology may be used when more appropriate). The discounted cash flow approach to determine fair
  value (or a range of fair values) involves applying an appropriate discount rate(s) to the estimated future cash flows using various
  relevant factors depending on investment type, including comparing the latest arm&rsquo;s length or market transactions involving
  the subject security to the selected benchmark credit spread, assumed growth rate (in cash flows), and capitalization rates/multiples
  (for determining terminal values of underlying portfolio companies). The valuation based on the inputs determined to be the most
  reasonable and probable is used as the fair value of the investment. The determination of fair value using these methodologies
  may take into consideration a range of factors including, but not limited to, the price at which the investment was acquired, the
  nature of the investment, local market conditions, trading values on public exchanges for comparable securities, current and projected
  operating performance, financing transactions subsequent to the acquisition of the investment and anticipated financing transactions
  after the valuation date. Application of these valuation methodologies involves a significant degree of judgment by management.
  Fair values of new investments are generally assumed to be equal to their cost to the Company for up to three months after their
  initial purchase.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-indent: 0.5in">&nbsp;</P>
  
  
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  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 10pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">To assess the reasonableness of the
  discounted cash flow approach, the fair value of equity securities, including warrants, in portfolio companies may also consider
  the market approach&mdash;that is, through analyzing and applying to the underlying portfolio companies, market valuation multiples
  of publicly-traded firms engaged in businesses similar to those of the portfolio companies. The market approach to determining
  the fair value of a portfolio company&rsquo;s equity security (or securities) will typically involve: (1) applying to the portfolio
  company&rsquo;s trailing twelve months (or current year projected) EBITDA a low to high range of enterprise value to EBITDA multiples
  that are derived from an analysis of publicly-traded comparable companies, in order to arrive at a range of enterprise values for
  the portfolio company; (2) subtracting from the range of calculated enterprise values the outstanding balances of any debt or equity
  securities that would be senior in right of payment to the equity securities we hold; and (3) multiplying the range of equity values
  derived therefrom by our ownership share of such equity tranche in order to arrive at a range of fair values for our equity security
  (or securities). Application of these valuation methodologies involves a significant degree of judgment by Management.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Equity in a portfolio company that invests
  in loans will typically be valued by arriving at a fair value of such vehicle&rsquo;s loan assets (plus, when appropriate, the
  carrying value of certain other assets), and deducting the book value or fair value (as appropriate) of such vehicle&rsquo;s liabilities
  to arrive at a fair value for the equity. When appropriate, in order to recognize value that would be created by growth opportunities
  of such portfolio company, equity in a portfolio company may also be valued by taking into consideration the magnitude, timing,
  and effective life of its expected future investments in loans.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Due to the inherent uncertainty of determining
  the fair value of Level 3 investments that do not have a readily available market value, the fair value of the investments may
  differ significantly from the values that would have been used had a ready market existed for such investments and may differ materially
  from the values that may ultimately be received or settled. Further, such investments are generally subject to legal and other
  restrictions or otherwise are less liquid than publicly traded instruments. If we were required to liquidate a portfolio investment
  in a forced or liquidation sale, we might realize significantly less than the value at which such investment had previously been
  recorded. With respect to Level 3 investments, where sufficient market quotations are not readily available or for which no or
  an insufficient number of indicative prices from pricing services or brokers or dealers have been received, we undertake, on a
  quarterly basis, a valuation process as described below:</P>
  
  <P STYLE="font: 10.5pt/normal Trebuchet MS, Times, Serif; margin: 0 0 0 0.5in; text-indent: 0.5in">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="width: 100%; font: 11pt Calibri, Helvetica, Sans-Serif">
  <tr style="vertical-align: top">
      <td style="width: 73px; text-align: right; line-height: 115%">&bull;</td>
      <td style="width: 7px">&nbsp;</td>
      <td style="text-align: justify; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">For each debt investment, a basic credit review process is completed. The risk profile on every credit facility is reviewed and either reaffirmed or revised by our Investment Committee.</font></td></tr>
  </table>
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="width: 100%; font: 11pt Calibri, Helvetica, Sans-Serif">
  <tr style="vertical-align: top">
      <td style="width: 73px; text-align: right; line-height: 115%">&bull;</td>
      <td style="width: 7px">&nbsp;</td>
      <td style="text-align: justify; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Each portfolio company or investment is valued by an investment professional</font></td></tr>
  </table>
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="width: 100%; font: 11pt Calibri, Helvetica, Sans-Serif">
  <tr style="vertical-align: top">
      <td style="width: 73px; text-align: right; line-height: 115%">&bull;</td>
      <td style="width: 7px">&nbsp;</td>
      <td style="text-align: justify; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Third party valuation firm(s) are engaged to provide valuation services as requested, by reviewing Management&rsquo;s preliminary valuations and/or analysis of the portfolio investment in question. For investments with a fair value exceeding $2.5 million, our Management&rsquo;s preliminary fair value conclusions on each of the Fund&rsquo;s assets for which sufficient market quotations are not readily available is reviewed and assessed by a third-party valuation firm at least once in every 12-month period, and more often as determined by the Audit Committee or required by our valuation policy. Such valuation assessment may be in the form of positive assurance, range of values or another valuation method based on the discretion of our Board.</font></td></tr>
  </table>
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="width: 100%; font: 11pt Calibri, Helvetica, Sans-Serif">
  <tr style="vertical-align: top">
      <td style="width: 73px; text-align: right; line-height: 115%">&bull;</td>
      <td style="width: 7px">&nbsp;</td>
      <td style="text-align: justify; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">The Audit Committee reviews the preliminary valuations of our Management and independent valuation firms and, if appropriate, recommends the approval of the valuations by the Board.</font></td></tr>
  </table>
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="width: 100%; font: 11pt Calibri, Helvetica, Sans-Serif">
  <tr style="vertical-align: top">
      <td style="width: 73px; text-align: right; line-height: 115%">&bull;</td>
      <td style="width: 7px">&nbsp;</td>
      <td style="text-align: justify; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Our Board discusses valuations and determines the fair value of each investment in the portfolio in good faith based on the input of Management, the Audit Committee and, where appropriate, the respective independent valuation firms.</font></td></tr>
  </table>
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">The following sections describe the
  valuation techniques we use to measure different financial instruments at fair value and include the levels within the fair value
  hierarchy in which the financial instruments are categorized.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>Market approach</B> &ndash; The market
  approach typically employed by Management calculates the enterprise value of a company as a multiple of earnings before interest,
  taxes, depreciation and amortization (&ldquo;EBITDA&rdquo;) generated by the company for the trailing twelve month period. Adjustments
  to the company&rsquo;s EBITDA, including those for non-recurring items, may be considered. Multiples are estimated based on current
  market conditions and past experience in the private company marketplace and are subjective in nature. We will apply liquidity
  and other discounts as deemed appropriate to equity valuations where applicable. We may also use, when available, third-party transactions
  in a portfolio company&rsquo;s securities as the basis of valuation (the &ldquo;private market method&rdquo;). The private market
  method will be used only with respect to completed transactions or firm offers made by sophisticated, independent investors.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  
  <!-- Field: Page; Sequence: 15 -->
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  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 10pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>Income approach</B> &ndash; The income
  approach typically utilized by our Management calculates the enterprise value of a company utilizing a discounted cash flow model
  incorporating projected future cash flows of the company. Projected future cash flows consider the historical performance of the
  company as well as current and projected market participant performance. Discount rates are estimated based on current market conditions
  and past experience in the private company marketplace and are subjective in nature. We will apply liquidity and other discounts
  as deemed appropriate to equity valuations where applicable.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>Asset approach</B> &ndash; We consider
  the asset approach to determine the fair value of significantly deteriorated investments demonstrating circumstances indicative
  of a liquidation analysis. This situation may arise when a portfolio company: 1) cannot generate adequate cash flow to meet the
  principal and interest payments on its indebtedness; 2) is not successful in refinancing its debt upon maturity; 3) we believe
  the credit quality of a loan has deteriorated due to changes in the business and underlying asset or market conditions may result
  in the company&rsquo;s inability to meet future obligations; or 4) the portfolio company&rsquo;s reorganization or bankruptcy.
  Consideration is also given as to whether a liquidation event would be orderly or forced.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">We base adjustments upon such factors
  as the portfolio company&rsquo;s earnings, cash flow and net worth, the market prices for similar securities of comparable companies,
  an assessment of the company&rsquo;s current and future financial prospects and various other factors and assumptions. In the case
  of unsuccessful or substantially declining operations, we may base a portfolio company&rsquo;s fair value upon the company&rsquo;s
  estimated liquidation value. Fair valuations are necessarily subjective, and our estimate of fair value may differ materially from
  amounts actually received upon the disposition of its portfolio securities. Also, any failure by a portfolio company to achieve
  its business plan or obtain and maintain its financing arrangements could result in increased volatility and result in a significant
  and rapid change in its value.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Our general intent is to hold our loans
  to maturity when appraising our privately held debt investments. As such, we believe that the fair value will not exceed the cost
  of the investment. However, in addition to the previously described analysis involving allocation of value to the debt instrument,
  we will often perform a yield analysis to determine if a debt security has been impaired. Certificates of deposit purchased by
  the Fund generally will be valued at their face value, plus interest accrued to the date of valuation.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">For most of our investments, market
  quotations are not available. With respect to investments for which market quotations are not readily available or when such market
  quotations are deemed not to represent fair value, our Board has approved a multi-step valuation process each quarter, as described
  below:</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="width: 100%; font: 11pt Calibri, Helvetica, Sans-Serif">
  <tr style="vertical-align: top">
      <td style="width: 47px; text-align: right; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">1.</font></td>
      <td style="width: 7px">&nbsp;</td>
      <td style="text-align: justify; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Each portfolio company or investment is reviewed by our investment professionals and, where necessary, with independent valuation firms engaged by the Fund;</font></td></tr>
  </table>
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="width: 100%; font: 11pt Calibri, Helvetica, Sans-Serif">
  <tr style="vertical-align: top">
      <td style="width: 47px; text-align: right; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">2.</font></td>
      <td style="width: 7px">&nbsp;</td>
      <td style="text-align: justify; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">The independent valuation firms conduct independent valuations and make their own independent assessments;</font></td></tr>
  </table>
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="width: 100%; font: 11pt Calibri, Helvetica, Sans-Serif">
  <tr style="vertical-align: top">
      <td style="width: 47px; text-align: right; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">3.</font></td>
      <td style="width: 7px">&nbsp;</td>
      <td style="text-align: justify; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">The Audit Committee of our Board reviews and discusses the preliminary valuation of the Fund and that of the independent valuation firms; and</font></td></tr>
  </table>
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="width: 100%; font: 11pt Calibri, Helvetica, Sans-Serif">
  <tr style="vertical-align: top">
      <td style="width: 47px; text-align: right; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">4.</font></td>
      <td style="width: 7px">&nbsp;</td>
      <td style="text-align: justify; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">The Board discusses valuations and determines the fair value of each investment in our portfolio in good faith based on the input of our Management, the respective independent valuation firm and the Audit Committee.</font></td></tr>
  </table>
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Investments are valued utilizing a yield
  analysis, enterprise value (&ldquo;EV&rdquo;) analysis, net asset value analysis, liquidation analysis, discounted cash flow analysis,
  or a combination of methods, as appropriate. The yield analysis uses loan spreads and other relevant information implied by market
  data involving identical or comparable assets or liabilities. Under the EV analysis, the EV of a portfolio company is first determined
  and allocated over the portfolio company&rsquo;s securities in order of their preference relative to one another (i.e., &ldquo;waterfall&rdquo;
  allocation). To determine the EV, we typically use a market multiples approach that considers relevant and applicable market trading
  data of guideline public companies, transaction metrics from precedent M&amp;A transactions and/or a discounted cash flow analysis.
  The net asset value analysis is used to derive a value of an underlying investment (such as real estate property) by dividing a
  relevant earnings stream by an appropriate capitalization rate. For this purpose, we consider capitalization rates for similar
  properties as may be obtained from guideline public companies and/or relevant transactions. The liquidation analysis is intended
  to approximate the net recovery value of an investment based on, among other things, assumptions regarding liquidation proceeds
  based on a hypothetical liquidation of a portfolio company&rsquo;s assets. The discounted cash flow analysis uses valuation techniques
  to convert future cash flows or earnings to a range of fair values from which a single estimate may be derived utilizing an appropriate
  discount rate. The measurement is based on the net present value indicated by current market expectations about those future amounts.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  
  <!-- Field: Page; Sequence: 16 -->
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      <DIV STYLE="page-break-before: always; margin-top: 6pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
      <!-- Field: /Page -->
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 10pt">&nbsp;</P>
  
  <P STYLE="font: 10.5pt/normal Trebuchet MS, Times, Serif; margin: 0 0 0 0.5in; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">In applying these methodologies, additional
  factors that we consider in fair value pricing our investments may include, as we deem relevant: security covenants, call protection
  provisions, and information rights; the nature and realizable value of any collateral; the portfolio company&rsquo;s ability to
  make payments; the principal markets in which the portfolio company does business; publicly available financial ratios of peer
  companies; the principal market; and enterprise values, among other factors.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Because of the inherent uncertainty
  of the valuation of portfolio securities which do not have readily ascertainable market values, amounting to $15.3 million and
  $15.7 million as of June 30, 2015 and December 31, 2014, respectively, our fair value determinations may materially differ from
  the values that would have been used had a ready market existed for the securities. As of June 30, 2015, one of our portfolio investments,
  415,946 common shares of MVC, was publicly listed on the NYSE. As of December 31, 2014, one of our portfolio investments, 404,968
  common shares of MVC was publicly listed on the NYSE and our holding of &euro;1,200,790 [$1.5 million] in OPG notes was publicly
  listed on the Luxembourg Stock Exchange.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">We adjust our net asset value for the
  changes in the value of our publicly held securities, if applicable, and material changes in the value of private securities, generally
  determined on a quarterly basis or as announced in a press release, and report those amounts to Lipper Analytical Services, Inc.
  Our net asset value appears in various publications, including <I>Barron&rsquo;s </I>and <I>The Wall Street Journal</I>.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">For loan and debt securities held for
  longer than one year, the Fund will often perform a yield analysis assuming a hypothetical current sale of the security. The yield
  analysis considers changes in interest rates and changes in leverage levels of the portfolio company as compared to the market
  interest rates and leverage levels. Assuming the credit quality of the portfolio company remains stable, the Fund will use the
  value determined by the yield analysis as the fair value for that security.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">We will record unrealized depreciation
  on investments when we determine that the fair value of a security is less than its cost basis, and will record unrealized appreciation
  when we determine that the fair value is greater than its cost basis.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">We assess the levels of the investments
  at each measurement date, and transfers between levels are recognized on the subsequent measurement date closest in time to the
  actual date of the event or change in circumstances that caused the transfer. There were no transfers among Level 1, 2 and 3 for
  the quarter ended June 30, 2015 and the year ended December 31, 2014.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">As of June 30, 2015, investments measured
  at fair value on a recurring basis are categorized in the tables below based on the lowest level of significant input to the valuations:</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"></P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="font-size: 8pt; font-weight: bold; text-align: center"></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt"><B>&nbsp;</B></FONT></TD>
      <TD COLSPAN="15" STYLE="text-align: center; vertical-align: bottom; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 10pt"><B>Fair
      Value Measurements as of June 30, 2015</B></FONT></TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="font-weight: bold; font-style: italic; border-bottom: Black 1pt solid">(in thousands)</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Total</TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><P STYLE="margin-top: 0; margin-bottom: 0">Quoted Prices</P>
                                                                                                                    <P STYLE="margin-top: 0; margin-bottom: 0">in Active</P>
                                                                                                                    <P STYLE="margin-top: 0; margin-bottom: 0">Markets for</P>
                                                                                                                    <P STYLE="margin-top: 0; margin-bottom: 0">Identical</P>
                                                                                                                    <P STYLE="margin-top: 0; margin-bottom: 0">Assets</P>
                                                                                  <P STYLE="margin-top: 0; margin-bottom: 0">(Level 1)</P></TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><P STYLE="margin-top: 0; margin-bottom: 0">Significant</P>
                                                                                                                    <P STYLE="margin-top: 0; margin-bottom: 0">Other</P>
                                                                                                                    <P STYLE="margin-top: 0; margin-bottom: 0">Observable</P>
                                                                                                                    <P STYLE="margin-top: 0; margin-bottom: 0">Inputs</P>
                                                                                  <P STYLE="margin-top: 0; margin-bottom: 0">(Level 2)</P></TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><P STYLE="margin-top: 0; margin-bottom: 0">Significant</P>
                                                                                                                    <P STYLE="margin-top: 0; margin-bottom: 0">Unobservable</P>
                                                                                                                    <P STYLE="margin-top: 0; margin-bottom: 0">Inputs</P>
                                                                                  <P STYLE="margin-top: 0; margin-bottom: 0">(Level 3)</P></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD>Assets</TD><TD>&nbsp;</TD>
      <TD COLSPAN="3">&nbsp;</TD><TD>&nbsp;</TD>
      <TD COLSPAN="3">&nbsp;</TD><TD>&nbsp;</TD>
      <TD COLSPAN="3">&nbsp;</TD><TD>&nbsp;</TD>
      <TD COLSPAN="3">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD>&nbsp;&nbsp;Investments:</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="width: 40%; text-align: left; padding-left: 10pt">Control investments</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">8,715</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">8,715</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-left: 10pt">Affiliate investments</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,627</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,627</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-left: 10pt">Non-affiliate investments - related party</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,243</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,243</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="padding-bottom: 1pt; padding-left: 10pt">Non-affiliate investments</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">915</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">915</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-bottom: 2.5pt">Total investments in portfolio securities</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">19,500</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">4,243</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">15,257</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
  </TABLE>
  
  
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"></P>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>
  
  
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      <DIV STYLE="page-break-before: always; margin-top: 6pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
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  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">As of December 31, 2014, investments
  measured at fair value on a recurring basis are categorized in the tables below based on the lowest level of significant input
  to the valuations:</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr>
      <TD STYLE="vertical-align: bottom">&nbsp;</td>
      <TD STYLE="line-height: 115%">&nbsp;</td>
      <TD COLSPAN="15" STYLE="text-align: center; line-height: 115%; vertical-align: bottom; border-bottom: Black 1pt solid"><FONT STYLE="font: 9pt Times New Roman, Times, Serif"><B>Fair Value Measurements as of December 31, 2014</B></FONT></td></tr>
  <tr style="vertical-align: bottom">
      <TD STYLE="border-bottom: black 1pt solid; font-size: 10pt; line-height: 115%"><font style="font: 9pt Times New Roman, Times, Serif"><b><i>(in thousands)</i></b></font></td>
      <TD STYLE="line-height: 115%">&nbsp;</td>
      <TD COLSPAN="3" STYLE="border-bottom: black 1pt solid; text-align: center; font-size: 10pt; line-height: 115%"><font style="font: 9pt Times New Roman, Times, Serif"><b>Total</b></font></td>
      <TD STYLE="line-height: 115%">&nbsp;</td>
      <td colspan="3" style="border-bottom: black 1pt solid">
          <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Quoted Prices</B></P>
          <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B>in Active</B></P>
          <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B>Markets for</B></P>
          <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B>Identical</B></P>
          <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B>Assets</B>&nbsp;</P>
          <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>(Level 1)</b></P></td>
      <TD STYLE="line-height: 115%">&nbsp;</td>
      <td colspan="3" style="border-bottom: black 1pt solid">
          <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Significant</B></P>
          <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B>Other</B></P>
          <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B>Observable</B></P>
          <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B>Inputs</b></P>
          <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>(Level 2)</b></P></td>
      <TD STYLE="line-height: 115%">&nbsp;</td>
      <td colspan="3" style="border-bottom: black 1pt solid">
          <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Significant</B></P>
          <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B>Unobservable</B></P>
          <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B>Inputs</b></P>
          <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>(Level 3)</b></P></td></tr>
  <tr style="vertical-align: bottom; background-color: #CCEEFF">
      <TD STYLE="font-size: 9pt; line-height: 115%"><font style="font: 9pt Times New Roman, Times, Serif">Assets</font></td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="text-align: right; font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="text-align: right; font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="text-align: right; font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="text-align: right; font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td></tr>
  <tr style="vertical-align: bottom; background-color: white">
      <TD STYLE="font-size: 9pt; line-height: 115%"><font style="font: 9pt Times New Roman, Times, Serif">&nbsp;&nbsp;Investments:</font></td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="text-align: right; font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="text-align: right; font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="text-align: right; font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="text-align: right; font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td></tr>
  <tr style="vertical-align: bottom; background-color: #CCEEFF">
      <TD STYLE="width: 40%; padding-left: 10pt; font-size: 9pt; line-height: 115%"><font style="font: 9pt Times New Roman, Times, Serif">Control investments</font></td>
      <TD STYLE="width: 1%; font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="width: 1%; font-size: 9pt; line-height: 115%"><font style="font: 9pt Times New Roman, Times, Serif">$</font></td>
      <TD STYLE="width: 12%; text-align: right; font-size: 9pt; line-height: 115%"><font style="font: 9pt Times New Roman, Times, Serif">13,173</font></td>
      <TD STYLE="width: 1%; font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="width: 1%; font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="width: 1%; font-size: 9pt; line-height: 115%"><font style="font: 9pt Times New Roman, Times, Serif">$</font></td>
      <TD STYLE="width: 12%; text-align: right; font-size: 9pt; line-height: 115%"><font style="font: 9pt Times New Roman, Times, Serif">&mdash;&nbsp;&nbsp;</font></td>
      <TD STYLE="width: 1%; font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="width: 1%; font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="width: 1%; font-size: 9pt; line-height: 115%"><font style="font: 9pt Times New Roman, Times, Serif">$</font></td>
      <TD STYLE="width: 12%; text-align: right; font-size: 9pt; line-height: 115%"><font style="font: 9pt Times New Roman, Times, Serif">&mdash;&nbsp;&nbsp;</font></td>
      <TD STYLE="width: 1%; font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="width: 1%; font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="width: 1%; font-size: 9pt; line-height: 115%"><font style="font: 9pt Times New Roman, Times, Serif">$</font></td>
      <TD STYLE="width: 12%; text-align: right; font-size: 9pt; line-height: 115%"><font style="font: 9pt Times New Roman, Times, Serif">13,173</font></td>
      <TD STYLE="width: 1%; font-size: 9pt; line-height: 115%">&nbsp;</td></tr>
  <tr style="vertical-align: bottom; background-color: white">
      <TD STYLE="padding-left: 10pt; font-size: 9pt; line-height: 115%"><font style="font: 9pt Times New Roman, Times, Serif">Affiliate investments</font></td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="text-align: right; font-size: 9pt; line-height: 115%"><font style="font: 9pt Times New Roman, Times, Serif">960</font></td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="text-align: right; font-size: 9pt; line-height: 115%"><font style="font: 9pt Times New Roman, Times, Serif">&mdash;&nbsp;&nbsp;</font></td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="text-align: right; font-size: 9pt; line-height: 115%"><font style="font: 9pt Times New Roman, Times, Serif">&mdash;&nbsp;&nbsp;</font></td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="text-align: right; font-size: 9pt; line-height: 115%"><font style="font: 9pt Times New Roman, Times, Serif">960</font></td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td></tr>
  <tr style="vertical-align: bottom; background-color: #CCEEFF">
      <TD STYLE="padding-left: 10pt; font-size: 9pt; line-height: 115%"><font style="font: 9pt Times New Roman, Times, Serif">Non-affiliate investments - related party</font></td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="text-align: right; font-size: 9pt; line-height: 115%"><font style="font: 9pt Times New Roman, Times, Serif">3,981</font></td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="text-align: right; font-size: 9pt; line-height: 115%"><font style="font: 9pt Times New Roman, Times, Serif">3,981</font></td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="text-align: right; font-size: 9pt; line-height: 115%"><font style="font: 9pt Times New Roman, Times, Serif">&mdash;&nbsp;&nbsp;</font></td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="text-align: right; font-size: 9pt; line-height: 115%"><font style="font: 9pt Times New Roman, Times, Serif">&mdash;&nbsp;&nbsp;</font></td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td></tr>
  <tr style="vertical-align: bottom; background-color: white">
      <TD STYLE="padding-left: 10pt; font-size: 9pt; line-height: 115%"><font style="font: 9pt Times New Roman, Times, Serif">Non-affiliate investments</font></td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="border-bottom: black 1pt solid; font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="border-bottom: black 1pt solid; text-align: right; font-size: 9pt; line-height: 115%"><font style="font: 9pt Times New Roman, Times, Serif">1,532</font></td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="border-bottom: black 1pt solid; font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="border-bottom: black 1pt solid; text-align: right; font-size: 9pt; line-height: 115%"><font style="font: 9pt Times New Roman, Times, Serif">&mdash;&nbsp;&nbsp;</font></td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="border-bottom: black 1pt solid; font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="border-bottom: black 1pt solid; text-align: right; font-size: 9pt; line-height: 115%"><font style="font: 9pt Times New Roman, Times, Serif">&mdash;&nbsp;&nbsp;</font></td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="border-bottom: black 1pt solid; font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="border-bottom: black 1pt solid; text-align: right; font-size: 9pt; line-height: 115%"><font style="font: 9pt Times New Roman, Times, Serif">1,532</font></td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td></tr>
  <tr style="vertical-align: bottom; background-color: #CCEEFF">
      <TD STYLE="font-size: 9pt; line-height: 115%"><font style="font: 9pt Times New Roman, Times, Serif">Total investments</font></td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="text-align: right; font-size: 9pt; line-height: 115%"><font style="font: 9pt Times New Roman, Times, Serif">19,646</font></td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="text-align: right; font-size: 9pt; line-height: 115%"><font style="font: 9pt Times New Roman, Times, Serif">3,981</font></td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="text-align: right; font-size: 9pt; line-height: 115%"><font style="font: 9pt Times New Roman, Times, Serif">&mdash;&nbsp;&nbsp;</font></td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="text-align: right; font-size: 9pt; line-height: 115%"><font style="font: 9pt Times New Roman, Times, Serif">15,665</font></td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td></tr>
  <tr style="vertical-align: bottom; background-color: white">
      <TD STYLE="font-size: 9pt; line-height: 115%"><font style="font: 9pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Temporary cash investments</font></td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="border-bottom: black 1pt solid; font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="border-bottom: black 1pt solid; text-align: right; font-size: 9pt; line-height: 115%"><font style="font: 9pt Times New Roman, Times, Serif">14,996</font></td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="border-bottom: black 1pt solid; font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="border-bottom: black 1pt solid; text-align: right; font-size: 9pt; line-height: 115%"><font style="font: 9pt Times New Roman, Times, Serif">14,996</font></td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="border-bottom: black 1pt solid; font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="border-bottom: black 1pt solid; text-align: right; font-size: 9pt; line-height: 115%"><font style="font: 9pt Times New Roman, Times, Serif">&mdash;&nbsp;&nbsp;</font></td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="border-bottom: black 1pt solid; font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="border-bottom: black 1pt solid; text-align: right; font-size: 9pt; line-height: 115%"><font style="font: 9pt Times New Roman, Times, Serif">&mdash;&nbsp;&nbsp;</font></td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td></tr>
  <tr style="vertical-align: bottom; background-color: #CCEEFF">
      <TD STYLE="font-size: 9pt; line-height: 115%"><font style="font: 9pt Times New Roman, Times, Serif">Total investments and temporary cash investments</font></td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="border-bottom: black 2.25pt double; font-size: 9pt; line-height: 115%"><font style="font: 9pt Times New Roman, Times, Serif">$</font></td>
      <TD STYLE="border-bottom: black 2.25pt double; text-align: right; font-size: 9pt; line-height: 115%"><font style="font: 9pt Times New Roman, Times, Serif">34,642</font></td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="border-bottom: black 2.25pt double; font-size: 9pt; line-height: 115%"><font style="font: 9pt Times New Roman, Times, Serif">$</font></td>
      <TD STYLE="border-bottom: black 2.25pt double; text-align: right; font-size: 9pt; line-height: 115%"><font style="font: 9pt Times New Roman, Times, Serif">18,977</font></td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="border-bottom: black 2.25pt double; font-size: 9pt; line-height: 115%"><font style="font: 9pt Times New Roman, Times, Serif">$</font></td>
      <TD STYLE="border-bottom: black 2.25pt double; text-align: right; font-size: 9pt; line-height: 115%"><font style="font: 9pt Times New Roman, Times, Serif">&mdash;&nbsp;&nbsp;</font></td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td>
      <TD STYLE="border-bottom: black 2.25pt double; font-size: 9pt; line-height: 115%"><font style="font: 9pt Times New Roman, Times, Serif">$</font></td>
      <TD STYLE="border-bottom: black 2.25pt double; text-align: right; font-size: 9pt; line-height: 115%"><font style="font: 9pt Times New Roman, Times, Serif">15,665</font></td>
      <TD STYLE="font-size: 9pt; line-height: 115%">&nbsp;</td></tr>
  </table>
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">The following table provides a reconciliation
  of fair value changes during the six months ended June 30, 2015 for all investments for which we determine fair value using unobservable
  (Level 3) factors:</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 0.4in"></P>
  
  
  
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 0.4in"></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 0.4in; text-indent: 0.5in"></P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="font-size: 8pt; font-weight: bold; text-align: center"></TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="15" STYLE="text-align: center; vertical-align: bottom; border-bottom: Black 1pt solid"><B>Fair value measurements
      using significant unobservable inputs (Level 3)</B></TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="font-weight: bold; font-style: italic; border-bottom: Black 1pt solid">(in thousands)</TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 1pt solid"><B>Control Investments</B></TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 1pt solid"><B>Affiliate
      Investments</B></TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt"><B>&nbsp;</B></TD>
      <TD COLSPAN="3" STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 1pt solid"><B>Non-affiliate Investments</B></TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt"><B>&nbsp;</B></TD>
      <TD COLSPAN="3" STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: Black 1pt solid"><B>Total</B></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="width: 40%">Fair value as of December&nbsp;31, 2014</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">13,173</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">960</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">1,532</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">15,665</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">Realized gains (losses)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,850</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">372</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,478</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">Change in unrealized appreciation (depreciation)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,550</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,667</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(580</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,637</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">Purchases of portfolio securities</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">54</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">54</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-bottom: 1pt">Proceeds from sales/dispositions</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(3,158</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(463</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(3,621</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="padding-bottom: 2.5pt">Fair value as of June 30, 2015 (unaudited)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">8,715</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">5,627</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">915</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">15,257</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
  </TABLE>
  
  
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 0.4in; text-indent: 0.5in"></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">The following table provides a reconciliation
  of fair value changes during the six months ended June 30, 2014 for all investments for which we determine fair value using unobservable
  (Level 3) factors:</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 27pt"></P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="font-size: 8pt; font-weight: bold; text-align: center"></TD><TD STYLE="padding-bottom: 1pt"><B>&nbsp;</B></TD>
      <TD COLSPAN="15" STYLE="text-align: center; vertical-align: bottom; border-bottom: Black 1pt solid"><B>Fair value measurements using significant unobservable
      inputs (Level 3)</B></TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="font-weight: bold; font-style: italic; border-bottom: Black 1pt solid">(in thousands)</TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><P STYLE="margin-top: 0; margin-bottom: 0">Control</P>
                                                                                  <P STYLE="margin-top: 0; margin-bottom: 0">Investments</P></TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><P STYLE="margin-top: 0; margin-bottom: 0">Affiliate</P>
                                                                                  <P STYLE="margin-top: 0; margin-bottom: 0">Investments</P></TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><P STYLE="margin-top: 0; margin-bottom: 0">Non-affiliate</P>
                                                                                  <P STYLE="margin-top: 0; margin-bottom: 0">Investments</P></TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Total</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="width: 40%">Fair value as of December&nbsp;31, 2013</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">11,105</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">250</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">1,980</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">13,335</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">Realized gains (losses)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(63</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(63</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">Change in unrealized appreciation (depreciation)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">800</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">718</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(21</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,497</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">Purchases of portfolio securities</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">139</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">117</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">256</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-bottom: 1pt">Proceeds from sales/dispositions</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">63</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">63</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="padding-bottom: 2.5pt">Fair value as of June 30, 2014 (unaudited)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">12,044</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">150</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">2,076</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">15,088</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
  </TABLE>
  
  
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 27pt"></P>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>Foreign Exchange&mdash;</B>We record
  temporary changes in foreign exchange rates of portfolio securities denominated in foreign currencies as changes in fair value.
  These changes are therefore reflected as unrealized gains or losses until realized.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>Investment Transactions</B>&mdash;Investment
  transactions are recorded on the accrual method. Realized gains and losses on investments sold are computed on a specific identification
  basis.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  
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  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 10pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">We classify our investments in accordance
  with the requirements of the 1940 Act. Under the 1940 Act, &ldquo;Control Investments&rdquo; are defined as investments in companies
  in which the Fund owns more than 25% of the voting securities or maintains greater than 50% of the board representation. Under
  the 1940 Act, &ldquo;Affiliate Investments&rdquo; are defined as those non-control investments in companies in which we own between
  5% and 25% of the voting securities. Under the 1940 Act, &ldquo;Non-affiliate Investments&rdquo; are defined as investments that
  are neither Control Investments nor Affiliate Investments.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">As of June 30, 2015 and December 31,
  2014, we had no outstanding commitments to our portfolio company investments; however, under certain circumstances, we may be called
  on to make follow-on investments in certain portfolio companies. If we do not have sufficient funds to make follow-on investments,
  the portfolio company in need of the investment may be negatively impacted. Also, our equity interest in the estimated fair value
  of the portfolio company could be reduced. Follow-on investments may include capital infusions which are expenditures made directly
  to the portfolio company to ensure that operations are completed, thereby allowing the portfolio company to generate cash flows
  to service the debt.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>Interest Income Recognition</B>&mdash;We
  record interest income, adjusted for amortization of premium and accretion of discount, on an accrual basis to the extent that
  we expect to collect such amounts. We accrete or amortize discounts and premiums on securities purchased over the life of the respective
  security using the effective yield method. The amortized cost of investments represents the original cost adjusted for the accretion
  of discount and/or amortization of premium on debt securities. We stop accruing interest on investments when we determine that
  interest is no longer collectible. We may also impair the accrued interest when we determine that all or a portion of the current
  accrual is uncollectible. If we receive any cash after determining that interest is no longer collectible, we treat such cash as
  payment on the principal balance until the entire principal balance has been repaid, before we recognize any additional interest
  income. We will write off uncollectible interest upon the occurrence of a definitive event such as a sale, bankruptcy, or reorganization
  of the relevant portfolio interest.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>Payment in Kind Interest (PIK)</B>&mdash;We
  have loans in our portfolio that may pay PIK interest. We add PIK interest, if any, computed at the contractual rate specified
  in each loan agreement, to the principal balance of the loan and recorded as interest income. To maintain our status as a RIC,
  we must pay out to stockholders this non-cash source of income in the form of dividends even if we have not yet collected any cash
  in respect of such investments. We will continue to pay out net investment income and/or realized capital gains, if any, on an
  annual basis as required under the Investment Company Act of 1940.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>Cash Flows</B>&mdash;For purposes
  of the Statements of Cash Flows, we consider all highly liquid temporary cash investments purchased with an original maturity of
  three months or less to be cash equivalents. We include our investing activities within cash flows from operations. We exclude
  &ldquo;Restricted Cash and Temporary Cash Investments&rdquo; used for purposes of complying with RIC requirements from cash equivalents.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>Taxes</B>&mdash;We intend to comply
  with the requirements of the Internal Revenue Code necessary to qualify as a regulated investment company and, as such, will not
  be subject to federal income taxes on otherwise taxable income (including net realized capital gains) which is distributed to stockholders.
  Therefore, no provision for federal income taxes is recorded in the financial statements. We borrow money from time to time to
  maintain our tax status under the Internal Revenue Code as a RIC. See Note 1 for discussion of Taxable Subsidiaries and see Note
  2 for further discussion of the Fund&rsquo;s RIC borrowings.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">All corporations incorporated in the
  State of Delaware are required to file an Annual Report and to pay a franchise tax. As a result, we paid Delaware Franchise tax
  in the amount of $0.02 million for the year ended December 31, 2014.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Texas margin tax applies to legal entities
  conducting business in Texas. The margin tax is based on our Texas sourced taxable margin. The tax is calculated by applying a
  tax rate to a base that considers both revenue and expenses and therefore has the characteristics of an income tax. As a result,
  we did not owe state income tax for the year ended December 31, 2014.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>Significant Unobservable Inputs </B>&mdash;
  Our investment portfolio is not composed of homogeneous debt and equity securities that can be valued with a small number of inputs.
  Instead, the majority of our investment portfolio is composed of complex debt and equity securities with distinct contract terms
  and conditions. As such, our valuation of each investment in our portfolio is unique and complex, often factoring in numerous different
  inputs, including historical and forecasted financial and operational performance of the portfolio company, project cash flows,
  market multiples comparable market transactions, the priority of our securities compared with those of other investors, credit
  risk, interest rates, independent valuations and reviews and other inputs.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  
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  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 10pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">The following table summarizes the significant
  non-observable inputs in the fair value measurements of our Level 3 investments by category of investment and valuation technique
  as of June 30, 2015 (unaudited):</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0"></P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <TR STYLE="vertical-align: bottom">
      <TD>&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD>&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD>&nbsp;</TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="7" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Range</TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="font-weight: bold; font-style: italic; border-bottom: Black 1pt solid">(in thousands)</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Fair Value</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Valuation Techniques</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Unobservable Inputs</TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Minimum</TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Maximum</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="width: 31%; text-align: left">Secured and subordinated debt</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 8%; text-align: right">915</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 18%; text-align: center">Yield-to-maturity</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 20%; text-align: center"><P STYLE="margin-top: 0; margin-bottom: 0">Discount for lack of</P>
                                                 <P STYLE="margin-top: 0; margin-bottom: 0">marketability</P></TD><TD STYLE="width: 1%; font-size: 8pt">&nbsp;</TD>
      <TD STYLE="width: 1%; font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="width: 6%; font-size: 8pt; text-align: right"><FONT STYLE="font-size: 10pt">0</FONT></TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 10pt">%</FONT></TD><TD STYLE="width: 1%; font-size: 8pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="width: 1%; font-size: 8pt; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="width: 6%; font-size: 8pt; text-align: right"><FONT STYLE="font-size: 10pt">0</FONT></TD><TD STYLE="width: 1%; font-size: 8pt; text-align: left"><FONT STYLE="font-size: 10pt">%</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">Common stock</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,627</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: center"><P STYLE="margin-top: 0; margin-bottom: 0">Income/Market</P>
                                     <P STYLE="margin-top: 0; margin-bottom: 0">approach</P></TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: center"><P STYLE="margin-top: 0; margin-bottom: 0">EBITDA</P>
                                     <P STYLE="margin-top: 0; margin-bottom: 0">Multiple/Discount for</P>
                                     <P STYLE="margin-top: 0; margin-bottom: 0">lack of</P>
                                     <P STYLE="margin-top: 0; margin-bottom: 0">marketability/Control</P>
                                     <P STYLE="margin-top: 0; margin-bottom: 0">premium</P></TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
      <TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: right"><FONT STYLE="font-size: 10pt">0</FONT></TD><TD STYLE="font-size: 8pt; text-align: left"><FONT STYLE="font-size: 10pt">%</FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="font-size: 8pt; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 8pt; text-align: right"><FONT STYLE="font-size: 10pt">35</FONT></TD><TD STYLE="font-size: 8pt; text-align: left"><FONT STYLE="font-size: 10pt">%</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
      <TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 8pt; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="font-size: 8pt; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 8pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 8pt; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: center">Asset approach</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: center">Recovery rate</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
      <TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: right"><FONT STYLE="font-size: 10pt">0</FONT></TD><TD STYLE="font-size: 8pt; text-align: left"><FONT STYLE="font-size: 10pt">%</FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="font-size: 8pt; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 8pt; text-align: right"><FONT STYLE="font-size: 10pt">100</FONT></TD><TD STYLE="font-size: 8pt; text-align: left"><FONT STYLE="font-size: 10pt">%</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-bottom: 1pt">Limited liability company investments</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">8,715</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="text-align: center; padding-bottom: 1pt"><P STYLE="margin-top: 0; margin-bottom: 0">Discounted cash flow;</P>
                                                          <P STYLE="margin-top: 0; margin-bottom: 0">Guideline transaction</P>
                                                          <P STYLE="margin-top: 0; margin-bottom: 0">method</P></TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="text-align: center; padding-bottom: 1pt"><P STYLE="margin-top: 0; margin-bottom: 0">Reserve adjustment</P>
                                                          <P STYLE="margin-top: 0; margin-bottom: 0">factors</P></TD><TD STYLE="font-size: 8pt; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: right"><FONT STYLE="font-size: 10pt">75</FONT></TD><TD STYLE="padding-bottom: 1pt; font-size: 8pt; text-align: left"><FONT STYLE="font-size: 10pt">%</FONT></TD><TD STYLE="font-size: 8pt; padding-bottom: 1pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="font-size: 8pt; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 8pt; text-align: right"><FONT STYLE="font-size: 10pt">100</FONT></TD><TD STYLE="padding-bottom: 1pt; font-size: 8pt; text-align: left"><FONT STYLE="font-size: 10pt">%</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: right; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">15,257</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="text-align: right; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="text-align: right; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
  </TABLE>
  
  
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0"></P>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <tr style="vertical-align: top">
      <td style="width: 24px; font-size: 12pt; line-height: 115%">&nbsp;</td>
      <td style="width: 24px; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>(4)</b></font></td>
      <td style="text-decoration: underline; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b><u>Related Party Transactions and Agreements </u></b></font></td></tr>
  </table>
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Except as noted below, as compensation
  for services to the Fund, each Independent Director receives an annual fee of $20,000 paid quarterly in arrears, a fee of $2,000
  for each meeting of the Board of Directors attended in person, a fee of $1,000 for participation in each telephonic meeting of
  the Board and a fee of $1,000 for each committee meeting attended, and reimbursement of all out-of-pocket expenses relating to
  attendance at such meetings. A quarterly fee of $15,000 is paid to the Chairman of the Audit Committee and a quarterly fee of $3,750
  is paid to the Chairman of the Independent Directors. We may also pay other one-time or recurring fees to members of our Board
  of Directors in special circumstances. None of our interested directors receive annual fees for their service on the Board of Directors.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">In 2011, Equus Energy, LLC, a wholly-owned
  subsidiary of the Fund, entered into a consulting agreement with Global Energy Associates, LLC (&ldquo;Global Energy&rdquo;) to
  provide consulting services for energy related investments. Henry W. Hankinson, Director, is a managing partner and co-founder
  of Global Energy. Payments to Global Energy totaled $37,500 for each of the six months ended June 30, 2015 and 2014.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">In respect of services provided to the
  Fund by members of the Board not in connection with their roles and duties as directors, the Fund pays a fixed amount at a rate
  of $250 per hour for services rendered. During the six months ended June 30, 2015 and 2014, we paid Kenneth I. Denos, P.C., a professional
  corporation owned by Kenneth I. Denos, a director of the Fund, $163,813 and $176,125, respectively, for services provided the Fund.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <tr style="vertical-align: top">
      <td style="width: 24px; font-size: 12pt; line-height: 115%">&nbsp;</td>
      <td style="width: 24px; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>(5)</b></font></td>
      <td style="text-decoration: underline; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b><u>Dividends </u></b></font></td></tr>
  </table>
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">We will pay out net investment income
  and/or realized capital gains, if any, on an annual basis as required under the 1940 Act.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <tr style="vertical-align: top">
      <td style="width: 24px; font-size: 12pt; line-height: 115%">&nbsp;</td>
      <td style="width: 24px; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>(6)</b></font></td>
      <td style="text-decoration: underline; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b><u>Portfolio Securities </u></b></font></td></tr>
  </table>
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 10pt; text-indent: 24.5pt">On January 6, 2015, we sold
  our interests in Spectrum to 5<FONT STYLE="font-variant: small-caps"><SUP>th</SUP></FONT> Element Tracking, LLC (&ldquo;5<FONT STYLE="font-variant: small-caps"><SUP>th
  </SUP></FONT>Element&rdquo;). The purchase price of $3.9 million paid by 5<FONT STYLE="font-variant: small-caps"><SUP>th</SUP></FONT>
  Element consisted of $3.0 million in cash and a 1-year subordinated note in the original principal amount of $0.9 million, bearing
  interest at the rate of 14% per annum. We realized a net capital loss of $2.8 million in connection with the sale of our interest
  in Spectrum.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Also on January 6, 2015, in connection
  with the sale of our interest in Spectrum, our $0.5 million loan to Security Monitor Holdings, LLC, together with all accrued interest
  amounting to approximately $0.1 million, was repaid.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">On January 30, 2015, we received a partial
  redemption payment in respect of our holding of OPG Notes in the amount of &euro;36,587 [$41,478].</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  
  <!-- Field: Page; Sequence: 20 -->
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      <DIV STYLE="page-break-before: always; margin-top: 6pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
      <!-- Field: /Page -->
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 10pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">On February 20, 2015, we sold our OPG
  Notes at a discount of 23% to their par value, receiving $1.0 million in cash and a realized gain of $0.4 million.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">During the six months ended June 30,
  2015, we received dividends in the form of additional shares of $0.1 million relating to our shareholding in MVC.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">During the six months ended June 30,
  2015, we recorded a net change in unrealized appreciation of $5.9 million, to a net unrealized appreciation of $2.4 million. Such
  change in unrealized appreciation resulted primarily from the following changes:</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <tr style="vertical-align: top">
      <td style="width: 33px; font-size: 10pt; line-height: 115%">&nbsp;</td>
      <td style="width: 48px; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(i)</font></td>
      <td style="font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Decrease in the fair value of our holdings in Equus Energy, LLC of $1.3 million, principally due to a combination of decreased production and declining oil and prices;</font></td></tr>
  </table>
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><FONT STYLE="background-color: White">&nbsp;</FONT></P>
  
  <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <tr style="vertical-align: top">
      <td style="width: 33px; font-size: 10pt; line-height: 115%">&nbsp;</td>
      <td style="width: 48px; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(ii)</font></td>
      <td style="font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Increase in the fair value of our shareholding in MVC of $0.2 million due to an increase in the MVC share price during the period, along with dividends received in the form of additional MVC shares;</font></td></tr>
  </table>
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <tr style="vertical-align: top">
      <td style="width: 33px; font-size: 10pt; line-height: 115%">&nbsp;</td>
      <td style="width: 48px; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(iii)</font></td>
      <td style="font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Increase in fair value of our shareholding in PalletOne, Inc. of $4.7 million due to an overall improvement in the industry sector for packaging companies, as well as continued revenue and earnings growth; </font></td></tr>
  </table>
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <tr style="vertical-align: top">
      <td style="width: 33px; font-size: 10pt; line-height: 115%">&nbsp;</td>
      <td style="width: 48px; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(iv)</font></td>
      <td style="font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Transfer of unrealized depreciation to realized gain on our holding of OPG Notes of $0.4 million in connection with the sale of our interest in the OPG Notes; and</font></td></tr>
  </table>
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <tr style="vertical-align: top">
      <td style="width: 33px; font-size: 10pt; line-height: 115%">&nbsp;</td>
      <td style="width: 48px; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(v)</font></td>
      <td style="font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Transfer of unrealized depreciation to realized loss on our holdings in Spectrum of $2.9 million in connection with the sale of our interest in Spectrum.</font></td></tr>
  </table>
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">On April 3, 2014, we sold all of our 73,666
  remaining shares of OPG, wherein we received $61,867 in net proceeds and reported a realized loss of $0.06 million.</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">During the six months ended June 30,
  2014, we capitalized legal and consulting expenses of $0.1 million relating to our investment in Spectrum Management. We also
  received a semi-annual interest payment of $0.04 million in cash and $0.1 million in the form of PIK&rsquo;d interest in
  respect of our &euro;1.2 million [$1.5 million] in OPG notes. On May 14, 2014, we sold to MVC 2,112,000 shares of the
  Fund&rsquo;s common stock in exchange for 395,839 shares of MVC (see <I>Plan of Reorganization</I> <I>&ndash; Share Exchange
  with MVC Capital</I> below).</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">During the six months ended June 30, 2014,
  we realized net capital gains of $0.7 million related to our Share Exchange with MVC (see <I>Plan of Reorganization &ndash; Share
  Exchange with MVC Capital</I> below).</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Net unrealized depreciation on investments
  decreased $1.0 million during the six months ended June 30, 2014, to a net unrealized depreciation of $3.0 million. Such change
  in unrealized appreciation resulted primarily from the following changes:</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <tr style="vertical-align: top">
      <td style="width: 33px; font-size: 10pt; line-height: 115%">&nbsp;</td>
      <td style="width: 48px; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(i)</font></td>
      <td style="font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Increase in fair value of our holding in Equus Energy, LLC of $0.8 million due to an increase in comparable transactions for mineral leases, continued improved economic conditions, industry outlook, pricing assumptions, as well as additional proved reserves from new drilling and recompletion activities;</font></td></tr>
  </table>
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <tr style="vertical-align: top">
      <td style="width: 4%; font-size: 10pt; line-height: 115%">&nbsp;</td>
      <td style="width: 6%; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(ii)</font></td>
      <td style="width: 90%; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Increase in fair value of our shareholding in PalletOne, Inc. of $0.7 million due to an improvement in the industry sector for packaging companies and continued revenue and earnings growth; and</font></td></tr>
  </table>
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <tr style="vertical-align: top">
      <td style="width: 33px; font-size: 10pt; line-height: 115%">&nbsp;</td>
      <td style="width: 48px; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(iii)</font></td>
      <td style="font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Decrease in fair value of our shareholding in MVC of $0.4 million due to a difference between our cost basis in the MVC shares and the closing trading price of the MVC shares on June 30, 2014. Our cost basis included the closing trading price of the shares on May 14, 2014 (the closing date of the Share Exchange) as well as capitalized transaction costs of $0.5 million incurred in connection with the Share Exchange. </font></td></tr>
  </table>
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  
  <!-- Field: Page; Sequence: 21 -->
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  <P STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin: 0 0 0pt">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <tr style="vertical-align: top">
      <td style="width: 24px; font-size: 12pt; line-height: 115%">&nbsp;</td>
      <td style="width: 24px; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>(7)</b></font></td>
      <td style="text-decoration: underline; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b><u>Plan of Reorganization - Share Exchange with MVC Capital </u></b></font></td></tr>
  </table>
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">On May 14, 2014, we announced that the
  Fund intended to effect a reorganization pursuant to Section 2(a)(33) of the 1940 Act. As a first step to consummating the reorganization,
  we sold to MVC 2,112,000 newly-issued shares of the Fund&rsquo;s common stock in exchange for 395,839 shares of MVC (such transaction
  is hereinafter referred to as the &ldquo;Share Exchange&rdquo;). MVC is a business development company traded on the New York Stock
  Exchange that provides long-term debt and equity investment capital to fund growth, acquisitions and recapitalizations of companies
  in a variety of industries. The Share Exchange was calculated based on the Fund&rsquo;s and MVC&rsquo;s respective net asset value
  per share. At the time of the Share Exchange, the number of MVC shares received by Equus represented approximately 1.73% of MVC&rsquo;s
  total outstanding shares of common stock.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Pursuant to the terms of a Share Exchange
  Agreement, dated May 12, 2014, entered into by Equus and MVC which memorialized the Share Exchange, we intend to finalize the reorganization
  by pursuing a merger or consolidation with MVC, a subsidiary of MVC, or one or more of MVC&rsquo;s portfolio companies (the &ldquo;Consolidation&rdquo;).
  Absent Equus merging or consolidating with/into MVC or a subsidiary thereof, our current intention is for Equus to (i) consummate
  the Consolidation with a portfolio company of MVC, (ii) terminate its election to be classified as a BDC under the 1940 Act, and
  (iii) be restructured as a publicly-traded operating company focused on the energy and/or financial services sector. Our original
  intention was to consummate the Consolidation within one year from the date of our announcement, although actual completion will
  require additional time.</P>
  
  
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="width: 100%">
  <tr style="vertical-align: top">
      <td style="width: 24px; font: 12pt/115% Calibri, Helvetica, Sans-Serif">&nbsp;</td>
      <td style="width: 24px; font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif"><b>(8)</b></font></td>
      <td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-decoration: underline"><font style="font: 10pt Times New Roman, Times, Serif"><b><u>Equus Energy, LLC </u></b></font></td></tr>
  </table>
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">Equus Energy was formed in November
  2011 as a wholly-owned subsidiary of the Fund to make investments in companies in the energy sector, with particular emphasis on
  income-producing oil &amp; gas properties. In December 2011, we contributed $250,000 to the capital of Equus Energy. On December
  27, 2012, we invested an additional $6.8 million in Equus Energy for the purpose of additional working capital and to fund the
  purchase of $6.6 million in working interests in 132 producing and non-producing oil and gas wells (which has since decreased to
  130). The working interests include associated development rights of approximately 21,220 acres situated on 13 separate properties
  in Texas and Oklahoma. The working interests range from a <I>de minimus</I> amount to 50% of the leasehold that includes these
  wells.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">The wells are operated by a number of
  experienced operators, including Chevron USA, Inc., which has operating responsibility for all of Equus Energy&rsquo;s 40 producing
  well interests located in the Conger Field, a productive oil and gas field on the edge of the Permian Basin that has experienced
  successful gas and hydrocarbon extraction in multiple formations. Equus Energy, which holds a 50% working interest in each of these
  Conger Field wells, is working with Chevron in a recompletion program of existing Conger Field wells to the Wolfcamp formation,
  a zone containing oil as well as gas and natural gas liquids. Part of Equus Energy&rsquo;s acreage rights described above also
  includes a 50% working interest in possible new drilling to the base of the Canyon formation (approximately 8,500 feet) on 2,400
  acres in the Conger Field. Also included in the interests acquired by Equus Energy are working interests of 7.5% and 2.5% in the
  Burnell and North Pettus Units, respectively, which collectively comprise approximately 13,000 acres located in the area known
  as the &ldquo;Eagle Ford Shale&rdquo; play.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.35pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.35pt"><I>Revenue and Income</I>. During the
  three months ended June 30, 2015, Equus Energy&rsquo;s revenue, operating revenue less direct operating expenses, and net loss
  were $0.3 million, $0.05 million, and ($0.2) million, respectively, as compared to revenue, operating revenue less direct operating
  expenses, and net loss of $0.5 million, $0.3 million, and ($0.1) million, respectively, for the three months ended June 30, 2014.
  During the six months ended June 30, 2015, Equus Energy&rsquo;s revenue, operating revenue less direct operating expenses, and
  net loss were $0.6 million, $0.07 million, and ($0.5) million, respectively, as compared to revenue, operating revenue less direct
  operating expenses, and net loss of $1.1 million, $0.5 million, and ($0.3) million, respectively, for the six months ended June
  30, 2014.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.35pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.35pt"><I>Capital Expenditures</I>. During
  the six months ended June 30, 2015, Equus Energy invested $0.05 million in capital expenditures for recompletion activities. The
  operators of the various working interest have communicated their intent to wait until later in 2015, commensurate with an anticipated
  gradual rise in the price of crude oil, to commence new drilling and recompletion projects.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.35pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">We do not consolidate Equus Energy or
  its wholly-owned subsidiaries and accordingly only the value of our investment in Equus Energy is included on our statement of
  assets and liabilities. Our investment in Equus Energy is valued in accordance with our normal valuation procedures and is based
  in part on using a discounted cash flow analysis based on a reserve report prepared for Equus Energy by Lee Keeling &amp; Associates,
  Inc., an independent petroleum engineering firm, the transactions and values of comparable companies in this sector, and the estimated
  value of leasehold mineral interests associated with the acreage held by Equus Energy. A valuation of Equus Energy was performed
  by a third-party valuation firm, who recommended a value range of Equus Energy consistent with the fair value (See <B><I>Schedule
  of Investments</I></B><FONT STYLE="background-color: white">)</FONT>.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">&nbsp;</P>
  
  
  <!-- Field: Page; Sequence: 22 -->
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  <P STYLE="font: 10pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Below is summarized consolidated financial
  information for Equus Energy as of June 30, 2015 and December 31, 2014 and for the three and six months ended June 30, 2015 and
  2014, respectively, (in thousands):</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><U>EQUUS ENERGY, LLC </U></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><U>Consolidated Balance Sheets</U></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><U>(unaudited)</U></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 80%; font: 10pt Times New Roman, Times, Serif">
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="font-weight: bold; text-align: center"></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">June 30, <BR>2015</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: center; vertical-align: bottom; border-bottom: Black 1pt solid"><B>December 31, <BR>2014</B></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font-weight: bold; text-align: left">Assets</TD><TD>&nbsp;</TD>
      <TD COLSPAN="3">&nbsp;</TD><TD>&nbsp;</TD>
      <TD COLSPAN="3">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">Current assets:</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="width: 70%; text-align: left; padding-left: 10pt">Cash and cash equivalents</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">614</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">613</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-left: 10pt">Accounts receivable</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">155</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">310</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-left: 10pt">Due from affiliate</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">14&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 10pt"> Prepaid expenses/deposits</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">35</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">Total current assets</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">783</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">958</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">Oil and gas properties</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8,245</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8,200</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-bottom: 1pt">Less: accumulated depletion, depreciation and amortization</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(2,117</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(1,768</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 10pt">Net oil and gas properties</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">6,128</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">6,432</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-bottom: 1pt">Other non-current investment</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">193</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">193</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-bottom: 2.5pt; padding-left: 20pt">Total assets</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">7,104</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">7,583</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font-weight: bold; text-align: left">Liabilities and members capital</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">Current liabilities:</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-left: 10pt">Accounts payable and other</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">76</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">71</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 10pt">Due to affiliate</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">611</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">611</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">Total current liabilities</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">687</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">682</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-bottom: 1pt">Asset retirement obligations</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">181</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">183</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 20pt">Total liabilities</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">868</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">865</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 20pt">Total members capital</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">6,236</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">6,718</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-bottom: 2.5pt; padding-left: 20pt">Total liabilities and members capital</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">7,104</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">7,583</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
  </TABLE>
  
  
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 0 99pt; text-indent: 81pt"><FONT STYLE="font: 9pt Sans-Serif; color: Red"><B></B></FONT></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.35pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.35pt">Revenue and direct operating expenses
  for the various oil and gas assets included in the accompanying statements represent the net collective working and revenue interests
  acquired by Equus Energy. The revenue and direct operating expenses presented herein relate only to the interests in the producing
  oil and natural gas properties and do not represent all of the oil and natural gas operations of all of these properties. Direct
  operating expenses include lease operating expenses and production and other related taxes. General and administrative expenses,
  depletion, depreciation and amortization (&ldquo;DD&amp;A&rdquo;) of oil and gas properties and federal and state taxes have been
  excluded from direct operating expenses in the accompanying statements of revenues and direct operating expenses because the allocation
  of certain expenses would be arbitrary and would not be indicative of what such costs would have been had Equus Energy been operated
  as a stand-alone entity.<B> </B>The statements of revenue and direct operating expenses presented are not indicative of the financial
  condition or results of operations of Equus Energy on a go forward basis due to changes in the business and the omission of various
  operating expenses.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 10pt">&nbsp;</P>
  
  
  <!-- Field: Page; Sequence: 23 -->
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  <P STYLE="font: 10pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><U>EQUUS ENERGY, LLC </U></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><U>Consolidated Statements of Operations</U></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><U>(unaudited)</U></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"></P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <TR STYLE="vertical-align: bottom">
      <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="7" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Three months ended June 30,</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="7" STYLE="text-align: center; vertical-align: bottom; border-bottom: Black 1pt solid"><B>Six months ended June 30,</B></TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid; vertical-align: bottom">2015</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid; vertical-align: bottom">2014</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid; vertical-align: bottom">2015</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid; vertical-align: bottom">2014</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="width: 40%; text-align: left">Operating revenue</TD><TD STYLE="width: 3%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">309</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">532</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">592</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">1,072</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">Operating expenses</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-left: 10pt">Direct operating expenses</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">263</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">262</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">522</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">596</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-left: 10pt">Depletion, depreciation, amortization and accretion</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">162</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">298</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">348</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">494</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 10pt">General and administrative</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">75</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">80</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">204</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">232</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 20pt">Total operating expenses</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">500</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">640</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,074</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,322</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-bottom: 2.5pt">Net loss</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(191</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(108</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(482</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(250</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD></TR>
  </TABLE>
  
  
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><U>EQUUS ENERGY, LLC</U></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><U>Consolidated Statements of Cash Flows</U></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><U>(unaudited)</U></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"></P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 80%; font: 10pt Times New Roman, Times, Serif">
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
      <TD COLSPAN="7" STYLE="font-weight: bold; text-align: center">Six months ended June 30,</TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid; vertical-align: bottom">2015</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid; vertical-align: bottom">2014</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">Cash flows from operating activities:</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
      <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD>&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
      <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="width: 70%; text-align: left">Net loss</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">(482</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">(250</TD><TD STYLE="width: 1%; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-left: 10pt">Adjustments to reconcile net loss to</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-left: 20pt">net cash provided by operating activities:</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-left: 30pt">Depletion, depreciation and amortization</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">348</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">494</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-left: 10pt">Changes in operating assets and liabilities:</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-left: 20pt">Accounts receivable and other</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">176</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(12</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-left: 20pt">Affiliate payable/receivable</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">202</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 20pt">Accounts payable and other</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">5</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(214</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 30pt">Net cash provided by operating activities</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">47</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">220</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">Cash flows from investing activities:</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
      <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
      <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-left: 10pt">Investment in oil &amp; gas properties</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(46</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(101</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 10pt">Other investments</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(178</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 20pt">Net cash used in investing activities</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(46</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(279</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">Net increase (decrease) in cash</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(59</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-bottom: 1pt">Cash and cash equivalents at beginning of period</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">613</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">486</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-bottom: 2.5pt">Cash and cash equivalents at end of period</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">614</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">427</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
  </TABLE>
  
  
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"></P>
  
  <P STYLE="font: 9pt/normal Sans-Serif; margin: 0; text-align: center; color: Red"><B></B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>Critical Accounting Policies for
  Equus Energy </B>&ndash; Equus Energy and its wholly-owned subsidiary EQS Energy Holdings, Inc. (collectively, &ldquo;the Company&rdquo;)
  follow the <I>Full Cost Method of Accounting</I> for oil and gas properties. Under the full cost method, all costs associated with
  property acquisition, exploration, and development activities are capitalized. Capitalized costs include lease acquisitions, geological
  and geophysical work, delay rentals, costs of drilling, completing and equipping successful and unsuccessful oil and gas wells
  and related costs. Gains or losses are normally not recognized on the sale or other disposition of oil and gas properties. Gains
  or losses are normally reflected as an adjustment to the full cost pool.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">The capitalized costs of oil and gas
  properties, plus estimated future development costs relating to proved reserves and estimated cost of dismantlement and abandonment,
  net of salvage value, are amortized on a unit-of-production method over the estimated productive life of the proved oil and gas
  reserves. Unevaluated oil and gas properties are excluded from this calculation.&nbsp; Depletion, depreciation and amortization
  expense for the Company&rsquo;s oil and gas properties totaled $0.2 million and $0.3 million, respectively, for the three months
  ended June 30, 2015 and June 30, 2014 and $0.4 million for the six months ended June 30, 2015 compared to $0.5 million for the
  six months ended June 30, 2014.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  
  <!-- Field: Page; Sequence: 24 -->
      <DIV STYLE="margin-bottom: 6pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font-size: 10pt"><TR STYLE="vertical-align: top; text-align: left"><TD STYLE="width: 33%"><A HREF="#TableOfContents" TITLE="Table of Contents" STYLE="font-style: italic">Table of Contents</A>&nbsp;</TD><TD STYLE="width: 34%; text-align: center"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->24<!-- Field: /Sequence --></TD><TD STYLE="width: 33%; text-align: right">&nbsp;</TD></TR></TABLE></DIV>
      <DIV STYLE="page-break-before: always; margin-top: 6pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
      <!-- Field: /Page -->
  
  <P STYLE="font: 10pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Capitalized oil and gas property costs
  are limited to an amount (the ceiling limitation) equal to the sum of the following:</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-indent: 0.5in">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="width: 100%; font-family: Calibri, Helvetica, Sans-Serif">
  <tr style="vertical-align: top">
      <td style="width: 48px; font-size: 12pt; line-height: 115%">&nbsp;</td>
      <td style="width: 48px; padding-top: 4.5pt; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(a)</font></td>
      <td style="padding-top: 4.5pt; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">As of June 30, 2015, the present value of estimated future net revenue from the projected production of proved oil and gas reserves, calculated at the simple arithmetic average, first-day-of-the-month prices during the twelve-month period before the balance sheet date (with consideration of price changes only to the extent provided by contractual arrangements) and a discount factor of 10%;</font></td></tr>
  </table>
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="width: 100%; font-family: Calibri, Helvetica, Sans-Serif">
  <tr style="vertical-align: top">
      <td style="width: 48px; font-size: 12pt; line-height: 115%">&nbsp;</td>
      <td style="width: 48px; padding-top: 4.5pt; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(b)</font></td>
      <td style="padding-top: 4.5pt; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">The cost of investments in unproved and unevaluated properties excluded from the costs being amortized; and</font></td></tr>
  </table>
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="width: 100%; font-family: Calibri, Helvetica, Sans-Serif">
  <tr style="vertical-align: top">
      <td style="width: 48px; font-size: 12pt; line-height: 115%">&nbsp;</td>
      <td style="width: 48px; padding-top: 4.5pt; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(c)</font></td>
      <td style="padding-top: 4.5pt; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">The lower of cost or estimated fair value of unproved properties included in the costs being amortized.</font></td></tr>
  </table>
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">When it is determined that oil and gas
  property costs exceed the ceiling limitation, an impairment charge is recorded to reduce its carrying value to the ceiling limitation.&nbsp;
  The Company did not recognize an impairment loss on its oil and gas properties during 2014 or during the six months ended June
  30, 2015.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">The costs of certain unevaluated leasehold
  acreage and certain wells being drilled are not amortized. The Company excludes all costs until proved reserves are found or until
  it is determined that the costs are impaired. Costs not amortized are periodically assessed for possible impairment or reduction
  in value. If a reduction in value has occurred, costs being amortized are increased accordingly.&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B><U>Revenue Recognition</U> - </B>Revenue
  recognized for oil and natural gas sales under the sales method of accounting. Under this method, revenue recognized on production
  as it is taken and delivered to its purchasers. The volumes sold may be more or less than the volumes entitled to, based on the
  owner&rsquo;s net leasehold interest. These differences result from production imbalances, which are not significant, and are reflected
  as adjustments to proven reserves and future cash flows in the unaudited consolidated financial information included herein.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B><U>Accounting Policy on DD&amp;A</U></B>
  - The Company employs the &ldquo;Units of Production&rdquo; method in calculating depletion of its proved oil and gas properties,
  wherein capitalized costs, as adjusted for future development costs and asset retirement obligations, are amortized over the total
  estimated proved reserves.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B><U>Income Taxes</U></B> -A limited
  liability company is not subject to the payment of federal income taxes as components of its income and expenses flow through directly
  to the members. However, the Company is subject to certain state income taxes. Texas margin tax applies to legal entities conducting
  business in Texas. The margin tax is based on our Texas sourced taxable margin. The tax is calculated by applying a tax rate to
  a base that considers both revenue and expenses and therefore has the characteristics of an income tax. Taxable Subsidiaries may
  generate income tax expense because of the Taxable Subsidiaries&rsquo; ownership of the portfolio companies. We reflect any such
  income tax expense on our Statements of Operations.&nbsp; As of June 30, 2015 and June 30, 2014, the Company recorded $0 in federal
  income taxes, respectively.&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B><U>Asset Retirement Obligations </U></B>-
  The fair value of asset retirement obligations are recorded in the period in which they are incurred if a reasonable estimate of
  fair value can be made, and the corresponding cost is capitalized as part of the carrying amount of the related long-lived asset.&nbsp;
  The fair value of the asset retirement obligation is measured using expected future cash outflows discounted at the Company&rsquo;s
  credit-adjusted risk-free interest rate.&nbsp; Fair value, to the extent possible, should include a market risk premium for unforeseeable
  circumstances.&nbsp; No market risk premium was included in the Company&rsquo;s asset retirement obligation fair value estimate
  since a reasonable estimate could not be made. &nbsp;The liability is accreted to its then present value each period, and the capitalized
  cost is depleted or amortized over the estimated recoverable reserves using the units-of-production method.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="width: 100%; font-family: Calibri, Helvetica, Sans-Serif">
  <tr style="vertical-align: top">
      <td style="width: 24px; font-size: 12pt; line-height: 115%">&nbsp;</td>
      <td style="width: 24px; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>(9)</b></font></td>
      <td style="text-decoration: underline; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b><u>Recent Accounting Pronouncements </u></b></font></td></tr>
  </table>
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">In February&nbsp;2015, the FASB issued
  ASU No.&nbsp;2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis. The new guidance modifies the consolidation
  analysis for limited partnerships and similar type entities as well as variable interests in a variable interest entity, particularly
  those that have fee arrangements and related party relationships. Additionally, it provides a scope exception to the consolidation
  guidance for certain entities. The amendments in ASU No.&nbsp;2015-02 are effective for annual reporting periods beginning after
  December&nbsp;15, 2015, including interim periods within that reporting period. Early adoption is permitted. The Company is currently
  evaluating the impact of adopting this ASU on its consolidated financial statements.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  
  <!-- Field: Page; Sequence: 25 -->
      <DIV STYLE="margin-bottom: 6pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font-size: 10pt"><TR STYLE="vertical-align: top; text-align: left"><TD STYLE="width: 33%"><A HREF="#TableOfContents" TITLE="Table of Contents" STYLE="font-style: italic">Table of Contents</A>&nbsp;</TD><TD STYLE="width: 34%; text-align: center"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->25<!-- Field: /Sequence --></TD><TD STYLE="width: 33%; text-align: right">&nbsp;</TD></TR></TABLE></DIV>
      <DIV STYLE="page-break-before: always; margin-top: 6pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
      <!-- Field: /Page -->
  
  <P STYLE="font: 10pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">In May 2015, the FASB issued ASU No.
  2015-07, Fair Value Measurement (Topic 820): Disclosures for Investments in Certain Entities that Calculate Net Asset Value per
  Share (or Its Equivalent). The new guidance removes the requirement that investments for which NAV is determined based on practical
  expedient reliance be reported utilizing the fair value hierarchy. ASU No. 2015-07 shall be applied retrospectively for periods
  beginning on or after December 15, 2015, and interim periods within those fiscal years, with early adoption permitted. The Company
  is currently evaluating the impact of adopting this ASU on its consolidated financial statements.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="width: 100%; font-family: Calibri, Helvetica, Sans-Serif">
  <tr style="vertical-align: top">
      <td style="width: 24px; font-size: 12pt; line-height: 115%">&nbsp;</td>
      <td style="width: 24px; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>(10) </b></font></td>
      <td style="text-decoration: underline; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b><u>Subsequent Events </u></b></font></td></tr>
  </table>
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Management performed an evaluation of
  the Fund&rsquo;s activity through the date the financial statements were issued, noting there were no subsequent events.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B><U><A NAME="a_010"></A>Item 2.</U> <U>Management&rsquo;s Discussion and Analysis
  of Financial Condition and Results of Operations</U></B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Equus Total Return, Inc. (<I>&ldquo;we,&rdquo;
  &ldquo;us,&rdquo; &ldquo;our,&rdquo; &ldquo;Equus,&rdquo; the &ldquo;Company,&rdquo; and the &ldquo;Fund</I>&rdquo;), a Delaware
  corporation, was formed on August 16, 1991. Our shares trade on the New York Stock Exchange under the symbol &lsquo;EQS&rsquo;.
  Our investment strategy seeks to provide the highest total return, consisting of capital appreciation and current income.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">We attempt to maximize the return to
  stockholders in the form of current investment income and long-term capital gains by investing in the debt and equity securities
  of companies with a total enterprise value of between $5.0 million and $75.0 million, although we may engage in transactions with
  smaller or larger investee companies from time to time. We seek to invest primarily in companies pursuing growth either through
  acquisition or organically, leveraged buyouts, management buyouts and recapitalizations of existing businesses or special situations.
  Our income-producing investments consist principally of debt securities including subordinate debt, debt convertible into common
  or preferred stock, or debt combined with warrants and common and preferred stock. Debt and preferred equity financing may also
  be used to create long-term capital appreciation through the exercise and sale of warrants received in connection with the financing.
  We seek to achieve capital appreciation by making investments in equity and equity-oriented securities issued by privately-owned
  companies (and smaller public companies) in transactions negotiated directly with such companies. Given market conditions over
  the past several years and the performance of our portfolio, our management and Board of Directors believe it is prudent to continue
  to review alternatives to refine and further clarify the current strategies.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 22.5pt 0 0; text-indent: 24.5pt">We elected to be treated
  as a BDC under the 1940 Act. We currently qualify as a RIC for federal income tax purposes and, therefore, are not required to
  pay corporate income taxes on any income or gains that we distribute to our stockholders. We have certain wholly owned Taxable
  Subsidiaries each of which holds one or more portfolio investments listed on our Schedules of Investments. The purpose of these
  Taxable Subsidiaries is to permit us to hold certain income-producing investments or portfolio companies organized as limited liability
  companies, or LLCs, (or other forms of pass-through entities) and still satisfy the RIC tax requirement that at least 90% of our
  gross revenue for income tax purposes must consist of investment income. Absent the Taxable Subsidiaries, a portion of the gross
  income of these income-producing investments or of any LLC (or other pass-through entity) portfolio investment, as the case may
  be, would flow through directly to us for the 90% test. To the extent that such income did not consist of investment income, it
  could jeopardize our ability to qualify as a RIC and, therefore, cause us to incur significant federal income taxes. The income
  of the LLCs (or other pass-through entities) owned by Taxable Subsidiaries is taxed to the Taxable Subsidiaries and does not flow
  through to us, thereby helping us preserve our RIC status and resultant tax advantages. We do not consolidate the Taxable Subsidiaries
  for income tax purposes and they may generate income tax expense because of the Taxable Subsidiaries&rsquo; ownership of the portfolio
  investments. We reflect any such income tax expense on our Statements of Operations.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 22.5pt 0 0"><B>Plan of Reorganization </B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 22.5pt 0 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 22.5pt 0 0; text-indent: 24.5pt">On May 14, 2014, we announced
  that the Fund intended to effect a reorganization pursuant to Section 2(a)(33) of the 1940 Act. As a first step to consummating
  the reorganization, we sold to MVC 2,112,000 newly-issued shares of the Fund&rsquo;s common stock in exchange for 395,839 shares
  of MVC (such transaction is hereinafter referred to as the &ldquo;Share Exchange&rdquo;). MVC is a business development company
  traded on the New York Stock Exchange that provides long-term debt and equity investment capital to fund growth, acquisitions and
  recapitalizations of companies in a variety of industries. The Share Exchange was calculated based on the Fund&rsquo;s and MVC&rsquo;s
  respective net asset value per share. The number of MVC shares received by Equus represents approximately 1.73% of MVC&rsquo;s
  total outstanding shares of common stock. The number of Equus shares sold to MVC pursuant to the Share Exchange represents approximately
  16.7% of our issued and outstanding shares of common stock at March 31, 2015. We incurred dilution of $0.11 per share as a result
  of the Share Exchange. Since the announcement, we have received 20,107 shares of MVC (market value of $0.2 million calculated as
  of the date of receipt) in the form of dividend payments.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 22.5pt 0 0; text-indent: 24.5pt">&nbsp;</P>
  
  
  <!-- Field: Page; Sequence: 26 -->
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  <P STYLE="font: 10pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 22.5pt 0 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 22.5pt 0 0; text-indent: 24.5pt">Pursuant to the terms of
  a Share Exchange Agreement, dated May 14, 2014, entered into by Equus and MVC which memorialized the Share Exchange, we intend
  to finalize the reorganization by pursuing a merger or consolidation with MVC, or a subsidiary of MVC, or one or more of MVC&rsquo;s
  portfolio companies (the &ldquo;Consolidation&rdquo;). Absent Equus merging or consolidating with/into MVC, our current intention
  is for Equus to (i) consummate the Consolidation, (ii) terminate its election to be classified as a business development company
  under the 1940 Act, and (iii) be restructured as a publicly-traded operating company focused on the energy and/or financial services
  sector.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 22.5pt 0 0; text-indent: 24.5pt"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 22.5pt 0 0"><B>Critical Accounting Policies </B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">See the Fund&rsquo;s Critical Accounting
  Policies from the disclosure set forth in the Annual Report on Form10-K for the year ended December 31, 2014.<B><I>&nbsp;</I></B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B><I>&nbsp;</I></B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B><I>Recent Accounting Pronouncements</I></B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B><I>&nbsp;</I></B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.35pt"></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">In February&nbsp;2015, the FASB issued
  ASU No.&nbsp;2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis. The new guidance modifies the consolidation
  analysis for limited partnerships and similar type entities as well as variable interests in a variable interest entity, particularly
  those that have fee arrangements and related party relationships. Additionally, it provides a scope exception to the consolidation
  guidance for certain entities. The amendments in ASU No.&nbsp;2015-02 are effective for annual reporting periods beginning after
  December&nbsp;15, 2015, including interim periods within that reporting period. Early adoption is permitted. The Company is currently
  evaluating the impact of adopting this ASU on its consolidated financial statements.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">In May 2015, the FASB issued ASU No.
  2015-07, Fair Value Measurement (Topic 820): Disclosures for Investments in Certain Entities that Calculate Net Asset Value per
  Share (or Its Equivalent). The new guidance removes the requirement that investments for which NAV is determined based on practical
  expedient reliance be reported utilizing the fair value hierarchy. ASU No. 2015-07 shall be applied retrospectively for periods
  beginning on or after December 15, 2015, and interim periods within those fiscal years, with early adoption permitted. The Company
  is currently evaluating the impact of adopting this ASU on its consolidated financial statements.</P>
  
  
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.35pt"></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.35pt"><B><I>&nbsp;</I></B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.35pt"><B><I>Current Market Conditions</I></B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.35pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Although the U.S. economy expanded 2.43%
  in 2014, it contracted at an annualized rate of 0.2% in the first quarter of 2015, repeating a drop of 1% on an annualized basis
  during the first quarter of 2014. Growth in the second quarter of 2015 has been weak but is expected to accelerate in the second
  half of 2015, with an annual growth rate of 2.4% predicted for the year. (Sources: <I>U.S. Dept. of Commerce Bureau of Economic
  Analysis, Forbes, the Associated Press, CNBC</I>)</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B><I>&nbsp;</I></B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Market conditions for business transactions
  including mergers and acquisitions and private equity investments during 2014 and the first half of 2015 improved to their highest
  level since prior to the 2008 financial crisis, as corporations have been deleveraging and are holding significant amounts of cash
  and many have focused on acquisitions as part of future growth plans. The U.S., which has accounted for almost half of worldwide
  merger and acquisition activity during 2015, recorded a record $1 trillion worth of transactions during the first six months of
  2015, an increase of approximately 60% over the same period in 2014. Commensurately, worldwide and U.S. private equity activity
  grew sharply as well during the first six months of 2015, increasing approximately 49% and 93%, respectively, as compared to the
  same period in 2014. (Source: <I>Fortune</I>)</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">During the six months ended June 30,
  2015, our net asset value increased from $2.86 per share to $3.00 per share, an increase of 4.9%. As of June 30, 2015, our common
  stock is trading at a 36.6% discount to our net asset value as compared to 26.5% as of December 31, 2014.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Over the past several years, we have
  executed certain initiatives to enhance liquidity, achieve a lower operational cost structure, provide more assistance to portfolio
  companies and realize certain of our portfolio investments. Specifically, we changed the composition of our Board of Directors
  and Management, terminated certain of our follow-on investments, internalized the management of the Fund, suspended our managed
  distribution policy, modified our investment strategy to pursue shorter term liquidation opportunities, pursued non-cash investment
  opportunities, and sold certain of our legacy and underperforming investment holdings. We believe these actions continue to be
  necessary to protect capital and liquidity in order to preserve and enhance shareholder value. Because our Management is internalized,
  certain of our expenses should not increase commensurate with an increase in the size of the Fund and, therefore, we expect to
  achieve efficiencies in our cost structure if we are able to grow the Fund.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  
  <!-- Field: Page; Sequence: 27 -->
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  <P STYLE="font: 10pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>Liquidity and Capital Resources </B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">We generate cash primarily from maturities,
  sales of securities and borrowings, as well as capital gains realized upon the sale of portfolio investments. We use cash primarily
  to make additional investments, either in new companies or as follow-on investments in the existing portfolio companies and to
  pay the dividends to our stockholders.</P>
  
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Because of the nature and size of the
  portfolio investments, we may periodically borrow funds to make qualifying investments to maintain our tax status as a RIC. We
  often borrow such funds by utilizing a margin account with a securities brokerage firm. There is no assurance that such arrangement
  will be available in the future. If the Fund is unable to borrow funds to make qualifying investments, it may no longer qualify
  as a RIC. The Fund would then be subject to corporate income tax on its net investment income and realized capital gains, and distributions
  to stockholders would be subject to income tax as ordinary dividends.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 0.4in; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">The Fund has the ability to borrow funds
  and issue forms of senior securities representing indebtedness or stock, such as preferred stock, subject to certain restrictions.
  Net taxable investment income and net taxable realized gains from the sales of portfolio investments are intended to be distributed
  at least annually, to the extent such amounts are not reserved for payment of expenses and contingencies or to make follow-on or
  new investments.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">The Fund reserves the right to retain
  net long-term capital gains in excess of net short-term capital losses for reinvestment or to pay contingencies and expenses. Such
  retained amounts, if any, will be taxable to the Fund as long-term capital gains and stockholders will be able to claim their proportionate
  share of the federal income taxes paid on such gains as a credit against their own federal income tax liabilities. Stockholders
  will also be entitled to increase the adjusted tax basis of their Fund shares by the difference between their undistributed capital
  gains and their tax credit.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">We are evaluating the impact of current
  market conditions on our portfolio company valuations and their ability to provide current income. We have followed valuation techniques
  in a consistent manner; however, we are cognizant of current market conditions that might affect future valuations of portfolio
  securities. We believe that our operating cash flow and cash on hand will be sufficient to meet operating requirements and to finance
  routine capital expenditures through the next twelve months.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B>Results of Operations </B>&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>Investment Income and Expense </B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Net investment loss was unchanged at
  $0.6 million and $0.7 million for the three months ended June 30, 2015 and June 30, 2014, respectively, and $1.7 million and $1.2
  million for the six months ended June 30, 2015 and June 30, 2014, respectively. The increase in net investment loss generated at
  June 30, 2015 compared to June 30, 2014 is due primarily to a decrease in total investment income and an increase in operating
  expense.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Investment income was $0.09 million
  and $0.06 million for the three months ended June 30, 2015 and June 30, 2014, respectively, and $0.1 million and $0.3 million for
  the six months ended June 30, 2015 and June 30, 2014, respectively. The decrease in investment income was primarily due to the
  decrease in income producing investments due to the sale of our interests in SMH, Spectrum, and OPG during the three months ended
  March 31, 2015.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Total expenses were $0.7 and $0.8 million
  for the three months ended June 30, 2015 and June 30, 2014, respectively, and $1.8 million and $1.5 million for the six months
  ended June 30, 2015 and June 30, 2014, respectively. The increase in expenses was primarily due to officer and employee bonuses
  earned during the period.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0; text-indent: 24.5pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>Realized
  Gains and Losses on Sales of Portfolio Securities</B></FONT>&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">During the six months ended June 30,
  2015, we realized net capital losses of $2.5 million, including the following significant transactions (in thousands):</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"></P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid">Portfolio Company</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid">Industry</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-weight: bold; border-bottom: Black 1pt solid">Type</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><P STYLE="margin-top: 0; margin-bottom: 0">Transaction</P>
                                                                                  <P STYLE="margin-top: 0; margin-bottom: 0">Type</P></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><P STYLE="margin-top: 0; margin-bottom: 0">Realized Gain</P>
                                                                                  <P STYLE="margin-top: 0; margin-bottom: 0">(Loss)</P></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="width: 25%; text-align: left">Spectrum Management, LLC</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 31%; text-align: left">Business products&nbsp;&nbsp;and services</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: left; vertical-align: bottom">Control</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 12%">Disposition</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">(2,850</TD><TD STYLE="width: 1%; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">Orco Property Group S. A.</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">Real Estate</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: bottom">Non-affiliate</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD>Disposition</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">372</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-bottom: 1pt">Various others</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="text-align: right; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="padding-bottom: 1pt">Disposition</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(5</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font-family: Helv; text-align: right; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="font-family: Helv; padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="font-family: Helv; text-align: right; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="font-family: Helv; padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="font-family: Helv; text-align: left">&nbsp;</TD><TD STYLE="font-family: Helv; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; font-family: Helv; text-align: left">&nbsp;</TD><TD STYLE="font-family: Helv; padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="font-family: Helv; text-align: right; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(2,483</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD></TR>
  </TABLE>
  
  
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  
  <!-- Field: Page; Sequence: 28 -->
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      <DIV STYLE="page-break-before: always; margin-top: 6pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
      <!-- Field: /Page -->
  
  <P STYLE="font: 10pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">During the six months ended June 30,
  2014, we realized net capital gains of $0.7 million, including the following significant transactions:</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="width: 100%; font-family: Calibri, Helvetica, Sans-Serif">
  <tr style="vertical-align: top">
      <td style="width: 33px; font-size: 10pt; line-height: 115%">&nbsp;</td>
      <td style="width: 48px; font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(i)</font></td>
      <td style="font-size: 10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">On April 3, 2014, we sold all of our 73,666 remaining shares of OPG, wherein we received $61,867 in net proceeds and reported a realized loss of $0.06 million.</font></td></tr>
  </table>
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 10pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <tr style="vertical-align: top">
      <td style="width: 33px; line-height: 115%">&nbsp;</td>
      <td style="width: 48px; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(ii)</font></td>
      <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">During the six months ended June, 2014, we realized net capital gains of $0.7 million related to our Share Exchange with MVC (see <i>Plan of Reorganization</i> above).</font></td></tr>
  </table>
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>Changes in Unrealized Appreciation/Depreciation
  of Portfolio Securities</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">During the six months ended June 30,
  2015, we recorded a net change in unrealized appreciation of $5.9 million, to a net unrealized appreciation of $2.4 million. Such
  change in unrealized appreciation resulted primarily from the following changes:</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 10pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <tr style="vertical-align: top">
      <td style="width: 33px; line-height: 115%">&nbsp;</td>
      <td style="width: 48px; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(i)</font></td>
      <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Decrease in the fair value of our holdings in Equus Energy, LLC of $1.3 million, principally due to a combination of decreased production and declining oil and prices;</font></td></tr>
  </table>
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><FONT STYLE="background-color: White">&nbsp;</FONT></P>
  
  <table cellspacing="0" cellpadding="0" style="font: 10pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <tr style="vertical-align: top">
      <td style="width: 33px; line-height: 115%">&nbsp;</td>
      <td style="width: 48px; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(ii)</font></td>
      <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Increase in the fair value of our shareholding in MVC of $0.2 million due to an increase in the MVC share price during the period, along with dividends received in the form of additional MVC shares ;</font></td></tr>
  </table>
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 10pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <tr style="vertical-align: top">
      <td style="width: 33px; line-height: 115%">&nbsp;</td>
      <td style="width: 48px; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(iii)</font></td>
      <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Increase in fair value of our shareholding in PalletOne, Inc. of $4.7 million due to an overall improvement in the industry sector for packaging companies, as well as continued revenue and earnings growth; </font></td></tr>
  </table>
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 10pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <tr style="vertical-align: top">
      <td style="width: 33px; line-height: 115%">&nbsp;</td>
      <td style="width: 48px; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(iv)</font></td>
      <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Transfer of unrealized depreciation to realized gain on our holding of OPG Notes of $0.4 million in connection with the sale of our interest in the OPG Notes; and</font></td></tr>
  </table>
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 10pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <tr style="vertical-align: top">
      <td style="width: 33px; line-height: 115%">&nbsp;</td>
      <td style="width: 48px; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(v)</font></td>
      <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Transfer of unrealized depreciation to realized loss on our holdings in Spectrum of $2.9 million in connection with the sale of our interest in Spectrum.</font></td></tr>
  </table>
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Net unrealized depreciation on investments
  decreased $1.0 million during the six months ended June 30, 2014, to a net unrealized depreciation of $3.0 million. Such change
  in unrealized appreciation resulted primarily from the following changes:</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 10pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <tr style="vertical-align: top">
      <td style="width: 33px; line-height: 115%">&nbsp;</td>
      <td style="width: 48px; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(i)</font></td>
      <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Increase in fair value of our holding in Equus Energy, LLC of $0.8 million due to an increase in comparable transactions for mineral leases, continued improved economic conditions, industry outlook, pricing assumptions, as well as additional proved reserves from new drilling and recompletion activities;</font></td></tr>
  </table>
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 10pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <tr style="vertical-align: top">
      <td style="width: 4%; line-height: 115%">&nbsp;</td>
      <td style="width: 6%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(ii)</font></td>
      <td style="width: 90%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Increase in fair value of our shareholding in PalletOne, Inc. of $0.7 million due to an improvement in the industry sector for packaging companies and continued revenue and earnings growth; and</font></td></tr>
  </table>
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 10pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <tr style="vertical-align: top">
      <td style="width: 33px; line-height: 115%">&nbsp;</td>
      <td style="width: 48px; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(iii)</font></td>
      <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Decrease in fair value of our shareholding in MVC of $0.4 million due to a difference between our cost basis in the MVC shares and the closing trading price of the MVC shares on June 30, 2014. Our cost basis included the closing trading price of the shares on May 14, 2014 (the closing date of the Share Exchange) as well as capitalized transaction costs of $0.5 million incurred in connection with the Share Exchange. </font></td></tr>
  </table>
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>Dividends </B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">We will pay out net investment income
  and/or realized capital gains, if any, on an annual basis as required under the Investment Company Act of 1940.</P>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>Portfolio Securities </B>&nbsp;</P>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">During the six months ended June 30,
  2015, we received dividends in the form of additional shares of $0.1 million relating to our shareholding in MVC. As a result of
  the sale of our interests in Spectrum to 5th Element Tracking, LLC, we received $3.0 million in cash and a 1-year subordinated
  note in the original principal amount of $0.9 million, bearing interest at the rate of 14% per annum.</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">During the six months ended June, 2014, we
  capitalized legal and consulting expenses of $0.1 million relating to Spectrum Management. We also received a semi-annual interest
  payment of $0.04 million in cash and $0.1 million in the form of PIK&rsquo;d interest in respect of our &euro;1.2 million [$1.5
  million] in OPG notes. On May 14, 2014, we sold to MVC 2,112,000 shares of the Fund&rsquo;s common stock in exchange for 395,839
  shares of MVC. (see <I>Plan of Reorganization</I> <I>&ndash; Share Exchange with MVC Capital</I> above).&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"></P>
  
  <!-- Field: Page; Sequence: 29 -->
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      <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt">&nbsp;</DIV>
      <!-- Field: /Page -->
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>Subsequent Events </B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Management performed an evaluation of
  the Fund&rsquo;s activity through the date the financial statements were issued, noting that there were no subsequent events.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B><A NAME="a_011"></A><U>Item 3. Quantitative and Qualitative Disclosure about
  Market Risk </U></B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">We are subject to financial market risks,
  including changes in interest rates with respect to investments in debt securities and outstanding debt payable, as well as changes
  in marketable equity security prices. In the future, in addition to our investment in the OPG notes, we may invest in companies
  outside the United States, including in Europe and Asia, which would give rise to exposure to foreign currency value fluctuations.
  We do not use derivative financial instruments to mitigate any of these risks. The return on investments is generally not affected
  by foreign currency fluctuations.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Our investments in portfolio securities
  consist of some fixed-rate debt securities. Since the debt securities are generally priced at a fixed rate, changes in interest
  rates do not directly affect interest income. In addition, changes in market interest rates are not typically a significant factor
  in the determination of fair value of these debt securities, since the securities are generally held to maturity. We determine
  their fair values based on the terms of the relevant debt security and the financial condition of the issuer.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">A major portion of our investment portfolio
  consists of debt and equity investments in private companies. Modest changes in public market equity prices generally do not significantly
  impact the estimated fair value of these investments. However, significant changes in market equity prices can have a longer-term
  effect on valuations of private companies, which could affect the carrying value and the amount and timing of gains or losses realized
  on these investments. A small portion of the investment portfolio could also consist of common stock in publicly traded companies.
  These investments are directly exposed to equity price risk, in that a hypothetical ten percent change in these equity prices would
  result in a similar percentage change in the fair value of these securities.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">We are classified as a &ldquo;non-diversified&rdquo;
  investment company under the 1940 Act, which means we are not limited in the proportion of our assets that may be invested in the
  securities of a single user. The value of one segment called &ldquo;Energy&rdquo; includes one portfolio company, Equus Energy,
  LLC, and was 22.4% of the net asset value and 43.6% of our investments in portfolio company securities (at fair value) as of June
  30, 2015. Changes in business or industry trends or in the financial condition, results of operations, or the market&rsquo;s assessment
  of any single portfolio company will affect the net asset value and the market price of our common stock to a greater extent than
  would be the case if we were a &ldquo;diversified&rdquo; company holding numerous investments.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 0.4in; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 55.05pt; text-indent: -55.1pt"><B><A NAME="a_012"></A><U>Item 4. Controls
  and Procedures </U></B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 55.05pt; text-indent: -55.1pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">The Fund maintains disclosure controls
  and other procedures that are designed to ensure that information required to be disclosed by the Fund in the reports that it files
  or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC&rsquo;s
  rules and forms, and that such information is accumulated and communicated to the Fund&rsquo;s management, including its Chief
  Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">The Fund&rsquo;s management, with the
  participation of the Fund&rsquo;s Chief Executive Officer and Chief Financial Officer, have evaluated the effectiveness of the
  design and operations of the Fund&rsquo;s &ldquo;disclosure controls and procedures&rdquo; (as defined in Rule 13a-15(e) under
  the Securities Exchange Act of 1934) as of June 30, 2015. Based on their evaluation, the Fund&rsquo;s Chief Executive Officer and
  Chief Financial Officer concluded that the Fund&rsquo;s disclosure controls and procedures were effective at a reasonable assurance
  level. There has been no change in the Fund&rsquo;s internal control over financial reporting during the quarter ended June 30,
  2015, that has materially affected, or is reasonably likely to materially affect, the Fund&rsquo;s internal control over financial
  reporting.&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B><U><A NAME="a_013"></A>Part II. Other Information </U></B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 55.05pt; text-indent: -55.1pt"><FONT STYLE="background-color: white"><B>&nbsp;</B></FONT></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 55.05pt; text-indent: -55.1pt"><B><U><A NAME="a_014"></A>Item 1. Legal Proceedings
  </U></B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 55.05pt; text-indent: -55.1pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>Champion Window Arbitration Settlement</B>&mdash;In
  January 2006, we sold our 31.5% ownership interest in Champion Window, Inc. (&ldquo;Champion&rdquo;), a portfolio company of the
  Fund, to Atrium Companies Inc. (&ldquo;Atrium&rdquo;) pursuant to a Stock Purchase Agreement (&ldquo;SPA&rdquo;) dated December
  22, 2005. The SPA contained certain limited rights of indemnification for Atrium in connection with its purchase of such ownership
  interest.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  
  <!-- Field: Page; Sequence: 30 -->
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      <DIV STYLE="page-break-before: always; margin-top: 6pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
      <!-- Field: /Page -->
  
  <P STYLE="font: 10pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">More than five years after the closing
  of the sale of our Champion interest, Atrium filed suit in Texas state court, which was subsequently consolidated into an Arbitration
  Action, against two former officers of Champion, Equus, and another former Champion shareholder. The suit alleged breaches of fiduciary
  duty against Champion&rsquo;s former officers for hiring undocumented workers that were discovered as a result of an investigation
  by the U.S. Immigration and Customs Enforcement agency (&ldquo;ICE&rdquo;) into Atrium&rsquo;s hiring practices. The suit also
  sought indemnification under the SPA from these officers, Equus, and another former Champion shareholder, for a payment of $2.0
  million made to ICE in settlement of the investigation and associated legal costs, as well as for claimed lost profits as a result
  of the investigation.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">On February 4, 2015, without admitting
  to any liability on the part of Equus, we entered into a settlement agreement with Atrium and its associated companies. Pursuant
  to the settlement agreement and in view of the estimated costs of protracted litigation and the associated disruption to the operations
  of the Fund, we agreed to pay $500,000, in complete settlement of the lawsuit, as being in the best interests of the Fund and its
  shareholders. The settlement payment was made on February 6, 2015. Atrium filed a motion to dismiss the lawsuit with prejudice
  on February 4, 2015.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>Indemnification Settlement</B>&mdash;Effective
  June 13, 2013, the Fund entered into a settlement agreement with Sam Douglass, a former director and executive officer of the Fund,
  in respect of a claim for indemnification pursuant to the General Corporation Law of Delaware and an indemnification agreement
  entered into by the Fund with Mr. Douglass on May 3, 2001. The settlement agreement provides for the reimbursement to Mr. Douglass
  of actual expenses incurred, excluding any fines or penalties, in connection with an enforcement action initiated by the Securities
  and Exchange Commission against Mr. Douglass in 2009. The settlement payment of $125,000 was made on June 24, 2013.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>Lawsuit Settlement</B>&mdash;On August
  12, 2012, Paula Douglass filed a lawsuit against the Fund and members of the Board of Directors in the District Court of Harris
  County, Texas. Ms. Douglass&rsquo; complaint alleged various causes of action, including minority shareholder oppression, dilution,
  and breach of fiduciary duty, and sought unspecified damages and attorney&rsquo;s fees. Effective June 13, 2013, the Fund entered
  into a settlement agreement with Ms. Douglass, Sam Douglass, as well as certain trusts controlled by them. Pursuant to the settlement
  agreement and in view of the estimated costs of protracted litigation and the associated disruption to the operations of the Fund,
  the Board of Directors approved a payment of $402,254, in complete settlement of the lawsuit, as being in the best interests of
  the Fund and its shareholders. The settlement payment was made on July 30, 2013. Ms. Douglass filed a motion to dismiss the lawsuit
  with prejudice on August 8, 2013.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">From time to time, the Fund is also
  a party to certain proceedings incidental to the normal course of our business including the enforcement of our rights under contracts
  with our portfolio companies. While the outcome of these legal proceedings cannot at this time be predicted with certainty, we
  do not expect that these proceedings will have a material effect upon the Fund&rsquo;s financial condition or results of operations.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><A NAME="a_015"></A><B><U>Item 1A. Risk Factors </U></B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">There have been no material changes
  in the Fund&rsquo;s risk factors from the disclosure set forth in the Annual Report on Form 10-K for the year ended December 31,
  2014.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Readers should carefully consider these
  risks and all other information contained in the annual report on Form 10-K, including the Fund&rsquo;s financial statements and
  the related notes thereto. The risks and uncertainties described below are not the only ones facing the Fund.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Additional risks and uncertainties not
  presently known to the Fund, or not presently deemed material by the Fund, may also impair its operations and performance.&nbsp;&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B>&nbsp;</B></P>
  
  
  <!-- Field: Page; Sequence: 31 -->
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  <P STYLE="font: 10pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><A NAME="a_016"></A><B><U>Item 6. Exhibits </U></B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 10pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <tr style="vertical-align: top">
      <td style="width: 0px; font-size: 12pt; line-height: 115%">&nbsp;</td>
      <td style="width: 33px; padding-top: 4.5pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">3.</font></td>
      <td style="padding-top: 4.5pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Articles of Incorporation and by-laws</font></td></tr>
  </table>
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 10pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <tr style="vertical-align: top">
      <td style="width: 41px; font-size: 12pt; line-height: 115%">&nbsp;</td>
      <td style="width: 41px; padding-top: 4.5pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(a)</font></td>
      <td style="padding-top: 4.5pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Restated Certificate of Incorporation of the Fund, as amended. [Incorporated by reference to Exhibit 3(a) to Registrant&rsquo;s Annual Report on Form 10-K for the year ended December 31, 2007]</font></td></tr>
  </table>
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 10pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <tr style="vertical-align: top">
      <td style="width: 41px; font-size: 12pt; line-height: 115%">&nbsp;</td>
      <td style="width: 41px; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(b)</font></td>
      <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Certificate of Merger dated June 30, 1993, between the Fund and Equus Investments Incorporated [Incorporated by reference to Exhibit 3(c) to Registrant&rsquo;s Annual Report on Form 10-K for the year ended December 31, 2007]</font></td></tr>
  </table>
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 10pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <tr style="vertical-align: top">
      <td style="width: 41px; font-size: 12pt; line-height: 115%">&nbsp;</td>
      <td style="width: 41px; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(c)</font></td>
      <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Amended and Restated Bylaws of the Fund. [Incorporated by reference to Exhibit 3(b) to Registrant&rsquo;s Current Report on Form 8-K filed on June 30, 2014.]</font></td></tr>
  </table>
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 10pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <tr style="vertical-align: top">
      <td style="width: 0px; font-size: 12pt; line-height: 115%">&nbsp;</td>
      <td style="width: 33px; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">10.</font></td>
      <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Material Contracts.</font></td></tr>
  </table>
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 10pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <tr style="vertical-align: top">
      <td style="width: 41px; font-size: 12pt; line-height: 115%">&nbsp;</td>
      <td style="width: 41px; padding-top: 4.5pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(a)</font></td>
      <td style="padding-top: 4.5pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Safekeeping Agreement between the Fund and Amegy Bank dated August 16, 2008. [Incorporated by reference to Exhibit 10(c) to Registrant&rsquo;s Annual Report on Form 10-K for the year ended December 31, 2008.]</font></td></tr>
  </table>
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 10pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <tr style="vertical-align: top">
      <td style="width: 41px; font-size: 12pt; line-height: 115%">&nbsp;</td>
      <td style="width: 41px; padding-top: 4.5pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(b)</font></td>
      <td style="padding-top: 4.5pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Form of Indemnification Agreement between the Fund and its directors and certain officers. [Incorporated by reference to Exhibit 10(d) to Registrant&rsquo;s Annual Report on Form 10-K for the year ended December 31, 2011.]</font></td></tr>
  </table>
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 10pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <tr style="vertical-align: top">
      <td style="width: 41px; font-size: 12pt; line-height: 115%">&nbsp;</td>
      <td style="width: 41px; padding-top: 4.5pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(c)</font></td>
      <td style="padding-top: 4.5pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Form of Release Agreement between the Fund and certain of its officers and former officers. [Incorporated by reference to Exhibit 10(h) to Registrant&rsquo;s Annual Report on Form 10-K for the year ended December 31, 2004.]</font></td></tr>
  <tr style="vertical-align: top">
      <td style="font-size: 12pt; line-height: 115%">&nbsp;</td>
      <td style="padding-top: 4.5pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(d)</font></td>
      <td style="padding-top: 4.5pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Code of Ethics of the Fund (Rule 17j-1) [Incorporated by reference to Exhibit 10(f) to Registrant&rsquo;s Annual Report on Form 10-K for the year ended December 31, 2009.]</font></td></tr>
  </table>
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 10pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <tr style="vertical-align: top">
      <td style="width: 41px; font-size: 12pt; line-height: 115%">&nbsp;</td>
      <td style="width: 41px; padding-top: 4.5pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(e)</font></td>
      <td style="padding-top: 4.5pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Share Exchange Agreement between the Fund and MVC Capital, Inc., dated May 14, 2014. [Incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K, filed on May 15, 2014.]</font></td></tr>
  </table>
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 10pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <tr style="vertical-align: top">
      <td style="width: 0px; font-size: 12pt; line-height: 115%">&nbsp;</td>
      <td style="width: 33px; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">31.</font></td>
      <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Rule 13a-14(a)/15d-14(a) Certifications</font></td></tr>
  </table>
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 10pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <tr style="vertical-align: top">
      <td style="width: 41px; font-size: 12pt; line-height: 115%">&nbsp;</td>
      <td style="width: 41px; padding-top: 4.5pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">1.</font></td>
      <td style="padding-top: 4.5pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><A HREF="ex31_1302cert.htm">Certification by Chief Executive Officer</A></font></td></tr>
  </table>
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 10pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <tr style="vertical-align: top">
      <td style="width: 41px; font-size: 12pt; line-height: 115%">&nbsp;</td>
      <td style="width: 41px; padding-top: 4.5pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">2.</font></td>
      <td style="padding-top: 4.5pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><A HREF="ex31_2302cert.htm">Certification by Chief Financial Officer</A></font></td></tr>
  </table>
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 10pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <tr style="vertical-align: top">
      <td style="width: 0px; font-size: 12pt; line-height: 115%">&nbsp;</td>
      <td style="width: 33px; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">32.</font></td>
      <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Section 1350 Certifications</font></td></tr>
  </table>
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 10pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <tr style="vertical-align: top">
      <td style="width: 41px; font-size: 12pt; line-height: 115%">&nbsp;</td>
      <td style="width: 41px; padding-top: 4.5pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">1.</font></td>
      <td style="padding-top: 4.5pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><A HREF="ex32_1906cert.htm">Certification by Chief Executive Officer</A></font></td></tr>
  </table>
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 10pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <tr style="vertical-align: top">
      <td style="width: 41px; font-size: 12pt; line-height: 115%">&nbsp;</td>
      <td style="width: 41px; padding-top: 4.5pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">2.</font></td>
      <td style="padding-top: 4.5pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><A HREF="ex32_2906cert.htm">Certification by Chief Financial Officer</A></font></td></tr>
  </table>
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 6pt; text-indent: 0.5in">&nbsp;</P>
  
  
  <!-- Field: Page; Sequence: 32 -->
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  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 0.4in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><A NAME="a_017"></A>SIGNATURE</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Pursuant to the requirements of Section
  13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has caused this report to be signed by the undersigned, thereunto
  duly authorized.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 9pt 0 0">Date: August 12, 2015</P>
  
  <TABLE CELLSPACING="0" CELLPADDING="0" ALIGN="RIGHT" STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; width: 30%; border-collapse: collapse">
  <tr>
      <TD STYLE="width: 100%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">EQUUS TOTAL RETURN, INC.</font></td></tr>
  <tr>
      <td style="font-size: 12pt; line-height: 115%">&nbsp;</td></tr>
  <tr style="vertical-align: top">
      <td style="border-bottom: black 1pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">/s/ John A. Hardy</font></td></tr>
  <tr style="vertical-align: top">
      <td style="text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>John A. Hardy</b></font></td></tr>
  <tr style="vertical-align: top">
      <td style="text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Chief Executive Officer</b></font></td></tr>
  </table><BR STYLE="clear: both">
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><BR CLEAR="ALL">
  </P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 6pt; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 10pt; text-indent: 0.5in"><B>&nbsp;</B></P>
  
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  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 0 0.4in; text-indent: 0.5in"></P>
  
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metadata_documents: [{"type": "10-Q", "sequence": "1", "filename": "f10q_equus63015.htm", "description": "FORM 10-Q", "secsgml_size_bytes": 496439}]
metadata_filer: {"company-data": {"conformed-name": "EQUUS TOTAL RETURN, INC.", "cik": "0000878932", "irs-number": "760345915", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "10-Q", "act": "34", "file-number": "814-00098", "film-number": "151046061"}, "business-address": {"street1": "EIGHT GREENWAY PLAZA", "street2": "SUITE 930", "city": "HOUSTON", "state": "TX", "zip": "77046", "phone": "7135290900"}, "mail-address": {"street1": "EIGHT GREENWAY PLAZA", "street2": "SUITE 930", "city": "HOUSTON", "state": "TX", "zip": "77046"}, "former-company": {"former-conformed-name": "EQUUS II INC", "date-changed": "19970422"}}
text: UNITED STATES
  SECURITIES AND EXCHANGE COMMISSION
  Washington, D.C. 20549
  FORM 10-Q
  (Mark One)
  ☒
  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
  For the quarterly period ended
  June 30, 2015
  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
  EQUUS TOTAL RETURN, INC.
  (Exact name of registrant as specified
  in its charter)
  Delaware
  76-0345915
  (State or other jurisdiction of
  incorporation or organization)
  (I.R.S. Employer
  Identification No.)
  700 Louisiana St., 48
  th
  Floor
  Houston, Texas
  77002
  (Address of principal executive offices)
  (Zip Code)
  (Former Name, Former Address and
  Former Fiscal Year, if Changed Since Last Report)
  Registrant's telephone
  number, including area code: (713) 529-0900
  Indicate
  by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
  Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and
  (2) has been subject to such filing requirements for the past 90 days. Yes
  x
  No
  ¨
  Indicate
  by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive
  Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the
  preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes
  ☐
  No
  ☐
  Indicate by check mark whether
  the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of "accelerated
  filer and large accelerated filer" in Rule 12b-2 of the Exchange Act.
  Large accelerated filer
  ☐
  Accelerated filer
  ☐
  Non-accelerated filer
  ☒
  Smaller Reporting Company
  ☐
  Indicate
  by check mark whether the registrant is a shell company. Yes
  ☐
  No
  ☒
  There were 12,673,646 shares
  of the registrant's common stock, $.001 par value, outstanding, as of August 12, 2015.
  Table of Contents
  EQUUS TOTAL RETURN, INC.
  (A Delaware Corporation)
  INDEX
  PAGE
  PART I. FINANCIAL INFORMATION
  Item 1. Financial Statements
  3
  Balance Sheets
  3
  Statements of Operations
  4
  Statements of Changes in Net Assets
  5
  Statements of Cash Flows
  6
  Supplemental Information—Selected Per Share Data and Ratios
  7
  Schedules of Investments
  8
  Notes to Financial Statements
  12
  Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
  26
  Item 3. Quantitative and Qualitative Disclosure about Market Risk
  30
  Item 4. Controls and Procedures
  30
  PART II. OTHER INFORMATION
  Item 1. Legal Proceedings
  30
  Item 1A. Risk Factors
  31
  Item 6. Exhibits
  32
  SIGNATURE
  33
  Table of Contents
  2
  EQUUS TOTAL RETURN, INC.
  BALANCE SHEETS
  (Unaudited)
  Part I. Financial Information
  Item 1. Financial Statements
  June 30,
  2015
  December 31,
  2014
  (in thousands, except per share amounts)
  Assets
  Investments in portfolio securities at fair value:
  Control investments (cost at $10,050 and $16,058 respectively)
  $
  8,715
  $
  13,173
  Affiliate investments (cost at $350 and $350 respectively)
  5,627
  960
  Non-affiliate investments - related party (cost at $5,815 and $5,706 respectively)
  4,243
  3,981
  Non-affiliate investments (cost at $915 and $1,097 respectively)
  915
  1,532
  Total investments in portfolio securities at fair value
  19,500
  19,646
  Cash and cash equivalents
  17,977
  15,697
  Restricted cash and temporary cash investments
  —
  15,149
  Accounts receivable from investments
  614
  614
  Accrued interest receivable
  62
  764
  Accrued dividend receivable
  —
  54
  Accounts receivable and other
  169
  114
  Total assets
  38,322
  52,038
  Liabilities and net assets
  Accounts payable and accrued liabilities
  87
  664
  Accounts payable to related parties
  250
  174
  Borrowing under margin account
  —
  14,999
  Total liabilities
  337
  15,837
  Commitments and contingencies (see Note 2)
  Net assets
  $
  37,985
  $
  36,201
  Net assets consist of:
  Common stock, par value
  $
  13
  $
  13
  Capital in excess of par value
  54,227
  56,049
  Undistributed net investment losses
  (18,625
  )
  (16,956
  )
  Undistributed net capital gains
  —
  660
  Unrealized appreciation (depreciation) of portfolio securities, net
  3,942
  (1,840
  )
  Unrealized depreciation of portfolio securities - related party, net
  (1,572
  )
  (1,725
  )
  Total net assets
  $
  37,985
  $
  36,201
  Shares of common stock issued and outstanding, $.001 par value, 50,000 shares authorized
  12,674
  12,674
  Shares of preferred stock issued and outstanding, $.001 par value, 5,000 shares authorized
  —
  —
  Net asset value per share
  $
  3.00
  $
  2.86
  The accompanying notes are an integral
  part of these financial statements.
  Table of Contents
  3
  EQUUS TOTAL RETURN, INC.
  STATEMENTS OF OPERATIONS
  (Unaudited)
  Three months ended June 30,
  Six months ended June 30,
  (in thousands, except per share amounts)
  2015
  2014
  2015
  2014
  Investment income:
  Interest and dividend income:
  Control investments
  $
  —
  $
  —
  $
  —
  $
  198
  Non-affiliate investments - related party
  55
  —
  55
  —
  Non-affiliate investments
  32
  64
  76
  122
  Total interest and dividend income
  87
  64
  131
  320
  Interest from temporary cash investments
  2
  —
  2
  —
  Total investment income
  89
  64
  133
  320
  Expenses:
  Professional fees
  109
  237
  436
  528
  Compensation expense
  239
  225
  863
  437
  Director fees and expenses
  116
  161
  211
  257
  General and administrative expense
  135
  69
  176
  169
  Mailing, printing and other expenses
  66
  77
  89
  98
  Taxes
  18
  8
  25
  14
  Interest expense
  —
  —
  1
  —
  Total expenses
  683
  777
  1,801
  1,503
  Net investment loss
  (594
  )
  (713
  )
  (1,668
  )
  (1,183
  )
  Net realized gain (loss):
  Control investments
  —
  —
  (2,850
  )
  —
  Non-affiliate investments
  —
  660
  372
  660
  Temporary cash investments
  —
  —
  (5
  )
  —
  Net realized gain (loss)
  —
  660
  (2,483
  )
  660
  Net unrealized appreciation (depreciation) of portfolio securities:
  End of period
  3,942
  (2,502
  )
  3,942
  (2,502
  )
  Beginning of period
  1,023
  (4,024
  )
  (1,840
  )
  (3,956
  )
  Net change in unrealized appreciation (depreciation) of portfolio securities
  2,919
  1,522
  5,782
  1,454
  Net unrealized depreciation of portfolio securities - related party:
  End of period
  (1,572
  )
  (458
  )
  (1,572
  )
  (458
  )
  Beginning of period
  (1,870
  )
  —
  (1,725
  )
  —
  Net change in unrealized depreciation of portfolio securities - related party
  298
  (458
  )
  153
  (458
  )
  Net increase in net assets resulting from operations
  $
  2,623
  $
  1,011
  $
  1,784
  $
  473
  Net increase in net assets resulting from operations per share:
  Basic and diluted
  $
  0.21
  $
  0.09
  $
  0.14
  $
  0.04
  Weighted average shares outstanding:
  Basic and diluted
  12,674
  11,676
  12,674
  11,122
  The accompanying notes are an integral
  part of these financial statements.
  Table of Contents
  4
  EQUUS TOTAL RETURN, INC.
  STATEMENTS OF CHANGES IN NET ASSETS
  (Unaudited)
  Six months ended June 30,
  (in thousands)
  2015
  2014
  Net increase in net assets resulting from operations
  $
  1,784
  $
  473
  Shares issued for portfolio securities - related party
  —
  4,351
  Increase in net assets
  1,784
  4,824
  Net assets at beginning of period
  36,201
  33,217
  Net assets at end of period
  $
  37,985
  $
  38,041
  The accompanying notes are an integral
  part of these financial statements.
  Table of Contents
  5
  EQUUS TOTAL RETURN, INC.
  STATEMENTS OF CASH FLOWS
  (Unaudited)
  Six months ended June 30,
  (in thousands)
  2015
  2014
  Reconciliation of increase in net assets resulting from operations to net cash
  provided by operating activities:
  Net increase in net assets resulting from operations
  $
  1,784
  $
  473
  Adjustments to reconcile net decrease in net assets resulting from operations to net cash
  provided by operating activities:
  Net realized loss (gain)
  2,483
  (660
  )
  Net change in unrealized appreciation (depreciation) of portfolio
      securities
  (5,782
  )
  (458
  )
  Net change in unrealized depreciation of portfolio securities - related party
  (153
  )
  (538
  )
  Changes in operating assets and liabilities:
  Purchase of portfolio securities
  —
  (647
  )
  Net proceeds from dispositions of portfolio securities
  372
  62
  Principal payments received from portfolio securities
  4,255
  —
  Sales of temporary cash investments, net
  15,144
  15,149
  Increase in accounts receivable from investments
  —
  (202
  )
  (Increase) decrease  in accrued interest receivable
  (268
  )
  4
  Increase in accounts receivable and other
  (55
  )
  (280
  )
  (Decrease) increase in accounts payable and accrued liabilities
  (577
  )
  194
  Increase in accounts payable to related parties
  76
  36
  Net cash provided by operating activities
  17,279
  13,133
  Cash flows from financing activities:
  Repayments under margin account
  (14,999
  )
  (15,000
  )
  Net cash used in financing activities
  (14,999
  )
  (15,000
  )
  Net increase (decrease) in cash and cash equivalents
  2,280
  (1,867
  )
  Cash and cash equivalents at beginning of period
  15,697
  19,065
  Cash and cash equivalents at end of period
  $
  17,977
  $
  17,198
  Non-cash operating and financing activities:
  Shares issued in lieu of cash for portfolio securities
  $
  —
  $
  4,351
  Accrued interest or dividends exchanged for portfolio securities
  $
  915
  $
  117
  Accrued interest or dividends exchanged for portfolio securities - related party
  $
  110
  $
  —
  Supplemental disclosure of cash flow information:
  Interest paid
  $
  1
  $
  —
  Income taxes paid
  $
  22
  $
  11
  The accompanying notes are an integral
  part of these financial statements.
  Table of Contents
  6
  EQUUS TOTAL RETURN, INC.
  SUPPLEMENTAL INFORMATION—SELECTED
  PER SHARE DATA AND RATIOS
  (Unaudited)
  Six months ended June 30,
  2015
  2014
  Investment income
  $
  0.01
  $
  0.03
  Expenses
  0.14
  (0.14
  )
  Net investment loss
  (0.13
  )
  (0.11
  )
  Net realized (loss) gain
  (0.20
  )
  0.06
  Net change in unrealized depreciation
  0.46
  0.13
  Net change in unrealized depreciation - related party
  0.01
  (0.04
  )
  Net increase in net assets  from operations
  0.14
  0.04
  Capital transactions:
  Shares issued for portfolio securities
  —
  0.39
  Dilutive effect of shares issued
  —
  (0.57
  )
  Decrease in net assets resulting from capital transactions
  —
  (0.18
  )
  Net increase (decrease) in net assets
  0.14
  (0.14
  )
  Net assets at beginning of period
  2.86
  3.14
  Net assets at end of period, basic and diluted
  $
  3.00
  $
  3.00
  Weighted average number of shares outstanding during period,
  in thousands
  12,674
  11,122
  Market price per share:
  Beginning of period
  $
  2.10
  $
  1.92
  End of period
  $
  1.90
  $
  2.48
  Selected information and ratios:
  Ratio of expenses to average net assets
  4.86
  %
  4.56
  %
  Ratio of net investment loss to average net assets
  (4.50
  %)
  (3.58
  %)
  Ratio of net increase in net assets resulting from operations to average net
      assets
  4.81
  %
  1.30
  %
  Total return on market price
  (1)
  (9.52
  %)
  29.17
  %
  (1)
  Total return = [(ending market price per share - beginning price per share) / beginning market price per share
  ].
  The accompanying notes are an integral
  part of these financial statement
  Table of Contents
  7
  EQUUS TOTAL RETURN, INC.
  SCHEDULE OF INVESTMENTS
  JUNE 30, 2015
  (Unaudited)
  (in thousands, except share data)
  Name and Location of
  Date of Initial
  Cost of
  Fair
  Portfolio Company
  Industry
  Investment
  Investment
  Principal
  Investment
  Value
  (1)
  Control Investments:  Majority-owned
  (3)
  :
  Equus Energy, LLC
  Houston, TX
  Energy
  December 2011
  Member interest (100%)
  $
  7,050
  $
  8,500
  Equus Media Development Company, LLC
  Houston, TX
  Media
  January 2007
  Member interest (100%)
  3,000
  215
  Total Control Investments: Majority-owned (represents 44.7% of total investments at fair value)
  $
  10,050
  $
  8,715
  Affiliate Investments
  (4)
  :
  PalletOne, Inc.
  Bartow, FL
  Shipping products and services
  October 2001
  350,000 shares of common stock (18.8%)
  $
  350
  $
  5,627
  Total Affiliate Investments (represents 28.8% of total investments at fair value)
  $
  350
  $
  5,627
  Non-Affiliate Investments - Related Party (less than 5% owned):
  MVC Capital, Inc.
  Purchase, NY
  Financial services
  September 2014
  415,946 shares of common stock (1.7%)
  (5)
  $
  5,815
  $
  4,243
  Total Non-Affiliate Investments - Related Party (represents 21.8% of total investments at fair value)
  $
  5,815
  $
  4,243
  Non-Affiliate Investments (less than 5% owned):
  5
  TH
  Element Tracking LLC
  Boston, MA
  Business products and services
  January 2015
  14% promissory note due 1/16
  (2)
  $
  915
  915
  915
  Total Non-Affiliate Investments (represents 4.7% of total investments at fair value)
  $
  915
  $
  915
  Total Investment in Portfolio Securities
  $
  17,130
  $
  19,500
  (1)
  See Note 3 to the financial statements, Valuation of Investments.
  (2)
  Income-producing.
  (3)
  Majority owned investments are generally defined under the Investment Company Act of 1940 as companies in which we own more than 50% of the voting securities of the company.
  (4)
  Affiliate investments are generally defined under the Investment Company Act of 1940 as companies in which we own at least 5% but not more than 25% voting securities of the company.
  (5)
  Pursuant to a Share Exchange Agreement between the Fund and MVC dated May 14, 2014, MVC has the right to rescind the Agreement and cancel the Share Exchange if Equus does not complete a "reorganization" (as defined under Section 2(a)(33) of the 1940 Act) within a 90-day period following the 1-year anniversary date of the Agreement.
  The accompanying notes are an integral
  part of these financial statements.
  Table of Contents
  8
  EQUUS TOTAL RETURN, INC.
  SCHEDULE OF INVESTMENTS –
  (Continued)
  JUNE 30, 2015
  (Unaudited)
  Except for our holding of shares of
  MVC Capital, Inc. ("MVC"), substantially all of our portfolio securities are restricted from public sale without prior
  registration under the Securities Act of 1933 (hereafter, the "Securities Act") or other relevant foreign regulatory
  authority. We negotiate certain aspects of the method and timing of the disposition of our investment in each portfolio company,
  including registration rights and related costs.
  We may invest up to 30% of our assets
  in non-qualifying portfolio investments, as permitted by the Investment Company Act of 1940 (hereafter, the "1940 Act").
  Specifically, we may invest up to 30% of our assets in entities that are not considered "eligible portfolio companies"
  (as defined in the 1940 Act), including companies located outside of the United States, entities that are operating pursuant to
  certain exceptions under the 1940 Act, and publicly-traded entities with a market capitalization exceeding $250 million. As of
  June 30, 2015, except for our shares of MVC, all of our investments are in enterprises that are considered eligible portfolio companies
  under the 1940 Act. We provide significant managerial assistance to portfolio companies that comprise 44.7% of the total value
  of the investments in portfolio securities as of June 30, 2015.
  Our investments in portfolio securities
  consist of the following types of securities as of June 30, 2015 (in thousands):
  Type of Securities
  Cost
  Fair Value
  Fair Value as
  Percentage of
  Net Assets
  Limited liability company investments
  $
  10,050
  $
  8,715
  22.9
  %
  Common stock
  6,165
  9,870
  26.0
  %
  Secured and subordinated debt
  915
  915
  2.4
  %
  Total
  $
  17,130
  $
  19,500
  51.3
  %
  The following is a summary by industry
  of the Fund's investments in portfolio securities as of June 30, 2015 (in thousands):
  Industry
  Fair Value
  Fair Value as
  Percentage of
  Net Assets
  Energy
  $
  8,500
  22.4
  %
  Financial services
  4,243
  11.2
  %
  Shipping products and services
  5,627
  14.8
  %
  Business products and services
  915
  2.4
  %
  Media
  215
  0.5
  %
  Total
  $
  19,500
  51.3
  %
  The accompanying notes are an integral
  part of these financial statements.
  Table of Contents
  9
  EQUUS TOTAL RETURN, INC.
  SCHEDULE OF INVESTMENTS
  DECEMBER 31, 2014
  (Unaudited)
  (in thousands, except share data)
  Name and Location of
  Date of Initial
  Cost of
  Fair
  Portfolio Company
  Industry
  Investment
  Investment
  Principal
  Investment
  Value
  (1)
  Control Investments: Majority-owned
  (4)
  :
  Equus Energy, LLC
  Houston, TX
  Energy
  December 2011
  Member interest (100%)
  $
  7,050
  $
  9,800
  Equus Media Development Company, LLC
  Houston, TX
  Media
  January 2007
  Member interest (100%)
  3,000
  215
  Spectrum Management, LLC
  Carrolton, TX
  Business products and services
  December 1999
  285,000 units of Class A member interest (92.1%/82.5% fully diluted)
  2,850
  -
  16% subordinated promissory note due 11/11
  (3)
  $
  3,158
  3,158
  3,158
  6,008
  3,158
  Total Control Investments: Majority-owned (represents 38.0% of total investments at fair value)
  $
  16,058
  $
  13,173
  Affiliate Investments
  (5)
  :
  PalletOne, Inc.
  Bartow, FL
  Shipping products and services
  October 2001
  350,000 shares of common stock (18.8%)
  $
  350
  $
  960
  Total Affiliate Investments (represents 2.8% of total investments at fair value)
  $
  350
  $
  960
  Non-Affiliate Investments - Related Party (less than 5% owned):
  MVC Capital, Inc.
  Purchase, NY
  Financial services
  September 2014
  404,968 shares of common stock (1.7%)
  (6)
  $
  5,706
  $
  3,981
  Total Non-Affiliate Investments - Related Party (represents 11.5% of total investments at fair value)
  $
  5,706
  $
  3,981
  Non-Affiliate Investments (less than 5% owned):
  Orco Property Group S. A.
  Paris, France
  Real estate
  April 2011
  10% promissory note due 2/18
  (2)(7)
  $
  597
  597
  1,032
  Security Monitor Holdings, LLC
  Boston, MA
  Business products and services
  November 2013
  14% promissory note due 6/14
  (2)
  500
  500
  500
  Total Non-Affiliate Investments (represents 4.4% of total investments at fair value)
  $
  1,097
  $
  1,532
  Total Investment in Portfolio Securities
  $
  23,211
  $
  19,646
  Temporary Cash Investments
  U.S. Treasury Bill
  Government
  December 2014
  UST 0% 6/15
  14,999
  $
  14,999
  $
  14,996
  Total Temporary Cash Investments (represents 43.3% of total investments at fair value)
  $
  14,999
  $
  14,996
  Total Investments
  $
  38,210
  $
  34,642
  (1)
  See Note 3 to the financial statements, Valuation of Investments.
  (2)
  Income-producing.
  (3)
  Non-income producing.
  (4)
  Majority owned investments are generally defined under the Investment Company Act of 1940 as companies in which we own more than 50% of the voting securities of the company.
  (5)
  Affiliate investments are generally defined under the Investment Company Act of 1940 as companies in which we own at least 5% but not more than 25% voting securities of the company.
  (6)
  Pursuant to a Share Exchange Agreement between the Fund and MVC dated May 14, 2014, MVC has the right to rescind the Agreement and cancel the Share Exchange if Equus does not complete a "reorganization" (as defined under Section 2(a)(33) of the 1940 Act) within a 90-day period following the 1-year anniversary date of the Agreement.
  (7)
  In October 2014, the terms of these notes were amended to provide, among other changes, an extension of the maturity date to October 2019, and a reduction in the interest rate applicable to the notes from a combination of 5% cash and 5% payment-in-kind securities, to 7% in cash.
  The accompanying notes are an integral
  part of these financial statements.
  Table of Contents
  10
  EQUUS TOTAL RETURN, INC.
  SCHEDULE OF INVESTMENTS – (Continued)
  DECEMBER 31, 2014
  (Unaudited)
  Except for our holding of shares of
  MVC and our notes of Orco Property Group S.A. ("OPG"), substantially all of our portfolio securities are restricted
  from public sale without prior registration under the Securities Act. We negotiate certain aspects of the method and timing of
  the disposition of our investment in each portfolio company, including registration rights and related costs.
  As defined in the 1940 Act, all of our
  investments are in eligible portfolio companies. We provide significant managerial assistance to portfolio companies that comprise
  67.1% of the total value of the investments in portfolio securities as of December 31, 2014.
  Our investments in portfolio securities
  consist of the following types of securities as of December 31, 2014 (in thousands):
  Type of Securities
  Cost
  Fair Value
  Fair Value as
  Percentage of
  Net Assets
  Limited liability company investments
  $
  12,900
  $
  10,015
  27.7
  %
  Secured and subordinated debt
  4,255
  4,690
  13.0
  %
  Common stock
  6,056
  4,941
  13.6
  %
  Total
  $
  23,211
  $
  19,646
  54.3
  %
  Interest payments are being received
  and/or accrued on notes with a fair value of $1.5 million, while accrued interest has been impaired on notes receivable included
  in secured and subordinated debt with a fair value of $3.2 million.
  The following is a summary by industry of our investments
  in portfolio securities as of December 31, 2014 (in thousands):
  Industry
  Fair Value
  Fair Value as
  Percentage of
  Net Assets
  Energy
  $
  9,800
  27.1
  %
  Financial services
  3,981
  11.0
  %
  Business products and services
  3,658
  10.1
  %
  Real estate
  1,032
  2.9
  %
  Shipping products and services
  960
  2.7
  %
  Media
  215
  0.5
  %
  Total
  $
  19,646
  54.3
  %
  The accompanying notes are an integral
  part of these financial statements.
  Table of Contents
  11
  EQUUS TOTAL RETURN, INC.
  NOTES TO FINANCIAL STATEMENTS
  JUNE 30, 2015
  (Unaudited)
  (1)
  Description of Business and Basis of Presentation
  Description of Business
  —
  Equus Total Return, Inc. (
  "we," "us," "our," "Equus" the "Company"
  and the "Fund
  "), a Delaware corporation, was formed by Equus Investments II, L.P. (the "Partnership")
  on August 16, 1991. On July 1, 1992, the Partnership was reorganized and all of the assets and liabilities of the Partnership were
  transferred to the Fund in exchange for shares of common stock of the Fund. Our shares trade on the New York Stock Exchange under
  the symbol EQS. On August 11, 2006, our shareholders approved the change of the Fund's investment strategy to a total return
  investment objective. This strategy seeks to provide the highest total return, consisting of capital appreciation and current income.
  In connection with this strategic investment change, the shareholders also approved the change of name from Equus II Incorporated
  to Equus Total Return, Inc.
  We attempt to maximize the return to
  stockholders in the form of current investment income and long-term capital gains by investing in the debt and equity securities
  of companies with a total enterprise value of between $5.0 million and $75.0 million, although we may engage in transactions with
  smaller or larger investee companies from time to time. We seek to invest primarily in companies pursuing growth either through
  acquisition or organically, leveraged buyouts, management buyouts and recapitalizations of existing businesses or special situations.
  Our income-producing investments consist principally of debt securities including subordinate debt, debt convertible into common
  or preferred stock, or debt combined with warrants and common and preferred stock. Debt and preferred equity financing may also
  be used to create long-term capital appreciation through the exercise and sale of warrants received in connection with the financing.
  We seek to achieve capital appreciation by making investments in equity and equity-oriented securities issued by privately-owned
  companies (or smaller public companies) in transactions negotiated directly with such companies. Given market conditions over the
  past several years and the performance of our portfolio, our Management and Board of Directors believe it prudent to continue to
  review alternatives to refine and further clarify the current strategies.
  We elected to be treated as a business
  development company ("BDC") under the 1940 Act. We currently qualify as a regulated investment company ("RIC")
  for federal income tax purposes and, therefore, are not required to pay corporate income taxes on any income or gains that we distribute
  to our stockholders. We have certain wholly owned taxable subsidiaries ("Taxable Subsidiaries") each of which holds
  one or more portfolio investments listed on our Schedules of Investments. The purpose of these Taxable Subsidiaries is to permit
  us to hold certain income-producing investments or portfolio companies organized as limited liability companies, or LLCs, (or other
  forms of pass-through entities) and still satisfy the RIC tax requirement that at least 90% of our gross revenue for income tax
  purposes must consist of investment income. Absent the Taxable Subsidiaries, a portion of the gross income of these income-producing
  investments or of any LLC (or other pass-through entity) portfolio investment, as the case may be, would flow through directly
  to us for the 90% test. To the extent that such income did not consist of investment income, it could jeopardize our ability to
  qualify as a RIC and, therefore, cause us to incur significant federal income taxes. The income of the LLCs (or other pass-through
  entities) owned by Taxable Subsidiaries is taxed to the Taxable Subsidiaries and does not flow through to us, thereby helping us
  preserve our RIC status and resultant tax advantages. We do not consolidate the Taxable Subsidiaries for income tax purposes and
  they may generate income tax expense because of the Taxable Subsidiaries' ownership of the portfolio companies. We reflect
  any such income tax expense on our Statements of Operations.
  Basis of Presentation
  —In
  accordance with Article 6 of Regulation S-X under the Securities Act of 1933 and the Securities Exchange Act of 1934, we do not
  consolidate portfolio company investments, including those in which we have a controlling interest. Our interim unaudited financial
  statements were prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP,
  for interim financial information and in accordance with the requirements of reporting on Form 10-Q and Article 10 of Regulation
  S-X, under the Securities Exchange Act of 1934, as amended. Accordingly, they are unaudited and exclude some disclosures required
  for annual financial statements. Management believes it has made all adjustments, consisting solely of normal recurring accruals,
  necessary for the fair presentation of these interim financial statements.
  The results of operations for the six
  months ended June 30, 2015 are not necessarily indicative of results that ultimately may be achieved for the remainder of the year.
  The interim unaudited financial statements and notes thereto should be read in conjunction with the financial statements and notes
  thereto included in the Fund's Annual Report on Form 10-K for the fiscal year ended December 31, 2014, as filed with the
  Securities and Exchange Commission ("SEC"). Certain previously reported June 30, 2014 amounts have been reclassified
  to conform with the current presentation.
  Table of Contents
  12
  (2)
  Liquidity and Financing Arrangements
  Liquidity
  —There are several
  factors that may materially affect our liquidity during the reasonably foreseeable future. We view this period as the twelve month
  period from the date of the financial statements in this Form 10-Q,
  i.e
  ., the period through June 30, 2016. We are evaluating
  the impact of current market conditions on our portfolio company valuations and their ability to provide current income. We have
  followed valuation techniques in a consistent manner; however, we are cognizant of current market conditions that might affect
  future valuations of portfolio securities. We believe that our operating cash flow and cash on hand will be sufficient to meet
  operating requirements and to finance routine follow-on investments, if any, through the next twelve months.
  Cash and Cash Equivalents
  —As
  of June 30, 2015, we had cash and cash equivalents of $18.0 million. We had $19.5 million of our net assets of $38.0 million invested
  in portfolio securities.
  As of December 31, 2014, we had cash
  and cash equivalents of $15.7 million. We had $19.7 million of our net assets of $36.2 million invested in portfolio securities.
  We also had $15.1 million of restricted cash and temporary cash investments, including primarily the proceeds of a quarter-end
  margin loan that we incurred to maintain the diversification requirements applicable to a RIC to maintain our pass-through tax
  treatment. Of this amount, $15.0 million was invested in U.S. Treasury bills and $0.1 million represented a required 1% brokerage
  margin deposit. These securities were held by a securities brokerage firm and pledged along with other assets to secure repayment
  of the margin loan. The U.S. Treasury bills were sold on January 2, 2015 and we subsequently repaid this margin loan. The margin
  loan and interest was paid on February 4, 2015.
  Dividends
  — We will pay
  out net investment income and/or realized capital gains, if any, on an annual basis as required under the 1940 Act.
  Investment Commitments
  —As
  of June 30, 2015, we had no outstanding commitments to our portfolio company investments.
  Under certain circumstances, we may
  be called on to make follow-on investments in certain portfolio companies. If we do not have sufficient funds to make follow-on
  investments, the portfolio company in need of the investment may be negatively impacted. Also, our equity interest in the estimated
  fair value of the portfolio company could be reduced.
  RIC Borrowings, Restricted Cash and
  Temporary Cash Investments
  —We may periodically borrow sufficient funds to maintain the Fund's RIC status by utilizing
  a margin account with a securities brokerage firm. There is no assurance that such arrangement will be available in the future.
  If we are unable to borrow funds to make qualifying investments, we may no longer qualify as a RIC. We would then be subject to
  corporate income tax on the Fund's net investment income and realized capital gains, and distributions to stockholders would
  be subject to income tax as ordinary dividends. Failure to continue to qualify as a RIC could be materially adverse to us and our
  stockholders.
  We had no RIC borrowings or restricted
  cash as of June 30, 2015.
  As of December 31, 2014, we borrowed
  $15.0 million to maintain our RIC status by utilizing a margin account with a securities brokerage firm. We collateralized such
  borrowings with restricted cash and temporary cash investments in U.S. Treasury bills of $15.1 million. The U.S. Treasury bills
  were sold on January 2, 2015 and the total amount borrowed was repaid at that time. The margin loan and interest was paid on February
  4, 2015.
  Certain Risks and Uncertainties
  —
  Market and economic volatility which has become endemic in the past few years has resulted in a relatively limited amount of available
  debt financing for small and medium-sized companies such as Equus and its portfolio companies. Such debt financing generally has
  shorter maturities, higher interest rates and fees, and more restrictive terms than debt facilities available in the past. In addition,
  during these years and continuing into the first six months of 2015, the price of our common stock remained well below our net
  asset value, thereby making it undesirable to issue additional shares of our common stock below net asset value. Because of these
  challenges, our near-term strategies shifted from originating debt and equity investments to preserving liquidity necessary to
  meet our operational needs. Key initiatives that we have previously undertaken to provide necessary liquidity include monetizations,
  the suspension of dividends and the internalization of management. Although we cannot assure you that such initiatives will be
  sufficient, we believe we have sufficient liquidity to meet our operating requirements for the remainder of 2015 and the first
  six months of 2016.
  Table of Contents
  13
  (3)
  Significant Accounting Policies
  The following is a summary of significant
  accounting policies followed by the Fund in the preparation of its financial statements:
  Use of Estimates
  —The preparation
  of financial statements in accordance with GAAP requires us to make estimates and assumptions that affect the reported amounts
  and disclosures in the financial statements. Although we believe the estimates and assumptions used in preparing these financial
  statements and related notes are reasonable in light of known facts and circumstances, actual results could differ from those estimates.
  Valuation of Investments—
  We
  follow ASC Topic 820 for measuring fair value. Prior to our election to become a BDC, we also followed the guidance in ASC Topic
  820 in disclosing the fair value reported for all financial instruments that were either impaired or available for sale securities,
  using the definitions provided in Accounting Standards Codification Topic 320, "Investments – Debt and Equity Securities"
  ("ASC Topic 320"). Fair value is the price that would be received to sell an asset or paid to transfer a liability
  in an orderly transaction between market participants at the measurement date and sets out a fair value hierarchy. The fair value
  hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest
  priority to unobservable inputs (Level 3). Inputs are broadly defined under ASC Topic 820 as assumptions market participants would
  use in pricing an asset or liability. The three levels of the fair value hierarchy under ASC Topic 820 are described below:
  Level 1—Unadjusted quoted prices
  in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.
  Level 2—Inputs other than quoted
  prices within Level 1 that are observable for the asset or liability, either directly or indirectly; and fair value is determined
  through the use of models or other valuation methodologies.
  Level 3—Inputs are unobservable
  for the asset or liability and include situations where there is little, if any, market activity for the asset or liability. The
  inputs into the determination of fair value are based upon the best information under the circumstances and may require significant
  management judgment or estimation.
  We consider a two-step process when
  appraising investments of privately held companies. The first step involves determining the enterprise value of the portfolio company.
  During this step, we consider three different valuation approaches: a market approach, an income approach, and a cost approach.
  The particular facts and circumstances of each portfolio company determine which approach, or combination of approaches, will be
  utilized. The second step when appraising equity investments of privately held companies involves allocating value to the various
  debt and equity securities of the company. We allocate value to these securities based on their relative priorities. For equity
  securities such as warrants, we may also incorporate alternative methodologies including the Black-Scholes Option Pricing Model.
  Yield analysis is also employed to determine if a debt security has been impaired.
  In certain cases, the inputs used to
  measure fair value may fall into different levels of the fair value hierarchy. In such cases, an investment's level within
  the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. Our assessment
  of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors
  specific to the investment.
  Investments for which prices are not
  observable are generally private investments in the debt and equity securities of operating companies. The primary valuation method
  used to estimate the fair value of these Level 3 investments is the discounted cash flow method (although a liquidation analysis,
  option theoretical, or other methodology may be used when more appropriate). The discounted cash flow approach to determine fair
  value (or a range of fair values) involves applying an appropriate discount rate(s) to the estimated future cash flows using various
  relevant factors depending on investment type, including comparing the latest arm's length or market transactions involving
  the subject security to the selected benchmark credit spread, assumed growth rate (in cash flows), and capitalization rates/multiples
  (for determining terminal values of underlying portfolio companies). The valuation based on the inputs determined to be the most
  reasonable and probable is used as the fair value of the investment. The determination of fair value using these methodologies
  may take into consideration a range of factors including, but not limited to, the price at which the investment was acquired, the
  nature of the investment, local market conditions, trading values on public exchanges for comparable securities, current and projected
  operating performance, financing transactions subsequent to the acquisition of the investment and anticipated financing transactions
  after the valuation date. Application of these valuation methodologies involves a significant degree of judgment by management.
  Fair values of new investments are generally assumed to be equal to their cost to the Company for up to three months after their
  initial purchase.
  Table of Contents
  14
  To assess the reasonableness of the
  discounted cash flow approach, the fair value of equity securities, including warrants, in portfolio companies may also consider
  the market approach—that is, through analyzing and applying to the underlying portfolio companies, market valuation multiples
  of publicly-traded firms engaged in businesses similar to those of the portfolio companies. The market approach to determining
  the fair value of a portfolio company's equity security (or securities) will typically involve: (1) applying to the portfolio
  company's trailing twelve months (or current year projected) EBITDA a low to high range of enterprise value to EBITDA multiples
  that are derived from an analysis of publicly-traded comparable companies, in order to arrive at a range of enterprise values for
  the portfolio company; (2) subtracting from the range of calculated enterprise values the outstanding balances of any debt or equity
  securities that would be senior in right of payment to the equity securities we hold; and (3) multiplying the range of equity values
  derived therefrom by our ownership share of such equity tranche in order to arrive at a range of fair values for our equity security
  (or securities). Application of these valuation methodologies involves a significant degree of judgment by Management.
  Equity in a portfolio company that invests
  in loans will typically be valued by arriving at a fair value of such vehicle's loan assets (plus, when appropriate, the
  carrying value of certain other assets), and deducting the book value or fair value (as appropriate) of such vehicle's liabilities
  to arrive at a fair value for the equity. When appropriate, in order to recognize value that would be created by growth opportunities
  of such portfolio company, equity in a portfolio company may also be valued by taking into consideration the magnitude, timing,
  and effective life of its expected future investments in loans.
  Due to the inherent uncertainty of determining
  the fair value of Level 3 investments that do not have a readily available market value, the fair value of the investments may
  differ significantly from the values that would have been used had a ready market existed for such investments and may differ materially
  from the values that may ultimately be received or settled. Further, such investments are generally subject to legal and other
  restrictions or otherwise are less liquid than publicly traded instruments. If we were required to liquidate a portfolio investment
  in a forced or liquidation sale, we might realize significantly less than the value at which such investment had previously been
  recorded. With respect to Level 3 investments, where sufficient market quotations are not readily available or for which no or
  an insufficient number of indicative prices from pricing services or brokers or dealers have been received, we undertake, on a
  quarterly basis, a valuation process as described below:
  •
  For each debt investment, a basic credit review process is completed. The risk profile on every credit facility is reviewed and either reaffirmed or revised by our Investment Committee.
  •
  Each portfolio company or investment is valued by an investment professional
  •
  Third party valuation firm(s) are engaged to provide valuation services as requested, by reviewing Management's preliminary valuations and/or analysis of the portfolio investment in question. For investments with a fair value exceeding $2.5 million, our Management's preliminary fair value conclusions on each of the Fund's assets for which sufficient market quotations are not readily available is reviewed and assessed by a third-party valuation firm at least once in every 12-month period, and more often as determined by the Audit Committee or required by our valuation policy. Such valuation assessment may be in the form of positive assurance, range of values or another valuation method based on the discretion of our Board.
  •
  The Audit Committee reviews the preliminary valuations of our Management and independent valuation firms and, if appropriate, recommends the approval of the valuations by the Board.
  •
  Our Board discusses valuations and determines the fair value of each investment in the portfolio in good faith based on the input of Management, the Audit Committee and, where appropriate, the respective independent valuation firms.
  The following sections describe the
  valuation techniques we use to measure different financial instruments at fair value and include the levels within the fair value
  hierarchy in which the financial instruments are categorized.
  Market approach
  – The market
  approach typically employed by Management calculates the enterprise value of a company as a multiple of earnings before interest,
  taxes, depreciation and amortization ("EBITDA") generated by the company for the trailing twelve month period. Adjustments
  to the company's EBITDA, including those for non-recurring items, may be considered. Multiples are estimated based on current
  market conditions and past experience in the private company marketplace and are subjective in nature. We will apply liquidity
  and other discounts as deemed appropriate to equity valuations where applicable. We may also use, when available, third-party transactions
  in a portfolio company's securities as the basis of valuation (the "private market method"). The private market
  method will be used only with respect to completed transactions or firm offers made by sophisticated, independent investors.
  Table of Contents
  15
  Income approach
  – The income
  approach typically utilized by our Management calculates the enterprise value of a company utilizing a discounted cash flow model
  incorporating projected future cash flows of the company. Projected future cash flows consider the historical performance of the
  company as well as current and projected market participant performance. Discount rates are estimated based on current market conditions
  and past experience in the private company marketplace and are subjective in nature. We will apply liquidity and other discounts
  as deemed appropriate to equity valuations where applicable.
  Asset approach
  – We consider
  the asset approach to determine the fair value of significantly deteriorated investments demonstrating circumstances indicative
  of a liquidation analysis. This situation may arise when a portfolio company: 1) cannot generate adequate cash flow to meet the
  principal and interest payments on its indebtedness; 2) is not successful in refinancing its debt upon maturity; 3) we believe
  the credit quality of a loan has deteriorated due to changes in the business and underlying asset or market conditions may result
  in the company's inability to meet future obligations; or 4) the portfolio company's reorganization or bankruptcy.
  Consideration is also given as to whether a liquidation event would be orderly or forced.
  We base adjustments upon such factors
  as the portfolio company's earnings, cash flow and net worth, the market prices for similar securities of comparable companies,
  an assessment of the company's current and future financial prospects and various other factors and assumptions. In the case
  of unsuccessful or substantially declining operations, we may base a portfolio company's fair value upon the company's
  estimated liquidation value. Fair valuations are necessarily subjective, and our estimate of fair value may differ materially from
  amounts actually received upon the disposition of its portfolio securities. Also, any failure by a portfolio company to achieve
  its business plan or obtain and maintain its financing arrangements could result in increased volatility and result in a significant
  and rapid change in its value.
  Our general intent is to hold our loans
  to maturity when appraising our privately held debt investments. As such, we believe that the fair value will not exceed the cost
  of the investment. However, in addition to the previously described analysis involving allocation of value to the debt instrument,
  we will often perform a yield analysis to determine if a debt security has been impaired. Certificates of deposit purchased by
  the Fund generally will be valued at their face value, plus interest accrued to the date of valuation.
  For most of our investments, market
  quotations are not available. With respect to investments for which market quotations are not readily available or when such market
  quotations are deemed not to represent fair value, our Board has approved a multi-step valuation process each quarter, as described
  below:
  1.
  Each portfolio company or investment is reviewed by our investment professionals and, where necessary, with independent valuation firms engaged by the Fund;
  2.
  The independent valuation firms conduct independent valuations and make their own independent assessments;
  3.
  The Audit Committee of our Board reviews and discusses the preliminary valuation of the Fund and that of the independent valuation firms; and
  4.
  The Board discusses valuations and determines the fair value of each investment in our portfolio in good faith based on the input of our Management, the respective independent valuation firm and the Audit Committee.
  Investments are valued utilizing a yield
  analysis, enterprise value ("EV") analysis, net asset value analysis, liquidation analysis, discounted cash flow analysis,
  or a combination of methods, as appropriate. The yield analysis uses loan spreads and other relevant information implied by market
  data involving identical or comparable assets or liabilities. Under the EV analysis, the EV of a portfolio company is first determined
  and allocated over the portfolio company's securities in order of their preference relative to one another (i.e., "waterfall"
  allocation). To determine the EV, we typically use a market multiples approach that considers relevant and applicable market trading
  data of guideline public companies, transaction metrics from precedent M&A transactions and/or a discounted cash flow analysis.
  The net asset value analysis is used to derive a value of an underlying investment (such as real estate property) by dividing a
  relevant earnings stream by an appropriate capitalization rate. For this purpose, we consider capitalization rates for similar
  properties as may be obtained from guideline public companies and/or relevant transactions. The liquidation analysis is intended
  to approximate the net recovery value of an investment based on, among other things, assumptions regarding liquidation proceeds
  based on a hypothetical liquidation of a portfolio company's assets. The discounted cash flow analysis uses valuation techniques
  to convert future cash flows or earnings to a range of fair values from which a single estimate may be derived utilizing an appropriate
  discount rate. The measurement is based on the net present value indicated by current market expectations about those future amounts.
  Table of Contents
  16
  In applying these methodologies, additional
  factors that we consider in fair value pricing our investments may include, as we deem relevant: security covenants, call protection
  provisions, and information rights; the nature and realizable value of any collateral; the portfolio company's ability to
  make payments; the principal markets in which the portfolio company does business; publicly available financial ratios of peer
  companies; the principal market; and enterprise values, among other factors.
  Because of the inherent uncertainty
  of the valuation of portfolio securities which do not have readily ascertainable market values, amounting to $15.3 million and
  $15.7 million as of June 30, 2015 and December 31, 2014, respectively, our fair value determinations may materially differ from
  the values that would have been used had a ready market existed for the securities. As of June 30, 2015, one of our portfolio investments,
  415,946 common shares of MVC, was publicly listed on the NYSE. As of December 31, 2014, one of our portfolio investments, 404,968
  common shares of MVC was publicly listed on the NYSE and our holding of €1,200,790 [$1.5 million] in OPG notes was publicly
  listed on the Luxembourg Stock Exchange.
  We adjust our net asset value for the
  changes in the value of our publicly held securities, if applicable, and material changes in the value of private securities, generally
  determined on a quarterly basis or as announced in a press release, and report those amounts to Lipper Analytical Services, Inc.
  Our net asset value appears in various publications, including
  Barron's
  and
  The Wall Street Journal
  .
  For loan and debt securities held for
  longer than one year, the Fund will often perform a yield analysis assuming a hypothetical current sale of the security. The yield
  analysis considers changes in interest rates and changes in leverage levels of the portfolio company as compared to the market
  interest rates and leverage levels. Assuming the credit quality of the portfolio company remains stable, the Fund will use the
  value determined by the yield analysis as the fair value for that security.
  We will record unrealized depreciation
  on investments when we determine that the fair value of a security is less than its cost basis, and will record unrealized appreciation
  when we determine that the fair value is greater than its cost basis.
  We assess the levels of the investments
  at each measurement date, and transfers between levels are recognized on the subsequent measurement date closest in time to the
  actual date of the event or change in circumstances that caused the transfer. There were no transfers among Level 1, 2 and 3 for
  the quarter ended June 30, 2015 and the year ended December 31, 2014.
  As of June 30, 2015, investments measured
  at fair value on a recurring basis are categorized in the tables below based on the lowest level of significant input to the valuations:
  Fair
      Value Measurements as of June 30, 2015
  (in thousands)
  Total
  Quoted Prices
  in Active
  Markets for
  Identical
  Assets
  (Level 1)
  Significant
  Other
  Observable
  Inputs
  (Level 2)
  Significant
  Unobservable
  Inputs
  (Level 3)
  Assets
  Investments:
  Control investments
  $
  8,715
  $
  —
  $
  —
  $
  8,715
  Affiliate investments
  5,627
  —
  —
  5,627
  Non-affiliate investments - related party
  4,243
  4,243
  —
  —
  Non-affiliate investments
  915
  —
  —
  915
  Total investments in portfolio securities
  $
  19,500
  $
  4,243
  $
  —
  $
  15,257
  Table of Contents
  17
  As of December 31, 2014, investments
  measured at fair value on a recurring basis are categorized in the tables below based on the lowest level of significant input
  to the valuations:
  Fair Value Measurements as of December 31, 2014
  (in thousands)
  Total
  Quoted Prices
  in Active
  Markets for
  Identical
  Assets
  (Level 1)
  Significant
  Other
  Observable
  Inputs
  (Level 2)
  Significant
  Unobservable
  Inputs
  (Level 3)
  Assets
  Investments:
  Control investments
  $
  13,173
  $
  —
  $
  —
  $
  13,173
  Affiliate investments
  960
  —
  —
  960
  Non-affiliate investments - related party
  3,981
  3,981
  —
  —
  Non-affiliate investments
  1,532
  —
  —
  1,532
  Total investments
  19,646
  3,981
  —
  15,665
  Temporary cash investments
  14,996
  14,996
  —
  —
  Total investments and temporary cash investments
  $
  34,642
  $
  18,977
  $
  —
  $
  15,665
  The following table provides a reconciliation
  of fair value changes during the six months ended June 30, 2015 for all investments for which we determine fair value using unobservable
  (Level 3) factors:
  Fair value measurements
      using significant unobservable inputs (Level 3)
  (in thousands)
  Control Investments
  Affiliate
      Investments
  Non-affiliate Investments
  Total
  Fair value as of December 31, 2014
  $
  13,173
  $
  960
  $
  1,532
  $
  15,665
  Realized gains (losses)
  (2,850
  )
  —
  372
  (2,478
  )
  Change in unrealized appreciation (depreciation)
  1,550
  4,667
  (580
  )
  5,637
  Purchases of portfolio securities
  —
  —
  54
  54
  Proceeds from sales/dispositions
  (3,158
  )
  —
  (463
  )
  (3,621
  )
  Fair value as of June 30, 2015 (unaudited)
  $
  8,715
  $
  5,627
  $
  915
  $
  15,257
  The following table provides a reconciliation
  of fair value changes during the six months ended June 30, 2014 for all investments for which we determine fair value using unobservable
  (Level 3) factors:
  Fair value measurements using significant unobservable
      inputs (Level 3)
  (in thousands)
  Control
  Investments
  Affiliate
  Investments
  Non-affiliate
  Investments
  Total
  Fair value as of December 31, 2013
  $
  11,105
  $
  250
  $
  1,980
  $
  13,335
  Realized gains (losses)
  —
  —
  (63
  )
  (63
  )
  Change in unrealized appreciation (depreciation)
  800
  718
  (21
  )
  1,497
  Purchases of portfolio securities
  139
  —
  117
  256
  Proceeds from sales/dispositions
  —
  —
  63
  63
  Fair value as of June 30, 2014 (unaudited)
  $
  12,044
  $
  150
  $
  2,076
  $
  15,088
  Foreign Exchange—
  We record
  temporary changes in foreign exchange rates of portfolio securities denominated in foreign currencies as changes in fair value.
  These changes are therefore reflected as unrealized gains or losses until realized.
  Investment Transactions
  —Investment
  transactions are recorded on the accrual method. Realized gains and losses on investments sold are computed on a specific identification
  basis.
  Table of Contents
  18
  We classify our investments in accordance
  with the requirements of the 1940 Act. Under the 1940 Act, "Control Investments" are defined as investments in companies
  in which the Fund owns more than 25% of the voting securities or maintains greater than 50% of the board representation. Under
  the 1940 Act, "Affiliate Investments" are defined as those non-control investments in companies in which we own between
  5% and 25% of the voting securities. Under the 1940 Act, "Non-affiliate Investments" are defined as investments that
  are neither Control Investments nor Affiliate Investments.
  As of June 30, 2015 and December 31,
  2014, we had no outstanding commitments to our portfolio company investments; however, under certain circumstances, we may be called
  on to make follow-on investments in certain portfolio companies. If we do not have sufficient funds to make follow-on investments,
  the portfolio company in need of the investment may be negatively impacted. Also, our equity interest in the estimated fair value
  of the portfolio company could be reduced. Follow-on investments may include capital infusions which are expenditures made directly
  to the portfolio company to ensure that operations are completed, thereby allowing the portfolio company to generate cash flows
  to service the debt.
  Interest Income Recognition
  —We
  record interest income, adjusted for amortization of premium and accretion of discount, on an accrual basis to the extent that
  we expect to collect such amounts. We accrete or amortize discounts and premiums on securities purchased over the life of the respective
  security using the effective yield method. The amortized cost of investments represents the original cost adjusted for the accretion
  of discount and/or amortization of premium on debt securities. We stop accruing interest on investments when we determine that
  interest is no longer collectible. We may also impair the accrued interest when we determine that all or a portion of the current
  accrual is uncollectible. If we receive any cash after determining that interest is no longer collectible, we treat such cash as
  payment on the principal balance until the entire principal balance has been repaid, before we recognize any additional interest
  income. We will write off uncollectible interest upon the occurrence of a definitive event such as a sale, bankruptcy, or reorganization
  of the relevant portfolio interest.
  Payment in Kind Interest (PIK)
  —We
  have loans in our portfolio that may pay PIK interest. We add PIK interest, if any, computed at the contractual rate specified
  in each loan agreement, to the principal balance of the loan and recorded as interest income. To maintain our status as a RIC,
  we must pay out to stockholders this non-cash source of income in the form of dividends even if we have not yet collected any cash
  in respect of such investments. We will continue to pay out net investment income and/or realized capital gains, if any, on an
  annual basis as required under the Investment Company Act of 1940.
  Cash Flows
  —For purposes
  of the Statements of Cash Flows, we consider all highly liquid temporary cash investments purchased with an original maturity of
  three months or less to be cash equivalents. We include our investing activities within cash flows from operations. We exclude
  "Restricted Cash and Temporary Cash Investments" used for purposes of complying with RIC requirements from cash equivalents.
  Taxes
  —We intend to comply
  with the requirements of the Internal Revenue Code necessary to qualify as a regulated investment company and, as such, will not
  be subject to federal income taxes on otherwise taxable income (including net realized capital gains) which is distributed to stockholders.
  Therefore, no provision for federal income taxes is recorded in the financial statements. We borrow money from time to time to
  maintain our tax status under the Internal Revenue Code as a RIC. See Note 1 for discussion of Taxable Subsidiaries and see Note
  2 for further discussion of the Fund's RIC borrowings.
  All corporations incorporated in the
  State of Delaware are required to file an Annual Report and to pay a franchise tax. As a result, we paid Delaware Franchise tax
  in the amount of $0.02 million for the year ended December 31, 2014.
  Texas margin tax applies to legal entities
  conducting business in Texas. The margin tax is based on our Texas sourced taxable margin. The tax is calculated by applying a
  tax rate to a base that considers both revenue and expenses and therefore has the characteristics of an income tax. As a result,
  we did not owe state income tax for the year ended December 31, 2014.
  Significant Unobservable Inputs
  —
  Our investment portfolio is not composed of homogeneous debt and equity securities that can be valued with a small number of inputs.
  Instead, the majority of our investment portfolio is composed of complex debt and equity securities with distinct contract terms
  and conditions. As such, our valuation of each investment in our portfolio is unique and complex, often factoring in numerous different
  inputs, including historical and forecasted financial and operational performance of the portfolio company, project cash flows,
  market multiples comparable market transactions, the priority of our securities compared with those of other investors, credit
  risk, interest rates, independent valuations and reviews and other inputs.
  Table of Contents
  19
  The following table summarizes the significant
  non-observable inputs in the fair value measurements of our Level 3 investments by category of investment and valuation technique
  as of June 30, 2015 (unaudited):
  Range
  (in thousands)
  Fair Value
  Valuation Techniques
  Unobservable Inputs
  Minimum
  Maximum
  Secured and subordinated debt
  $
  915
  Yield-to-maturity
  Discount for lack of
  marketability
  0
  %
  0
  %
  Common stock
  5,627
  Income/Market
  approach
  EBITDA
  Multiple/Discount for
  lack of
  marketability/Control
  premium
  0
  %
  35
  %
  Asset approach
  Recovery rate
  0
  %
  100
  %
  Limited liability company investments
  8,715
  Discounted cash flow;
  Guideline transaction
  method
  Reserve adjustment
  factors
  75
  %
  100
  %
  $
  15,257
  (4)
  Related Party Transactions and Agreements
  Except as noted below, as compensation
  for services to the Fund, each Independent Director receives an annual fee of $20,000 paid quarterly in arrears, a fee of $2,000
  for each meeting of the Board of Directors attended in person, a fee of $1,000 for participation in each telephonic meeting of
  the Board and a fee of $1,000 for each committee meeting attended, and reimbursement of all out-of-pocket expenses relating to
  attendance at such meetings. A quarterly fee of $15,000 is paid to the Chairman of the Audit Committee and a quarterly fee of $3,750
  is paid to the Chairman of the Independent Directors. We may also pay other one-time or recurring fees to members of our Board
  of Directors in special circumstances. None of our interested directors receive annual fees for their service on the Board of Directors.
  In 2011, Equus Energy, LLC, a wholly-owned
  subsidiary of the Fund, entered into a consulting agreement with Global Energy Associates, LLC ("Global Energy") to
  provide consulting services for energy related investments. Henry W. Hankinson, Director, is a managing partner and co-founder
  of Global Energy. Payments to Global Energy totaled $37,500 for each of the six months ended June 30, 2015 and 2014.
  In respect of services provided to the
  Fund by members of the Board not in connection with their roles and duties as directors, the Fund pays a fixed amount at a rate
  of $250 per hour for services rendered. During the six months ended June 30, 2015 and 2014, we paid Kenneth I. Denos, P.C., a professional
  corporation owned by Kenneth I. Denos, a director of the Fund, $163,813 and $176,125, respectively, for services provided the Fund.
  (5)
  Dividends
  We will pay out net investment income
  and/or realized capital gains, if any, on an annual basis as required under the 1940 Act.
  (6)
  Portfolio Securities
  On January 6, 2015, we sold
  our interests in Spectrum to 5
  th
  Element Tracking, LLC ("5
  th
  Element"). The purchase price of $3.9 million paid by 5
  th
  Element consisted of $3.0 million in cash and a 1-year subordinated note in the original principal amount of $0.9 million, bearing
  interest at the rate of 14% per annum. We realized a net capital loss of $2.8 million in connection with the sale of our interest
  in Spectrum.
  Also on January 6, 2015, in connection
  with the sale of our interest in Spectrum, our $0.5 million loan to Security Monitor Holdings, LLC, together with all accrued interest
  amounting to approximately $0.1 million, was repaid.
  On January 30, 2015, we received a partial
  redemption payment in respect of our holding of OPG Notes in the amount of €36,587 [$41,478].
  Table of Contents
  20
  On February 20, 2015, we sold our OPG
  Notes at a discount of 23% to their par value, receiving $1.0 million in cash and a realized gain of $0.4 million.
  During the six months ended June 30,
  2015, we received dividends in the form of additional shares of $0.1 million relating to our shareholding in MVC.
  During the six months ended June 30,
  2015, we recorded a net change in unrealized appreciation of $5.9 million, to a net unrealized appreciation of $2.4 million. Such
  change in unrealized appreciation resulted primarily from the following changes:
  (i)
  Decrease in the fair value of our holdings in Equus Energy, LLC of $1.3 million, principally due to a combination of decreased production and declining oil and prices;
  (ii)
  Increase in the fair value of our shareholding in MVC of $0.2 million due to an increase in the MVC share price during the period, along with dividends received in the form of additional MVC shares;
  (iii)
  Increase in fair value of our shareholding in PalletOne, Inc. of $4.7 million due to an overall improvement in the industry sector for packaging companies, as well as continued revenue and earnings growth;
  (iv)
  Transfer of unrealized depreciation to realized gain on our holding of OPG Notes of $0.4 million in connection with the sale of our interest in the OPG Notes; and
  (v)
  Transfer of unrealized depreciation to realized loss on our holdings in Spectrum of $2.9 million in connection with the sale of our interest in Spectrum.
  On April 3, 2014, we sold all of our 73,666
  remaining shares of OPG, wherein we received $61,867 in net proceeds and reported a realized loss of $0.06 million.
  During the six months ended June 30,
  2014, we capitalized legal and consulting expenses of $0.1 million relating to our investment in Spectrum Management. We also
  received a semi-annual interest payment of $0.04 million in cash and $0.1 million in the form of PIK'd interest in
  respect of our €1.2 million [$1.5 million] in OPG notes. On May 14, 2014, we sold to MVC 2,112,000 shares of the
  Fund's common stock in exchange for 395,839 shares of MVC (see
  Plan of Reorganization
  – Share Exchange
  with MVC Capital
  below).
  During the six months ended June 30, 2014,
  we realized net capital gains of $0.7 million related to our Share Exchange with MVC (see
  Plan of Reorganization – Share
  Exchange with MVC Capital
  below).
  Net unrealized depreciation on investments
  decreased $1.0 million during the six months ended June 30, 2014, to a net unrealized depreciation of $3.0 million. Such change
  in unrealized appreciation resulted primarily from the following changes:
  (i)
  Increase in fair value of our holding in Equus Energy, LLC of $0.8 million due to an increase in comparable transactions for mineral leases, continued improved economic conditions, industry outlook, pricing assumptions, as well as additional proved reserves from new drilling and recompletion activities;
  (ii)
  Increase in fair value of our shareholding in PalletOne, Inc. of $0.7 million due to an improvement in the industry sector for packaging companies and continued revenue and earnings growth; and
  (iii)
  Decrease in fair value of our shareholding in MVC of $0.4 million due to a difference between our cost basis in the MVC shares and the closing trading price of the MVC shares on June 30, 2014. Our cost basis included the closing trading price of the shares on May 14, 2014 (the closing date of the Share Exchange) as well as capitalized transaction costs of $0.5 million incurred in connection with the Share Exchange.
  Table of Contents
  21
  (7)
  Plan of Reorganization - Share Exchange with MVC Capital
  On May 14, 2014, we announced that the
  Fund intended to effect a reorganization pursuant to Section 2(a)(33) of the 1940 Act. As a first step to consummating the reorganization,
  we sold to MVC 2,112,000 newly-issued shares of the Fund's common stock in exchange for 395,839 shares of MVC (such transaction
  is hereinafter referred to as the "Share Exchange"). MVC is a business development company traded on the New York Stock
  Exchange that provides long-term debt and equity investment capital to fund growth, acquisitions and recapitalizations of companies
  in a variety of industries. The Share Exchange was calculated based on the Fund's and MVC's respective net asset value
  per share. At the time of the Share Exchange, the number of MVC shares received by Equus represented approximately 1.73% of MVC's
  total outstanding shares of common stock.
  Pursuant to the terms of a Share Exchange
  Agreement, dated May 12, 2014, entered into by Equus and MVC which memorialized the Share Exchange, we intend to finalize the reorganization
  by pursuing a merger or consolidation with MVC, a subsidiary of MVC, or one or more of MVC's portfolio companies (the "Consolidation").
  Absent Equus merging or consolidating with/into MVC or a subsidiary thereof, our current intention is for Equus to (i) consummate
  the Consolidation with a portfolio company of MVC, (ii) terminate its election to be classified as a BDC under the 1940 Act, and
  (iii) be restructured as a publicly-traded operating company focused on the energy and/or financial services sector. Our original
  intention was to consummate the Consolidation within one year from the date of our announcement, although actual completion will
  require additional time.
  (8)
  Equus Energy, LLC
  Equus Energy was formed in November
  2011 as a wholly-owned subsidiary of the Fund to make investments in companies in the energy sector, with particular emphasis on
  income-producing oil & gas properties. In December 2011, we contributed $250,000 to the capital of Equus Energy. On December
  27, 2012, we invested an additional $6.8 million in Equus Energy for the purpose of additional working capital and to fund the
  purchase of $6.6 million in working interests in 132 producing and non-producing oil and gas wells (which has since decreased to
  130). The working interests include associated development rights of approximately 21,220 acres situated on 13 separate properties
  in Texas and Oklahoma. The working interests range from a
  de minimus
  amount to 50% of the leasehold that includes these
  wells.
  The wells are operated by a number of
  experienced operators, including Chevron USA, Inc., which has operating responsibility for all of Equus Energy's 40 producing
  well interests located in the Conger Field, a productive oil and gas field on the edge of the Permian Basin that has experienced
  successful gas and hydrocarbon extraction in multiple formations. Equus Energy, which holds a 50% working interest in each of these
  Conger Field wells, is working with Chevron in a recompletion program of existing Conger Field wells to the Wolfcamp formation,
  a zone containing oil as well as gas and natural gas liquids. Part of Equus Energy's acreage rights described above also
  includes a 50% working interest in possible new drilling to the base of the Canyon formation (approximately 8,500 feet) on 2,400
  acres in the Conger Field. Also included in the interests acquired by Equus Energy are working interests of 7.5% and 2.5% in the
  Burnell and North Pettus Units, respectively, which collectively comprise approximately 13,000 acres located in the area known
  as the "Eagle Ford Shale" play.
  Revenue and Income
  . During the
  three months ended June 30, 2015, Equus Energy's revenue, operating revenue less direct operating expenses, and net loss
  were $0.3 million, $0.05 million, and ($0.2) million, respectively, as compared to revenue, operating revenue less direct operating
  expenses, and net loss of $0.5 million, $0.3 million, and ($0.1) million, respectively, for the three months ended June 30, 2014.
  During the six months ended June 30, 2015, Equus Energy's revenue, operating revenue less direct operating expenses, and
  net loss were $0.6 million, $0.07 million, and ($0.5) million, respectively, as compared to revenue, operating revenue less direct
  operating expenses, and net loss of $1.1 million, $0.5 million, and ($0.3) million, respectively, for the six months ended June
  30, 2014.
  Capital Expenditures
  . During
  the six months ended June 30, 2015, Equus Energy invested $0.05 million in capital expenditures for recompletion activities. The
  operators of the various working interest have communicated their intent to wait until later in 2015, commensurate with an anticipated
  gradual rise in the price of crude oil, to commence new drilling and recompletion projects.
  We do not consolidate Equus Energy or
  its wholly-owned subsidiaries and accordingly only the value of our investment in Equus Energy is included on our statement of
  assets and liabilities. Our investment in Equus Energy is valued in accordance with our normal valuation procedures and is based
  in part on using a discounted cash flow analysis based on a reserve report prepared for Equus Energy by Lee Keeling & Associates,
  Inc., an independent petroleum engineering firm, the transactions and values of comparable companies in this sector, and the estimated
  value of leasehold mineral interests associated with the acreage held by Equus Energy. A valuation of Equus Energy was performed
  by a third-party valuation firm, who recommended a value range of Equus Energy consistent with the fair value (See
  Schedule
  of Investments
  )
  .
  Table of Contents
  22
  Below is summarized consolidated financial
  information for Equus Energy as of June 30, 2015 and December 31, 2014 and for the three and six months ended June 30, 2015 and
  2014, respectively, (in thousands):
  EQUUS ENERGY, LLC
  Consolidated Balance Sheets
  (unaudited)
  June 30,
  2015
  December 31,
  2014
  Assets
  Current assets:
  Cash and cash equivalents
  $
  614
  $
  613
  Accounts receivable
  155
  310
  Due from affiliate
  14
  —
  Prepaid expenses/deposits
  —
  35
  Total current assets
  783
  958
  Oil and gas properties
  8,245
  8,200
  Less: accumulated depletion, depreciation and amortization
  (2,117
  )
  (1,768
  )
  Net oil and gas properties
  6,128
  6,432
  Other non-current investment
  193
  193
  Total assets
  $
  7,104
  $
  7,583
  Liabilities and members capital
  Current liabilities:
  Accounts payable and other
  $
  76
  $
  71
  Due to affiliate
  611
  611
  Total current liabilities
  687
  682
  Asset retirement obligations
  181
  183
  Total liabilities
  868
  865
  Total members capital
  6,236
  6,718
  Total liabilities and members capital
  $
  7,104
  $
  7,583
  Revenue and direct operating expenses
  for the various oil and gas assets included in the accompanying statements represent the net collective working and revenue interests
  acquired by Equus Energy. The revenue and direct operating expenses presented herein relate only to the interests in the producing
  oil and natural gas properties and do not represent all of the oil and natural gas operations of all of these properties. Direct
  operating expenses include lease operating expenses and production and other related taxes. General and administrative expenses,
  depletion, depreciation and amortization ("DD&A") of oil and gas properties and federal and state taxes have been
  excluded from direct operating expenses in the accompanying statements of revenues and direct operating expenses because the allocation
  of certain expenses would be arbitrary and would not be indicative of what such costs would have been had Equus Energy been operated
  as a stand-alone entity.
  The statements of revenue and direct operating expenses presented are not indicative of the financial
  condition or results of operations of Equus Energy on a go forward basis due to changes in the business and the omission of various
  operating expenses.
  Table of Contents
  23
  EQUUS ENERGY, LLC
  Consolidated Statements of Operations
  (unaudited)
  Three months ended June 30,
  Six months ended June 30,
  2015
  2014
  2015
  2014
  Operating revenue
  $
  309
  $
  532
  $
  592
  $
  1,072
  Operating expenses
  Direct operating expenses
  263
  262
  522
  596
  Depletion, depreciation, amortization and accretion
  162
  298
  348
  494
  General and administrative
  75
  80
  204
  232
  Total operating expenses
  500
  640
  1,074
  1,322
  Net loss
  $
  (191
  )
  $
  (108
  )
  $
  (482
  )
  $
  (250
  )
  EQUUS ENERGY, LLC
  Consolidated Statements of Cash Flows
  (unaudited)
  Six months ended June 30,
  2015
  2014
  Cash flows from operating activities:
  Net loss
  $
  (482
  )
  $
  (250
  )
  Adjustments to reconcile net loss to
  net cash provided by operating activities:
  Depletion, depreciation and amortization
  348
  494
  Changes in operating assets and liabilities:
  Accounts receivable and other
  176
  (12
  )
  Affiliate payable/receivable
  —
  202
  Accounts payable and other
  5
  (214
  )
  Net cash provided by operating activities
  47
  220
  Cash flows from investing activities:
  Investment in oil & gas properties
  (46
  )
  (101
  )
  Other investments
  —
  (178
  )
  Net cash used in investing activities
  (46
  )
  (279
  )
  Net increase (decrease) in cash
  1
  (59
  )
  Cash and cash equivalents at beginning of period
  613
  486
  Cash and cash equivalents at end of period
  $
  614
  $
  427
  Critical Accounting Policies for
  Equus Energy
  – Equus Energy and its wholly-owned subsidiary EQS Energy Holdings, Inc. (collectively, "the Company")
  follow the
  Full Cost Method of Accounting
  for oil and gas properties. Under the full cost method, all costs associated with
  property acquisition, exploration, and development activities are capitalized. Capitalized costs include lease acquisitions, geological
  and geophysical work, delay rentals, costs of drilling, completing and equipping successful and unsuccessful oil and gas wells
  and related costs. Gains or losses are normally not recognized on the sale or other disposition of oil and gas properties. Gains
  or losses are normally reflected as an adjustment to the full cost pool.
  The capitalized costs of oil and gas
  properties, plus estimated future development costs relating to proved reserves and estimated cost of dismantlement and abandonment,
  net of salvage value, are amortized on a unit-of-production method over the estimated productive life of the proved oil and gas
  reserves. Unevaluated oil and gas properties are excluded from this calculation.  Depletion, depreciation and amortization
  expense for the Company's oil and gas properties totaled $0.2 million and $0.3 million, respectively, for the three months
  ended June 30, 2015 and June 30, 2014 and $0.4 million for the six months ended June 30, 2015 compared to $0.5 million for the
  six months ended June 30, 2014.
  Table of Contents
  24
  Capitalized oil and gas property costs
  are limited to an amount (the ceiling limitation) equal to the sum of the following:
  (a)
  As of June 30, 2015, the present value of estimated future net revenue from the projected production of proved oil and gas reserves, calculated at the simple arithmetic average, first-day-of-the-month prices during the twelve-month period before the balance sheet date (with consideration of price changes only to the extent provided by contractual arrangements) and a discount factor of 10%;
  (b)
  The cost of investments in unproved and unevaluated properties excluded from the costs being amortized; and
  (c)
  The lower of cost or estimated fair value of unproved properties included in the costs being amortized.
  When it is determined that oil and gas
  property costs exceed the ceiling limitation, an impairment charge is recorded to reduce its carrying value to the ceiling limitation. 
  The Company did not recognize an impairment loss on its oil and gas properties during 2014 or during the six months ended June
  30, 2015.
  The costs of certain unevaluated leasehold
  acreage and certain wells being drilled are not amortized. The Company excludes all costs until proved reserves are found or until
  it is determined that the costs are impaired. Costs not amortized are periodically assessed for possible impairment or reduction
  in value. If a reduction in value has occurred, costs being amortized are increased accordingly.
  Revenue Recognition
  -
  Revenue
  recognized for oil and natural gas sales under the sales method of accounting. Under this method, revenue recognized on production
  as it is taken and delivered to its purchasers. The volumes sold may be more or less than the volumes entitled to, based on the
  owner's net leasehold interest. These differences result from production imbalances, which are not significant, and are reflected
  as adjustments to proven reserves and future cash flows in the unaudited consolidated financial information included herein.
  Accounting Policy on DD&A
  - The Company employs the "Units of Production" method in calculating depletion of its proved oil and gas properties,
  wherein capitalized costs, as adjusted for future development costs and asset retirement obligations, are amortized over the total
  estimated proved reserves.
  Income Taxes
  -A limited
  liability company is not subject to the payment of federal income taxes as components of its income and expenses flow through directly
  to the members. However, the Company is subject to certain state income taxes. Texas margin tax applies to legal entities conducting
  business in Texas. The margin tax is based on our Texas sourced taxable margin. The tax is calculated by applying a tax rate to
  a base that considers both revenue and expenses and therefore has the characteristics of an income tax. Taxable Subsidiaries may
  generate income tax expense because of the Taxable Subsidiaries' ownership of the portfolio companies. We reflect any such
  income tax expense on our Statements of Operations.  As of June 30, 2015 and June 30, 2014, the Company recorded $0 in federal
  income taxes, respectively.
  Asset Retirement Obligations
  -
  The fair value of asset retirement obligations are recorded in the period in which they are incurred if a reasonable estimate of
  fair value can be made, and the corresponding cost is capitalized as part of the carrying amount of the related long-lived asset. 
  The fair value of the asset retirement obligation is measured using expected future cash outflows discounted at the Company's
  credit-adjusted risk-free interest rate.  Fair value, to the extent possible, should include a market risk premium for unforeseeable
  circumstances.  No market risk premium was included in the Company's asset retirement obligation fair value estimate
  since a reasonable estimate could not be made.  The liability is accreted to its then present value each period, and the capitalized
  cost is depleted or amortized over the estimated recoverable reserves using the units-of-production method.
  (9)
  Recent Accounting Pronouncements
  In February 2015, the FASB issued
  ASU No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis. The new guidance modifies the consolidation
  analysis for limited partnerships and similar type entities as well as variable interests in a variable interest entity, particularly
  those that have fee arrangements and related party relationships. Additionally, it provides a scope exception to the consolidation
  guidance for certain entities. The amendments in ASU No. 2015-02 are effective for annual reporting periods beginning after
  December 15, 2015, including interim periods within that reporting period. Early adoption is permitted. The Company is currently
  evaluating the impact of adopting this ASU on its consolidated financial statements.
  Table of Contents
  25
  In May 2015, the FASB issued ASU No.
  2015-07, Fair Value Measurement (Topic 820): Disclosures for Investments in Certain Entities that Calculate Net Asset Value per
  Share (or Its Equivalent). The new guidance removes the requirement that investments for which NAV is determined based on practical
  expedient reliance be reported utilizing the fair value hierarchy. ASU No. 2015-07 shall be applied retrospectively for periods
  beginning on or after December 15, 2015, and interim periods within those fiscal years, with early adoption permitted. The Company
  is currently evaluating the impact of adopting this ASU on its consolidated financial statements.
  (10)
  Subsequent Events
  Management performed an evaluation of
  the Fund's activity through the date the financial statements were issued, noting there were no subsequent events.
  Item 2.
  Management's Discussion and Analysis
  of Financial Condition and Results of Operations
  Equus Total Return, Inc. (
  "we,"
  "us," "our," "Equus," the "Company," and the "Fund
  "), a Delaware
  corporation, was formed on August 16, 1991. Our shares trade on the New York Stock Exchange under the symbol 'EQS'.
  Our investment strategy seeks to provide the highest total return, consisting of capital appreciation and current income.
  We attempt to maximize the return to
  stockholders in the form of current investment income and long-term capital gains by investing in the debt and equity securities
  of companies with a total enterprise value of between $5.0 million and $75.0 million, although we may engage in transactions with
  smaller or larger investee companies from time to time. We seek to invest primarily in companies pursuing growth either through
  acquisition or organically, leveraged buyouts, management buyouts and recapitalizations of existing businesses or special situations.
  Our income-producing investments consist principally of debt securities including subordinate debt, debt convertible into common
  or preferred stock, or debt combined with warrants and common and preferred stock. Debt and preferred equity financing may also
  be used to create long-term capital appreciation through the exercise and sale of warrants received in connection with the financing.
  We seek to achieve capital appreciation by making investments in equity and equity-oriented securities issued by privately-owned
  companies (and smaller public companies) in transactions negotiated directly with such companies. Given market conditions over
  the past several years and the performance of our portfolio, our management and Board of Directors believe it is prudent to continue
  to review alternatives to refine and further clarify the current strategies.
  We elected to be treated
  as a BDC under the 1940 Act. We currently qualify as a RIC for federal income tax purposes and, therefore, are not required to
  pay corporate income taxes on any income or gains that we distribute to our stockholders. We have certain wholly owned Taxable
  Subsidiaries each of which holds one or more portfolio investments listed on our Schedules of Investments. The purpose of these
  Taxable Subsidiaries is to permit us to hold certain income-producing investments or portfolio companies organized as limited liability
  companies, or LLCs, (or other forms of pass-through entities) and still satisfy the RIC tax requirement that at least 90% of our
  gross revenue for income tax purposes must consist of investment income. Absent the Taxable Subsidiaries, a portion of the gross
  income of these income-producing investments or of any LLC (or other pass-through entity) portfolio investment, as the case may
  be, would flow through directly to us for the 90% test. To the extent that such income did not consist of investment income, it
  could jeopardize our ability to qualify as a RIC and, therefore, cause us to incur significant federal income taxes. The income
  of the LLCs (or other pass-through entities) owned by Taxable Subsidiaries is taxed to the Taxable Subsidiaries and does not flow
  through to us, thereby helping us preserve our RIC status and resultant tax advantages. We do not consolidate the Taxable Subsidiaries
  for income tax purposes and they may generate income tax expense because of the Taxable Subsidiaries' ownership of the portfolio
  investments. We reflect any such income tax expense on our Statements of Operations.
  Plan of Reorganization
  On May 14, 2014, we announced
  that the Fund intended to effect a reorganization pursuant to Section 2(a)(33) of the 1940 Act. As a first step to consummating
  the reorganization, we sold to MVC 2,112,000 newly-issued shares of the Fund's common stock in exchange for 395,839 shares
  of MVC (such transaction is hereinafter referred to as the "Share Exchange"). MVC is a business development company
  traded on the New York Stock Exchange that provides long-term debt and equity investment capital to fund growth, acquisitions and
  recapitalizations of companies in a variety of industries. The Share Exchange was calculated based on the Fund's and MVC's
  respective net asset value per share. The number of MVC shares received by Equus represents approximately 1.73% of MVC's
  total outstanding shares of common stock. The number of Equus shares sold to MVC pursuant to the Share Exchange represents approximately
  16.7% of our issued and outstanding shares of common stock at March 31, 2015. We incurred dilution of $0.11 per share as a result
  of the Share Exchange. Since the announcement, we have received 20,107 shares of MVC (market value of $0.2 million calculated as
  of the date of receipt) in the form of dividend payments.
  Table of Contents
  26
  Pursuant to the terms of
  a Share Exchange Agreement, dated May 14, 2014, entered into by Equus and MVC which memorialized the Share Exchange, we intend
  to finalize the reorganization by pursuing a merger or consolidation with MVC, or a subsidiary of MVC, or one or more of MVC's
  portfolio companies (the "Consolidation"). Absent Equus merging or consolidating with/into MVC, our current intention
  is for Equus to (i) consummate the Consolidation, (ii) terminate its election to be classified as a business development company
  under the 1940 Act, and (iii) be restructured as a publicly-traded operating company focused on the energy and/or financial services
  sector.
  Critical Accounting Policies
  See the Fund's Critical Accounting
  Policies from the disclosure set forth in the Annual Report on Form10-K for the year ended December 31, 2014.
  Recent Accounting Pronouncements
  In February 2015, the FASB issued
  ASU No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis. The new guidance modifies the consolidation
  analysis for limited partnerships and similar type entities as well as variable interests in a variable interest entity, particularly
  those that have fee arrangements and related party relationships. Additionally, it provides a scope exception to the consolidation
  guidance for certain entities. The amendments in ASU No. 2015-02 are effective for annual reporting periods beginning after
  December 15, 2015, including interim periods within that reporting period. Early adoption is permitted. The Company is currently
  evaluating the impact of adopting this ASU on its consolidated financial statements.
  In May 2015, the FASB issued ASU No.
  2015-07, Fair Value Measurement (Topic 820): Disclosures for Investments in Certain Entities that Calculate Net Asset Value per
  Share (or Its Equivalent). The new guidance removes the requirement that investments for which NAV is determined based on practical
  expedient reliance be reported utilizing the fair value hierarchy. ASU No. 2015-07 shall be applied retrospectively for periods
  beginning on or after December 15, 2015, and interim periods within those fiscal years, with early adoption permitted. The Company
  is currently evaluating the impact of adopting this ASU on its consolidated financial statements.
  Current Market Conditions
  Although the U.S. economy expanded 2.43%
  in 2014, it contracted at an annualized rate of 0.2% in the first quarter of 2015, repeating a drop of 1% on an annualized basis
  during the first quarter of 2014. Growth in the second quarter of 2015 has been weak but is expected to accelerate in the second
  half of 2015, with an annual growth rate of 2.4% predicted for the year. (Sources:
  U.S. Dept. of Commerce Bureau of Economic
  Analysis, Forbes, the Associated Press, CNBC
  )
  Market conditions for business transactions
  including mergers and acquisitions and private equity investments during 2014 and the first half of 2015 improved to their highest
  level since prior to the 2008 financial crisis, as corporations have been deleveraging and are holding significant amounts of cash
  and many have focused on acquisitions as part of future growth plans. The U.S., which has accounted for almost half of worldwide
  merger and acquisition activity during 2015, recorded a record $1 trillion worth of transactions during the first six months of
  2015, an increase of approximately 60% over the same period in 2014. Commensurately, worldwide and U.S. private equity activity
  grew sharply as well during the first six months of 2015, increasing approximately 49% and 93%, respectively, as compared to the
  same period in 2014. (Source:
  Fortune
  )
  During the six months ended June 30,
  2015, our net asset value increased from $2.86 per share to $3.00 per share, an increase of 4.9%. As of June 30, 2015, our common
  stock is trading at a 36.6% discount to our net asset value as compared to 26.5% as of December 31, 2014.
  Over the past several years, we have
  executed certain initiatives to enhance liquidity, achieve a lower operational cost structure, provide more assistance to portfolio
  companies and realize certain of our portfolio investments. Specifically, we changed the composition of our Board of Directors
  and Management, terminated certain of our follow-on investments, internalized the management of the Fund, suspended our managed
  distribution policy, modified our investment strategy to pursue shorter term liquidation opportunities, pursued non-cash investment
  opportunities, and sold certain of our legacy and underperforming investment holdings. We believe these actions continue to be
  necessary to protect capital and liquidity in order to preserve and enhance shareholder value. Because our Management is internalized,
  certain of our expenses should not increase commensurate with an increase in the size of the Fund and, therefore, we expect to
  achieve efficiencies in our cost structure if we are able to grow the Fund.
  Table of Contents
  27
  Liquidity and Capital Resources
  We generate cash primarily from maturities,
  sales of securities and borrowings, as well as capital gains realized upon the sale of portfolio investments. We use cash primarily
  to make additional investments, either in new companies or as follow-on investments in the existing portfolio companies and to
  pay the dividends to our stockholders.
  Because of the nature and size of the
  portfolio investments, we may periodically borrow funds to make qualifying investments to maintain our tax status as a RIC. We
  often borrow such funds by utilizing a margin account with a securities brokerage firm. There is no assurance that such arrangement
  will be available in the future. If the Fund is unable to borrow funds to make qualifying investments, it may no longer qualify
  as a RIC. The Fund would then be subject to corporate income tax on its net investment income and realized capital gains, and distributions
  to stockholders would be subject to income tax as ordinary dividends.
  The Fund has the ability to borrow funds
  and issue forms of senior securities representing indebtedness or stock, such as preferred stock, subject to certain restrictions.
  Net taxable investment income and net taxable realized gains from the sales of portfolio investments are intended to be distributed
  at least annually, to the extent such amounts are not reserved for payment of expenses and contingencies or to make follow-on or
  new investments.
  The Fund reserves the right to retain
  net long-term capital gains in excess of net short-term capital losses for reinvestment or to pay contingencies and expenses. Such
  retained amounts, if any, will be taxable to the Fund as long-term capital gains and stockholders will be able to claim their proportionate
  share of the federal income taxes paid on such gains as a credit against their own federal income tax liabilities. Stockholders
  will also be entitled to increase the adjusted tax basis of their Fund shares by the difference between their undistributed capital
  gains and their tax credit.
  We are evaluating the impact of current
  market conditions on our portfolio company valuations and their ability to provide current income. We have followed valuation techniques
  in a consistent manner; however, we are cognizant of current market conditions that might affect future valuations of portfolio
  securities. We believe that our operating cash flow and cash on hand will be sufficient to meet operating requirements and to finance
  routine capital expenditures through the next twelve months.
  Results of Operations
  Investment Income and Expense
  Net investment loss was unchanged at
  $0.6 million and $0.7 million for the three months ended June 30, 2015 and June 30, 2014, respectively, and $1.7 million and $1.2
  million for the six months ended June 30, 2015 and June 30, 2014, respectively. The increase in net investment loss generated at
  June 30, 2015 compared to June 30, 2014 is due primarily to a decrease in total investment income and an increase in operating
  expense.
  Investment income was $0.09 million
  and $0.06 million for the three months ended June 30, 2015 and June 30, 2014, respectively, and $0.1 million and $0.3 million for
  the six months ended June 30, 2015 and June 30, 2014, respectively. The decrease in investment income was primarily due to the
  decrease in income producing investments due to the sale of our interests in SMH, Spectrum, and OPG during the three months ended
  March 31, 2015.
  Total expenses were $0.7 and $0.8 million
  for the three months ended June 30, 2015 and June 30, 2014, respectively, and $1.8 million and $1.5 million for the six months
  ended June 30, 2015 and June 30, 2014, respectively. The increase in expenses was primarily due to officer and employee bonuses
  earned during the period.
  Realized
  Gains and Losses on Sales of Portfolio Securities
  During the six months ended June 30,
  2015, we realized net capital losses of $2.5 million, including the following significant transactions (in thousands):
  Portfolio Company
  Industry
  Type
  Transaction
  Type
  Realized Gain
  (Loss)
  Spectrum Management, LLC
  Business products  and services
  Control
  Disposition
  $
  (2,850
  )
  Orco Property Group S. A.
  Real Estate
  Non-affiliate
  Disposition
  372
  Various others
  Disposition
  (5
  )
  $
  (2,483
  )
  Table of Contents
  28
  During the six months ended June 30,
  2014, we realized net capital gains of $0.7 million, including the following significant transactions:
  (i)
  On April 3, 2014, we sold all of our 73,666 remaining shares of OPG, wherein we received $61,867 in net proceeds and reported a realized loss of $0.06 million.
  (ii)
  During the six months ended June, 2014, we realized net capital gains of $0.7 million related to our Share Exchange with MVC (see
  Plan of Reorganization
  above).
  Changes in Unrealized Appreciation/Depreciation
  of Portfolio Securities
  During the six months ended June 30,
  2015, we recorded a net change in unrealized appreciation of $5.9 million, to a net unrealized appreciation of $2.4 million. Such
  change in unrealized appreciation resulted primarily from the following changes:
  (i)
  Decrease in the fair value of our holdings in Equus Energy, LLC of $1.3 million, principally due to a combination of decreased production and declining oil and prices;
  (ii)
  Increase in the fair value of our shareholding in MVC of $0.2 million due to an increase in the MVC share price during the period, along with dividends received in the form of additional MVC shares ;
  (iii)
  Increase in fair value of our shareholding in PalletOne, Inc. of $4.7 million due to an overall improvement in the industry sector for packaging companies, as well as continued revenue and earnings growth;
  (iv)
  Transfer of unrealized depreciation to realized gain on our holding of OPG Notes of $0.4 million in connection with the sale of our interest in the OPG Notes; and
  (v)
  Transfer of unrealized depreciation to realized loss on our holdings in Spectrum of $2.9 million in connection with the sale of our interest in Spectrum.
  Net unrealized depreciation on investments
  decreased $1.0 million during the six months ended June 30, 2014, to a net unrealized depreciation of $3.0 million. Such change
  in unrealized appreciation resulted primarily from the following changes:
  (i)
  Increase in fair value of our holding in Equus Energy, LLC of $0.8 million due to an increase in comparable transactions for mineral leases, continued improved economic conditions, industry outlook, pricing assumptions, as well as additional proved reserves from new drilling and recompletion activities;
  (ii)
  Increase in fair value of our shareholding in PalletOne, Inc. of $0.7 million due to an improvement in the industry sector for packaging companies and continued revenue and earnings growth; and
  (iii)
  Decrease in fair value of our shareholding in MVC of $0.4 million due to a difference between our cost basis in the MVC shares and the closing trading price of the MVC shares on June 30, 2014. Our cost basis included the closing trading price of the shares on May 14, 2014 (the closing date of the Share Exchange) as well as capitalized transaction costs of $0.5 million incurred in connection with the Share Exchange.
  Dividends
  We will pay out net investment income
  and/or realized capital gains, if any, on an annual basis as required under the Investment Company Act of 1940.
  Portfolio Securities
  During the six months ended June 30,
  2015, we received dividends in the form of additional shares of $0.1 million relating to our shareholding in MVC. As a result of
  the sale of our interests in Spectrum to 5th Element Tracking, LLC, we received $3.0 million in cash and a 1-year subordinated
  note in the original principal amount of $0.9 million, bearing interest at the rate of 14% per annum.
  During the six months ended June, 2014, we
  capitalized legal and consulting expenses of $0.1 million relating to Spectrum Management. We also received a semi-annual interest
  payment of $0.04 million in cash and $0.1 million in the form of PIK'd interest in respect of our €1.2 million [$1.5
  million] in OPG notes. On May 14, 2014, we sold to MVC 2,112,000 shares of the Fund's common stock in exchange for 395,839
  shares of MVC. (see
  Plan of Reorganization
  – Share Exchange with MVC Capital
  above).
  Table of Contents
  29
  Subsequent Events
  Management performed an evaluation of
  the Fund's activity through the date the financial statements were issued, noting that there were no subsequent events.
  Item 3. Quantitative and Qualitative Disclosure about
  Market Risk
  We are subject to financial market risks,
  including changes in interest rates with respect to investments in debt securities and outstanding debt payable, as well as changes
  in marketable equity security prices. In the future, in addition to our investment in the OPG notes, we may invest in companies
  outside the United States, including in Europe and Asia, which would give rise to exposure to foreign currency value fluctuations.
  We do not use derivative financial instruments to mitigate any of these risks. The return on investments is generally not affected
  by foreign currency fluctuations.
  Our investments in portfolio securities
  consist of some fixed-rate debt securities. Since the debt securities are generally priced at a fixed rate, changes in interest
  rates do not directly affect interest income. In addition, changes in market interest rates are not typically a significant factor
  in the determination of fair value of these debt securities, since the securities are generally held to maturity. We determine
  their fair values based on the terms of the relevant debt security and the financial condition of the issuer.
  A major portion of our investment portfolio
  consists of debt and equity investments in private companies. Modest changes in public market equity prices generally do not significantly
  impact the estimated fair value of these investments. However, significant changes in market equity prices can have a longer-term
  effect on valuations of private companies, which could affect the carrying value and the amount and timing of gains or losses realized
  on these investments. A small portion of the investment portfolio could also consist of common stock in publicly traded companies.
  These investments are directly exposed to equity price risk, in that a hypothetical ten percent change in these equity prices would
  result in a similar percentage change in the fair value of these securities.
  We are classified as a "non-diversified"
  investment company under the 1940 Act, which means we are not limited in the proportion of our assets that may be invested in the
  securities of a single user. The value of one segment called "Energy" includes one portfolio company, Equus Energy,
  LLC, and was 22.4% of the net asset value and 43.6% of our investments in portfolio company securities (at fair value) as of June
  30, 2015. Changes in business or industry trends or in the financial condition, results of operations, or the market's assessment
  of any single portfolio company will affect the net asset value and the market price of our common stock to a greater extent than
  would be the case if we were a "diversified" company holding numerous investments.
  Item 4. Controls
  and Procedures
  The Fund maintains disclosure controls
  and other procedures that are designed to ensure that information required to be disclosed by the Fund in the reports that it files
  or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's
  rules and forms, and that such information is accumulated and communicated to the Fund's management, including its Chief
  Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
  The Fund's management, with the
  participation of the Fund's Chief Executive Officer and Chief Financial Officer, have evaluated the effectiveness of the
  design and operations of the Fund's "disclosure controls and procedures" (as defined in Rule 13a-15(e) under
  the Securities Exchange Act of 1934) as of June 30, 2015. Based on their evaluation, the Fund's Chief Executive Officer and
  Chief Financial Officer concluded that the Fund's disclosure controls and procedures were effective at a reasonable assurance
  level. There has been no change in the Fund's internal control over financial reporting during the quarter ended June 30,
  2015, that has materially affected, or is reasonably likely to materially affect, the Fund's internal control over financial
  reporting.
  Part II. Other Information
  Item 1. Legal Proceedings
  Champion Window Arbitration Settlement
  —In
  January 2006, we sold our 31.5% ownership interest in Champion Window, Inc. ("Champion"), a portfolio company of the
  Fund, to Atrium Companies Inc. ("Atrium") pursuant to a Stock Purchase Agreement ("SPA") dated December
  22, 2005. The SPA contained certain limited rights of indemnification for Atrium in connection with its purchase of such ownership
  interest.
  Table of Contents
  30
  More than five years after the closing
  of the sale of our Champion interest, Atrium filed suit in Texas state court, which was subsequently consolidated into an Arbitration
  Action, against two former officers of Champion, Equus, and another former Champion shareholder. The suit alleged breaches of fiduciary
  duty against Champion's former officers for hiring undocumented workers that were discovered as a result of an investigation
  by the U.S. Immigration and Customs Enforcement agency ("ICE") into Atrium's hiring practices. The suit also
  sought indemnification under the SPA from these officers, Equus, and another former Champion shareholder, for a payment of $2.0
  million made to ICE in settlement of the investigation and associated legal costs, as well as for claimed lost profits as a result
  of the investigation.
  On February 4, 2015, without admitting
  to any liability on the part of Equus, we entered into a settlement agreement with Atrium and its associated companies. Pursuant
  to the settlement agreement and in view of the estimated costs of protracted litigation and the associated disruption to the operations
  of the Fund, we agreed to pay $500,000, in complete settlement of the lawsuit, as being in the best interests of the Fund and its
  shareholders. The settlement payment was made on February 6, 2015. Atrium filed a motion to dismiss the lawsuit with prejudice
  on February 4, 2015.
  Indemnification Settlement
  —Effective
  June 13, 2013, the Fund entered into a settlement agreement with Sam Douglass, a former director and executive officer of the Fund,
  in respect of a claim for indemnification pursuant to the General Corporation Law of Delaware and an indemnification agreement
  entered into by the Fund with Mr. Douglass on May 3, 2001. The settlement agreement provides for the reimbursement to Mr. Douglass
  of actual expenses incurred, excluding any fines or penalties, in connection with an enforcement action initiated by the Securities
  and Exchange Commission against Mr. Douglass in 2009. The settlement payment of $125,000 was made on June 24, 2013.
  Lawsuit Settlement
  —On August
  12, 2012, Paula Douglass filed a lawsuit against the Fund and members of the Board of Directors in the District Court of Harris
  County, Texas. Ms. Douglass' complaint alleged various causes of action, including minority shareholder oppression, dilution,
  and breach of fiduciary duty, and sought unspecified damages and attorney's fees. Effective June 13, 2013, the Fund entered
  into a settlement agreement with Ms. Douglass, Sam Douglass, as well as certain trusts controlled by them. Pursuant to the settlement
  agreement and in view of the estimated costs of protracted litigation and the associated disruption to the operations of the Fund,
  the Board of Directors approved a payment of $402,254, in complete settlement of the lawsuit, as being in the best interests of
  the Fund and its shareholders. The settlement payment was made on July 30, 2013. Ms. Douglass filed a motion to dismiss the lawsuit
  with prejudice on August 8, 2013.
  From time to time, the Fund is also
  a party to certain proceedings incidental to the normal course of our business including the enforcement of our rights under contracts
  with our portfolio companies. While the outcome of these legal proceedings cannot at this time be predicted with certainty, we
  do not expect that these proceedings will have a material effect upon the Fund's financial condition or results of operations.
  Item 1A. Risk Factors
  There have been no material changes
  in the Fund's risk factors from the disclosure set forth in the Annual Report on Form 10-K for the year ended December 31,
  2014.
  Readers should carefully consider these
  risks and all other information contained in the annual report on Form 10-K, including the Fund's financial statements and
  the related notes thereto. The risks and uncertainties described below are not the only ones facing the Fund.
  Additional risks and uncertainties not
  presently known to the Fund, or not presently deemed material by the Fund, may also impair its operations and performance.
  Table of Contents
  31
  Item 6. Exhibits
  3.
  Articles of Incorporation and by-laws
  (a)
  Restated Certificate of Incorporation of the Fund, as amended. [Incorporated by reference to Exhibit 3(a) to Registrant's Annual Report on Form 10-K for the year ended December 31, 2007]
  (b)
  Certificate of Merger dated June 30, 1993, between the Fund and Equus Investments Incorporated [Incorporated by reference to Exhibit 3(c) to Registrant's Annual Report on Form 10-K for the year ended December 31, 2007]
  (c)
  Amended and Restated Bylaws of the Fund. [Incorporated by reference to Exhibit 3(b) to Registrant's Current Report on Form 8-K filed on June 30, 2014.]
  10.
  Material Contracts.
  (a)
  Safekeeping Agreement between the Fund and Amegy Bank dated August 16, 2008. [Incorporated by reference to Exhibit 10(c) to Registrant's Annual Report on Form 10-K for the year ended December 31, 2008.]
  (b)
  Form of Indemnification Agreement between the Fund and its directors and certain officers. [Incorporated by reference to Exhibit 10(d) to Registrant's Annual Report on Form 10-K for the year ended December 31, 2011.]
  (c)
  Form of Release Agreement between the Fund and certain of its officers and former officers. [Incorporated by reference to Exhibit 10(h) to Registrant's Annual Report on Form 10-K for the year ended December 31, 2004.]
  (d)
  Code of Ethics of the Fund (Rule 17j-1) [Incorporated by reference to Exhibit 10(f) to Registrant's Annual Report on Form 10-K for the year ended December 31, 2009.]
  (e)
  Share Exchange Agreement between the Fund and MVC Capital, Inc., dated May 14, 2014. [Incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K, filed on May 15, 2014.]
  31.
  Rule 13a-14(a)/15d-14(a) Certifications
  1.
  Certification by Chief Executive Officer
  2.
  Certification by Chief Financial Officer
  32.
  Section 1350 Certifications
  1.
  Certification by Chief Executive Officer
  2.
  Certification by Chief Financial Officer
  Table of Contents
  32
  SIGNATURE
  Pursuant to the requirements of Section
  13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has caused this report to be signed by the undersigned, thereunto
  duly authorized.
  Date: August 12, 2015
  EQUUS TOTAL RETURN, INC.
  /s/ John A. Hardy
  John A. Hardy
  Chief Executive Officer
  Table of Contents
  33