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  <P STYLE="font: 13.5pt Times New Roman, Times, Serif; margin: 0.25in 0 0; text-align: center"><B>UNITED STATES </B></P>
  
  <P STYLE="font: 13.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>SECURITIES AND EXCHANGE COMMISSION </B></P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>Washington, D.C. 20549 </B></P>
  
  <P STYLE="font: 6pt/4pt Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center; text-indent: 0.5in; border-bottom: Black 1pt solid">&nbsp;</P>
  
  <P STYLE="font: 18pt Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center"><B>FORM 10-Q </B></P>
  
  <P STYLE="font: 6pt/4pt Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center; text-indent: 0.5in; border-bottom: Black 1pt solid">&nbsp;</P>
  
  <P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 9pt 0 0">(Mark One)</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
  <TD STYLE="width: 0"></TD><TD STYLE="width: 24.45pt"><FONT STYLE="font-family: Wingdings"><B>x</B></FONT></TD><TD><B>QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 </B></TD></TR></TABLE>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center">For the quarterly period ended March 31,
  2014</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center">or</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 9pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
  <TD STYLE="width: 0"></TD><TD STYLE="width: 24.45pt"><FONT STYLE="font-family: Wingdings"><B>&#168;</B></FONT></TD><TD><B>TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 </B></TD></TR></TABLE>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center">For the transition period <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
  to <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  </U></P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center">Commission File Number 814-00098</P>
  
  <P STYLE="font: 6pt/4pt Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: left; border-bottom: Black 1pt solid">&#9;&nbsp;</P>
  
  <P STYLE="font: 24pt Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center"><B>EQUUS TOTAL RETURN, INC. </B></P>
  
  <P STYLE="font: 10pt 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: 6pt/4pt Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center; text-indent: 0.5in; border-bottom: Black 1pt solid">&nbsp;</P>
  
  <P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="width: 100%; border-collapse: collapse">
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      <td style="width: 50%; font: 0.5pt Times New Roman, Times, Serif">&nbsp;</td>
      <td style="width: 50%; font: 0.5pt Times New Roman, Times, Serif">&nbsp;</td></tr>
  <tr style="vertical-align: top">
      <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 10pt"><b>Delaware</b></font></td>
      <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 10pt"><b>76-0345915</b></font></td></tr>
  <tr style="vertical-align: top">
      <td>
          <P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>(State or other jurisdiction of</b></P>
          <P STYLE="font: 7.5pt 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 Times New Roman, Times, Serif; margin: 0; text-align: center"><b>(I.R.S. Employer</b></P>
          <P STYLE="font: 7.5pt 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 Times New Roman, Times, Serif">&nbsp;</td>
      <td style="font: 12pt Times New Roman, Times, Serif">&nbsp;</td></tr>
  <tr style="vertical-align: top">
      <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 10pt"><b>Eight Greenway Plaza, Suite 930 Houston, Texas</b></font></td>
      <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 10pt"><b>77046</b></font></td></tr>
  <tr style="vertical-align: top">
      <td style="font: 7.5pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 7.5pt"><b>(Address of principal executive offices)</b></font></td>
      <td style="font: 7.5pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 7.5pt"><b>(Zip Code)</b></font></td></tr>
  </table>
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center"><B>Registrant&rsquo;s telephone number,
  including area code:&nbsp;(713)&nbsp;529-0900 </B></P>
  
  <P STYLE="font: 6pt/4pt Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center; text-indent: 0.5in; border-bottom: Black 1pt solid">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 9pt 0 0; text-indent: 24.5pt">Indicate by check mark whether the registrant
  (1)&nbsp;has filed all reports required to be filed by Section&nbsp;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)&nbsp;has been subject
  to such filing requirements for the past 90 days.&nbsp;&nbsp;&nbsp;&nbsp;Yes&nbsp;&nbsp;<FONT STYLE="font-family: Wingdings">x</FONT>&nbsp;&nbsp;&nbsp;&nbsp;No&nbsp;&nbsp;
  <FONT STYLE="font-family: Wingdings">&#168;</FONT></P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 9pt 0 0; text-indent: 24.5pt">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).&nbsp;&nbsp;&nbsp;&nbsp;Yes&nbsp;&nbsp;<FONT STYLE="font-family: Wingdings">&#168;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;No&nbsp;&nbsp;
  <FONT STYLE="font-family: Wingdings">&#168;</FONT></P>
  
  <P STYLE="font: 10pt 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: 13.5pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="width: 100%; border-collapse: collapse; font-family: Times New Roman, Times, Serif">
  <tr>
      <td style="width: 25%; font-size: 0.5pt">&nbsp;</td>
      <td style="width: 25%; font-size: 0.5pt">&nbsp;</td>
      <td style="width: 25%; font-size: 0.5pt">&nbsp;</td>
      <td style="width: 25%; font-size: 0.5pt">&nbsp;</td></tr>
  <tr style="vertical-align: top">
      <td style="font-size: 10pt"><font style="font-size: 10pt">Large accelerated filer <font style="font-family: Wingdings">&#168;</font></font></td>
      <td style="font-size: 10pt; text-align: center"><font style="font-size: 10pt">Accelerated filer <font style="font-family: Wingdings">&#168;</font></font></td>
      <td style="font-size: 10pt; text-align: center"><font style="font-size: 10pt">Non-accelerated filer <font style="font-family: Wingdings">x</font></font></td>
      <td style="padding-bottom: 0.75pt; font-size: 10pt; text-align: right"><font style="font-size: 10pt">&#9;Smaller Reporting Company <font style="font-family: Wingdings">&#168;</font>&#9;</font></td></tr>
  </table>
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 9pt 0 0; text-indent: 24.5pt">Indicate by check mark whether the registrant
  is a shell company.&nbsp;&nbsp;&nbsp;&nbsp;Yes&nbsp;&nbsp;<FONT STYLE="font-family: Wingdings">&#168;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;No&nbsp;&nbsp;
  <FONT STYLE="font-family: Wingdings">x</FONT></P>
  
  <P STYLE="font: 10pt 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 May 15, 2014.</P>
  
  <P STYLE="font: 4pt/1pt Times New Roman, Times, Serif; margin: 0.25in 0 0; text-align: center; text-indent: 0.5in; border-top: black 0.5pt solid">&nbsp;</P>
  
  <P STYLE="font: 4pt/1pt Times New Roman, Times, Serif; margin: 1pt 0 0; text-align: center; text-indent: 0.5in; border-top: Black 1pt solid">&nbsp;</P>
  
  
  <!-- Field: Page; Sequence: 1 -->
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  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">EQUUS TOTAL RETURN, INC.</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">(A Delaware Corporation)</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center"><A NAME="a_019"></A>INDEX</P>
  
  <P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr>
      <td style="width: 93%; font-size: 0.5pt">&nbsp;</td>
      <td style="width: 7%; font-size: 0.5pt">&nbsp;</td></tr>
  <tr style="vertical-align: bottom">
      <td style="padding-left: 0.1in; font-size: 4pt; line-height: 2pt">&nbsp;</td>
      <td style="padding-left: 0.1in">
          <P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>PAGE</b></P>
          <P STYLE="font: 4pt/1pt Times New Roman, Times, Serif; margin: 1pt 0 0; text-align: center; text-indent: 0.5in; border-top: Black 1pt solid">&nbsp;</P></td></tr>
  <tr>
      <td style="vertical-align: top; padding-left: 12pt; text-indent: -12pt"><font style="font-size: 10pt"><A HREF="#a_001">PART I.&nbsp;FINANCIAL INFORMATION</A></font></td>
      <td style="vertical-align: bottom; padding-left: 0.1in; font-size: 4pt; line-height: 2pt">&nbsp;</td></tr>
  <tr>
      <td style="vertical-align: top; padding-left: 0.5in; text-indent: -12pt"><font style="font-size: 10pt"><A HREF="#a_002">Item&nbsp;1. Financial Statements</A></font></td>
      <td style="vertical-align: bottom; padding-left: 0.1in; font-size: 4pt; line-height: 2pt">&nbsp;</td></tr>
  <tr>
      <td style="vertical-align: top; padding-left: 60pt; text-indent: -12pt"><font style="font-size: 10pt"><A HREF="#a_003">Balance Sheets</A>&#9;</font></td>
      <td nowrap style="vertical-align: bottom; padding-bottom: 0.75pt">3</td></tr>
  <tr>
      <td style="vertical-align: top; padding-left: 60pt; text-indent: -12pt"><font style="font-size: 10pt"><A HREF="#a_004">Statements of Operations</A>&#9;</font></td>
      <td nowrap style="vertical-align: bottom; padding-bottom: 0.75pt"><font style="font-size: 10pt">4</font></td></tr>
  <tr>
      <td style="vertical-align: top; padding-left: 60pt; text-indent: -12pt"><font style="font-size: 10pt"><A HREF="#a_005">Statements of Changes in Net Assets</A>&#9;</font></td>
      <td nowrap style="vertical-align: bottom; padding-bottom: 0.75pt"><font style="font-size: 10pt">5</font></td></tr>
  <tr>
      <td style="vertical-align: top; padding-left: 60pt; text-indent: -12pt"><font style="font-size: 10pt"><A HREF="#a_006">Statements of Cash Flows</A>&#9;</font></td>
      <td nowrap style="vertical-align: bottom; padding-bottom: 0.75pt"><font style="font-size: 10pt">6</font></td></tr>
  <tr>
      <td style="vertical-align: top; padding-left: 60pt; text-indent: -12pt"><font style="font-size: 10pt"><A HREF="#a_007">Supplemental Information&mdash;Selected Per Share Data and Ratios</A>&#9;</font></td>
      <td nowrap style="vertical-align: bottom; padding-bottom: 0.75pt"><font style="font-size: 10pt">7</font></td></tr>
  <tr>
      <td style="vertical-align: top; padding-left: 60pt; text-indent: -12pt"><font style="font-size: 10pt"><A HREF="#a_008">Schedule of Investments</A>&#9;</font></td>
      <td nowrap style="vertical-align: bottom; padding-bottom: 0.75pt"><font style="font-size: 10pt">8</font></td></tr>
  <tr>
      <td style="vertical-align: top; padding-left: 60pt; text-indent: -12pt"><font style="font-size: 10pt"><A HREF="#a_010">Notes to Financial Statements</A>&#9;</font></td>
      <td nowrap style="vertical-align: bottom; padding-bottom: 0.75pt"><font style="font-size: 10pt">12</font></td></tr>
  <tr>
      <td style="vertical-align: top; padding-left: 0.5in; text-indent: -12pt"><font style="font-size: 10pt"><A HREF="#a_011">Item&nbsp;2. Management&rsquo;s Discussion and Analysis of Financial Condition and Results of Operations</A>&#9;</font></td>
      <td nowrap style="vertical-align: bottom; padding-bottom: 0.75pt"><FONT STYLE="font-size: 10pt">23</FONT></td></tr>
  <tr>
      <td style="vertical-align: top; padding-left: 0.5in; text-indent: -12pt"><font style="font-size: 10pt"><A HREF="#a_012">Item&nbsp;3. Quantitative and Qualitative Disclosure about Market Risk</A>&#9;</font></td>
      <td nowrap style="vertical-align: bottom; padding-bottom: 0.75pt"><font style="font-size: 10pt">28</font></td></tr>
  <tr>
      <td style="vertical-align: top; padding-left: 0.5in; text-indent: -12pt"><font style="font-size: 10pt"><A HREF="#a_013">Item&nbsp;4. Controls and Procedures</A>&#9;</font></td>
      <td nowrap style="vertical-align: bottom; padding-bottom: 0.75pt"><font style="font-size: 10pt">28</font></td></tr>
  <tr>
      <td style="vertical-align: top; padding-left: 12pt; text-indent: -12pt"><font style="font-size: 10pt"><A HREF="#a_014">PART II.&nbsp;OTHER INFORMATION</A></font></td>
      <td style="vertical-align: bottom; padding-left: 0.1in; line-height: 2pt">&nbsp;</td></tr>
  <tr>
      <td style="vertical-align: top; padding-left: 0.5in; text-indent: -12pt"><font style="font-size: 10pt"><A HREF="#a_015">Item 1. Legal Proceedings</A>&#9;</font></td>
      <td nowrap style="vertical-align: bottom; padding-bottom: 0.75pt"><font style="font-size: 10pt">28</font></td></tr>
  <tr>
      <td style="vertical-align: top; padding-left: 0.5in; text-indent: -12pt"><font style="font-size: 10pt"><A HREF="#a_016">Item 1A. Risk Factors</A> &#9;</font></td>
      <td nowrap style="vertical-align: bottom; padding-bottom: 0.75pt"><font style="font-size: 10pt">30</font></td></tr>
  <tr>
      <td style="vertical-align: top; padding-left: 0.5in; text-indent: -12pt"><font style="font-size: 10pt"><A HREF="#a_017">Item&nbsp;6. Exhibits</A>&#9;</font></td>
      <td nowrap style="vertical-align: bottom; padding-bottom: 0.75pt"><FONT STYLE="font-size: 10pt">31</FONT></td></tr>
  <tr>
      <td style="vertical-align: top; padding-left: 12pt; text-indent: -12pt"><font style="font-size: 10pt"><A HREF="#a_018">SIGNATURE</A>&#9;</font></td>
      <td nowrap style="vertical-align: bottom; padding-bottom: 0.75pt"><FONT STYLE="font-size: 10pt">32</FONT></td></tr>
  <tr>
      <td style="vertical-align: top; padding-left: 12pt; text-indent: -12pt">&nbsp;</td>
      <td nowrap style="vertical-align: bottom; padding-bottom: 0.75pt">&nbsp;</td></tr>
  </table>
  
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  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><U>EQUUS TOTAL RETURN, INC. </U></P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><A NAME="a_003"></A><U>BALANCE SHEETS </U></P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 4.5pt 0 0">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><A NAME="a_001"></A><B><U>Part I. Financial Information</U></B></P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><A NAME="a_002"></A><B><U>Item&nbsp; 1. Financial Statements </U></B></P>
  
  <P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 9pt Sans-Serif; margin: 9pt 0 0; text-align: center; color: Red"><B></B></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; vertical-align: bottom"><P STYLE="margin-top: 0; margin-bottom: 0">March 31,</P>
                                                                                  <P STYLE="margin-top: 0; margin-bottom: 0">2014</P></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"><P STYLE="margin-top: 0; margin-bottom: 0">December 31,</P>
                                                                                  <P STYLE="margin-top: 0; margin-bottom: 0">2013</P></TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center">(unaudited)</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-weight: bold">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom">
      <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: rgb(204,238,255)">
      <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: White">
      <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: rgb(204,238,255)">
      <TD STYLE="width: 71%; text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Control investments (cost at $15,863 and $15,789 respectively)</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 11%; text-align: right">11,179</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">11,105</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;Affiliate investments (cost at $350 and $350 respectively)</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">250</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 $1,321 and $1,321 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">2,081</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">2,149</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">13,510</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">13,504</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">18,690</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">19,065</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">15,150</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">386</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></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">444</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">228</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">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">28</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">30</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 assets</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">33,058</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">48,349</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">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: White">
      <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">254</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">106</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 to related parties</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">125</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">26</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;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">15,000</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 liabilities</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">379</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">15,132</TD><TD STYLE="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">Commitments and contingencies</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="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: rgb(204,238,255)">
      <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">32,679</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">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">33,217</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">Net assets consist of:</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Common stock, par value</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">10</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">10</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;Capital in excess of par value</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">51,700</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">51,701</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;Undistributed net investment losses</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(15,007</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(14,538</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unrealized depreciation of portfolio securities, net</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">(4,024</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 10pt">)</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">(3,956</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 10pt">)</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-bottom: 2.5pt"><FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
      net assets</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-size: 10pt">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 10pt">32,679</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-size: 10pt">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 10pt">33,217</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 10pt">Shares of common stock issued and outstanding, $.001 par value,
      50,000 shares authorized</FONT></TD><TD STYLE="font-size: 11.5pt; padding-bottom: 2.5pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font-size: 11.5pt; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 11.5pt; text-align: right"><FONT STYLE="font-size: 10pt">10,562</FONT></TD><TD STYLE="padding-bottom: 2.5pt; font-size: 11.5pt; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 11.5pt; padding-bottom: 2.5pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font-size: 11.5pt; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 11.5pt; text-align: right"><FONT STYLE="font-size: 10pt">10,562</FONT></TD><TD STYLE="padding-bottom: 2.5pt; font-size: 11.5pt; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 10pt">Shares of preferred stock issued and outstanding, $.001 par
      value, 5,000 shares authorized</FONT></TD><TD STYLE="font-size: 11.5pt; padding-bottom: 2.5pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font-size: 11.5pt; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 11.5pt; text-align: right"><FONT STYLE="font-size: 10pt">&mdash;&nbsp;&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt; font-size: 11.5pt; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 11.5pt; padding-bottom: 2.5pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font-size: 11.5pt; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 11.5pt; text-align: right"><FONT STYLE="font-size: 10pt">&mdash;&nbsp;&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt; font-size: 11.5pt; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="padding-bottom: 2.5pt">Net asset value per share</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">3.09</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">3.14</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 11.5pt">&nbsp;</TD>
      <TD STYLE="font-size: 11.5pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 11.5pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 11.5pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 11.5pt">&nbsp;</TD>
      <TD STYLE="font-size: 11.5pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 11.5pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 11.5pt; text-align: left">&nbsp;</TD></TR>
  </TABLE>
  
  
  
  <P STYLE="font: 9pt Sans-Serif; margin: 9pt 0 0; text-align: center; color: Red"><B></B></P>
  
  <P STYLE="font: 10pt 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 Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center">&nbsp;</P>
  
  
  <!-- Field: Page; Sequence: 3 -->
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  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><U>EQUUS TOTAL RETURN, INC.</U></P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><U><A NAME="a_004"></A>STATEMENTS OF OPERATIONS </U></P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">(Unaudited)</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 9pt Sans-Serif; margin: 0; color: Red"><B></B></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">Three months ended March 31,</TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="font-size: 11.5pt; font-weight: bold"><FONT STYLE="font-size: 10pt">(in thousands, except per share amounts)</FONT></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">2013</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">Investment income (loss):</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="text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest income (loss), net:</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: rgb(204,238,255)">
      <TD STYLE="width: 70%; 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">$</TD><TD STYLE="width: 12%; text-align: right">198</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">(132</TD><TD STYLE="width: 1%; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <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">59</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">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total interest income</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><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(96</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;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">&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></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;Total investment income (loss)</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><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(96</TD><TD STYLE="text-align: left">)</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>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></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <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">291</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">268</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;Compensation expense</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">212</TD><TD STYLE="text-align: left">&nbsp;</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></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">100</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">38</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">96</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">102</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;Mailing, printing and other expenses</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">21</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">23</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;Taxes</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</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">&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">726</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">675</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">Net investment loss</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(469</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(771</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:</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: 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">(1</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 loss</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1</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: rgb(204,238,255)">
      <TD>&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><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 depreciation of portfolio securities:</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: 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">(4,024</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(17,910</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">(3,956</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">(17,222</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 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">(68</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">(688</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD>&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><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: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-bottom: 2.5pt">Net decrease 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">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(538</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(1,459</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD>&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><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: rgb(204,238,255)">
      <TD STYLE="text-align: left">Net decrease in net assets resulting from operations 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-size: 11pt">&nbsp;</TD>
      <TD STYLE="font-size: 11pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 11pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 11pt; 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;&nbsp;Basic and diluted</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(0.05</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(0.14</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD>Weighted average shares outstanding:</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-size: 11pt">&nbsp;</TD>
      <TD STYLE="font-size: 11pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 11pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 11pt; 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;&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">10,562</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">10,562</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
  </TABLE>
  
  
  
  <P STYLE="font: 9pt Sans-Serif; margin: 0; color: Red"><B></B></P>
  
  
  
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center">The accompanying notes are an integral
  part of these financial statements.</P>
  
  
  <!-- Field: Page; Sequence: 4 -->
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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: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><U>EQUUS TOTAL RETURN, INC. </U></P>
  
  <P STYLE="font: 10pt 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 Times New Roman, Times, Serif; margin: 0; text-align: center">(Unaudited)</P>
  
  <P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  
  
  <P STYLE="font: 9pt Sans-Serif; margin: 9pt 0 0; text-align: center; color: Red"><B></B></P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 100%; font: 11.5pt Times New Roman, Times, Serif">
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD COLSPAN="7" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 10pt">Three
      months ended March 31,</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="font-weight: bold"><FONT STYLE="font-size: 10pt">(in thousands)</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 10pt">2014</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 10pt">2013</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD COLSPAN="3" STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD COLSPAN="3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD COLSPAN="3" STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD COLSPAN="3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="width: 56%; text-align: left"><FONT STYLE="font-size: 10pt">Net decrease in net assets resulting
      from operations</FONT></TD><TD STYLE="width: 8%"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 10pt">$</FONT></TD><TD STYLE="width: 12%; text-align: right"><FONT STYLE="font-size: 10pt">(538</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 10pt">)</FONT></TD><TD STYLE="width: 8%"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 10pt">$</FONT></TD><TD STYLE="width: 12%; text-align: right"><FONT STYLE="font-size: 10pt">(1,459</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 10pt">)</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 10pt">Net assets at beginning of period</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">33,217</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">32,875</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-bottom: 2.5pt"><FONT STYLE="font-size: 10pt">Net assets at end of period</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-size: 10pt">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 10pt">32,679</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-size: 10pt">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 10pt">31,416</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
  </TABLE>
  
  
  
  <P STYLE="font: 9pt Sans-Serif; margin: 9pt 0 0; text-align: center; color: Red"><B></B></P>
  
  <P STYLE="font: 10pt 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: 7.5pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
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  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><U>EQUUS TOTAL RETURN, INC. </U></P>
  
  <P STYLE="font: 10pt 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 Times New Roman, Times, Serif; margin: 0; text-align: center">(Unaudited)</P>
  
  <P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 9pt Sans-Serif; margin: 0; 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">Three months ended March 31,</TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="font-size: 10pt; 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">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">2013</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">Reconciliation of 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 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">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; provided by (used in) 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 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="width: 71%; text-align: left">Net decrease in net assets resulting from operations</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 11%; text-align: right">(538</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">(1,459</TD><TD STYLE="width: 1%; text-align: left">)</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 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">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; provided by (used in) operating activities:</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">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net realized loss</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1</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: rgb(204,238,255)">
      <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net change in unrealized depreciation of portfolio securities</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">68</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">688</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <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: rgb(204,238,255)">
      <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">(74</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(90</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;Principal payments received from 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">9</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">15,149</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">&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">(4</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: rgb(204,238,255)">
      <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">(8</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(150</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;(Increase) decrease in accrued interest receivable</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(216</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">126</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;Increase in accounts payable and accrued liabilities</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">148</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">107</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 (decrease) 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">99</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">(157</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 cash provided by (used in) operating activities </TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">14,625</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(926</TD><TD STYLE="text-align: left">)</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">(15,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="font-size: 12pt; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font-size: 12pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 12pt; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-size: 12pt; text-align: left">&nbsp;</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">(15,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="font-size: 12pt; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font-size: 12pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 12pt; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-size: 12pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">Net decrease in cash and cash equivalents</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(375</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(926</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">19,065</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">23,687</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">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">18,690</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">22,761</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;Income taxes paid</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">11</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">5</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
  </TABLE>
  
  
  
  <P STYLE="font: 9pt Sans-Serif; margin: 0; color: Red"></P>
  
  
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt 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: 7.5pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  
  <!-- Field: Page; Sequence: 6 -->
      <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: left; width: 33%"><A HREF="#a_019" TITLE="Table of Contents" STYLE="font-style: italic">Table of Contents</A></TD><TD STYLE="text-align: center; width: 34%"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->6<!-- Field: /Sequence --></TD><TD STYLE="text-align: right; width: 33%">&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: 7.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><U>EQUUS TOTAL RETURN, INC. </U></P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><U><A NAME="a_007"></A>SUPPLEMENTAL INFORMATION&mdash;SELECTED PER
  SHARE DATA AND RATIOS </U></P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">(Unaudited)</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 9pt Sans-Serif; margin: 0; text-align: center; 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">Three months ended March 31,</TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt; text-align: center; vertical-align: bottom">&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; text-align: center">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid; vertical-align: bottom">2013</TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD>
      <TD COLSPAN="3">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="width: 70%; text-align: left">Investment income (loss)</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">0.03</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">(0.01</TD><TD STYLE="width: 1%; text-align: left">)</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"></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">0.07</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">0.06</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 investment loss</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left"></TD><TD STYLE="text-align: right">(0.04</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(0.07</TD><TD STYLE="text-align: left">)</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">Net realized loss</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(0.00</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 STYLE="text-align: left; padding-bottom: 1pt">Net change in unrealized 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">(0.01</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">(0.07</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 decrease in net assets resulting from operations</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(0.05</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(0.14</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <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">3.14</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">3.11</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 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">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">3.09</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">2.97</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <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: rgb(204,238,255)">
      <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">10,562</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10,562</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <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: rgb(204,238,255)">
      <TD STYLE="padding-bottom: 2.5pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Beginning of period</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">1.99</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">2.36</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">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;End of period</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">1.92</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">2.16</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">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: White">
      <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">2.20</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2.10</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;&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">(1.42</TD><TD STYLE="text-align: left">%)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2.40</TD><TD STYLE="text-align: left">%)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-left: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Ratio of net decrease in net assets resulting from operations to average &nbsp;net assets</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1.63</TD><TD STYLE="text-align: left">%)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(4.54</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;&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">(3.52</TD><TD STYLE="text-align: left">%)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(8.47</TD><TD STYLE="text-align: left">%)</TD></TR>
  </TABLE>
  
  
  
  <P STYLE="font: 9pt Sans-Serif; margin: 0; text-align: center; color: Red"></P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 9pt 0 0"><FONT STYLE="font-size: 7pt"><SUP>(1)</SUP></FONT><FONT STYLE="font-size: 8pt">&nbsp;&nbsp;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 Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt 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: 7.5pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;</P>
  
  <P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  
  <!-- Field: Page; Sequence: 7 -->
      <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: left; width: 33%"><A HREF="#a_019" TITLE="Table of Contents" STYLE="font-style: italic">Table of Contents</A></TD><TD STYLE="text-align: center; width: 34%"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->7<!-- Field: /Sequence --></TD><TD STYLE="text-align: right; width: 33%">&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: 7.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B><U>EQUUS TOTAL RETURN, INC. </U></B></P>
  
  <P STYLE="font: 10pt 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 Times New Roman, Times, Serif; margin: 0; text-align: center"><B><U>MARCH 31, 2014</U> </B></P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>(Unaudited) </B></P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B><I>(in thousands, except share data)</I></B></P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>&nbsp;</B></P>
  
  <P STYLE="font: 9pt Sans-Serif; margin: 0; text-align: center; color: Red"><B></B></P>
  
  <TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 7pt Times New Roman, Times, Serif; width: 100%; background-color: white; border-collapse: collapse">
  <tr style="vertical-align: bottom">
      <TD STYLE="font-size: 1pt; width: 27%">&nbsp;</td>
      <TD STYLE="font-size: 1pt; width: 10%; text-align: left; vertical-align: top">&nbsp;</td>
      <TD STYLE="font-size: 1pt; text-align: center; width: 10%; vertical-align: top">&nbsp;</td>
      <TD STYLE="font-size: 1pt; width: 20%; text-align: left; vertical-align: top">&nbsp;</td>
      <TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="font-size: 1pt; width: 10%">&nbsp;</td>
      <TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="font-size: 1pt; width: 10%; text-align: right; vertical-align: top">&nbsp;</td>
      <TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="font-size: 1pt; width: 10%; text-align: right; vertical-align: top">&nbsp;</td></tr>
  <tr style="vertical-align: bottom">
      <TD STYLE="font-weight: bold">Name&nbsp;and&nbsp;Location&nbsp;of&nbsp;</td>
      <TD STYLE="font: 10pt Arial, Helvetica, Sans-Serif; text-align: left; vertical-align: top">&nbsp;</td>
      <TD STYLE="font-weight: bold; text-align: center; vertical-align: top">&nbsp;Date&nbsp;of&nbsp;Initial&nbsp;</td>
      <TD STYLE="font: 10pt Arial, Helvetica, Sans-Serif; text-align: left; vertical-align: top">&nbsp;</td>
      <TD>&nbsp;</TD>
      <TD STYLE="font: 10pt Arial, Helvetica, Sans-Serif; text-align: right">&nbsp;</td>
      <TD>&nbsp;</TD>
      <TD STYLE="font-weight: bold; text-align: center; vertical-align: bottom">&nbsp;Cost of&nbsp;</td>
      <TD>&nbsp;</TD>
      <TD STYLE="font-weight: bold; text-align: center; vertical-align: top">&nbsp;Fair&nbsp;</td></tr>
  <tr style="vertical-align: bottom">
      <TD STYLE="font-weight: bold; text-decoration: underline">Portfolio&nbsp;Company&nbsp;</td>
      <TD STYLE="font-weight: bold; text-decoration: underline; text-align: center; vertical-align: top">&nbsp;Industry&nbsp;</td>
      <TD STYLE="font-weight: bold; text-decoration: underline; text-align: center; vertical-align: top">&nbsp;Investment&nbsp;</td>
      <TD STYLE="font-weight: bold; text-decoration: underline; text-align: center; vertical-align: top">&nbsp;Investment&nbsp;</td>
      <TD>&nbsp;</TD>
      <TD STYLE="font-weight: bold; text-decoration: underline; text-align: center">&nbsp;Principal&nbsp;</td>
      <TD>&nbsp;</TD>
      <TD STYLE="font-weight: bold; text-decoration: underline; text-align: center; vertical-align: bottom">&nbsp;Investment&nbsp;</td>
      <TD><B>&nbsp;</B></TD>
      <TD STYLE="text-align: center"><B><U>Value</U><FONT STYLE="font: normal 7.5pt Times New Roman, Times, Serif"><SUP>(1)</SUP></FONT></B></td></tr>
  <tr style="vertical-align: bottom">
      <TD STYLE="font-size: 4pt; text-align: right">&nbsp;</td>
      <TD STYLE="font-size: 4pt; text-align: left; vertical-align: top">&nbsp;</td>
      <TD STYLE="font-size: 4pt; text-align: center; vertical-align: top">&nbsp;</td>
      <TD STYLE="font-size: 4pt; text-align: left; vertical-align: top">&nbsp;</td>
      <TD>&nbsp;</TD>
      <TD COLSPAN="5" STYLE="font-weight: bold; font-style: italic; text-align: center">&nbsp;</td></tr>
  <tr style="vertical-align: bottom">
      <TD COLSPAN="2" STYLE="font-weight: bold; text-align: left">Control Investments:&nbsp;&nbsp;Majority-owned <SUP>(3)</SUP>:&nbsp;</td>
      <TD STYLE="font: bold 9pt Arial, Helvetica, Sans-Serif; text-align: center; vertical-align: top">&nbsp;</td>
      <TD STYLE="font-size: 9pt; font-weight: bold; text-align: left; vertical-align: top">&nbsp;</td>
      <TD>&nbsp;</TD>
      <TD STYLE="font-size: 9pt; font-weight: bold; text-align: center">&nbsp;</td>
      <TD>&nbsp;</TD>
      <TD STYLE="font: bold 9pt Arial, Helvetica, Sans-Serif; text-align: right; vertical-align: top">&nbsp;</td>
      <TD>&nbsp;</TD>
      <TD STYLE="font: bold 9pt Arial, Helvetica, Sans-Serif; text-align: right; vertical-align: top">&nbsp;</td></tr>
  <TR STYLE="background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; border-top: Black 1pt solid; border-bottom: Black 1pt solid"><P STYLE="margin-top: 0; margin-bottom: 0">Equus Energy, LLC</P>
                                   <P STYLE="margin-top: 0; margin-bottom: 0">Houston, TX</P></td>
      <TD STYLE="text-align: left; border-top: Black 1pt solid; border-bottom: Black 1pt solid; vertical-align: top">Energy&nbsp;</td>
      <TD STYLE="text-align: center; border-top: Black 1pt solid; border-bottom: Black 1pt solid; vertical-align: top">December 2011</td>
      <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: left; vertical-align: top">&nbsp;Member interest (100%)&nbsp;</td>
      <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid">&nbsp;</TD>
      <TD STYLE="font-size: 4pt; text-align: right; border-top: Black 1pt solid; border-bottom: Black 1pt solid">&nbsp;</td>
      <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: right; vertical-align: top">$</TD>
      <TD STYLE="text-align: right; border-top: Black 1pt solid; border-bottom: Black 1pt solid; vertical-align: top">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7,050&nbsp; </td>
      <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: right; vertical-align: top">$</TD>
      <TD STYLE="text-align: right; border-top: Black 1pt solid; border-bottom: Black 1pt solid; vertical-align: top">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8,000</td></tr>
  <tr style="vertical-align: top">
      <TD STYLE="text-align: left"><P STYLE="margin-top: 0; margin-bottom: 0">Equus Media Development Company, LLC</P>
                                   <P STYLE="margin-top: 0; margin-bottom: 0">Houston, TX</P></td>
      <TD STYLE="text-align: left; vertical-align: top">Media&nbsp;</td>
      <TD STYLE="text-align: center; vertical-align: top">January 2007&nbsp;</td>
      <TD STYLE="text-align: left; vertical-align: top">&nbsp;Member interest (100%)&nbsp;</td>
      <TD>&nbsp;</TD>
      <TD STYLE="font-size: 4pt; text-align: right">&nbsp;</td>
      <TD>&nbsp;</TD>
      <TD STYLE="text-align: right; vertical-align: top">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3,000&nbsp;</td>
      <TD>&nbsp;</TD>
      <TD STYLE="text-align: right; vertical-align: top">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;216</td></tr>
  <TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
      <TD STYLE="border-top: Black 1pt solid"><P STYLE="margin-top: 0; margin-bottom: 0">Spectrum Management,</P>
          <P STYLE="margin-top: 0; margin-bottom: 0">Carrolton, TX</P></td>
      <TD STYLE="border-top: Black 1pt solid; text-align: left; vertical-align: top">Business products and services&nbsp;</td>
      <TD STYLE="text-align: center; border-top: Black 1pt solid; vertical-align: top">December&nbsp;1999&nbsp;</td>
      <TD STYLE="border-top: Black 1pt solid; text-align: left; vertical-align: top">&nbsp;285,000 units of Class&nbsp;A member interest (92.1%/82.5% fully diluted)&nbsp;</td>
      <TD STYLE="border-top: Black 1pt solid">&nbsp;</TD>
      <TD STYLE="font-size: 4pt; text-align: right; border-top: Black 1pt solid">&nbsp;</td>
      <TD STYLE="border-top: Black 1pt solid">&nbsp;</TD>
      <TD STYLE="text-align: right; border-top: Black 1pt solid; vertical-align: top">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,850&nbsp;</td>
      <TD STYLE="border-top: Black 1pt solid">&nbsp;</TD>
      <TD STYLE="text-align: right; border-top: Black 1pt solid; vertical-align: top">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-</td></tr>
  <TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: right">&nbsp;</td>
      <TD STYLE="text-align: left; vertical-align: top">&nbsp;</td>
      <TD STYLE="text-align: center; vertical-align: top">&nbsp;</td>
      <TD STYLE="text-align: left; vertical-align: top">&nbsp;</td>
      <TD>&nbsp;</TD>
      <TD STYLE="font-size: 4pt; text-align: right">&nbsp;</td>
      <TD>&nbsp;</TD>
      <TD STYLE="text-align: right; vertical-align: top">&nbsp;</td>
      <TD>&nbsp;</TD>
      <TD STYLE="text-align: right; vertical-align: top">&nbsp;</td></tr>
  <TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
      <TD STYLE="font-size: 4pt; text-align: right">&nbsp;</td>
      <TD STYLE="font-size: 4pt; text-align: left; vertical-align: top">&nbsp;</td>
      <TD STYLE="font-size: 4pt; text-align: center; vertical-align: top">&nbsp;</td>
      <TD STYLE="text-align: left; vertical-align: top">16% subordinated promissory note due 11/11 <font style="font: normal 7.5pt Times New Roman, Times, Serif"><sup>(2)</sup></font></td>
      <TD STYLE="text-align: right; vertical-align: top">$</TD>
      <TD STYLE="text-align: right; border-bottom: Black 1pt solid">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,963</td>
      <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: right; vertical-align: top">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,963&nbsp;</td>
      <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: right; vertical-align: top">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,963</td></tr>
  <TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
      <TD STYLE="font-size: 4pt; text-align: right">&nbsp;</td>
      <TD STYLE="font-size: 4pt; text-align: left; vertical-align: top">&nbsp;</td>
      <TD STYLE="font-size: 4pt; text-align: center; vertical-align: top">&nbsp;</td>
      <TD STYLE="text-align: left; vertical-align: top">&nbsp;</td>
      <TD>&nbsp;</TD>
      <TD STYLE="text-align: right">&nbsp;</td>
      <TD>&nbsp;</TD>
      <TD STYLE="text-align: right; vertical-align: top">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5,813&nbsp;</td>
      <TD>&nbsp;</TD>
      <TD STYLE="text-align: right; vertical-align: top">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,963</td></tr>
  <tr>
      <TD COLSPAN="4" STYLE="font-weight: bold; vertical-align: bottom; border-top: Black 1pt solid; text-align: left">Total Control Investments: Majority-owned (represents 82.7.% of total investments at fair value)&nbsp;</td>
      <TD STYLE="border-top: Black 1pt solid">&nbsp;</TD>
      <TD STYLE="font-weight: bold; vertical-align: top; border-top: Black 1pt solid; text-align: right">&nbsp;</td>
      <TD STYLE="border-top: Black 1pt solid; text-align: right; vertical-align: top">$</TD>
      <TD STYLE="font-weight: bold; vertical-align: top; border-top: Black 1pt solid; text-align: right">&nbsp;&nbsp;15,863&nbsp;</td>
      <TD STYLE="border-top: Black 1pt solid; text-align: right; vertical-align: top">$</TD>
      <TD STYLE="font-weight: bold; vertical-align: top; border-top: Black 1pt solid; text-align: right">&nbsp;&nbsp;&nbsp;&nbsp;11,179</td></tr>
  <TR STYLE="background-color: rgb(204,238,255)">
      <TD STYLE="font-weight: bold; border-top: Black 1pt solid; border-bottom: Black 1pt solid">Affiliate Investments <SUP>(4)</SUP>:&nbsp;</td>
      <TD STYLE="font-weight: bold; text-align: left; border-top: Black 1pt solid; border-bottom: Black 1pt solid; vertical-align: top">&nbsp;</td>
      <TD STYLE="font-weight: bold; text-align: center; border-top: Black 1pt solid; border-bottom: Black 1pt solid; vertical-align: top">&nbsp;</td>
      <TD STYLE="font-weight: bold; text-align: left; border-top: Black 1pt solid; border-bottom: Black 1pt solid; vertical-align: top">&nbsp;</td>
      <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid">&nbsp;</TD>
      <TD STYLE="font-weight: bold; text-align: right; border-top: Black 1pt solid; border-bottom: Black 1pt solid">&nbsp;</td>
      <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid">&nbsp;</TD>
      <TD STYLE="font-weight: bold; text-align: right; border-top: Black 1pt solid; border-bottom: Black 1pt solid; vertical-align: top">&nbsp;</td>
      <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid">&nbsp;</TD>
      <TD STYLE="font-weight: bold; text-align: right; border-top: Black 1pt solid; border-bottom: Black 1pt solid; vertical-align: top">&nbsp;</td></tr>
  <tr style="vertical-align: top">
      <TD><P STYLE="margin-top: 0; margin-bottom: 0">PalletOne, Inc.</P>
          <P STYLE="margin-top: 0; margin-bottom: 0">Bartow, FL</P></td>
      <TD STYLE="text-align: left; vertical-align: top">Shipping products and services&nbsp;</td>
      <TD STYLE="text-align: center; vertical-align: top">October 2001&nbsp;</td>
      <TD STYLE="text-align: left; vertical-align: top">&nbsp;350,000&nbsp;shares&nbsp;of&nbsp;common stock (18.70%)&nbsp;</td>
      <TD>&nbsp;</TD>
      <TD STYLE="font-size: 4pt; text-align: right; vertical-align: top">&nbsp;</td>
      <TD STYLE="text-align: right; 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;350&nbsp;</td>
      <TD STYLE="text-align: right; vertical-align: top">$</TD>
      <TD STYLE="text-align: right; border-top-color: Black; border-top-width: 0.5pt; vertical-align: top">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;250</td></tr>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD COLSPAN="4" STYLE="font-weight: bold; border-bottom: Black 1pt solid; text-align: left; border-top: Black 1pt solid">Total Affiliate Investments (represents 1.9% of total investments at fair value)&nbsp;</td>
      <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid">&nbsp;</TD>
      <TD STYLE="font-size: 4pt; border-bottom: Black 1pt solid; text-align: right; border-top: Black 1pt solid">&nbsp;</td>
      <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: right; vertical-align: top">$</TD>
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid; text-align: right; border-top: Black 1pt solid; vertical-align: top">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;350&nbsp;</td>
      <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: right; vertical-align: top">$</TD>
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid; text-align: right; border-top: Black 1pt solid; vertical-align: top">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;250</td></tr>
  <tr style="vertical-align: bottom">
      <TD COLSPAN="4" STYLE="font-weight: bold">Non-Affiliate Investments (less than 5% owned):</td>
      <TD>&nbsp;</TD>
      <TD STYLE="font-weight: bold">&nbsp;</td>
      <TD>&nbsp;</TD>
      <TD STYLE="font-weight: bold; text-align: right; vertical-align: top">&nbsp;</td>
      <TD>&nbsp;</TD>
      <TD STYLE="font-weight: bold; text-align: right; vertical-align: top">&nbsp;</td></tr>
  <TR STYLE="background-color: rgb(204,238,255)">
      <TD STYLE="border-top: Black 1pt solid"><P STYLE="margin-top: 0; margin-bottom: 0">Orco Property Group</P>
                                                                   <P STYLE="margin-top: 0; margin-bottom: 0">Paris, France</P></td>
      <TD STYLE="border-top: Black 1pt solid; text-align: left; vertical-align: top">Real estate</td>
      <TD STYLE="text-align: center; border-top: Black 1pt solid; vertical-align: top">April 2011</td>
      <TD STYLE="border-top: Black 1pt solid; text-align: left; vertical-align: top">73,666 shares common stock</td>
      <TD STYLE="border-top: Black 1pt solid">&nbsp;</TD>
      <TD STYLE="text-align: right; border-top: Black 1pt solid">&nbsp;</td>
      <TD STYLE="border-top: Black 1pt solid; text-align: right; vertical-align: top">$</TD>
      <TD STYLE="text-align: right; border-top: Black 1pt solid; vertical-align: top">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;125&nbsp;</td>
      <TD STYLE="border-top: Black 1pt solid; text-align: right; vertical-align: top">$</TD>
      <TD STYLE="text-align: right; border-top: Black 1pt solid; vertical-align: top">101</td></tr>
  <TR STYLE="background-color: rgb(204,238,255)">
      <TD>&nbsp;</td>
      <TD STYLE="text-align: left; vertical-align: top">&nbsp;</td>
      <TD STYLE="text-align: center; vertical-align: top">&nbsp;</td>
      <TD STYLE="text-align: left; vertical-align: top">10% promissory note due 2/18 <font style="font: normal 7.5pt Times New Roman, Times, Serif"><sup>(2)</sup></font></td>
      <TD STYLE="text-align: right; vertical-align: top">$</TD>
      <TD STYLE="text-align: right; border-bottom: Black 1pt solid">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;696</td>
      <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: right; vertical-align: top">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;696&nbsp;</td>
      <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: right; vertical-align: top">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,480</td></tr>
  <TR STYLE="background-color: rgb(204,238,255)">
      <TD STYLE="font-size: 4pt; border-bottom: Black 1pt solid">&nbsp;</td>
      <TD STYLE="font-size: 4pt; border-bottom: Black 1pt solid; text-align: left; vertical-align: top">&nbsp;</td>
      <TD STYLE="font-size: 4pt; border-bottom: Black 1pt solid; text-align: center; vertical-align: top">&nbsp;</td>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left; vertical-align: top">&nbsp;</td>
      <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD>
      <TD STYLE="font-size: 4pt; border-bottom: Black 1pt solid">&nbsp;</td>
      <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: right; vertical-align: top">821&nbsp;</td>
      <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: right; vertical-align: top">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,581</td></tr>
  <tr style="vertical-align: top">
      <TD STYLE="border-top-color: black; border-top-width: 0.5pt"><P STYLE="margin-top: 0; margin-bottom: 0">Security Monitor Holding, LLC</P>
                                                                   <P STYLE="margin-top: 0; margin-bottom: 0">Boston, MA</P></td>
      <TD STYLE="text-align: left; vertical-align: top">Business products and services&nbsp;</td>
      <TD STYLE="text-align: center; border-top-color: black; border-top-width: 0.5pt; vertical-align: top">November 2013</td>
      <TD STYLE="text-align: left; vertical-align: top">14% promissory note due 6/14 <font style="font: normal 7.5pt Times New Roman, Times, Serif"><sup>(2)</sup></font></td>
      <TD>&nbsp;</TD>
      <TD STYLE="text-align: right; border-top-color: Black; border-top-width: 0.5pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;500</td>
      <TD>&nbsp;</TD>
      <TD STYLE="text-align: right; border-top-color: Black; border-top-width: 0.5pt; vertical-align: top">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;500&nbsp;</td>
      <TD>&nbsp;</TD>
      <TD STYLE="text-align: right; border-top-color: Black; border-top-width: 0.5pt; vertical-align: top">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;500</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 (represents 15.4% of total investments at fair value)</td>
      <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: right; vertical-align: top"></TD>
      <TD STYLE="font-weight: bold; border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: left">&nbsp;</td>
      <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: right; vertical-align: top">$</TD>
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid; text-align: right; border-top: Black 1pt solid; vertical-align: top">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,321&nbsp;</td>
      <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: right; vertical-align: top">$</TD>
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid; text-align: right; border-top: Black 1pt solid; vertical-align: top">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,081</td></tr>
  <tr style="vertical-align: bottom">
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid; border-top-color: black; border-top-width: 0.5pt">Total Investment in Portfolio Securities</td>
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid; border-top-color: black; border-top-width: 0.5pt; text-align: left; vertical-align: top">&nbsp;</td>
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid; border-top-color: black; border-top-width: 0.5pt; text-align: center; vertical-align: top">&nbsp;</td>
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid; border-top-color: black; border-top-width: 0.5pt; text-align: left; vertical-align: top">&nbsp;</td>
      <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD>
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid; text-align: left; border-top-color: black; border-top-width: 0.5pt">&nbsp;</td>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: right; vertical-align: top">$</TD>
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid; text-align: right; border-top-color: Black; border-top-width: 0.5pt; vertical-align: top">&nbsp;&nbsp;&nbsp;17,534&nbsp;</td>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: right; vertical-align: top">$</TD>
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid; text-align: right; border-top-color: Black; border-top-width: 0.5pt; vertical-align: top">&nbsp;&nbsp;&nbsp;13,510</td></tr>
  </table>
  
  
  <P STYLE="font: 9pt Sans-Serif; margin: 0; text-align: center; color: Red"><B></B></P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: center"></P>
  
  <TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 7pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
      <TD STYLE="font-size: 7.5pt"><font style="font-size: 7.5pt"><sup>(1) &nbsp;</sup></font> </td>
      <TD STYLE="font-size: 7.5pt"><font style="font-size: 7.5pt">See Note 3 to the financial statements, Valuation of Investments.</font></td></tr>
  <tr style="vertical-align: top">
      <TD STYLE="font-size: 7.5pt"><font style="font-size: 7.5pt"><sup>(2) &nbsp;</sup></font></td>
      <TD STYLE="font-size: 7.5pt"><font style="font-size: 7.5pt">Income-producing.</font></td></tr>
  <tr style="vertical-align: top">
      <TD STYLE="font-size: 7.5pt"><font style="font-size: 7.5pt"><sup>(3) &nbsp;</sup></font></td>
      <TD STYLE="font-size: 7.5pt"><font style="font-size: 7.5pt">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"><font style="font-size: 7.5pt"><sup>(4) &nbsp;</sup></font></td>
      <TD STYLE="font-size: 7.5pt"><font style="font-size: 7.5pt">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>
  </table>
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">The accompanying notes are an integral part
  of these financial statements.</P>
  
  
  <!-- Field: Page; Sequence: 8 -->
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  <P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B><U>EQUUS TOTAL RETURN, INC. </U></B></P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B><U>SCHEDULE OF INVESTMENTS &ndash; (Continued)
  </U></B></P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B><U>MARCH 31, 2014 </U></B></P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>(Unaudited) </B></P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 9pt 0 0; text-indent: 24.5pt">Except for our holding of ordinary shares
  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 of 1933 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 Times New Roman, Times, Serif; margin: 9pt 0 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
  March 31, 2014, except for our holdings in OPG, 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 82.7% of the total
  value of the investments in portfolio securities as of March 31, 2014.</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 9pt 0 0; text-indent: 24.5pt">Our investments in portfolio securities
  consist of the following types of securities as of March 31, 2014 (in thousands):</P>
  
  <P STYLE="font: 9pt Sans-Serif; margin: 9pt 0 0; text-indent: 24.5pt; 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-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>Net Assets</B></FONT></P></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="width: 46%; text-align: left">Limited liability company investments</TD><TD STYLE="width: 5%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 11%; text-align: right">12,900</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 5%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 11%; text-align: right">8,216</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 5%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 11%; text-align: right">25.1</TD><TD STYLE="width: 1%; text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">Secured and subordinated debt</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,159</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,943</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">15.1</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">Common stock</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">475</TD><TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">351</TD><TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">1.1</TD><TD STYLE="text-align: left; border-bottom: Black 1pt solid">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-bottom: 2.5pt; vertical-align: bottom">Total</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">17,534</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">13,510</TD><TD STYLE="border-bottom: Black 2.5pt double; 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">41.3</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: left">%</TD></TR>
  </TABLE>
  
  
  
  <P STYLE="font: 9pt Sans-Serif; margin: 0; text-indent: 24.5pt; color: Red">&nbsp;</P>
  
  <P STYLE="font: 10pt 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 $2.0 million, while accrued interest has been impaired on notes receivable included
  in secured and subordinated debt with a fair value of $3.0 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">The following is a summary by industry of
  the Fund&rsquo;s investments in portfolio securities as of March 31, 2014 (in thousands):</P>
  
  <P STYLE="font: 9pt Sans-Serif; margin: 9pt 0 0 45pt; text-align: center; 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-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>Net Assets</B></FONT></P></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="width: 56%">Energy</TD><TD STYLE="width: 8%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">8,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">24.5</TD><TD STYLE="width: 1%; 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">3,463</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10.6</TD><TD STYLE="text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">Real estate</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,581</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4.8</TD><TD STYLE="text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <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">250</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.8</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="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">216</TD><TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">0.6</TD><TD STYLE="text-align: left; border-bottom: Black 1pt solid">%</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">13,510</TD><TD STYLE="border-bottom: Black 2.5pt double; 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">41.3</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: left">%</TD></TR>
  </TABLE>
  
  
  
  <P STYLE="font: 9pt Sans-Serif; margin: 9pt 0 0 45pt; text-align: center; color: Red"></P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 9pt 0 0 81pt; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 9pt 0 0">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center">The accompanying notes are an integral
  part of these financial statements.</P>
  
  
  <!-- Field: Page; Sequence: 9 -->
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  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B><U>EQUUS
  TOTAL RETURN, INC.</U></B></FONT></P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B><U><A NAME="a_009"></A>SCHEDULE
  OF INVESTMENTS </U></B></FONT></P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B><U>DECEMBER
  31, 2013</U></B></FONT></P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B><I>(in
  thousands, except share data)</I></B></FONT></P>
  
  <P STYLE="font: 6pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 7pt Times New Roman, Times, Serif; width: 100%; background-color: white; border-collapse: collapse">
  <tr style="vertical-align: bottom">
      <td style="width: 27%; font-size: 12pt">&nbsp;</td>
      <td style="width: 10%; font-size: 12pt">&nbsp;</td>
      <td style="width: 10%; font-size: 12pt; text-align: center">&nbsp;</td>
      <td style="width: 20%; font-size: 12pt">&nbsp;</td>
      <TD STYLE="width: 1%; text-align: right; vertical-align: top">&nbsp;</td>
      <td style="width: 10%; font-size: 12pt">&nbsp;</td>
      <TD STYLE="width: 1%; text-align: right; vertical-align: top">&nbsp;</td>
      <td style="width: 10%; font-size: 12pt">&nbsp;</td>
      <TD STYLE="width: 1%; text-align: right; vertical-align: top">&nbsp;</td>
      <td style="width: 10%; font-size: 12pt">&nbsp;</td></tr>
  <tr style="vertical-align: bottom">
      <td><font style="font-size: 7pt"><b>Name&nbsp;and&nbsp;Location&nbsp;of&nbsp;</b></font></td>
      <td style="font-size: 12pt; text-align: right">&nbsp;</td>
      <td style="text-align: center"><font style="font-size: 7pt"><b>&nbsp;Date&nbsp;of&nbsp;Initial&nbsp;</b></font></td>
      <td style="font-size: 12pt; text-align: right">&nbsp;</td>
      <TD STYLE="text-align: right; vertical-align: top">&nbsp;</td>
      <td style="font-size: 12pt; text-align: right">&nbsp;</td>
      <TD STYLE="text-align: right; vertical-align: top">&nbsp;</td>
      <td style="text-align: center"><font style="font-size: 7pt"><b>&nbsp;Cost of&nbsp;</b></font></td>
      <TD STYLE="text-align: right; vertical-align: top">&nbsp;</td>
      <td style="text-align: center"><font style="font-size: 7pt"><b>&nbsp;Fair&nbsp;</b></font></td></tr>
  <tr style="vertical-align: bottom">
      <td><FONT STYLE="font-size: 7pt"><B><U>Portfolio&nbsp;Company&nbsp;</U></B></FONT></td>
      <td style="text-align: center"><font style="font-size: 7pt"><b><u>&nbsp;Industry&nbsp;</u></b></font></td>
      <td style="text-align: center"><font style="font-size: 7pt"><b><u>&nbsp;Investment&nbsp;</u></b></font></td>
      <td style="text-align: center"><font style="font-size: 7pt"><b><u>&nbsp;Investment&nbsp;</u></b></font></td>
      <TD STYLE="text-align: right; vertical-align: top">&nbsp;</td>
      <td style="text-align: center"><font style="font-size: 7pt"><b><u>&nbsp;Principal&nbsp;</u></b></font></td>
      <TD STYLE="text-align: right; vertical-align: top">&nbsp;</td>
      <td style="text-align: center"><font style="font-size: 7pt"><b><u>&nbsp;Investment&nbsp;</u></b></font></td>
      <TD STYLE="text-align: right; vertical-align: top">&nbsp;</td>
      <td style="text-align: center"><font style="font-size: 7pt"><b><u>Value</u><sup>(1)</sup></b></font></td></tr>
  <tr style="vertical-align: bottom">
      <td style="font-size: 12pt; text-align: right">&nbsp;</td>
      <td style="font-size: 12pt; text-align: right">&nbsp;</td>
      <td style="font-size: 12pt; text-align: center">&nbsp;</td>
      <td style="font-size: 12pt; text-align: right">&nbsp;</td>
      <TD STYLE="text-align: right; vertical-align: top">&nbsp;</td>
      <td colspan="5" style="text-align: center">&nbsp;</td></tr>
  <tr style="vertical-align: bottom">
      <td colspan="2" style="border-bottom: black 1pt solid"><font style="font-size: 7pt"><b>Control Investments:&nbsp;&nbsp;Majority-owned <sup>(3)</sup>:&nbsp;</b></font></td>
      <td style="border-bottom: black 1pt solid; font-size: 12pt; text-align: center">&nbsp;</td>
      <td style="border-bottom: black 1pt solid; font-size: 12pt; text-align: center">&nbsp;</td>
      <TD STYLE="border-bottom: black 1pt solid; text-align: right; vertical-align: top">&nbsp;</td>
      <td style="border-bottom: black 1pt solid; font-size: 12pt; text-align: center">&nbsp;</td>
      <TD STYLE="border-bottom: black 1pt solid; text-align: right; vertical-align: top">&nbsp;</td>
      <td style="border-bottom: black 1pt solid; font-size: 12pt; text-align: right">&nbsp;</td>
      <TD STYLE="border-bottom: black 1pt solid; text-align: right; vertical-align: top">&nbsp;</td>
      <td style="border-bottom: black 1pt solid; font-size: 12pt; text-align: right">&nbsp;</td></tr>
  <tr style="background-color: #CCEEFF">
      <td><P STYLE="font: 7pt Times New Roman, Times, Serif; margin: 0">Equus Energy, LLC</P>
          <P STYLE="margin-top: 0; margin-bottom: 0">Houston, TX</P></td>
      <TD STYLE="text-align: left; vertical-align: top"><font style="font-size: 7pt">Energy&nbsp;</font></td>
      <TD STYLE="text-align: center; vertical-align: top"><font style="font-size: 7pt">December 2011</font></td>
      <TD STYLE="text-align: left; vertical-align: top"><font style="font-size: 7pt">&nbsp;Member interest (100%)&nbsp;</font></td>
      <TD STYLE="text-align: right; vertical-align: top">&nbsp;</td>
      <td style="font-size: 12pt; text-align: right">&nbsp;</td>
      <TD STYLE="text-align: right; vertical-align: top"><font style="font-size: 7pt">$&nbsp;</font></td>
      <TD STYLE="text-align: right; vertical-align: top"><font style="font-size: 7pt">&nbsp;&nbsp;&nbsp;7,050 &nbsp;</font></td>
      <TD STYLE="text-align: right; vertical-align: top"><font style="font-size: 7pt">$</font></td>
      <TD STYLE="text-align: right; vertical-align: top"><font style="font-size: 7pt">&nbsp;&nbsp;&nbsp;&nbsp;8,000</font></td></tr>
  <tr style="vertical-align: top">
      <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid"><P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 7pt">Equus Media Development Company, LLC Houston,
  TX</FONT></P></td>
      <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid"><font style="font-size: 7pt">Media&nbsp;</font></td>
      <TD STYLE="text-align: center; border-top: Black 1pt solid; border-bottom: Black 1pt solid"><font style="font-size: 7pt">&nbsp;January 2007&nbsp;</font></td>
      <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid"><font style="font-size: 7pt">&nbsp;Member interest (100%)&nbsp;</font></td>
      <TD STYLE="text-align: right; vertical-align: top; border-top: Black 1pt solid; border-bottom: Black 1pt solid">&nbsp;</td>
      <TD STYLE="font-size: 12pt; text-align: right; border-top: Black 1pt solid; border-bottom: Black 1pt solid">&nbsp;</td>
      <TD STYLE="text-align: right; vertical-align: top; border-top: Black 1pt solid; border-bottom: Black 1pt solid">&nbsp;</td>
      <TD STYLE="text-align: right; border-top: Black 1pt solid; border-bottom: Black 1pt solid"><font style="font-size: 7pt">&nbsp;3,000 &nbsp;</font></td>
      <TD STYLE="text-align: right; vertical-align: top; border-top: Black 1pt solid; border-bottom: Black 1pt solid">&nbsp;</td>
      <TD STYLE="text-align: right; border-top: Black 1pt solid; border-bottom: Black 1pt solid"><font style="font-size: 7pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;216</font></td></tr>
  <tr style="background-color: #CCEEFF">
      <TD STYLE="text-align: left; vertical-align: top">
          <P STYLE="font: 7pt Times New Roman, Times, Serif; margin: 0">Spectrum Management, LLC</P>
          <P STYLE="font: 7pt Times New Roman, Times, Serif; margin: 0">Carrolton, TX</P></td>
      <TD STYLE="text-align: left; vertical-align: top"><font style="font-size: 7pt">Business products and services&nbsp;</font></td>
      <td style="vertical-align: top; text-align: center"><font style="font-size: 7pt">&nbsp;December&nbsp;1999&nbsp;</font></td>
      <td><font style="font-size: 7pt">&nbsp;285,000 units of Class&nbsp;A member interest (92.1%/82.5% fully diluted)&nbsp;</font></td>
      <TD STYLE="text-align: right; vertical-align: top">&nbsp;</td>
      <td style="font-size: 12pt; text-align: right">&nbsp;</td>
      <TD STYLE="text-align: right; vertical-align: top">&nbsp;</td>
      <td style="vertical-align: top; text-align: right"><font style="font-size: 7pt">&nbsp;&nbsp;&nbsp;&nbsp;2,850 &nbsp;</font></td>
      <TD STYLE="vertical-align: top; text-align: right">&nbsp;</td>
      <td style="vertical-align: top; text-align: right"><font style="font-size: 7pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-</font></td></tr>
  <tr style="background-color: #CCEEFF">
      <td style="font-size: 12pt; text-align: right">&nbsp;</td>
      <td style="font-size: 12pt; text-align: center">&nbsp;</td>
      <td style="font-size: 12pt; text-align: center">&nbsp;</td>
      <td><font style="font-size: 7pt">16% subordinated promissory note due 11/11 <sup>(2)</sup></font></td>
      <TD STYLE="vertical-align: top; text-align: right"><font style="font-size: 7pt">$</font></td>
      <TD STYLE="vertical-align: top; text-align: right; border-bottom: Black 1pt solid"><font style="font-size: 7pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,889 &nbsp;</font></td>
      <TD STYLE="vertical-align: top; text-align: right; border-bottom: Black 1pt solid">&nbsp;</td>
      <td style="vertical-align: top; border-bottom: black 1pt solid; text-align: right"><font style="font-size: 7pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,889 &nbsp;</font></td>
      <TD STYLE="vertical-align: top; border-bottom: black 1pt solid; text-align: right">&nbsp;</td>
      <td style="vertical-align: top; border-bottom: black 1pt solid; text-align: right"><font style="font-size: 7pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,889</font></td></tr>
  <tr style="background-color: #CCEEFF">
      <td style="font-size: 12pt; text-align: right">&nbsp;</td>
      <td style="font-size: 12pt; text-align: center">&nbsp;</td>
      <td style="font-size: 12pt; text-align: center">&nbsp;</td>
      <td style="text-align: right">&nbsp;</td>
      <TD STYLE="text-align: right; vertical-align: top">&nbsp;</td>
      <td style="text-align: right">&nbsp;</td>
      <TD STYLE="text-align: right; vertical-align: top">&nbsp;</td>
      <td style="text-align: right"><font style="font-size: 7pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5,739 &nbsp;</font></td>
      <TD STYLE="text-align: right; vertical-align: top">&nbsp;</td>
      <td style="text-align: right"><font style="font-size: 7pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,889</font></td></tr>
  <tr>
      <td colspan="5" style="vertical-align: bottom; border-top: black 1pt solid; border-bottom: black 1pt solid"><font style="font-size: 7pt"><b>Total Control Investments: Majority-owned (represents 39.0% of total investments at fair value)&nbsp;</b></font></td>
      <td style="vertical-align: top; border-top: black 1pt solid; border-bottom: black 1pt solid; text-align: right">&nbsp;</td>
      <TD STYLE="vertical-align: top; border-top: black 1pt solid; border-bottom: black 1pt solid; text-align: right"><font style="font-size: 7pt">$&nbsp;</font></td>
      <td style="vertical-align: bottom; border-top: black 1pt solid; border-bottom: black 1pt solid; text-align: right"><font style="font-size: 7pt"><b>&nbsp;&nbsp;15,789 &nbsp;</b></font></td>
      <TD STYLE="vertical-align: top; border-top: black 1pt solid; border-bottom: black 1pt solid; text-align: right"><font style="font-size: 7pt">$</font></td>
      <td style="vertical-align: bottom; border-top: black 1pt solid; border-bottom: black 1pt solid; text-align: right"><font style="font-size: 7pt"><b>&nbsp;&nbsp;&nbsp;11,105</b></font></td></tr>
  <tr style="background-color: #CCEEFF">
      <td style="border-bottom: black 1pt solid"><font style="font-size: 7pt"><b>Affiliate Investments <sup>(4)</sup>:&nbsp;</b></font></td>
      <td style="border-bottom: black 1pt solid; text-align: right">&nbsp;</td>
      <td style="border-bottom: black 1pt solid; text-align: center">&nbsp;</td>
      <td style="border-bottom: black 1pt solid; text-align: right">&nbsp;</td>
      <TD STYLE="border-bottom: black 1pt solid; text-align: right; vertical-align: top">&nbsp;</td>
      <td style="border-bottom: black 1pt solid; text-align: right">&nbsp;</td>
      <TD STYLE="border-bottom: black 1pt solid; text-align: right; vertical-align: top">&nbsp;</td>
      <td style="border-bottom: black 1pt solid; text-align: right">&nbsp;</td>
      <TD STYLE="border-bottom: black 1pt solid; text-align: right; vertical-align: top">&nbsp;</td>
      <td style="border-bottom: black 1pt solid; text-align: right">&nbsp;</td></tr>
  <tr style="vertical-align: top">
      <td style="border-bottom: black 1pt solid">
          <P STYLE="font: 7pt Times New Roman, Times, Serif; margin: 0">PalletOne, Inc.</P>
          <P STYLE="font: 7pt Times New Roman, Times, Serif; margin: 0">Bartow, FL</P></td>
      <td style="border-bottom: black 1pt solid"><font style="font-size: 7pt">Shipping products and services&nbsp;</font></td>
      <td style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 7pt">&nbsp;October 2001&nbsp;</font></td>
      <td style="border-bottom: black 1pt solid"><font style="font-size: 7pt">&nbsp;350,000&nbsp;shares&nbsp;of&nbsp;common stock (18.70%)&nbsp;</font></td>
      <TD STYLE="border-bottom: black 1pt solid; text-align: right; vertical-align: top">&nbsp;</td>
      <td style="border-bottom: black 1pt solid; font-size: 12pt; text-align: right">&nbsp;</td>
      <TD STYLE="border-bottom: black 1pt solid; text-align: right; vertical-align: top"><font style="font-size: 7pt">$&nbsp;</font></td>
      <td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 7pt">&nbsp;350 &nbsp;</font></td>
      <TD STYLE="border-bottom: black 1pt solid; text-align: right; vertical-align: top"><font style="font-size: 7pt">$</font></td>
      <td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 7pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;250</font></td></tr>
  <tr style="background-color: #CCEEFF">
      <td colspan="4" style="border-bottom: black 1pt solid"><font style="font-size: 7pt"><b>Total Affiliate Investments (represents 0.9% of total investments at fair value)&nbsp;</b></font></td>
      <TD STYLE="border-bottom: black 1pt solid; text-align: right; vertical-align: top">&nbsp;</td>
      <td style="border-bottom: black 1pt solid; font-size: 12pt; text-align: right">&nbsp;</td>
      <TD STYLE="border-bottom: black 1pt solid; text-align: right; vertical-align: top"><font style="font-size: 7pt">$&nbsp;</font></td>
      <td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 7pt"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;350 &nbsp;</b></font></td>
      <TD STYLE="border-bottom: black 1pt solid; text-align: right; vertical-align: top"><font style="font-size: 7pt">$</font></td>
      <td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 7pt"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;250</b></font></td></tr>
  <tr style="vertical-align: bottom">
      <td colspan="4" style="border-bottom: black 1pt solid"><font style="font-size: 7pt"><b>Non-Affiliate Investments (less than 5% owned):</b></font></td>
      <TD STYLE="border-bottom: black 1pt solid; text-align: right; vertical-align: top">&nbsp;</td>
      <td style="border-bottom: black 1pt solid">&nbsp;</td>
      <TD STYLE="border-bottom: black 1pt solid; text-align: right; vertical-align: top">&nbsp;</td>
      <td style="border-bottom: black 1pt solid">&nbsp;</td>
      <TD STYLE="border-bottom: black 1pt solid; text-align: right; vertical-align: top">&nbsp;</td>
      <td style="border-bottom: black 1pt solid">&nbsp;</td></tr>
  <tr style="background-color: #CCEEFF">
      <td>
          <P STYLE="font: 7pt Times New Roman, Times, Serif; margin: 0">Orco Property Group</P>
          <P STYLE="font: 7pt Times New Roman, Times, Serif; margin: 0">Paris, France</P></td>
      <td style="vertical-align: top"><font style="font-size: 7pt">Real estate</font></td>
      <td style="vertical-align: top; text-align: center"><font style="font-size: 7pt">April 2011</font></td>
      <td style="vertical-align: top"><font style="font-size: 7pt">73,666 shares common stock</font></td>
      <TD STYLE="text-align: right; vertical-align: top">&nbsp;</td>
      <td style="text-align: right">&nbsp;</td>
      <TD STYLE="vertical-align: top; text-align: right"><font style="font-size: 7pt">$&nbsp;</font></td>
      <td style="vertical-align: top; text-align: right"><font style="font-size: 7pt">125 &nbsp;</font></td>
      <TD STYLE="vertical-align: top; text-align: right"><font style="font-size: 7pt">$&nbsp;</font></td>
      <td style="vertical-align: top; text-align: right"><font style="font-size: 7pt">169</font></td></tr>
  <tr style="background-color: #CCEEFF">
      <td>&nbsp;</td>
      <td>&nbsp;</td>
      <td style="text-align: center">&nbsp;</td>
      <td><font style="font-size: 7pt">10% promissory note due 2/18 <sup>(2)</sup></font></td>
      <TD STYLE="text-align: right; vertical-align: top"><font style="font-size: 7pt">$</font></td>
      <td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 7pt">&nbsp;&nbsp;&nbsp;696 &nbsp;</font></td>
      <TD STYLE="border-bottom: black 1pt solid; text-align: right; vertical-align: top">&nbsp;</td>
      <td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 7pt">&nbsp;&nbsp;696 &nbsp;</font></td>
      <TD STYLE="border-bottom: black 1pt solid; text-align: right; vertical-align: top">&nbsp;</td>
      <td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 7pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,480</font></td></tr>
  <tr style="background-color: #CCEEFF">
      <td style="border-bottom: black 1pt solid; font-size: 12pt">&nbsp;</td>
      <td style="border-bottom: black 1pt solid; font-size: 12pt">&nbsp;</td>
      <td style="border-bottom: black 1pt solid; font-size: 12pt; text-align: center">&nbsp;</td>
      <td style="border-bottom: black 1pt solid">&nbsp;</td>
      <TD STYLE="border-bottom: black 1pt solid; text-align: right; vertical-align: top">&nbsp;</td>
      <td style="border-bottom: black 1pt solid; font-size: 12pt">&nbsp;</td>
      <TD STYLE="border-bottom: black 1pt solid; text-align: right; vertical-align: top">&nbsp;</td>
      <td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 7pt">821&nbsp;</font></td>
      <TD STYLE="border-bottom: black 1pt solid; text-align: right; vertical-align: top">&nbsp;</td>
      <td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 7pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,649</font></td></tr>
  <tr style="vertical-align: top">
      <td>
          <P STYLE="font: 7pt Times New Roman, Times, Serif; margin: 0">Security Monitor Holding, LLC</P>
          <P STYLE="font: 7pt Times New Roman, Times, Serif; margin: 0">Boston, MA</P></td>
      <td><font style="font-size: 7pt">&nbsp;Business products and services&nbsp;</font></td>
      <td style="text-align: center"><font style="font-size: 7pt">November 2013</font></td>
      <td><font style="font-size: 7pt">14% promissory note due 5/14 <sup>(2)</sup></font></td>
      <TD STYLE="text-align: right; vertical-align: top">&nbsp;</td>
      <td style="text-align: right"><font style="font-size: 7pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;500 &nbsp;</font></td>
      <TD STYLE="text-align: right; vertical-align: top">&nbsp;</td>
      <td style="text-align: right"><font style="font-size: 7pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;500&nbsp; </font></td>
      <TD STYLE="text-align: right; vertical-align: top">&nbsp;</td>
      <td style="text-align: right"><font style="font-size: 7pt">&nbsp;&nbsp;&nbsp;&nbsp;500</font></td></tr>
  <tr style="background-color: #CCEEFF">
      <td colspan="4" style="border-top: black 1pt solid; border-bottom: black 1pt solid"><font style="font-size: 7pt"><b>Total Non-Affiliate Investments (represents 7.5% of total investments at fair value)</b></font></td>
      <TD STYLE="border-top: black 1pt solid; border-bottom: black 1pt solid; text-align: right; vertical-align: top">&nbsp;</td>
      <td style="border-top: black 1pt solid; border-bottom: black 1pt solid">&nbsp;</td>
      <TD STYLE="border-top: black 1pt solid; border-bottom: black 1pt solid; text-align: right; vertical-align: top"><font style="font-size: 7pt">$&nbsp;</font></td>
      <td style="border-top: black 1pt solid; border-bottom: black 1pt solid; text-align: right"><font style="font-size: 7pt"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,321 &nbsp;</b></font></td>
      <TD STYLE="border-top: black 1pt solid; border-bottom: black 1pt solid; text-align: right; vertical-align: top"><font style="font-size: 7pt">$</font></td>
      <td style="border-top: black 1pt solid; border-bottom: black 1pt solid; text-align: right"><font style="font-size: 7pt"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,149</b></font></td></tr>
  <tr style="vertical-align: bottom">
      <td style="border-bottom: black 1pt solid"><font style="font-size: 7pt"><b>Total Investment in Portfolio Securities</b></font></td>
      <td style="border-bottom: black 1pt solid">&nbsp;</td>
      <td style="border-bottom: black 1pt solid">&nbsp;</td>
      <td style="border-bottom: black 1pt solid">&nbsp;</td>
      <TD STYLE="border-bottom: black 1pt solid; text-align: right; vertical-align: top">&nbsp;</td>
      <td style="border-bottom: black 1pt solid">&nbsp;</td>
      <TD STYLE="border-bottom: black 1pt solid; text-align: right; vertical-align: top"><font style="font-size: 7pt">$&nbsp;</font></td>
      <td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 7pt"><b>&nbsp;&nbsp;17,460 &nbsp;</b></font></td>
      <TD STYLE="border-bottom: black 1pt solid; text-align: right; vertical-align: top">&nbsp;</td>
      <td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 7pt"><b>&nbsp;&nbsp;13,504</b></font></td></tr>
  <tr style="background-color: #CCEEFF">
      <td><font style="font-size: 7pt"><b>Temporary Cash Investments</b></font></td>
      <td>&nbsp;</td>
      <td>&nbsp;</td>
      <td>&nbsp;</td>
      <TD STYLE="text-align: right; vertical-align: top">&nbsp;</td>
      <td>&nbsp;</td>
      <TD STYLE="text-align: right; vertical-align: top">&nbsp;</td>
      <td style="text-align: right">&nbsp;</td>
      <TD STYLE="text-align: right; vertical-align: top">&nbsp;</td>
      <td style="text-align: right">&nbsp;</td></tr>
  <tr style="background-color: #CCEEFF">
      <td><font style="font-size: 7pt">U.S. Treasury Bill</font></td>
      <td><font style="font-size: 7pt">Government</font></td>
      <td><font style="font-size: 7pt">December 2013</font></td>
      <td><font style="font-size: 7pt">UST 0% 2/14</font></td>
      <TD STYLE="text-align: right; vertical-align: top">&nbsp;</td>
      <td style="text-align: right"><font style="font-size: 7pt">&nbsp;&nbsp;15,000 &nbsp;</font></td>
      <TD STYLE="text-align: right; vertical-align: top"><font style="font-size: 7pt">$&nbsp;</font></td>
      <td style="text-align: right"><font style="font-size: 7pt">15,000 &nbsp;</font></td>
      <TD STYLE="text-align: right; vertical-align: top"><font style="font-size: 7pt">$</font></td>
      <td style="text-align: right"><font style="font-size: 7pt">15,000</font></td></tr>
  <tr style="vertical-align: bottom">
      <td colspan="4" style="border-top: black 1pt solid; border-bottom: black 1pt solid"><font style="font-size: 7pt"><b>Total Temporary Cash Investments (represents 52.6% of total investments at fair value)</b></font></td>
      <TD STYLE="border-top: black 1pt solid; border-bottom: black 1pt solid; text-align: right; vertical-align: top">&nbsp;</td>
      <td style="border-top: black 1pt solid; border-bottom: black 1pt solid">&nbsp;</td>
      <TD STYLE="border-top: black 1pt solid; border-bottom: black 1pt solid; text-align: right; vertical-align: top"><font style="font-size: 7pt">$&nbsp;</font></td>
      <td style="border-top: black 1pt solid; border-bottom: black 1pt solid; text-align: right"><font style="font-size: 7pt"><b>15,000 &nbsp;</b></font></td>
      <TD STYLE="border-top: black 1pt solid; border-bottom: black 1pt solid; text-align: right; vertical-align: top"><font style="font-size: 7pt">$</font></td>
      <td style="border-top: black 1pt solid; border-bottom: black 1pt solid; text-align: right"><font style="font-size: 7pt"><b>15,000</b></font></td></tr>
  <tr style="background-color: #CCEEFF">
      <td style="border-bottom: black 1pt solid"><font style="font-size: 7pt"><b>Total Investments</b></font></td>
      <td style="border-bottom: black 1pt solid">&nbsp;</td>
      <td style="border-bottom: black 1pt solid">&nbsp;</td>
      <td style="border-bottom: black 1pt solid">&nbsp;</td>
      <TD STYLE="border-bottom: black 1pt solid; text-align: right; vertical-align: top">&nbsp;</td>
      <td style="border-bottom: black 1pt solid">&nbsp;</td>
      <TD STYLE="border-bottom: black 1pt solid; text-align: right; vertical-align: top"><font style="font-size: 7pt">$&nbsp;</font></td>
      <td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 7pt"><b>&nbsp;&nbsp;32,460 &nbsp;</b></font></td>
      <TD STYLE="border-bottom: black 1pt solid; text-align: right; vertical-align: top"><font style="font-size: 7pt">$</font></td>
      <td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 7pt"><b>&nbsp;&nbsp;28,504</b></font></td></tr>
  </table>
  <P STYLE="font: 7pt 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-align: center; text-indent: 0.5in"><B>&nbsp;</B></P>
  
  <TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 7pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
      <TD STYLE="font-size: 7.5pt"><font style="font-size: 7.5pt"><sup>(1) &nbsp;</sup></font></td>
      <TD STYLE="font-size: 7.5pt"><font style="font-size: 7.5pt">See Note 3 to the financial statements, Valuation of Investments.</font></td></tr>
  <tr style="vertical-align: top">
      <TD STYLE="font-size: 7.5pt"><font style="font-size: 7.5pt"><sup>(2) &nbsp;</sup></font></td>
      <TD STYLE="font-size: 7.5pt"><font style="font-size: 7.5pt">Income-producing.</font></td></tr>
  <tr style="vertical-align: top">
      <TD STYLE="font-size: 7.5pt"><font style="font-size: 7.5pt"><sup>(3) &nbsp;</sup></font></td>
      <TD STYLE="font-size: 7.5pt"><font style="font-size: 7.5pt">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"><font style="font-size: 7.5pt"><sup>(4) &nbsp;</sup></font></td>
      <TD STYLE="font-size: 7.5pt"><font style="font-size: 7.5pt">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>
  </table>
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">The accompanying notes are an integral part
  of these financial statements.</P>
  
  
  <!-- Field: Page; Sequence: 10 -->
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  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B><U>EQUUS
  TOTAL RETURN, INC.</U></B></FONT></P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B><U>SCHEDULE
  OF INVESTMENTS &ndash; (Continued)</U></B></FONT></P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B><U>DECEMBER
  31, 2013</U></B></FONT></P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>(in
  thousands, except share data)</B></FONT></P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 9pt 0 0; text-indent: 24.5pt">Except for our holding of ordinary shares
  of OPG, substantially all of our portfolio securities are restricted from public sale
  without prior registration under the Securities Act of 1933 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 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">We may invest up to 30% of our assets in non-qualifying
  portfolio investments, as permitted by the  1940 Act. 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 December 31, 2013,
  except for our holdings in OPG, 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 82.2% of the total value of the investments
  in portfolio securities as of December 31, 2013.</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">Our investments in portfolio securities consist
  of the following types of securities as of December 31, 2013 (in thousands):</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 7pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: bottom">
      <td style="border-bottom: black 1pt solid; font-size: 10pt; text-align: center"><font style="font-size: 10pt"><b>Type of Securities</b></font></td>
      <td style="padding-bottom: 1pt; font-size: 10pt">&nbsp;</td>
      <td colspan="3" style="border-bottom: black 1pt solid; font-size: 10pt; text-align: center"><font style="font-size: 10pt"><b>Cost</b></font></td>
      <td style="padding-bottom: 1pt; font-size: 10pt">&nbsp;</td>
      <td colspan="3" style="border-bottom: black 1pt solid; font-size: 10pt; text-align: center"><font style="font-size: 10pt"><b>Fair Value</b></font></td>
      <td style="padding-bottom: 1pt; font-size: 10pt">&nbsp;</td>
      <td colspan="3" style="border-bottom: black 1pt solid">
          <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Fair Value as</b></P>
          <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Percentage of</b></P>
          <P STYLE="font: 10pt 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: 46%; font-size: 10pt"><font style="font-size: 10pt">Limited liability company investments</font></td>
      <td style="width: 5%; font-size: 10pt">&nbsp;</td>
      <td style="width: 1%; font-size: 10pt"><font style="font-size: 10pt">$</font></td>
      <td style="width: 11%; font-size: 10pt; text-align: right"><font style="font-size: 10pt">12,900</font></td>
      <td style="width: 1%; font-size: 10pt">&nbsp;</td>
      <td style="width: 5%; font-size: 10pt">&nbsp;</td>
      <td style="width: 1%; font-size: 10pt"><font style="font-size: 10pt">$</font></td>
      <td style="width: 11%; font-size: 10pt; text-align: right"><font style="font-size: 10pt">8,216</font></td>
      <td style="width: 1%; font-size: 10pt">&nbsp;</td>
      <td style="width: 5%; font-size: 10pt">&nbsp;</td>
      <td style="width: 1%; font-size: 10pt">&nbsp;</td>
      <td style="width: 11%; font-size: 10pt; text-align: right"><font style="font-size: 10pt">24.7</font></td>
      <td style="width: 1%; font-size: 10pt"><font style="font-size: 10pt">%</font></td></tr>
  <tr style="vertical-align: bottom; background-color: white">
      <td style="font-size: 10pt"><font style="font-size: 10pt">Secured and subordinated debt</font></td>
      <td style="font-size: 10pt">&nbsp;</td>
      <td style="font-size: 10pt">&nbsp;</td>
      <td style="font-size: 10pt; text-align: right"><font style="font-size: 10pt">4,085</font></td>
      <td style="font-size: 10pt">&nbsp;</td>
      <td style="font-size: 10pt">&nbsp;</td>
      <td style="font-size: 10pt">&nbsp;</td>
      <td style="font-size: 10pt; text-align: right"><font style="font-size: 10pt">4,869</font></td>
      <td style="font-size: 10pt">&nbsp;</td>
      <td style="font-size: 10pt">&nbsp;</td>
      <td style="font-size: 10pt">&nbsp;</td>
      <td style="font-size: 10pt; text-align: right"><font style="font-size: 10pt">14.7</font></td>
      <td style="font-size: 10pt"><font style="font-size: 10pt">%</font></td></tr>
  <tr style="vertical-align: bottom; background-color: #CCEEFF">
      <td style="padding-bottom: 1pt; font-size: 10pt"><font style="font-size: 10pt">Common stock</font></td>
      <td style="padding-bottom: 1pt; font-size: 10pt">&nbsp;</td>
      <td style="border-bottom: black 1pt solid; padding-bottom: 1pt; font-size: 10pt">&nbsp;</td>
      <td style="border-bottom: black 1pt solid; padding-bottom: 1pt; font-size: 10pt; text-align: right"><font style="font-size: 10pt">475</font></td>
      <td style="padding-bottom: 1pt; font-size: 10pt">&nbsp;</td>
      <td style="padding-bottom: 1pt; font-size: 10pt">&nbsp;</td>
      <td style="border-bottom: black 1pt solid; padding-bottom: 1pt; font-size: 10pt">&nbsp;</td>
      <td style="border-bottom: black 1pt solid; padding-bottom: 1pt; font-size: 10pt; text-align: right"><font style="font-size: 10pt">419</font></td>
      <td style="padding-bottom: 1pt; font-size: 10pt">&nbsp;</td>
      <td style="padding-bottom: 1pt; font-size: 10pt">&nbsp;</td>
      <td style="padding-bottom: 1pt; font-size: 10pt">&nbsp;</td>
      <td style="border-bottom: black 1pt solid; font-size: 10pt; text-align: right"><font style="font-size: 10pt">1.3</font></td>
      <td style="border-bottom: black 1pt solid; font-size: 10pt"><font style="font-size: 10pt">%</font></td></tr>
  <tr style="vertical-align: bottom; background-color: white">
      <td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: center"><font style="font-size: 10pt">Total</font></td>
      <td style="padding-bottom: 2.5pt; font-size: 10pt">&nbsp;</td>
      <td style="border-bottom: black 2.25pt double; padding-bottom: 2.5pt; font-size: 10pt"><font style="font-size: 10pt">$</font></td>
      <td style="border-bottom: black 2.25pt double; padding-bottom: 2.5pt; font-size: 10pt; text-align: right"><font style="font-size: 10pt">17,460</font></td>
      <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt">&nbsp;</td>
      <td style="padding-bottom: 2.5pt; font-size: 10pt">&nbsp;</td>
      <td style="border-bottom: black 2.25pt double; padding-bottom: 2.5pt; font-size: 10pt"><font style="font-size: 10pt">$</font></td>
      <td style="border-bottom: black 2.25pt double; padding-bottom: 2.5pt; font-size: 10pt; text-align: right"><font style="font-size: 10pt">13,504</font></td>
      <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt">&nbsp;</td>
      <td style="padding-bottom: 2.5pt; font-size: 10pt">&nbsp;</td>
      <td style="border-bottom: black 2.25pt double; font-size: 10pt">&nbsp;</td>
      <td style="border-bottom: black 2.25pt double; font-size: 10pt; text-align: right"><font style="font-size: 10pt">40.7</font></td>
      <td style="border-bottom: black 2.25pt double; font-size: 10pt"><font style="font-size: 10pt">%</font></td></tr>
  </table>
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt 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 $2.0 million, while accrued interest has been impaired on notes receivable included in secured
  and subordinated debt with a fair value of $2.9 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">The following is a summary by industry of our
  investments in portfolio securities as of December 31, 2013 (in thousands):</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 7pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: bottom">
      <td style="border-bottom: black 1pt solid; font-size: 10pt; text-align: center"><font style="font-size: 10pt"><b>Industry</b></font></td>
      <td style="padding-bottom: 1pt; font-size: 10pt">&nbsp;</td>
      <td colspan="3" style="border-bottom: black 1pt solid; font-size: 10pt; text-align: center"><font style="font-size: 10pt"><b>Fair Value</b></font></td>
      <td style="padding-bottom: 1pt; font-size: 10pt">&nbsp;</td>
      <td colspan="3" style="border-bottom: black 1pt solid">
          <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Fair Value as</b></P>
          <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Percentage of</b></P>
          <P STYLE="font: 10pt 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: 59%; font-size: 10pt"><font style="font-size: 10pt">Energy</font></td>
      <td style="width: 8%; font-size: 10pt">&nbsp;</td>
      <td style="width: 1%; font-size: 10pt"><font style="font-size: 10pt">$</font></td>
      <td style="width: 11%; font-size: 10pt; text-align: right"><font style="font-size: 10pt">8,000</font></td>
      <td style="width: 1%; font-size: 10pt">&nbsp;</td>
      <td style="width: 5%; font-size: 10pt">&nbsp;</td>
      <td style="width: 1%; font-size: 10pt">&nbsp;</td>
      <td style="width: 13%; font-size: 10pt; text-align: right"><font style="font-size: 10pt">24.1</font></td>
      <td style="width: 1%; font-size: 10pt"><font style="font-size: 10pt">%</font></td></tr>
  <tr style="vertical-align: bottom; background-color: white">
      <td style="font-size: 10pt"><font style="font-size: 10pt">Business products and services</font></td>
      <td style="font-size: 10pt">&nbsp;</td>
      <td style="font-size: 10pt">&nbsp;</td>
      <td style="font-size: 10pt; text-align: right"><font style="font-size: 10pt">3,389</font></td>
      <td style="font-size: 10pt">&nbsp;</td>
      <td style="font-size: 10pt">&nbsp;</td>
      <td style="font-size: 10pt">&nbsp;</td>
      <td style="font-size: 10pt; text-align: right"><font style="font-size: 10pt">10.2</font></td>
      <td style="font-size: 10pt"><font style="font-size: 10pt">%</font></td></tr>
  <tr style="vertical-align: bottom; background-color: #CCEEFF">
      <td style="font-size: 10pt"><font style="font-size: 10pt">Real estate</font></td>
      <td style="font-size: 10pt">&nbsp;</td>
      <td style="font-size: 10pt">&nbsp;</td>
      <td style="font-size: 10pt; text-align: right"><font style="font-size: 10pt">1,649</font></td>
      <td style="font-size: 10pt">&nbsp;</td>
      <td style="font-size: 10pt">&nbsp;</td>
      <td style="font-size: 10pt">&nbsp;</td>
      <td style="font-size: 10pt; text-align: right"><font style="font-size: 10pt">5.0</font></td>
      <td style="font-size: 10pt"><font style="font-size: 10pt">%</font></td></tr>
  <tr style="vertical-align: bottom; background-color: white">
      <td style="font-size: 10pt"><font style="font-size: 10pt">Shipping products and services</font></td>
      <td style="font-size: 10pt">&nbsp;</td>
      <td style="font-size: 10pt">&nbsp;</td>
      <td style="font-size: 10pt; text-align: right"><font style="font-size: 10pt">250</font></td>
      <td style="font-size: 10pt">&nbsp;</td>
      <td style="font-size: 10pt">&nbsp;</td>
      <td style="font-size: 10pt">&nbsp;</td>
      <td style="font-size: 10pt; text-align: right"><font style="font-size: 10pt">0.8</font></td>
      <td style="font-size: 10pt"><font style="font-size: 10pt">%</font></td></tr>
  <tr style="vertical-align: bottom; background-color: #CCEEFF">
      <td style="padding-bottom: 1pt; font-size: 10pt"><font style="font-size: 10pt">Media</font></td>
      <td style="padding-bottom: 1pt; font-size: 10pt">&nbsp;</td>
      <td style="border-bottom: black 1pt solid; padding-bottom: 1pt; font-size: 10pt">&nbsp;</td>
      <td style="border-bottom: black 1pt solid; padding-bottom: 1pt; font-size: 10pt; text-align: right"><font style="font-size: 10pt">216</font></td>
      <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt">&nbsp;</td>
      <td style="padding-bottom: 1pt; font-size: 10pt">&nbsp;</td>
      <td style="padding-bottom: 1pt; font-size: 10pt">&nbsp;</td>
      <td style="border-bottom: black 1pt solid; font-size: 10pt; text-align: right"><font style="font-size: 10pt">0.6</font></td>
      <td style="border-bottom: black 1pt solid; font-size: 10pt"><font style="font-size: 10pt">%</font></td></tr>
  <tr style="vertical-align: bottom; background-color: white">
      <td style="padding-bottom: 2.5pt; font-size: 10pt"><font style="font-size: 10pt">Total</font></td>
      <td style="padding-bottom: 2.5pt; font-size: 10pt">&nbsp;</td>
      <td style="border-bottom: black 2.25pt double; padding-bottom: 2.5pt; font-size: 10pt"><font style="font-size: 10pt">$</font></td>
      <td style="border-bottom: black 2.25pt double; padding-bottom: 2.5pt; font-size: 10pt; text-align: right"><font style="font-size: 10pt">13,504</font></td>
      <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt">&nbsp;</td>
      <td style="padding-bottom: 2.5pt; font-size: 10pt">&nbsp;</td>
      <td style="border-bottom: black 2.25pt double; font-size: 10pt">&nbsp;</td>
      <td style="border-bottom: black 2.25pt double; font-size: 10pt; text-align: right"><font style="font-size: 10pt">40.7</font></td>
      <td style="border-bottom: black 2.25pt double; font-size: 10pt"><font style="font-size: 10pt">%</font></td></tr>
  </table>
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">The accompanying notes are an integral part
  of these financial statements.</P>
  
  
  <!-- Field: Page; Sequence: 11 -->
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  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B><U>EQUUS TOTAL RETURN, INC.</U></B></P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B><U><A NAME="a_010"></A>NOTES TO FINANCIAL
  STATEMENTS </U></B></P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B><U>MARCH 31, 2014 </U></B></P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>(Unaudited)</B></P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>&nbsp;</B></P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
  <TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt"><B>(1)</B></FONT></TD><TD><FONT STYLE="font-size: 10pt"><B><U>Description of Business and Basis of Presentation </U></B></FONT></TD></TR></TABLE>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt 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 &lsquo;EQS&rsquo;. On August 11, 2006, our shareholders approved a change of the Fund&rsquo;s investment strategy to
  a total return investment objective. This new 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 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">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 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 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">We elected to be treated as a Business Development
  Company (&ldquo;BDC&rdquo;) under the Investment Company Act of 1940 (&ldquo;1940 Act&rdquo;). 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 investments. We reflect any such income tax expense on our Statements of Operations.</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: 27.35pt"><B>Basis of Presentation</B>&mdash;In accordance
  with Article 6 of Regulation S-X under the Securities Act of 1933 and 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 Times New Roman, Times, Serif; margin: 0; text-indent: 27.35pt">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">The results of operations for the three months
  ended March 31, 2014 are not necessarily indicative of results that ultimately may be achieved for 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 Form 10-K for the fiscal year ended December&nbsp;31, 2013, as filed with the Securities and Exchange Commission
  (&ldquo;SEC&rdquo;).</P>
  
  
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  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
  <TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt"><B>(2)</B></FONT></TD><TD><FONT STYLE="font-size: 10pt"><B><U>Liquidity and Financing Arrangements </U></B></FONT></TD></TR></TABLE>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt 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 March 31, 2015. 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. &nbsp;</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"><B>Cash and Cash Equivalents</B>&mdash;As of
  March 31, 2014, we had cash and cash equivalents of $18.7 million. We had $13.5 million of our net assets of $32.7 million invested
  in portfolio securities.</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">As of December 31, 2013, we had cash and cash
  equivalents of $19.1 million. We had $13.5 million of our net assets of $33.2 million invested in portfolio securities. We also
  had $15.2 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 $0.2 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, 2014 and we subsequently repaid this margin loan. The margin interest was
  paid on January 22, 2014.</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"><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 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"><B>Investment Commitments</B>&mdash;As of March
  31, 2014, we had no outstanding commitments to our portfolio company investments.</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">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: 12pt 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"><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 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">We had no RIC borrowings or restricted cash
  as of March 31, 2014.</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">As of December 31, 2013, we borrowed $15.0
  million to make qualifying investments 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 $15.2 million.
  The U.S. Treasury bills were sold on January 2, 2014 and the total amount borrowed was repaid at that time. The margin interest
  was paid on January 22, 2014.</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"><B>Certain Risks and Uncertainties</B>&mdash;
  Economic conditions since 2008 and resulting market dislocations have resulted in a significant decline in the availability of
  debt and equity. Generally, the limited amount of available debt financing 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 three months of 2014, the price of our common stock continued to fall well below our net asset value, thereby making it undesirable
  to issue additional shares of our common stock. 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 2014
  operating requirements.</P>
  
  
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  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
  <TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt"><B>(3)</B></FONT></TD><TD><FONT STYLE="font-size: 10pt"><B><U>Significant Accounting Policies </U></B></FONT></TD></TR></TABLE>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt 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 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"><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 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"><B>Valuation of Investments</B>&mdash;Portfolio
  investments are carried at fair value with the net change in unrealized appreciation or depreciation included in the determination
  of net assets. Valuations of portfolio securities are performed in accordance with accounting principles generally accepted in
  the United States of America and the financial reporting policies of the SEC. The applicable methods prescribed by such principles
  and policies are described 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"><I>Publicly-traded portfolio securities</I>&mdash;Investments
  in companies whose securities are publicly traded are generally valued at their quoted market price at the close of business on
  the valuation date.</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><I>Privately-held portfolio securities</I>&mdash;The
  fair value of investments for which no market exists is determined on the basis of procedures established in good faith by our
  Board of Directors. As a general principle, the current &ldquo;fair value&rdquo; of an investment would be the amount we might
  reasonably expect to receive for it upon its current sale, in an orderly manner. Appraisal valuations are necessarily subjective
  and the estimated values arrived at by the Fund may differ materially from amounts actually received upon the disposition of portfolio
  securities.</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"><I>Thinly Traded and Over-the-Counter Securities</I>&mdash;Generally,
  we value securities that are traded in the over-the-counter market or on a stock exchange at the average of the prevailing bid
  and ask prices on the date of the relevant period end. However, we may apply a discount to the market value of restricted or thinly
  traded public securities to reflect the impact that these restrictions have on the value of these securities. We review factors,
  including the trading volume, total securities outstanding and our percentage ownership of securities to determine whether the
  trading levels are active (Level 1) or inactive (Level 2) or unobservable (Level 3). These types of securities represented 11.0%
  of our investments in portfolio securities as of March 31, 2014 and December 31, 2013, respectively. We utilized independent pricing
  services with certain of our fair value estimates. To corroborate &ldquo;bid/ask&rdquo; quotes from independent pricing services,
  we perform a market-yield approach to validate prices obtained or obtain other evidence.</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 first twelve months after an investment
  is made, the original investment value is utilized to determine the fair value unless significant developments have occurred during
  this twelve month period which would indicate a material effect on the portfolio company (such as results of operations or changes
  in general market conditions). After the twelve month period, or if material events have occurred within the twelve month period,
  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 an asset 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.</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"><B>Market approach</B>&mdash;The market approach
  typically employed by our management calculates the enterprise value of a company as&nbsp;a multiple of earnings before interest,
  taxes, depreciation and amortization (&ldquo;EBITDA&rdquo;) generated by the company for the trailing twelve month period.&nbsp;
  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 it deems 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 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"><B>Income approach</B>&mdash;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.&nbsp; 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
  we deem appropriate to equity valuations where applicable.</P>
  
  
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  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>Asset approach</B>&mdash;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&nbsp;maturity; 3) we believe the credit
  quality of a loan has deteriorated due to changes in the business and underlying asset or market conditions which 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 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">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 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 management&rsquo;s 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 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">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 perform a yield analysis to determine if a debt security has been impaired.</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">The Audit Committee of the Board of Directors
  may engage independent, third-party valuation firms to conduct independent appraisals and review management&rsquo;s preliminary
  valuations of each privately-held investment in order to make their own independent assessment. Any third-party valuation data
  would be considered as one of many factors in a fair value determination. The Audit Committee then would recommend the fair values
  for all privately-held securities based on all relevant factors to the Board of Directors for final approval.</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 10pt 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 $13.4 million
  and $13.3 million as of March 31, 2014 and December 31, 2013, 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 March 31, 2014 and
  December 31, 2013 respectively, one of the Fund&rsquo;s portfolio investments, the 73,666 ordinary shares of Orco Property
  Group, S.A. (&ldquo;OPG&rdquo;), was publicly listed on the NYSE Euronext Paris Exchange, along with &euro;1,200,790 [$1.5
  million] in newly-issued 6-year OPG Notes. However, as of March 31, 2014 and December 31, 2013 respectively, there had been
  no significant trading activity in the OPG Notes.<FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif"> </FONT></P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><I>&nbsp;</I></P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">On a daily basis, 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 reports those amounts to Lipper Analytical Services,
  Inc. Weekly and daily net asset values appear in various publications, including <I>Barron&rsquo;s </I>and <I>The Wall Street Journal</I>.</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"><B>Foreign Exchange</B>&mdash;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 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"><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 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">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 we own more than 25% of the voting securities or maintain greater than 50% representation on the portfolio company&rsquo;s
  governing board. 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 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"><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 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 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.</P>
  
  
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  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 10pt 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 record it 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.</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 10pt 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&nbsp;&amp; Temporary Cash Investments&rdquo; used for purposes of complying with RIC requirements from cash equivalents. See
  Note 2 for further discussion of the Fund&rsquo;s RIC borrowings.</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"><B>Income Taxes</B>&mdash;We intend to comply
  with the requirements of the Internal Revenue Code necessary for us to qualify as a RIC. So long as we comply with these requirements,
  we generally will not be subject to corporate-level federal income taxes on otherwise taxable income (including net realized capital
  gains) distributed to stockholders. Therefore, we did not record a provision for federal income taxes in our financial statements.
  We borrow money from time to time to maintain our tax status under the Internal Revenue Code as a RIC. See Note 2 for further discussion
  of our RIC borrowings.</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">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 $0.01 million for the year ended December 31, 2013.</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">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, 2013.</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"><B>Fair Value Measurement</B>&mdash;Fair value
  is defined as 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. We have categorized all investments recorded at fair value based upon the level of
  judgment associated with the inputs used to measure their fair value. Hierarchical levels, directly related to the amount of subjectivity
  associated with the inputs to fair valuation of these assets and liabilities, are as follows:</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">Level 1&mdash;Inputs are unadjusted, quoted
  prices in active markets for identical assets at the measurement date. The types of assets carried at Level 1 fair value generally
  are equities listed in active markets.</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">Level 2&mdash;Inputs (other than quoted prices
  included in Level 1) are either directly or indirectly observable for the asset in connection with market data at the measurement
  date and for the extent of the instrument&rsquo;s anticipated life. Fair valued assets that are generally included in this category
  are warrants held in a public company.</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">Level 3&mdash;Inputs reflect our best estimate
  of what market participants would use in pricing the asset at the measurement date. It includes prices or valuations that require
  inputs that are both significant to the fair value measurement and unobservable. Generally, assets carried at fair value and included
  in this category are debt, warrants and/or other equity investments held in a private company. As previously described, 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: 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">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 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"></P>
  
  
  <!-- Field: Page; Sequence: 16 -->
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  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">As of March 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 Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 4.5pt"></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: 8pt"><B>Fair
      Value Measurements as of March 31, 2014</B> <B>(unaudited)</B></FONT></TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="font-weight: bold; font-style: italic; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">(in thousands)</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
      <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">Total</FONT></TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
      <TD COLSPAN="3" STYLE="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 8pt">Quoted
                                           Prices in Active Markets for Identical Assets</FONT></P>
                                                                                  <P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 8pt">(Level
                                           1)</FONT></P></TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
      <TD COLSPAN="3" STYLE="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 8pt">Significant
                                           Other Observable Inputs</FONT></P>
                                                                                  <P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 8pt">(Level
                                           2)</FONT></P></TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
      <TD COLSPAN="3" STYLE="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 8pt">Significant
                                           Unobservable Inputs&nbsp;</FONT></P>
                                                                                  <P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 8pt">(Level
                                           3)</FONT></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: 48%; text-align: left; padding-left: 10pt">Control investments</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">11,179</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</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">11,179</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">250</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">250</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; 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">2,081</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">101</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">1,980</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">Total investments</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">13,510</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">101</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">13,409</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
  </TABLE>
  
  
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 4.5pt"></P>
  
  <P STYLE="font: 9pt Sans-Serif; margin: 0; text-indent: 4.5pt; color: Red"><B></B></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">As of December 31, 2013, 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 Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 9pt Sans-Serif; margin: 0; color: Red"></P>
  
  
  
  
  <P STYLE="font: 9pt Sans-Serif; margin: 0; 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-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: 8pt"><B>Fair Value Measurements
      as of December 31, 2013</B></FONT></TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="font-weight: bold; font-style: italic; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">(in thousands)</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
      <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">Total</FONT></TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
      <TD COLSPAN="3" STYLE="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 8pt">Quoted
                                           Prices in Active Markets for Identical Assets</FONT></P>
                                                                                  <P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 8pt">(Level
                                           1)</FONT></P></TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
      <TD COLSPAN="3" STYLE="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 8pt">Significant
                                           Other Observable Inputs</FONT></P>
                                                                                  <P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 8pt">(Level
                                           2)</FONT></P></TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
      <TD COLSPAN="3" STYLE="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 8pt">Significant
                                           Unobservable Inputs</FONT></P>
                                                                                  <P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 8pt">(Level
                                           3)</FONT></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: 48%; text-align: left; padding-left: 10pt">Control investments</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">11,105</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 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">11,105</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">250</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">250</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; 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">2,149</TD><TD STYLE="border-bottom: Black 1pt solid; 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">169</TD><TD STYLE="border-bottom: Black 1pt solid; 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="border-bottom: Black 1pt solid; 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">1,980</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">Total investments</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">13,504</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><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">13,335</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;&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">15,150</TD><TD STYLE="border-bottom: Black 1pt solid; 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">15,150</TD><TD STYLE="border-bottom: Black 1pt solid; 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="border-bottom: Black 1pt solid; 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="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-bottom: 2.5pt">Total investments and temporary cash investments</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">28,654</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">15,319</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">13,335</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD></TR>
  </TABLE>
  
  
  
  <P STYLE="font: 9pt Sans-Serif; margin: 0; color: Red"></P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">The following table provides a reconciliation
  of fair value changes during the three months ended March 31, 2014 for all investments for which we determine fair value using
  unobservable (Level 3) factors:</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"></P>
  
  
  
  
  <P STYLE="font: 10pt Times New Roman, Times, 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 STYLE="font-size: 8pt; font-weight: bold; text-align: center"></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
      <TD COLSPAN="15" STYLE="text-align: center; vertical-align: bottom; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt"><B>Fair value measurements
      using significant unobservable inputs (Level 3</B>)</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="font-weight: bold; font-style: italic; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">(in thousands)</FONT></TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
      <TD COLSPAN="3" STYLE="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">Control
      Investments</FONT></TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
      <TD COLSPAN="3" STYLE="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">Affiliate
      Investments</FONT></TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
      <TD COLSPAN="3" STYLE="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">Non-affiliate
      Investments</FONT></TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
      <TD COLSPAN="3" STYLE="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">Total</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="width: 44%">Fair value as of December&nbsp;31, 2013</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 11%; text-align: right">11,105</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 11%; 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">$</TD><TD STYLE="width: 11%; text-align: right">1,980</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 11%; 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; padding-bottom: 1pt">Purchases of portfolio securities</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">74</TD><TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">74</TD><TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="padding-bottom: 2.5pt">Fair value as of March 31, 2014 (unaudited)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">11,179</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">250</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">1,980</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">13,409</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD></TR>
  </TABLE>
  
  
  
  <P STYLE="font: 9pt Sans-Serif; margin: 0; text-indent: 24.5pt; color: Red">&nbsp;</P>
  
  <P STYLE="font: 9pt Sans-Serif; margin: 0; text-indent: 24.5pt; color: Red"></P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">The following table provides a reconciliation
  of fair value changes during the three months ended March 31, 2013 for all investments for which we determine fair value using
  unobservable (Level 3) factors:</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 9pt/110% Sans-Serif; margin: 0; 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-size: 8pt; font-weight: bold; text-align: center"></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
      <TD COLSPAN="15" STYLE="text-align: center; vertical-align: bottom; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt"><B>Fair value measurements
      using significant unobservable inputs (Level 3)</B></FONT></TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="font-weight: bold; font-style: italic; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">(in thousands)</FONT></TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
      <TD COLSPAN="3" STYLE="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">Control
      Investments</FONT></TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
      <TD COLSPAN="3" STYLE="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">Affiliate
      Investments</FONT></TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
      <TD COLSPAN="3" STYLE="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">Non-affiliate
      Investments</FONT></TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
      <TD COLSPAN="3" STYLE="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">Total</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="width: 44%">Fair value as of December&nbsp;31, 2012</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 11%; text-align: right">7,419</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 11%; text-align: right">150</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 11%; text-align: right">1,425</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 11%; text-align: right">8,994</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <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">(616</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">(36</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(652</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <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">90</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">90</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">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="border-bottom: Black 1pt solid; 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="border-bottom: Black 1pt solid; 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">(9</TD><TD STYLE="border-bottom: Black 1pt solid; 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">(9</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="padding-bottom: 2.5pt">Fair value as of March 31, 2013 (unaudited)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">6,893</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">150</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">1,380</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">8,423</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD></TR>
  </TABLE>
  
  
  
  <P STYLE="font: 9pt/110% Sans-Serif; margin: 0; color: Red"></P>
  
  <!-- Field: Page; Sequence: 17 -->
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      <!-- Field: /Page -->
  
  <P STYLE="font: 9pt/110% Sans-Serif; margin: 0; color: Red"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt 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 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">The following table summarizes the significant
  observable inputs in the fair value measurements of our level 3 investments by category of investment and valuation technique as
  of March 31, 2014:</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, 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: 8pt; 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: 8pt; 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: 8pt; 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: 29%; 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: 10%; text-align: right">4,943</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 18%; text-align: center">Yield Analysis</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 18%; text-align: center">Market interest rate</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: 7%; font-size: 8pt; text-align: right">2.5</TD><TD STYLE="width: 1%; font-size: 8pt; text-align: left">%</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: 7%; font-size: 8pt; text-align: right">10.5</TD><TD STYLE="width: 1%; font-size: 8pt; text-align: left">%</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">Yield Analysis</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: center">Discount for lack of marketability</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">2.5</TD><TD STYLE="font-size: 8pt; text-align: left">%</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">12.0</TD><TD STYLE="font-size: 8pt; 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: center">Yield Analysis</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: center">Discount for lack of marketability</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">7.2</TD><TD STYLE="font-size: 8pt; text-align: left">%</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">25</TD><TD STYLE="font-size: 8pt; text-align: left">%</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">Yield Analysis</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: center">Control Premium</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">12</TD><TD STYLE="font-size: 8pt; text-align: left">%</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">171</TD><TD STYLE="font-size: 8pt; 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: center">New Transaction</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: center">Discount</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">0</TD><TD STYLE="font-size: 8pt; text-align: left">%</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">100</TD><TD STYLE="font-size: 8pt; 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">250</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: center">Pending Transaction</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: center">Discount</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">0</TD><TD STYLE="font-size: 8pt; text-align: left">%</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">100</TD><TD STYLE="font-size: 8pt; 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: 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">0</TD><TD STYLE="font-size: 8pt; text-align: left">%</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">100</TD><TD STYLE="font-size: 8pt; text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <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">8,216</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">Income/Market Approach</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="text-align: center; padding-bottom: 1pt">Reserve Adjustment Factors</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">75</TD><TD STYLE="padding-bottom: 1pt; font-size: 8pt; text-align: left">%</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">100</TD><TD STYLE="padding-bottom: 1pt; font-size: 8pt; text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <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">13,409</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: 9pt Sans-Serif; margin: 0; color: Red"><B></B></P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
  <TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt"><B>(4)</B></FONT></TD><TD><FONT STYLE="font-size: 10pt"><B><U>Related Party Transactions and Agreements </U></B></FONT></TD></TR></TABLE>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt 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 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">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 $18,750 for each of the three months ended March 31, 2014 and 2013.</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">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 rate of $250 per hour for services
  rendered.</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
  <TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt"><B>(5)</B></FONT></TD><TD><FONT STYLE="font-size: 10pt"><B><U>Dividends</U> </B></FONT></TD></TR></TABLE>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt 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 Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
  <TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt"><B>(6)</B></FONT></TD><TD><FONT STYLE="font-size: 10pt"><B><U>Portfolio Securities </U></B></FONT></TD></TR></TABLE>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">During the three months ended March 31, 2014,
  we capitalized legal and consulting expenses of $0.7 million relating to Spectrum Management. We also received a semi-annual interest
  payment of $0.04 million in respect of our &euro;1.2 million [$1.5 million] in OPG notes.</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"></P>
  
  
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  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">During the three months ended March 31, 2014,
  we did not realize any significant gains or losses on sales of portfolio securities.</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
  increased $0.07 million during the three months ended March 31, 2014, to a net unrealized depreciation of $4.0 million.&nbsp; Such
  increase in unrealized depreciation is due to the decrease in fair value of our holdings in OPG of $0.07 million due to
  a decline in the price of our OPG shares.</P>
  
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">During the three months ended March 31, 2013,
  we capitalized legal and consulting expenses of $0.1 million relating to Spectrum. We also received a semi-annual interest payment
  of $0.03 million and a 5.75% partial principal repayment of $9,000 in respect of our &euro;1.2 million [$1.5 million] in OPG notes.</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 three months ended March 31, 2013,
  we did not realize any significant gains or losses on sales of portfolio securities.</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
  increased $0.7 million during the three months ended March 31, 2013, to a net unrealized depreciation of $17.9 million.&nbsp; Such
  decrease in unrealized depreciation is largely due to the following changes:</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
  <TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-size: 10pt">(i)</FONT></TD><TD><FONT STYLE="font-size: 10pt">Decrease in fair value of Equus Energy, LLC of $0.2 million due to operating expenses;</FONT></TD></TR></TABLE>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
  <TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-size: 10pt">(ii)</FONT></TD><TD><FONT STYLE="font-size: 10pt">Decrease in fair value of our holdings in OPG of $0.1 million due to a decline in the price of
  our OPG shares and foreign exchange translation; and</FONT></TD></TR></TABLE>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
  <TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-size: 10pt">(iii)</FONT></TD><TD><FONT STYLE="font-size: 10pt">Decrease in fair value of Spectrum of $0.4 million due to a decline in operating performance.</FONT></TD></TR></TABLE>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
  <TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt"><B>(7)</B></FONT></TD><TD><FONT STYLE="font-size: 10pt"><B><U>Equus Energy, LLC</U> </B></FONT></TD></TR></TABLE>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1.1in; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">Equus Energy, LLC (&ldquo;Equus Energy&rdquo;)
  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 129 producing and non-producing oil and gas wells. The working
  interests include associated development rights of approximately 21,120 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 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: 27.35pt">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. Two recompletions in the Conger Field have been effected since the closing date of
  the acquisition of the working interests and a third recompletion is planned during the second quarter of 2014, with additional
  recompletions anticipated for the remainder of 2014 and beyond. 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 (appx. 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 Times New Roman, Times, Serif; margin: 0; text-indent: 27.35pt">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">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 on the values
  of the underlying assets held by EQS Energy Holdings, Inc. a wholly-owned subsidiary of Equus Energy, net of associated liabilities.</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">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  
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  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"></P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Below is summarized consolidated financial
  information for Equus Energy as of March 31, 2014 and December 31, 2013 and for the three months ended March 31, 2014 and 2013
  respectively (in thousands).</P>
  
  <P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0 0 0 1.1in; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 9pt Sans-Serif; margin: 0; color: Red"><B></B></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; 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"><P STYLE="margin-top: 0; margin-bottom: 0">March 31,</P>
                                                                                  <P STYLE="margin-top: 0; margin-bottom: 0">2014</P></TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: center; vertical-align: bottom; border-bottom: Black 1pt solid"><P STYLE="margin-top: 0; margin-bottom: 0"><B>December 31,</B></P>
                      <P STYLE="margin-top: 0; margin-bottom: 0"><B>2013</B></P></TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="font-weight: bold; text-align: center"></TD><TD STYLE="font-weight: bold">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center">(Unaudited)</TD><TD>&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: center; vertical-align: bottom"><B>(Unaudited)</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 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 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: 63%; padding-left: 10pt">Cash</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">406</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">486</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; padding-left: 10pt">Accounts receivable</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">209</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">288</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">615</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">774</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <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">Oil and gas properties</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7,725</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7,700</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">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">(1,178</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">(983</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: 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">6,547</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">6,717</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: 10pt">&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="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</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 assets</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">7,162</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">7,491</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; padding-left: 20pt">&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>
  <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="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><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">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: White">
      <TD STYLE="text-align: left; padding-left: 10pt">Accounts payable and other</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">121</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">324</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">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">378</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">364</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">Total current liabilities</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">499</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">688</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;</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: 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">180</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">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-bottom: 1pt">Total non-current 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">180</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">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; 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="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</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">679</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">866</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">&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="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</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">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; padding-bottom: 1pt">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">6,483</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">6,625</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">&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="text-align: left">&nbsp;</TD><TD STYLE="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; 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">7,162</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">7,491</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
  </TABLE>
  
  
  
  <P STYLE="font: 9pt Sans-Serif; margin: 0; color: Red"><B></B></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">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 revenue 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 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"></P>
  
  <!-- Field: Page; Sequence: 20 -->
      <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: left; width: 33%"><A HREF="#a_019" TITLE="Table of Contents" STYLE="font-style: italic">Table of Contents</A></TD><TD STYLE="text-align: center; width: 34%"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->20<!-- Field: /Sequence --></TD><TD STYLE="text-align: right; width: 33%">&nbsp;</TD></TR></TABLE></DIV>
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      <!-- Field: /Page -->
  
  <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"></P>
  
  
  
  
  <P STYLE="font: 10pt Times New Roman, Times, 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 STYLE="font-weight: bold; text-align: center"></TD><TD>&nbsp;</TD>
      <TD COLSPAN="7" STYLE="text-align: center; vertical-align: bottom"><B>Three months ended March 31</B></TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt; text-align: center; vertical-align: bottom">&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; text-align: center; vertical-align: bottom">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid; vertical-align: bottom">2013</TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="font-weight: bold; text-align: center"></TD><TD STYLE="font-weight: bold">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center">(Unaudited)</TD><TD>&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: center; vertical-align: bottom"><B>(Unaudited)</B></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="width: 63%; text-align: left">Operating revenue</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">540</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">605</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></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">335</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">328</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">196</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">322</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">151</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">187</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-left: 20pt">Total operating expenses</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><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">837</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">Operating income (loss) before income tax expense</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(142</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(232</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 10pt">Income tax</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></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-bottom: 2.5pt">Net income (loss)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(142</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(232</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD></TR>
  </TABLE>
  
  
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"></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"><B>Critical Accounting Policies for Equus
  Energy </B>&ndash; Equus Energy and its wholly-owned subsidiary EQS Energy Holdings, Inc. (collectively, the &ldquo;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 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">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 for the quarters ended March 31, 2014 and March
  31, 2013, respectively.</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">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 Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-indent: 0.5in">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 7pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
      <td style="width: 48px">&nbsp;</td>
      <td style="width: 48px; padding-top: 4.5pt; font-size: 10pt"><font style="font-size: 10pt">(a)</font></td>
      <td style="padding-top: 4.5pt; font-size: 10pt"><font style="font-size: 10pt">As of March 31, 2014, 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&nbsp; (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: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 7pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
      <td style="width: 48px">&nbsp;</td>
      <td style="width: 48px; padding-top: 4.5pt; font-size: 10pt"><font style="font-size: 10pt">(b)</font></td>
      <td style="padding-top: 4.5pt; font-size: 10pt"><font style="font-size: 10pt">The cost of investments in unproved and unevaluated properties excluded from the costs being amortized; and</font></td></tr>
  </table>
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 7pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
      <td style="width: 48px">&nbsp;</td>
      <td style="width: 48px; padding-top: 4.5pt; font-size: 10pt"><font style="font-size: 10pt">(c)</font></td>
      <td style="padding-top: 4.5pt; font-size: 10pt"><font style="font-size: 10pt">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 Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt 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 their oil and gas properties during 2013 or during the three months ended March
  31, 2014.</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">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 Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  
  
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B><U>Revenue Recognition</U> - </B>Revenue
  is recognized for oil and natural gas sales under the sales method of accounting. Under this method, revenue is 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 summarized oil
  and gas information included herein.</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"></P>
  
  <!-- Field: Page; Sequence: 21 -->
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  <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"><B><U>Accounting Policy on Depletion</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 Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><I>&nbsp;</I></P>
  
  <P STYLE="font: 10pt 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.&nbsp; &nbsp;&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
  <TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt"><B>(8)</B></FONT></TD><TD><FONT STYLE="font-size: 10pt"><B><U>Subsequent Events</U> </B></FONT></TD></TR></TABLE>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt 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 the following subsequent events:</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">On April 3, 2014, we sold all of our 73,666
  remaining shares of OPG, wherein we received $61,867 in net proceeds.</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"></P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"></P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">On May 15, 2014, the Fund announced that it had adopted a Plan
  of Reorganization (also referred to hereinafter as the &quot;Plan&quot;) within the meaning of Section 2(a)(33) of the 1940 Act.&nbsp;
  Under the terms of the Plan, Equus intends to pursue a merger or consolidation with MVC Capital, Inc. (&quot;MVC&quot;), a BDC
  traded on the New York Stock Exchange, or a subsidiary of MVC, or one or more of MVC's portfolio companies (referred to in the
  Plan as a &quot;Consolidation&quot;) within the next twelve months.&nbsp; Absent Equus merging or consolidating with/into MVC,
  the present intention is for Equus to (i) consummate the Consolidation, (ii) terminate its election to be classified as a BDC,
  and (iii) be restructured as a publicly-traded operating company focused on the energy and/or financial services sectors.</P>
  
  <P STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">On May 14, 2014, a Share Exchange Agreement was entered into between MVC and Equus as a first step in the
  Plan, wherein MVC received 2,112,000 shares of the Fund in exchange for Equus receiving 395,839 shares of MVC.&nbsp; The exchange
  was determined based on each company's respective net asset values per share, calculated as of May 12, 2014.&nbsp; The number of
  MVC shares that were received by Equus is subject to adjustment following MVC's release of its Form 10-Q, which will include its
  published net asset value per share for the quarter ended April 30, 2014.&nbsp; If a Consolidation has not occurred within one
  year from the date of the share exchange, MVC has the right, to the extent permitted by applicable law, to rescind the exchange,
  recover its shares that have been issued to Equus, and return to Equus the 2,112,000 shares issued by the Fund.&nbsp; As part of
  the reorganization, MVC may also acquire additional Equus shares from time to time, either through Equus' direct sale to MVC of
  newly-issued shares from treasury (which would require the approval of a majority of Equus shareholders) or through the purchase
  of Equus shares from existing shareholders.</P>
  
  
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"></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">&nbsp;</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">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0"></P>
  
  
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  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B><A NAME="a_011"></A><U>Item&nbsp;2.</U> <U>Management&rsquo;s
  Discussion and Analysis of Financial Condition and Results of Operations </U></B></P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 55.05pt; text-indent: -55.1pt">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B><U>Overview </U></B></P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 10pt 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 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 new 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 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">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 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 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">We elected to be treated as a Business Development
  Company (&ldquo;BDC&rdquo;) under the Investment Company Act of 1940 Act (&ldquo;1940 Act&rdquo;). We currently qualify as a regulated
  investment company (&ldquo;RIC&rsquo;) 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: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 22.5pt 0 0; text-indent: 24.5pt"><B>Critical Accounting Policies
  </B></P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 22.5pt 0 0">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Our financial statements are based on the selection
  and application of significant accounting policies, which require management to make significant estimates and assumptions. We
  believe that the following are some of the more critical judgment areas in the application of our accounting policies that currently
  affect our financial condition and results of operations.</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"><B>Valuation of Investments</B>&mdash; Portfolio
  investments are carried at fair value with the net change in unrealized appreciation or depreciation included in the determination
  of net assets. Valuations of portfolio securities are performed in accordance with accounting principles generally accepted in
  the United States of America and the financial reporting policies of the SEC. The applicable methods prescribed by such principles
  and policies are described 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"><I>Publicly-traded portfolio securities</I>&mdash;Investments
  in companies whose securities are publicly traded are generally valued at their quoted market price at the close of business on
  the valuation date.</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"><I>Privately-held portfolio securities</I>&mdash;The
  fair value of investments for which no market exists is determined on the basis of procedures established in good faith by our
  Board of Directors. As a general principle, the current &ldquo;fair value&rdquo; of an investment would be the amount we might
  reasonably expect to receive for it upon its current sale, in an orderly manner. Appraisal valuations are necessarily subjective
  and the estimated values arrived at by the Fund may differ materially from amounts actually received upon the disposition of portfolio
  securities.</P>
  
  
  <!-- Field: Page; Sequence: 23 -->
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  <P STYLE="font: 12pt 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"><I>Thinly Traded and Over-the-Counter Securities</I>&mdash;Generally,
  we value securities that are traded in the over-the-counter market or on a stock exchange at the average of the prevailing bid
  and ask prices on the date of the relevant period end. However, we may apply a discount to the market value of restricted or thinly
  traded public securities to reflect the impact that these restrictions have on the value of these securities. We review factors,
  including the trading volume, total securities outstanding and our percentage ownership of securities to determine whether the
  trading levels are active (Level 1) or inactive (Level 2) or unobservable (Level 3). These types of securities represented 11.0%
  of our investments in portfolio securities as of March 31, 2014 and December 31, 2013, respectively. We utilized independent pricing
  services with certain of our fair value estimates. To corroborate &ldquo;bid/ask&rdquo; quotes from independent pricing services,
  we perform a market-yield approach to validate prices obtained or obtain other evidence.</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 first twelve months after an investment
  is made, the original investment amount is utilized to determine the fair value unless significant developments have occurred during
  this twelve month period which would indicate a material effect on the portfolio company (such as results of operations or changes
  in general market conditions). After the twelve month period, or if material events have occurred within the twelve month period,
  Fund management considers 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, our management considers three different valuation approaches:
  a market approach, an income approach, and an asset 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. Fund management allocates
  value to these securities based on their relative priorities. For equity securities such as warrants, the Fund may also incorporate
  alternative methodologies including the Black-Scholes Option Pricing Model.</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"><B>Market approach</B>&mdash;The market approach
  typically employed by our management calculates the enterprise value of a company as&nbsp;a multiple of earnings before interest,
  taxes, depreciation and amortization (&ldquo;EBITDA&rdquo;) generated by the company for the trailing twelve month period.&nbsp;
  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 we deem 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 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"><B>Income approach</B>&mdash;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.&nbsp; 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
  we deem appropriate to equity valuations where applicable.</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"><B>Asset approach</B>&mdash;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&nbsp;maturity; 3) we believe the credit
  quality of a loan has deteriorated due to changes in the business and underlying asset or market conditions which 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 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">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 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 management&rsquo;s 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 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">Our general intent is to hold our loans to
  maturity when appraising its 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 perform a yield analysis to determine if a debt security has been impaired.</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  
  <!-- Field: Page; Sequence: 24 -->
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  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">The Audit Committee of the Board of Directors
  may engage independent, third-party valuation firms to conduct independent appraisals and review management&rsquo;s preliminary
  valuations of each privately-held investment in order to make their own independent assessment. Any third-party valuation data
  would be considered as one of many factors in a fair value determination. The Audit Committee then would recommend the fair values
  for all privately-held securities based on all relevant factors to the Board of Directors for final approval.</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">Because of the inherent uncertainty
  of the valuation of portfolio securities which do not have readily ascertainable market values, amounting to $13.4 million
  and $13.3 million as of March 31, 2014 and December 31, 2013, 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 March 31, 2014 and
  December 31, 2013 respectively, one of the Fund&rsquo;s portfolio investments, the 73,666 ordinary shares of Orco Property
  Group, S.A. (&ldquo;OPG&rdquo;), was publicly listed on the NYSE Euronext Paris Exchange, along with &euro;1,200,790 [$1.5
  million] in newly-issued 6-year OPG Notes. However, as of March 31, 2014 and December 31, 2013 respectively, there had been
  no significant trading activity in the OPG Notes.<FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif"> </FONT></P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><I>&nbsp;</I></P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">On a daily basis, 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 reports those amounts to Lipper Analytical Services,
  Inc. Weekly and daily net asset values appear in various publications, including Barron&rsquo;s and <I>The Wall Street Journal</I>.</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B><I>&nbsp;</I></B></P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>Federal Income Taxes </B></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"></P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">On May 15, 2014, we announced
  that we had adopted a Plan of Reorganization, which may involve the transformation of the Fund into an operating company, which
  will likely result in the loss of our status as a RIC for Federal income tax purposes.&nbsp; However, if we do not effect a transformation
  of the Fund into an operating company, we intend to comply with the requirements of the Internal Revenue Code necessary for us
  to qualify as a RIC. So long as we comply with these requirements, we generally will not be subject to corporate-level federal
  income taxes on otherwise taxable income (including net realized capital gains) distributed to stockholders. Therefore, we did
  not record a provision for federal income taxes in our financial statements.&nbsp; As of December 31, 2013, we had a capital loss
  carry-forward of $32.5 million which may be used to offset future capital gains. We may borrow money from time to time to maintain
  our status as a RIC under the Internal Revenue Code. See Note 2 for further discussion of our RIC borrowings.&nbsp; See also &ldquo;<I>Subsequent
  Events</I>&rdquo; and &ldquo;<I>Risk Factors</I>&rdquo; on pages 27 and 30.</P>
  
  
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"></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"><B>Interest Income Recognition</B></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">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 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 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.</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>Payment in Kind Interest </B></P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">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 record it as interest income. To maintain the Fund&rsquo;s status as a RIC, we must pay out to our 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.</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"><B>Current Market Conditions </B></P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Overall economic conditions in the United States
  have improved, albeit marginally. However, the economic recovery has been hampered by slower growth and persistent high unemployment
  levels. The U.S. Congressional Budget Office is forecasting higher growth in 2014 (3.1%), with a projected unemployment rate exceeding
  6.0% until 2017.</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">Further, the banking industry continues to
  experience additional bank failures as regulators continue to impose strict capital requirements. Additionally, future economic
  expansion and business investment is threatened by perceptions of higher taxes and healthcare costs, as well as the high levels
  of government deficit spending.</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  
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  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Market conditions for business transactions
  including mergers and acquisitions and private equity investments improved significantly in 2013 compared with previous years,
  and has continued through the first quarter of 2014, as corporations have been deleveraging and are holding significant amounts
  of cash and many have begun to focus on acquisitions as part of future growth plans. Private equity firms as a group enjoyed more
  success in 2013 in monetizing their investments through sales and public listings.</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 first quarter of 2014,
  our net asset value decreased to $3.09 per share from  $3.14 per share. As of March 31, 2014, the closing price
  of our common stock closed was $1.92, which is a discount of 37.9% to our net asset value.</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">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 during this turbulent economic period 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 Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>Liquidity and Capital Resources </B></P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 10pt 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 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">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 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">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 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">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 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">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. &nbsp;</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"><B>Results of Operations </B></P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>Investment Income and Expense </B></P>
  
  <P STYLE="font: 10pt 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 investment loss was $0.5 million and
  $0.8&nbsp;million for the three months ended March&nbsp;31, 2014 and March&nbsp;31, 2013, respectively. Investment income was
  $0.3 million for the three months ended March 31, 2014. The investment income of ($0.1) generated  for the three months
  ended March 31, 2013 is due primarily to due to the impairment of accrued interest income from Spectrum.</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">Total expenses were relatively unchanged at
  $0.7 million for the three months ended March 31, 2014 and March 31, 2013, respectively.</P>
  
  
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  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>Realized Gains and Losses on Sales of Portfolio Securities </B></P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">During the three months ended March&nbsp;31,
  2014, we realized a loss of $0.1 million from the sale of temporary cash investments. We did not realize any net capital gains
  or losses for the three months ended March 31, 2013.</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 31.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>Changes in Unrealized Appreciation/Depreciation of Portfolio
  Securities </B></P>
  
  <P STYLE="font: 7.5pt 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
  increased $0.07 million during the three months ended March 31, 2014, to a net unrealized depreciation of $4.0 million.&nbsp; Such
  increase in unrealized depreciation is largely due to the decrease in fair value of our holdings in OPG of $0.1 million due to
  a decline in the price of OPG shares.</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Net unrealized depreciation on investments
  increased $0.7 million during the three months ended March 31, 2013, to a net unrealized depreciation of $17.9 million.&nbsp; Such
  decrease in unrealized depreciation is largely due to the following changes:</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
  <TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-size: 10pt">(i)</FONT></TD><TD><FONT STYLE="font-size: 10pt">Decrease in fair value of Equus Energy of $0.2 million due to operating expenses; </FONT></TD></TR></TABLE>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
  <TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-size: 10pt">(ii)</FONT></TD><TD><FONT STYLE="font-size: 10pt">Decrease in fair value of our holdings in OPG of $0.1 million due to a decline in the price of
  OPG shares and foreign exchange translation; and</FONT></TD></TR></TABLE>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
  <TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-size: 10pt">(iii)</FONT></TD><TD><FONT STYLE="font-size: 10pt">Decrease in fair value of our holdings in Spectrum of $0.4 million due to a decline in operating
  performance.</FONT></TD></TR></TABLE>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>Dividends </B></P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 10pt 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: 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"><B>Portfolio Investments </B></P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>&nbsp;</B></P>
  
  <P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">During the three months ended March
  31, 2014, we capitalized consulting expenses of $0.07 million relating to Spectrum Management. We also received a semi-annual
  interest payment of $0.04 million in respect of our &euro;1.2 million [$1.5 million] in OPG notes.</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">During the three months ended March 31, 2013,
  we capitalized legal and consulting expenses of $0.1 million relating to Spectrum Management. We also received a semi-annual interest
  payment of $0.03 million and a 5.75% partial principal repayment of $9,000 in respect of our &euro;1.2 million [$1.5 million] in
  OPG notes.</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"><B><U>Subsequent Events</U> </B></P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt 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 the following subsequent events:</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">On April 3, 2014, we sold all of our 73,666
  remaining shares of OPG, wherein we received $61,867 in net proceeds.</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"></P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">On May 15, 2014, the Fund announced that it had adopted a Plan
  of Reorganization (also referred to hereinafter as the &quot;Plan&quot;) within the meaning of Section 2(a)(33) of the 1940 Act.&nbsp;
  Under the terms of the Plan, Equus intends to pursue a merger or consolidation with MVC Capital, Inc. (&quot;MVC&quot;), a BDC
  traded on the New York Stock Exchange, or a subsidiary of MVC, or one or more of MVC's portfolio companies (referred to in the
  Plan as a &quot;Consolidation&quot;) within the next twelve months.&nbsp; Absent Equus merging or consolidating with/into MVC,
  the present intention is for Equus to (i) consummate the Consolidation, (ii) terminate its election to be classified as a BDC,
  and (iii) be restructured as a publicly-traded operating company focused on the energy and/or financial services sectors.</P>
  
  <P STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">On May 14, 2014, a Share Exchange Agreement was entered into between MVC and Equus as a first step in the
  Plan, wherein MVC received 2,112,000 shares of the Fund in exchange for Equus receiving 395,839 shares of MVC.&nbsp; The exchange
  was determined based on each company's respective net asset values per share, calculated as of May 12, 2014.&nbsp; The number of
  MVC shares that were received by Equus is subject to adjustment following MVC's release of its Form 10-Q, which will include its
  published net asset value per share for the quarter ended April 30, 2014.&nbsp; If a Consolidation has not occurred within one
  year from the date of the share exchange, MVC has the right, to the extent permitted by applicable law, to rescind the exchange,
  recover its shares that have been issued to Equus, and return to Equus the 2,112,000 shares issued by the Fund.&nbsp; As part of
  the reorganization, MVC may also acquire additional Equus shares from time to time, either through Equus' direct sale to MVC of
  newly-issued shares from treasury (which would require the approval of a majority of Equus shareholders) or through the purchase
  of Equus shares from existing shareholders.</P>
  
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"></P>
  
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  <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"><A NAME="a_012"></A><B><U>Item&nbsp; 3. Quantitative and
  Qualitative Disclosure about Market Risk </U></B></P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 10pt 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 OPG shares and 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 Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"></P>
  
  
  
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 10pt 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 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">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 also consists 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 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">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 and was 24.5%
  of the net asset value and 59.2% of our investments in portfolio company securities (at fair value) as of March 31, 2014. 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 Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 55.05pt; text-indent: -55.1pt"><A NAME="a_013"></A><B><U>Item&nbsp;
  4. Controls and Procedures </U></B></P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 55.05pt; text-indent: -55.1pt">&nbsp;</P>
  
  <P STYLE="font: 10pt 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 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">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 March 31, 2014. 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 March 31, 2014, that has materially
  affected, or is reasonably likely to materially affect, the Fund&rsquo;s internal control over financial reporting.</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B><A NAME="a_014"></A><U>Part II. Other Information </U></B></P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 55.05pt; text-indent: -55.1pt"><A NAME="a_015"></A><B><U>Item&nbsp;
  1. Legal Proceedings </U></B></P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 55.05pt; text-indent: -55.1pt">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>Champion Window Arbitration Claim</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 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">More than five years after the closing of the
  sale of our Champion interest, Atrium filed suit in the District Court of Harris County, Texas against two former officers of Atrium&rsquo;s
  subsidiary, Champion, alleging, amongst other matters, that the former officers breached their fiduciary duties to Champion by
  hiring undocumented workers. This action was commenced primarily as a result of an investigation by the U.S. Immigration and Customs
  Enforcement agency (&ldquo;ICE&rdquo;) into Atrium&rsquo;s hiring practices. On March 12, 2012, to protect its interests, we filed
  a Petition in Intervention in the State Court Action seeking a declaration from the Court that Equus did not owe any obligation
  to indemnify Atrium or Champion for any penalties, costs or fees associated with the investigation by ICE.</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"></P>
  
  <!-- Field: Page; Sequence: 28 -->
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  <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">On March 16, 2012, Atrium and Champion filed
  a claim with the American Arbitration Association in Dallas, Texas, against Equus and a number of the other sellers under the SPA.
  In September 2013, all of Atrium and Champion&rsquo;s claims including claims against its former officers described above, were
  also consolidated in the Arbitration Action.</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">In the Arbitration Action, Atrium and Champion
  seek damages arising from Equus&rsquo; and the other sellers&rsquo; indemnity obligations set forth in the SPA. Atrium claims
  it is entitled to indemnification under the SPA for costs it has incurred in responding to an ongoing investigation by ICE. Atrium
  entered into a Non-Prosecution Agreement with ICE. It appears that one condition of the Non-Prosecution Agreement required Atrium
  to pay ICE $2,000,000. Atrium and Champion asserted two counts of breach of contract against Equus, both arising out of the alleged
  obligation to indemnify Atrium and Champion pursuant to certain provisions of the SPA. Atrium and Champion also asserted claims
  for fraudulent inducement against two former officers and directors of Champion. Through the arbitration, Atrium and Champion
  seek to recover an unspecified amount in the form of alleged &ldquo;losses, damages, assessments, penalties, interest, reasonable
  attorneys&rsquo; and accountants&rsquo; fees, settlement costs, and other costs and expenses arising directly or indirectly out
  of or incident to,&rdquo; the alleged breach of the indemnity provisions in the SPA. As a consequence of their fraudulent inducement
  claim against the two former officers and directors, Atrium and Champion alternatively seek equitable rescission of the SPA and
  exemplary damages from the two former officers and directors.</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">Atrium and Champion have yet to specify the
  amount of damages they seek from Equus or the other sellers pursuant to the alleged indemnity obligations under the SPA. Atrium
  and Champion have disclosed the payment of $2 million to ICE to resolve the investigation and avoid prosecution for their hiring
  practices.</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">We filed an answer to Atrium and Champion&rsquo;s
  claims on December 6, 2013. In our answer, we denied that we owed any indemnity obligations to Atrium or Champion and further denied
  that the Fund is in any way liable to Atrium or Champion. To the extent Atrium and Champion are able to establish a right to an
  indemnity, we will further contest the amount of the claimed indemnity, inasmuch as we believe (among other defenses) that the
  indemnity obligation can only exist, if at all, with respect to damages arising as a direct and proximate result of employees who
  were hired prior to the closing date of the 2006 sale of Champion and remained in continuous employment after the 2006 sale, and
  not to any employee who may have been hired in the six years after the sale.</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">While we believe the Atrium claim is without
  merit and we intend to continue to vigorously dispute the claim, there is a reasonable possibility of an adverse ruling which may
  require the Fund to indemnify Atrium. If Equus is required to indemnify Atrium and Champion, we estimate that such indemnity obligation
  could vary from $2.0 million to $3.0 million. Pursuant to the SPA, the indemnification obligation of Equus and the other sellers
  is several and not joint, and any such indemnity, however uncertain, would likely be reduced proportionately to our percentage
  ownership in Champion at the time of sale, which was 31.5% of Champion&rsquo;s shares outstanding.</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"><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 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"><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.&nbsp;</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">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 Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"></P>
  
  <!-- Field: Page; Sequence: 29 -->
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  <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 0 0 55.05pt; text-indent: -55.1pt"><A NAME="a_016"></A><B><U>Item&nbsp;1A.
  Risk Factors </U></B></P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 55.05pt; text-indent: -55.1pt">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"></P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">In addition to the various risks identified
  in the Fund&rsquo;s Annual Report on Form 10-K for the year ended December 31, 2013, filed on March 31, 2014, are the following:</P>
  
  <P STYLE="font: 10pt/normal 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"><B><I>If we reorganize as an operating
  company, we will likely not continue to qualify as a RIC under the Code. </I></B></P>
  
  <P STYLE="font: 10pt/normal 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">On May 15, 2014, we announced that we
  had adopted a Plan of Reorganization (also referred to hereinafter as the &ldquo;Plan&rdquo;) within the meaning of Section 2(a)(33)
  of the 1940 Act.&nbsp; The Plan contemplates the possible merger of the Fund with and into another BDC, or the restructuring of
  the Fund as an operating company no longer subject to the 1940 Act.&nbsp; If we were to reorganize as an operating company, we
  may lose our status as a RIC.&nbsp; If we fail to qualify as a RIC, we will be subject to corporate income tax, which would substantially
  reduce the amount of income we might otherwise distribute to our shareholders.&nbsp; See &ldquo;<I>Subsequent Events</I>&rdquo;
  on page 27.</P>
  
  <P STYLE="font: 10pt/normal 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"><B><I>If we reorganize as an operating
  company, we will not continue to operate as a BDC. </I></B></P>
  
  <P STYLE="font: 10pt/normal 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">We have elected to be classified as a
  BDC under the 1940 Act.&nbsp; In connection with our announcement on May 15, 2014 to effect a Plan of Reorganization, if we effect
  a reorganization of the Fund into an operating company, we will seek to terminate our BDC classification.&nbsp; If we were to terminate
  our election to be classified as a BDC and were still determined by the Securities and Exchange Commission to constitute an &ldquo;investment
  company,&rdquo; we would be subject to significantly greater regulatory requirements and constraints than under which we presently
  operate, the result of which would&nbsp; have a material adverse effect on our results and financial condition.</P>
  
  <P STYLE="font: 10pt/normal 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"><B><I>If we reorganize as an operating
  company, we may not be able to utilize our capital losses. </I></B></P>
  
  <P STYLE="font: 10pt/normal 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">As of March 31, 2014, we have incurred
  cumulative capital losses of $32.5 million, of which $15.6 million will begin expiring after 2017, with the remainder carried over
  indefinitely.&nbsp; Pursuant to the Plan of Reorganization announced on May 15, 2014, we may reorganize as an operating company.&nbsp;
  If we reorganize as an operating company, we may lose our ability to offset future income against our cumulative capital losses,
  including capital losses that would otherwise continue past 2017.&nbsp; If we reorganized as an operating company and were unable
  to offset future income against these capital losses, the result could have a material adverse effect on our future operating results
  and our financial condition.&nbsp;</P>
  
  <P STYLE="font: 10pt/normal 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">Other than the foregoing, there have
  been no material changes to 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, 2013.</P>
  
  
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"></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">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. 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.</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">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"></P>
  
  <!-- Field: Page; Sequence: 30 -->
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      <!-- Field: /Page -->
  
  <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">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><A NAME="a_017"></A><B><U>Item&nbsp; 6. Exhibits </U></B></P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 4.5pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
  <TD STYLE="width: 0"></TD><TD STYLE="width: 24.45pt">3.</TD><TD>Articles of Incorporation and by-laws</TD></TR></TABLE>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 4.5pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
  <TD STYLE="width: 30.6pt"></TD><TD STYLE="width: 30.6pt">(a)</TD><TD>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&nbsp;31, 2007]</TD></TR></TABLE>
  
  
  
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
  <TD STYLE="width: 30.6pt"></TD><TD STYLE="width: 30.6pt">(b)</TD><TD>Certificate of Merger dated June&nbsp;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&nbsp;31, 2007]</TD></TR></TABLE>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 4.5pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
  <TD STYLE="width: 30.6pt"></TD><TD STYLE="width: 30.6pt">(c)</TD><TD>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 December 16, 2010.]w</TD></TR></TABLE>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.85in; text-indent: -30.6pt">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
  <TD STYLE="width: 0"></TD><TD STYLE="width: 24.45pt">10.</TD><TD>Material Contracts.</TD></TR></TABLE>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 4.5pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
  <TD STYLE="width: 30.6pt"></TD><TD STYLE="width: 30.6pt">(c)</TD><TD>Safekeeping Agreement between the Fund and Amegy Bank dated August&nbsp;16, 2008.&nbsp;[Incorporated by reference to Exhibit&nbsp;10(c)
  to Registrant&rsquo;s Annual Report on Form 10-K for the year ended December&nbsp;31, 2008.]</TD></TR></TABLE>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 4.5pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
  <TD STYLE="width: 30.6pt"></TD><TD STYLE="width: 30.6pt">(d)</TD><TD>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&nbsp;31, 2011.]</TD></TR></TABLE>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 4.5pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
  <TD STYLE="width: 30.6pt"></TD><TD STYLE="width: 30.6pt">(e)</TD><TD>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&nbsp;31, 2004.]</TD></TR></TABLE>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 4.5pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
  <TD STYLE="width: 30.6pt"></TD><TD STYLE="width: 30.6pt">(f)</TD><TD>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&nbsp;31, 2009.]</TD></TR></TABLE>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 4.5pt; margin-bottom: 0">
  <TR STYLE="vertical-align: top">
  <TD STYLE="width: 30.6pt"></TD><TD STYLE="width: 30.6pt">(g)</TD><TD>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.]</TD></TR>
  </TABLE>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.85in; text-indent: -30.6pt">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
  <TD STYLE="width: 0"></TD><TD STYLE="width: 24.45pt">31.</TD><TD>Rule 13a-14(a)/15d-14(a) Certifications</TD></TR></TABLE>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 4.5pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
  <TD STYLE="width: 30.6pt"></TD><TD STYLE="width: 30.6pt">1.</TD><TD><A HREF="ex31_1ceocert.htm">Certification by Chief Executive Officer</A></TD></TR></TABLE>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 4.5pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
  <TD STYLE="width: 30.6pt"></TD><TD STYLE="width: 30.6pt">2.</TD><TD><A HREF="ex31_2cfocert.htm">Certification by Chief Financial Officer</A></TD></TR></TABLE>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 4.5pt 0 0 0.85in; text-indent: -30.6pt">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
  <TD STYLE="width: 0"></TD><TD STYLE="width: 24.45pt">32.</TD><TD>Section 1350 Certifications</TD></TR></TABLE>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 4.5pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
  <TD STYLE="width: 30.6pt"></TD><TD STYLE="width: 30.6pt">1.</TD><TD><A HREF="ex32_1ceocert.htm">Certification by Chief Executive Officer</A></TD></TR></TABLE>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 4.5pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
  <TD STYLE="width: 30.6pt"></TD><TD STYLE="width: 30.6pt">2.</TD><TD><A HREF="ex32_2cfocert.htm">Certification by Chief Financial Officer</A></TD></TR></TABLE>
  
  <P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  
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  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><A NAME="a_018"></A>SIGNATURE</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 9pt 0 0; text-indent: 24.5pt">Pursuant to the requirements of Section&nbsp;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>
  
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      <td style="width: 40%; font-size: 0.5pt">&nbsp;</td></tr>
  <tr>
      <td style="vertical-align: top; padding-left: 0.1in; font-size: 4pt; line-height: 2pt">&nbsp;</td>
      <td style="vertical-align: bottom; padding-left: 0.1in; font-size: 4pt; line-height: 2pt">&nbsp;</td>
      <td style="vertical-align: bottom; font-size: 10pt"><font style="font-size: 10pt">EQUUS TOTAL RETURN, INC.</font></td></tr>
  <tr>
      <td style="font-size: 12pt">&nbsp;</td>
      <td style="font-size: 12pt">&nbsp;</td>
      <td style="font-size: 12pt">&nbsp;</td></tr>
  <tr>
      <td style="vertical-align: top; font-size: 10pt"><font style="font-size: 10pt">Date: May 15, 2014</font></td>
      <td style="vertical-align: bottom; padding-left: 0.1in; font-size: 4pt; line-height: 2pt">&nbsp;</td>
      <td style="vertical-align: bottom">
          <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">/s/ John A. Hardy</P>
          <P STYLE="font: 4pt/1pt Times New Roman, Times, Serif; margin: 1pt 0 0; text-align: center; text-indent: 0.5in; border-top: Black 1pt solid">&nbsp;</P></td></tr>
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      <td style="vertical-align: bottom; padding-left: 0.1in; font-size: 4pt; line-height: 2pt">&nbsp;</td>
      <td style="vertical-align: bottom; font-size: 10pt; text-align: center"><font style="font-size: 10pt"><b>John A. Hardy</b></font></td></tr>
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      <td style="vertical-align: bottom; padding-left: 0.1in; font-size: 4pt; line-height: 2pt">&nbsp;</td>
      <td style="vertical-align: bottom; font-size: 10pt; text-align: center"><font style="font-size: 10pt"><b>Chief Executive Officer</b></font></td></tr>
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metadata_documents: [{"type": "10-Q", "sequence": "1", "filename": "f10q_equus033114.htm", "description": "FORM 10-Q", "secsgml_size_bytes": 412238}]
metadata_filer: {"company-data": {"conformed-name": "EQUUS TOTAL RETURN, INC.", "cik": "0000878932", "irs-number": "760345915", "state-of-incorporation": "DE", "fiscal-year-end": "0604"}, "filing-values": {"form-type": "10-Q", "act": "34", "file-number": "814-00098", "film-number": "14848995"}, "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)
  x
  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
  For the quarterly period ended March 31,
  2014
  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.)
  Eight Greenway Plaza, Suite 930 Houston, Texas
  77046
  (Address of principal executive offices)
  (Zip Code)
  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
  x
  Smaller Reporting Company
  ¨
  Indicate by check mark whether the registrant
  is a shell company.    Yes
  ¨
  No
  x
  There were 12,673,646 shares of the registrant's
  common stock, $.001 par value, outstanding, as of May 15, 2014.
  Table of Contents
  EQUUS TOTAL RETURN, INC.
  (A Delaware Corporation)
  INDEX
  PAGE
  PART I. FINANCIAL INFORMATION
  Item 1. Financial Statements
  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
  Schedule of Investments
  8
  Notes to Financial Statements
  12
  Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
  23
  Item 3. Quantitative and Qualitative Disclosure about Market Risk
  28
  Item 4. Controls and Procedures
  28
  PART II. OTHER INFORMATION
  Item 1. Legal Proceedings
  28
  Item 1A. Risk Factors
  30
  Item 6. Exhibits
  31
  SIGNATURE
  32
  Table of Contents
  2
  EQUUS TOTAL RETURN, INC.
  BALANCE SHEETS
  Part I. Financial Information
  Item  1. Financial Statements
  March 31,
  2014
  December 31,
  2013
  (unaudited)
  (in thousands, except per share amounts)
  Assets
  Investments in portfolio securities at fair value:
  Control investments (cost at $15,863 and $15,789 respectively)
  $
  11,179
  $
  11,105
  Affiliate investments (cost at $350 and $350 respectively)
  250
  250
  Non-affiliate investments (cost at $1,321 and $1,321 respectively)
  2,081
  2,149
  Total investments in portfolio securities at fair value
  13,510
  13,504
  Cash and cash equivalents
  18,690
  19,065
  Restricted cash and temporary cash investments
  —
  15,150
  Accounts receivable from investments
  386
  372
  Accrued interest receivable
  444
  228
  Accounts receivable and other
  28
  30
  Total assets
  33,058
  48,349
  Liabilities and net assets
  Accounts payable and accrued liabilities
  254
  106
  Accounts payable to related parties
  125
  26
  Borrowing under margin account
  —
  15,000
  Total liabilities
  379
  15,132
  Commitments and contingencies
  Net assets
  $
  32,679
  $
  33,217
  Net assets consist of:
  Common stock, par value
  $
  10
  $
  10
  Capital in excess of par value
  51,700
  51,701
  Undistributed net investment losses
  (15,007
  )
  (14,538
  )
  Unrealized depreciation of portfolio securities, net
  (4,024
  )
  (3,956
  )
  Total
      net assets
  $
  32,679
  $
  33,217
  Shares of common stock issued and outstanding, $.001 par value,
      50,000 shares authorized
  10,562
  10,562
  Shares of preferred stock issued and outstanding, $.001 par
      value, 5,000 shares authorized
  —
  —
  Net asset value per share
  $
  3.09
  $
  3.14
  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 March 31,
  (in thousands, except per share amounts)
  2014
  2013
  Investment income (loss):
  Interest income (loss), net:
  Control investments
  $
  198
  $
  (132
  )
  Non-affiliate investments
  59
  36
  Total interest income
  257
  (96
  )
  Interest from temporary cash investments
  —
  —
  Total investment income (loss)
  257
  (96
  )
  Expenses:
  Professional fees
  291
  268
  Compensation expense
  212
  239
  General and administrative expense
  100
  38
  Director fees and expenses
  96
  102
  Mailing, printing and other expenses
  21
  23
  Taxes
  6
  5
  Total expenses
  726
  675
  Net investment loss
  (469
  )
  (771
  )
  Net realized loss:
  Temporary cash investments
  (1
  )
  —
  Net realized loss
  (1
  )
  —
  Net unrealized depreciation of portfolio securities:
  End of period
  (4,024
  )
  (17,910
  )
  Beginning of period
  (3,956
  )
  (17,222
  )
  Net change in unrealized depreciation of portfolio securities
  (68
  )
  (688
  )
  Net decrease in net assets resulting from operations
  $
  (538
  )
  $
  (1,459
  )
  Net decrease in net assets resulting from operations per share:
  Basic and diluted
  $
  (0.05
  )
  $
  (0.14
  )
  Weighted average shares outstanding:
  Basic and diluted
  10,562
  10,562
  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)
  Three
      months ended March 31,
  (in thousands)
  2014
  2013
  Net decrease in net assets resulting
      from operations
  $
  (538
  )
  $
  (1,459
  )
  Net assets at beginning of period
  33,217
  32,875
  Net assets at end of period
  $
  32,679
  $
  31,416
  The accompanying notes are an integral
  part of these financial statements.
  Table of Contents
  5
  EQUUS TOTAL RETURN, INC.
  STATEMENTS OF CASH FLOWS
  (Unaudited)
  Three months ended March 31,
  (in thousands)
  2014
  2013
  Reconciliation of decrease in net assets resulting from operations to net cash
  provided by (used in) operating activities:
  Net decrease in net assets resulting from operations
  $
  (538
  )
  $
  (1,459
  )
  Adjustments to reconcile net decrease in net assets resulting from operations to net cash
  provided by (used in) operating activities:
  Net realized loss
  1
  —
  Net change in unrealized depreciation of portfolio securities
  68
  688
  Changes in operating assets and liabilities:
  Purchase of portfolio securities
  (74
  )
  (90
  )
  Principal payments received from portfolio securities
  —
  9
  Sales of temporary cash investments, net
  15,149
  —
  Increase in accounts receivable from investments
  (4
  )
  —
  Increase in accounts receivable and other
  (8
  )
  (150
  )
  (Increase) decrease in accrued interest receivable
  (216
  )
  126
  Increase in accounts payable and accrued liabilities
  148
  107
  Increase (decrease) in accounts payable to
      related parties
  99
  (157
  )
  Net cash provided by (used in) operating activities
  14,625
  (926
  )
  Cash flows from financing activities:
  Repayments under margin account
  (15,000
  )
  —
  Net cash used in financing activities
  (15,000
  )
  —
  Net decrease in cash and cash equivalents
  (375
  )
  (926
  )
  Cash and cash equivalents at beginning of period
  19,065
  23,687
  Cash and cash equivalents at end of period
  $
  18,690
  $
  22,761
  Supplemental disclosure of cash flow information:
  Income taxes paid
  $
  11
  $
  5
  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)
  Three months ended March 31,
  2014
  2013
  Investment income (loss)
  $
  0.03
  $
  (0.01
  )
  Expenses
  0.07
  0.06
  Net investment loss
  (0.04
  )
  (0.07
  )
  Net realized loss
  (0.00
  )
  —
  Net change in unrealized depreciation of portfolio securities
  (0.01
  )
  (0.07
  )
  Net decrease in net assets resulting from operations
  (0.05
  )
  (0.14
  )
  Net assets at beginning of period
  3.14
  3.11
  Net assets at end of period
  $
  3.09
  $
  2.97
  Weighted average number of shares outstanding during period,
  in thousands
  10,562
  10,562
  Market price per share:
  Beginning of period
  $
  1.99
  $
  2.36
  End of period
  $
  1.92
  $
  2.16
  Selected information and ratios:
  Ratio of expenses to average net assets
  2.20
  %
  2.10
  %
  Ratio of net investment loss to average net assets
  (1.42
  %)
  (2.40
  %)
  Ratio of net decrease in net assets resulting from operations to average  net assets
  (1.63
  %)
  (4.54
  %)
  Total return on market price
  (1)
  (3.52
  %)
  (8.47
  %)
  (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 statements.
  Table of Contents
  7
  EQUUS TOTAL RETURN, INC.
  SCHEDULE OF INVESTMENTS
  MARCH 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
  (3)
  :
  Equus Energy, LLC
  Houston, TX
  Energy
  December 2011
  Member interest (100%)
  $
  7,050
  $
  8,000
  Equus Media Development Company, LLC
  Houston, TX
  Media
  January 2007
  Member interest (100%)
  3,000
  216
  Spectrum Management,
  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
  (2)
  $
  2,963
  2,963
  2,963
  5,813
  2,963
  Total Control Investments: Majority-owned (represents 82.7.% of total investments at fair value)
  $
  15,863
  $
  11,179
  Affiliate Investments
  (4)
  :
  PalletOne, Inc.
  Bartow, FL
  Shipping products and services
  October 2001
  350,000 shares of common stock (18.70%)
  $
  350
  $
  250
  Total Affiliate Investments (represents 1.9% of total investments at fair value)
  $
  350
  $
  250
  Non-Affiliate Investments (less than 5% owned):
  Orco Property Group
  Paris, France
  Real estate
  April 2011
  73,666 shares common stock
  $
  125
  $
  101
  10% promissory note due 2/18
  (2)
  $
  696
  696
  1,480
  821
  1,581
  Security Monitor Holding, LLC
  Boston, MA
  Business products and services
  November 2013
  14% promissory note due 6/14
  (2)
  500
  500
  500
  Total Non-Affiliate Investments (represents 15.4% of total investments at fair value)
  $
  1,321
  $
  2,081
  Total Investment in Portfolio Securities
  $
  17,534
  $
  13,510
  (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.
  The accompanying notes are an integral part
  of these financial statements.
  Table of Contents
  8
  EQUUS TOTAL RETURN, INC.
  SCHEDULE OF INVESTMENTS – (Continued)
  MARCH 31, 2014
  (Unaudited)
  Except for our holding of ordinary shares
  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 of 1933 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
  March 31, 2014, except for our holdings in OPG, 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 82.7% of the total
  value of the investments in portfolio securities as of March 31, 2014.
  Our investments in portfolio securities
  consist of the following types of securities as of March 31, 2014 (in thousands):
  Type of Securities
  Cost
  Fair Value
  Fair Value as
  Percentage of
  Net Assets
  Limited liability company investments
  $
  12,900
  $
  8,216
  25.1
  %
  Secured and subordinated debt
  4,159
  4,943
  15.1
  %
  Common stock
  475
  351
  1.1
  %
  Total
  $
  17,534
  $
  13,510
  41.3
  %
  Interest payments are being received
  and/or accrued on notes with a fair value of $2.0 million, while accrued interest has been impaired on notes receivable included
  in secured and subordinated debt with a fair value of $3.0 million.
  The following is a summary by industry of
  the Fund's investments in portfolio securities as of March 31, 2014 (in thousands):
  Industry
  Fair Value
  Fair Value as
  Percentage of
  Net Assets
  Energy
  $
  8,000
  24.5
  %
  Business products and services
  3,463
  10.6
  %
  Real estate
  1,581
  4.8
  %
  Shipping products and services
  250
  0.8
  %
  Media
  216
  0.6
  %
  Total
  $
  13,510
  41.3
  %
  The accompanying notes are an integral
  part of these financial statements.
  Table of Contents
  9
  EQUUS
  TOTAL RETURN, INC.
  SCHEDULE
  OF INVESTMENTS
  DECEMBER
  31, 2013
  (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
  $
  8,000
  Equus Media Development Company, LLC Houston,
  TX
  Media
  January 2007
  Member interest (100%)
  3,000
  216
  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
  (2)
  $
  2,889
  2,889
  2,889
  5,739
  2,889
  Total Control Investments: Majority-owned (represents 39.0% of total investments at fair value)
  $
  15,789
  $
  11,105
  Affiliate Investments
  (4)
  :
  PalletOne, Inc.
  Bartow, FL
  Shipping products and services
  October 2001
  350,000 shares of common stock (18.70%)
  $
  350
  $
  250
  Total Affiliate Investments (represents 0.9% of total investments at fair value)
  $
  350
  $
  250
  Non-Affiliate Investments (less than 5% owned):
  Orco Property Group
  Paris, France
  Real estate
  April 2011
  73,666 shares common stock
  $
  125
  $
  169
  10% promissory note due 2/18
  (2)
  $
  696
  696
  1,480
  821
  1,649
  Security Monitor Holding, LLC
  Boston, MA
  Business products and services
  November 2013
  14% promissory note due 5/14
  (2)
  500
  500
  500
  Total Non-Affiliate Investments (represents 7.5% of total investments at fair value)
  $
  1,321
  $
  2,149
  Total Investment in Portfolio Securities
  $
  17,460
  13,504
  Temporary Cash Investments
  U.S. Treasury Bill
  Government
  December 2013
  UST 0% 2/14
  15,000
  $
  15,000
  $
  15,000
  Total Temporary Cash Investments (represents 52.6% of total investments at fair value)
  $
  15,000
  $
  15,000
  Total Investments
  $
  32,460
  $
  28,504
  (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.
  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, 2013
  (in
  thousands, except share data)
  Except for our holding of ordinary shares
  of OPG, substantially all of our portfolio securities are restricted from public sale
  without prior registration under the Securities Act of 1933 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  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 December 31, 2013,
  except for our holdings in OPG, 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 82.2% of the total value of the investments
  in portfolio securities as of December 31, 2013.
  Our investments in portfolio securities consist
  of the following types of securities as of December 31, 2013 (in thousands):
  Type of Securities
  Cost
  Fair Value
  Fair Value as
  Percentage of
  Net Assets
  Limited liability company investments
  $
  12,900
  $
  8,216
  24.7
  %
  Secured and subordinated debt
  4,085
  4,869
  14.7
  %
  Common stock
  475
  419
  1.3
  %
  Total
  $
  17,460
  $
  13,504
  40.7
  %
  Interest payments are being received and/or
  accrued on notes with a fair value of $2.0 million, while accrued interest has been impaired on notes receivable included in secured
  and subordinated debt with a fair value of $2.9 million.
  The following is a summary by industry of our
  investments in portfolio securities as of December 31, 2013 (in thousands):
  Industry
  Fair Value
  Fair Value as
  Percentage of
  Net Assets
  Energy
  $
  8,000
  24.1
  %
  Business products and services
  3,389
  10.2
  %
  Real estate
  1,649
  5.0
  %
  Shipping products and services
  250
  0.8
  %
  Media
  216
  0.6
  %
  Total
  $
  13,504
  40.7
  %
  The accompanying notes are an integral part
  of these financial statements.
  Table of Contents
  11
  EQUUS TOTAL RETURN, INC.
  NOTES TO FINANCIAL
  STATEMENTS
  MARCH 31, 2014
  (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 a change of the Fund's investment strategy to
  a total return investment objective. This new 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 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 Business Development
  Company ("BDC") under the Investment Company Act of 1940 ("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 investments. 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 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 three months
  ended March 31, 2014 are not necessarily indicative of results that ultimately may be achieved for 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 Form 10-K for the fiscal year ended December 31, 2013, as filed with the Securities and Exchange Commission
  ("SEC").
  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 March 31, 2015. 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.
  Cash and Cash Equivalents
  —As of
  March 31, 2014, we had cash and cash equivalents of $18.7 million. We had $13.5 million of our net assets of $32.7 million invested
  in portfolio securities.
  As of December 31, 2013, we had cash and cash
  equivalents of $19.1 million. We had $13.5 million of our net assets of $33.2 million invested in portfolio securities. We also
  had $15.2 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 $0.2 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, 2014 and we subsequently repaid this margin loan. The margin interest was
  paid on January 22, 2014.
  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 March
  31, 2014, 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 March 31, 2014.
  As of December 31, 2013, we borrowed $15.0
  million to make qualifying investments 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 $15.2 million.
  The U.S. Treasury bills were sold on January 2, 2014 and the total amount borrowed was repaid at that time. The margin interest
  was paid on January 22, 2014.
  Certain Risks and Uncertainties
  —
  Economic conditions since 2008 and resulting market dislocations have resulted in a significant decline in the availability of
  debt and equity. Generally, the limited amount of available debt financing 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 three months of 2014, the price of our common stock continued to fall well below our net asset value, thereby making it undesirable
  to issue additional shares of our common stock. 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 2014
  operating requirements.
  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
  —Portfolio
  investments are carried at fair value with the net change in unrealized appreciation or depreciation included in the determination
  of net assets. Valuations of portfolio securities are performed in accordance with accounting principles generally accepted in
  the United States of America and the financial reporting policies of the SEC. The applicable methods prescribed by such principles
  and policies are described below:
  Publicly-traded portfolio securities
  —Investments
  in companies whose securities are publicly traded are generally valued at their quoted market price at the close of business on
  the valuation date.
  Privately-held portfolio securities
  —The
  fair value of investments for which no market exists is determined on the basis of procedures established in good faith by our
  Board of Directors. As a general principle, the current "fair value" of an investment would be the amount we might
  reasonably expect to receive for it upon its current sale, in an orderly manner. Appraisal valuations are necessarily subjective
  and the estimated values arrived at by the Fund may differ materially from amounts actually received upon the disposition of portfolio
  securities.
  Thinly Traded and Over-the-Counter Securities
  —Generally,
  we value securities that are traded in the over-the-counter market or on a stock exchange at the average of the prevailing bid
  and ask prices on the date of the relevant period end. However, we may apply a discount to the market value of restricted or thinly
  traded public securities to reflect the impact that these restrictions have on the value of these securities. We review factors,
  including the trading volume, total securities outstanding and our percentage ownership of securities to determine whether the
  trading levels are active (Level 1) or inactive (Level 2) or unobservable (Level 3). These types of securities represented 11.0%
  of our investments in portfolio securities as of March 31, 2014 and December 31, 2013, respectively. We utilized independent pricing
  services with certain of our fair value estimates. To corroborate "bid/ask" quotes from independent pricing services,
  we perform a market-yield approach to validate prices obtained or obtain other evidence.
  During the first twelve months after an investment
  is made, the original investment value is utilized to determine the fair value unless significant developments have occurred during
  this twelve month period which would indicate a material effect on the portfolio company (such as results of operations or changes
  in general market conditions). After the twelve month period, or if material events have occurred within the twelve month period,
  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 an asset 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.
  Market approach
  —The market approach
  typically employed by our 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 it deems 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.
  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
  we deem appropriate to equity valuations where applicable.
  Table of Contents
  14
  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 which 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 operations, we may base a portfolio company's fair value upon the company's estimated liquidation value.
  Fair valuations are necessarily subjective, and management's 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 perform a yield analysis to determine if a debt security has been impaired.
  The Audit Committee of the Board of Directors
  may engage independent, third-party valuation firms to conduct independent appraisals and review management's preliminary
  valuations of each privately-held investment in order to make their own independent assessment. Any third-party valuation data
  would be considered as one of many factors in a fair value determination. The Audit Committee then would recommend the fair values
  for all privately-held securities based on all relevant factors to the Board of Directors for final approval.
  Because of the inherent uncertainty
  of the valuation of portfolio securities which do not have readily ascertainable market values, amounting to $13.4 million
  and $13.3 million as of March 31, 2014 and December 31, 2013, 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 March 31, 2014 and
  December 31, 2013 respectively, one of the Fund's portfolio investments, the 73,666 ordinary shares of Orco Property
  Group, S.A. ("OPG"), was publicly listed on the NYSE Euronext Paris Exchange, along with €1,200,790 [$1.5
  million] in newly-issued 6-year OPG Notes. However, as of March 31, 2014 and December 31, 2013 respectively, there had been
  no significant trading activity in the OPG Notes.
  On a daily basis, 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 reports those amounts to Lipper Analytical Services,
  Inc. Weekly and daily net asset values appear in various publications, including
  Barron's
  and
  The Wall Street Journal
  .
  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.
  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 we own more than 25% of the voting securities or maintain greater than 50% representation on the portfolio company's
  governing board. 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.
  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 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 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.
  Table of Contents
  15
  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 record it 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.
  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 & Temporary Cash Investments" used for purposes of complying with RIC requirements from cash equivalents. See
  Note 2 for further discussion of the Fund's RIC borrowings.
  Income Taxes
  —We intend to comply
  with the requirements of the Internal Revenue Code necessary for us to qualify as a RIC. So long as we comply with these requirements,
  we generally will not be subject to corporate-level federal income taxes on otherwise taxable income (including net realized capital
  gains) distributed to stockholders. Therefore, we did not record a provision for federal income taxes in our financial statements.
  We borrow money from time to time to maintain our tax status under the Internal Revenue Code as a RIC. See Note 2 for further discussion
  of our 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 $0.01 million for the year ended December 31, 2013.
  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, 2013.
  Fair Value Measurement
  —Fair value
  is defined as 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. We have categorized all investments recorded at fair value based upon the level of
  judgment associated with the inputs used to measure their fair value. Hierarchical levels, directly related to the amount of subjectivity
  associated with the inputs to fair valuation of these assets and liabilities, are as follows:
  Level 1—Inputs are unadjusted, quoted
  prices in active markets for identical assets at the measurement date. The types of assets carried at Level 1 fair value generally
  are equities listed in active markets.
  Level 2—Inputs (other than quoted prices
  included in Level 1) are either directly or indirectly observable for the asset in connection with market data at the measurement
  date and for the extent of the instrument's anticipated life. Fair valued assets that are generally included in this category
  are warrants held in a public company.
  Level 3—Inputs reflect our best estimate
  of what market participants would use in pricing the asset at the measurement date. It includes prices or valuations that require
  inputs that are both significant to the fair value measurement and unobservable. Generally, assets carried at fair value and included
  in this category are debt, warrants and/or other equity investments held in a private company. As previously described, 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.
  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.
  Table of Contents
  16
  As of March 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 March 31, 2014
  (unaudited)
  (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
  $
  11,179
  $
  —
  $
  —
  $
  11,179
  Affiliate investments
  250
  —
  —
  250
  Non-affiliate investments
  2,081
  101
  —
  1,980
  Total investments
  $
  13,510
  $
  101
  $
  —
  $
  13,409
  As of December 31, 2013, 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, 2013
  (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
  $
  11,105
  $
  —
  $
  —
  $
  11,105
  Affiliate investments
  250
  —
  —
  250
  Non-affiliate investments
  2,149
  169
  —
  1,980
  Total investments
  13,504
  169
  —
  13,335
  Temporary cash investments
  15,150
  15,150
  —
  —
  Total investments and temporary cash investments
  $
  28,654
  $
  15,319
  $
  —
  $
  13,335
  The following table provides a reconciliation
  of fair value changes during the three months ended March 31, 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
  Purchases of portfolio securities
  74
  —
  —
  74
  Fair value as of March 31, 2014 (unaudited)
  $
  11,179
  $
  250
  $
  1,980
  $
  13,409
  The following table provides a reconciliation
  of fair value changes during the three months ended March 31, 2013 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, 2012
  $
  7,419
  $
  150
  $
  1,425
  $
  8,994
  Change in unrealized appreciation (depreciation)
  (616
  )
  —
  (36
  )
  (652
  )
  Purchases of portfolio securities
  90
  —
  —
  90
  Proceeds from sales/dispositions
  —
  —
  (9
  )
  (9
  )
  Fair value as of March 31, 2013 (unaudited)
  $
  6,893
  $
  150
  $
  1,380
  $
  8,423
  Table of Contents
  17
  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.
  The following table summarizes the significant
  observable inputs in the fair value measurements of our level 3 investments by category of investment and valuation technique as
  of March 31, 2014:
  Range
  (in thousands)
  Fair Value
  Valuation Techniques
  Unobservable Inputs
  Minimum
  Maximum
  Secured and subordinated debt
  $
  4,943
  Yield Analysis
  Market interest rate
  2.5
  %
  10.5
  %
  Yield Analysis
  Discount for lack of marketability
  2.5
  %
  12.0
  %
  Yield Analysis
  Discount for lack of marketability
  7.2
  %
  25
  %
  Yield Analysis
  Control Premium
  12
  %
  171
  %
  New Transaction
  Discount
  0
  %
  100
  %
  Common stock
  250
  Pending Transaction
  Discount
  0
  %
  100
  %
  Asset Approach
  Recovery Rate
  0
  %
  100
  %
  Limited liability company investments
  8,216
  Income/Market Approach
  Reserve Adjustment Factors
  75
  %
  100
  %
  $
  13,409
  (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 $18,750 for each of the three months ended March 31, 2014 and 2013.
  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 rate of $250 per hour for services
  rendered.
  (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
  During the three months ended March 31, 2014,
  we capitalized legal and consulting expenses of $0.7 million relating to Spectrum Management. We also received a semi-annual interest
  payment of $0.04 million in respect of our €1.2 million [$1.5 million] in OPG notes.
  Table of Contents
  18
  During the three months ended March 31, 2014,
  we did not realize any significant gains or losses on sales of portfolio securities.
  Net unrealized depreciation on investments
  increased $0.07 million during the three months ended March 31, 2014, to a net unrealized depreciation of $4.0 million.  Such
  increase in unrealized depreciation is due to the decrease in fair value of our holdings in OPG of $0.07 million due to
  a decline in the price of our OPG shares.
  During the three months ended March 31, 2013,
  we capitalized legal and consulting expenses of $0.1 million relating to Spectrum. We also received a semi-annual interest payment
  of $0.03 million and a 5.75% partial principal repayment of $9,000 in respect of our €1.2 million [$1.5 million] in OPG notes.
  During the three months ended March 31, 2013,
  we did not realize any significant gains or losses on sales of portfolio securities.
  Net unrealized depreciation on investments
  increased $0.7 million during the three months ended March 31, 2013, to a net unrealized depreciation of $17.9 million.  Such
  decrease in unrealized depreciation is largely due to the following changes:
  (i)
  Decrease in fair value of Equus Energy, LLC of $0.2 million due to operating expenses;
  (ii)
  Decrease in fair value of our holdings in OPG of $0.1 million due to a decline in the price of
  our OPG shares and foreign exchange translation; and
  (iii)
  Decrease in fair value of Spectrum of $0.4 million due to a decline in operating performance.
  (7)
  Equus Energy, LLC
  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 129 producing and non-producing oil and gas wells. The working
  interests include associated development rights of approximately 21,120 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. Two recompletions in the Conger Field have been effected since the closing date of
  the acquisition of the working interests and a third recompletion is planned during the second quarter of 2014, with additional
  recompletions anticipated for the remainder of 2014 and beyond. 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 (appx. 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.
  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 on the values
  of the underlying assets held by EQS Energy Holdings, Inc. a wholly-owned subsidiary of Equus Energy, net of associated liabilities.
  Table of Contents
  19
  Below is summarized consolidated financial
  information for Equus Energy as of March 31, 2014 and December 31, 2013 and for the three months ended March 31, 2014 and 2013
  respectively (in thousands).
  March 31,
  2014
  December 31,
  2013
  (Unaudited)
  (Unaudited)
  Assets
  CURRENT ASSETS:
  Cash
  $
  406
  $
  486
  Accounts receivable
  209
  288
  Total current assets
  615
  774
  Oil and gas properties
  7,725
  7,700
  Less: accumulated depletion, depreciation and amortization
  (1,178
  )
  (983
  )
  Net oil and gas properties
  6,547
  6,717
  Total assets
  $
  7,162
  $
  7,491
  Liabilities and members' capital
  CURRENT LIABILITIES:
  Accounts payable and other
  $
  121
  $
  324
  Due to affiliate
  378
  364
  Total current liabilities
  499
  $
  688
  Asset retirement obligations
  180
  178
  Total non-current liabilities
  180
  178
  Total liabilities
  679
  866
  Members' capital
  Total members' capital
  6,483
  6,625
  Total liabilities and members' capital
  $
  7,162
  $
  7,491
  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 revenue 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
  20
  Three months ended March 31
  2014
  2013
  (Unaudited)
  (Unaudited)
  Operating revenue
  $
  540
  $
  605
  Operating expenses
  Direct operating expenses
  335
  328
  Depletion, depreciation, amortization and accretion
  196
  322
  General and administrative
  151
  187
  Total operating expenses
  682
  837
  Operating income (loss) before income tax expense
  (142
  )
  (232
  )
  Income tax
  —
  —
  Net income (loss)
  $
  (142
  )
  $
  (232
  )
  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 for the quarters ended March 31, 2014 and March
  31, 2013, respectively.
  Capitalized oil and gas property costs are
  limited to an amount (the ceiling limitation) equal to the sum of the following:
  (a)
  As of March 31, 2014, 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 their oil and gas properties during 2013 or during the three months ended March
  31, 2014.
  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
  is recognized for oil and natural gas sales under the sales method of accounting. Under this method, revenue is 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 summarized oil
  and gas information included herein.
  Table of Contents
  21
  Accounting Policy on Depletion
  - 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.
  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.
  (8)
  Subsequent Events
  Management performed an evaluation of the Fund's
  activity through the date the financial statements were issued, noting the following subsequent events:
  On April 3, 2014, we sold all of our 73,666
  remaining shares of OPG, wherein we received $61,867 in net proceeds.
  On May 15, 2014, the Fund announced that it had adopted a Plan
  of Reorganization (also referred to hereinafter as the "Plan") within the meaning of Section 2(a)(33) of the 1940 Act. 
  Under the terms of the Plan, Equus intends to pursue a merger or consolidation with MVC Capital, Inc. ("MVC"), a BDC
  traded on the New York Stock Exchange, or a subsidiary of MVC, or one or more of MVC's portfolio companies (referred to in the
  Plan as a "Consolidation") within the next twelve months.  Absent Equus merging or consolidating with/into MVC,
  the present intention is for Equus to (i) consummate the Consolidation, (ii) terminate its election to be classified as a BDC,
  and (iii) be restructured as a publicly-traded operating company focused on the energy and/or financial services sectors.
  On May 14, 2014, a Share Exchange Agreement was entered into between MVC and Equus as a first step in the
  Plan, wherein MVC received 2,112,000 shares of the Fund in exchange for Equus receiving 395,839 shares of MVC.  The exchange
  was determined based on each company's respective net asset values per share, calculated as of May 12, 2014.  The number of
  MVC shares that were received by Equus is subject to adjustment following MVC's release of its Form 10-Q, which will include its
  published net asset value per share for the quarter ended April 30, 2014.  If a Consolidation has not occurred within one
  year from the date of the share exchange, MVC has the right, to the extent permitted by applicable law, to rescind the exchange,
  recover its shares that have been issued to Equus, and return to Equus the 2,112,000 shares issued by the Fund.  As part of
  the reorganization, MVC may also acquire additional Equus shares from time to time, either through Equus' direct sale to MVC of
  newly-issued shares from treasury (which would require the approval of a majority of Equus shareholders) or through the purchase
  of Equus shares from existing shareholders.
  Table of Contents
  22
  Item 2.
  Management's
  Discussion and Analysis of Financial Condition and Results of Operations
  Overview
  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 new 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 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 Business Development
  Company ("BDC") under the Investment Company Act of 1940 Act ("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 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.
  Critical Accounting Policies
  Our financial statements are based on the selection
  and application of significant accounting policies, which require management to make significant estimates and assumptions. We
  believe that the following are some of the more critical judgment areas in the application of our accounting policies that currently
  affect our financial condition and results of operations.
  Valuation of Investments
  — Portfolio
  investments are carried at fair value with the net change in unrealized appreciation or depreciation included in the determination
  of net assets. Valuations of portfolio securities are performed in accordance with accounting principles generally accepted in
  the United States of America and the financial reporting policies of the SEC. The applicable methods prescribed by such principles
  and policies are described below:
  Publicly-traded portfolio securities
  —Investments
  in companies whose securities are publicly traded are generally valued at their quoted market price at the close of business on
  the valuation date.
  Privately-held portfolio securities
  —The
  fair value of investments for which no market exists is determined on the basis of procedures established in good faith by our
  Board of Directors. As a general principle, the current "fair value" of an investment would be the amount we might
  reasonably expect to receive for it upon its current sale, in an orderly manner. Appraisal valuations are necessarily subjective
  and the estimated values arrived at by the Fund may differ materially from amounts actually received upon the disposition of portfolio
  securities.
  Table of Contents
  23
  Thinly Traded and Over-the-Counter Securities
  —Generally,
  we value securities that are traded in the over-the-counter market or on a stock exchange at the average of the prevailing bid
  and ask prices on the date of the relevant period end. However, we may apply a discount to the market value of restricted or thinly
  traded public securities to reflect the impact that these restrictions have on the value of these securities. We review factors,
  including the trading volume, total securities outstanding and our percentage ownership of securities to determine whether the
  trading levels are active (Level 1) or inactive (Level 2) or unobservable (Level 3). These types of securities represented 11.0%
  of our investments in portfolio securities as of March 31, 2014 and December 31, 2013, respectively. We utilized independent pricing
  services with certain of our fair value estimates. To corroborate "bid/ask" quotes from independent pricing services,
  we perform a market-yield approach to validate prices obtained or obtain other evidence.
  During the first twelve months after an investment
  is made, the original investment amount is utilized to determine the fair value unless significant developments have occurred during
  this twelve month period which would indicate a material effect on the portfolio company (such as results of operations or changes
  in general market conditions). After the twelve month period, or if material events have occurred within the twelve month period,
  Fund management considers 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, our management considers three different valuation approaches:
  a market approach, an income approach, and an asset 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. Fund management allocates
  value to these securities based on their relative priorities. For equity securities such as warrants, the Fund may also incorporate
  alternative methodologies including the Black-Scholes Option Pricing Model.
  Market approach
  —The market approach
  typically employed by our 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 we deem 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.
  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
  we deem 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 which 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 operations, we may base a portfolio company's fair value upon the company's estimated liquidation value.
  Fair valuations are necessarily subjective, and management's 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 its 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 perform a yield analysis to determine if a debt security has been impaired.
  Table of Contents
  24
  The Audit Committee of the Board of Directors
  may engage independent, third-party valuation firms to conduct independent appraisals and review management's preliminary
  valuations of each privately-held investment in order to make their own independent assessment. Any third-party valuation data
  would be considered as one of many factors in a fair value determination. The Audit Committee then would recommend the fair values
  for all privately-held securities based on all relevant factors to the Board of Directors for final approval.
  Because of the inherent uncertainty
  of the valuation of portfolio securities which do not have readily ascertainable market values, amounting to $13.4 million
  and $13.3 million as of March 31, 2014 and December 31, 2013, 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 March 31, 2014 and
  December 31, 2013 respectively, one of the Fund's portfolio investments, the 73,666 ordinary shares of Orco Property
  Group, S.A. ("OPG"), was publicly listed on the NYSE Euronext Paris Exchange, along with €1,200,790 [$1.5
  million] in newly-issued 6-year OPG Notes. However, as of March 31, 2014 and December 31, 2013 respectively, there had been
  no significant trading activity in the OPG Notes.
  On a daily basis, 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 reports those amounts to Lipper Analytical Services,
  Inc. Weekly and daily net asset values appear in various publications, including Barron's and
  The Wall Street Journal
  .
  Federal Income Taxes
  On May 15, 2014, we announced
  that we had adopted a Plan of Reorganization, which may involve the transformation of the Fund into an operating company, which
  will likely result in the loss of our status as a RIC for Federal income tax purposes.  However, if we do not effect a transformation
  of the Fund into an operating company, we intend to comply with the requirements of the Internal Revenue Code necessary for us
  to qualify as a RIC. So long as we comply with these requirements, we generally will not be subject to corporate-level federal
  income taxes on otherwise taxable income (including net realized capital gains) distributed to stockholders. Therefore, we did
  not record a provision for federal income taxes in our financial statements.  As of December 31, 2013, we had a capital loss
  carry-forward of $32.5 million which may be used to offset future capital gains. We may borrow money from time to time to maintain
  our status as a RIC under the Internal Revenue Code. See Note 2 for further discussion of our RIC borrowings.  See also "
  Subsequent
  Events
  " and "
  Risk Factors
  " on pages 27 and 30.
  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 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 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.
  Payment in Kind Interest
  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 record it as interest income. To maintain the Fund's status as a RIC, we must pay out to our 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.
  Current Market Conditions
  Overall economic conditions in the United States
  have improved, albeit marginally. However, the economic recovery has been hampered by slower growth and persistent high unemployment
  levels. The U.S. Congressional Budget Office is forecasting higher growth in 2014 (3.1%), with a projected unemployment rate exceeding
  6.0% until 2017.
  Further, the banking industry continues to
  experience additional bank failures as regulators continue to impose strict capital requirements. Additionally, future economic
  expansion and business investment is threatened by perceptions of higher taxes and healthcare costs, as well as the high levels
  of government deficit spending.
  Table of Contents
  25
  Market conditions for business transactions
  including mergers and acquisitions and private equity investments improved significantly in 2013 compared with previous years,
  and has continued through the first quarter of 2014, as corporations have been deleveraging and are holding significant amounts
  of cash and many have begun to focus on acquisitions as part of future growth plans. Private equity firms as a group enjoyed more
  success in 2013 in monetizing their investments through sales and public listings.
  During the first quarter of 2014,
  our net asset value decreased to $3.09 per share from  $3.14 per share. As of March 31, 2014, the closing price
  of our common stock closed was $1.92, which is a discount of 37.9% to our net asset value.
  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 during this turbulent economic period 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.
  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 $0.5 million and
  $0.8 million for the three months ended March 31, 2014 and March 31, 2013, respectively. Investment income was
  $0.3 million for the three months ended March 31, 2014. The investment income of ($0.1) generated  for the three months
  ended March 31, 2013 is due primarily to due to the impairment of accrued interest income from Spectrum.
  Total expenses were relatively unchanged at
  $0.7 million for the three months ended March 31, 2014 and March 31, 2013, respectively.
  Table of Contents
  26
  Realized Gains and Losses on Sales of Portfolio Securities
  During the three months ended March 31,
  2014, we realized a loss of $0.1 million from the sale of temporary cash investments. We did not realize any net capital gains
  or losses for the three months ended March 31, 2013.
  Changes in Unrealized Appreciation/Depreciation of Portfolio
  Securities
  Net unrealized depreciation on investments
  increased $0.07 million during the three months ended March 31, 2014, to a net unrealized depreciation of $4.0 million.  Such
  increase in unrealized depreciation is largely due to the decrease in fair value of our holdings in OPG of $0.1 million due to
  a decline in the price of OPG shares.
  Net unrealized depreciation on investments
  increased $0.7 million during the three months ended March 31, 2013, to a net unrealized depreciation of $17.9 million.  Such
  decrease in unrealized depreciation is largely due to the following changes:
  (i)
  Decrease in fair value of Equus Energy of $0.2 million due to operating expenses;
  (ii)
  Decrease in fair value of our holdings in OPG of $0.1 million due to a decline in the price of
  OPG shares and foreign exchange translation; and
  (iii)
  Decrease in fair value of our holdings in Spectrum of $0.4 million due to a decline in operating
  performance.
  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 Investments
  During the three months ended March
  31, 2014, we capitalized consulting expenses of $0.07 million relating to Spectrum Management. We also received a semi-annual
  interest payment of $0.04 million in respect of our €1.2 million [$1.5 million] in OPG notes.
  During the three months ended March 31, 2013,
  we capitalized legal and consulting expenses of $0.1 million relating to Spectrum Management. We also received a semi-annual interest
  payment of $0.03 million and a 5.75% partial principal repayment of $9,000 in respect of our €1.2 million [$1.5 million] in
  OPG notes.
  Subsequent Events
  Management performed an evaluation of the Fund's
  activity through the date the financial statements were issued, noting the following subsequent events:
  On April 3, 2014, we sold all of our 73,666
  remaining shares of OPG, wherein we received $61,867 in net proceeds.
  On May 15, 2014, the Fund announced that it had adopted a Plan
  of Reorganization (also referred to hereinafter as the "Plan") within the meaning of Section 2(a)(33) of the 1940 Act. 
  Under the terms of the Plan, Equus intends to pursue a merger or consolidation with MVC Capital, Inc. ("MVC"), a BDC
  traded on the New York Stock Exchange, or a subsidiary of MVC, or one or more of MVC's portfolio companies (referred to in the
  Plan as a "Consolidation") within the next twelve months.  Absent Equus merging or consolidating with/into MVC,
  the present intention is for Equus to (i) consummate the Consolidation, (ii) terminate its election to be classified as a BDC,
  and (iii) be restructured as a publicly-traded operating company focused on the energy and/or financial services sectors.
  On May 14, 2014, a Share Exchange Agreement was entered into between MVC and Equus as a first step in the
  Plan, wherein MVC received 2,112,000 shares of the Fund in exchange for Equus receiving 395,839 shares of MVC.  The exchange
  was determined based on each company's respective net asset values per share, calculated as of May 12, 2014.  The number of
  MVC shares that were received by Equus is subject to adjustment following MVC's release of its Form 10-Q, which will include its
  published net asset value per share for the quarter ended April 30, 2014.  If a Consolidation has not occurred within one
  year from the date of the share exchange, MVC has the right, to the extent permitted by applicable law, to rescind the exchange,
  recover its shares that have been issued to Equus, and return to Equus the 2,112,000 shares issued by the Fund.  As part of
  the reorganization, MVC may also acquire additional Equus shares from time to time, either through Equus' direct sale to MVC of
  newly-issued shares from treasury (which would require the approval of a majority of Equus shareholders) or through the purchase
  of Equus shares from existing shareholders.
  Table of Contents
  27
  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 OPG shares and 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 also consists 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 and was 24.5%
  of the net asset value and 59.2% of our investments in portfolio company securities (at fair value) as of March 31, 2014. 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 March 31, 2014. 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 March 31, 2014, 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 Claim
  —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.
  More than five years after the closing of the
  sale of our Champion interest, Atrium filed suit in the District Court of Harris County, Texas against two former officers of Atrium's
  subsidiary, Champion, alleging, amongst other matters, that the former officers breached their fiduciary duties to Champion by
  hiring undocumented workers. This action was commenced primarily as a result of an investigation by the U.S. Immigration and Customs
  Enforcement agency ("ICE") into Atrium's hiring practices. On March 12, 2012, to protect its interests, we filed
  a Petition in Intervention in the State Court Action seeking a declaration from the Court that Equus did not owe any obligation
  to indemnify Atrium or Champion for any penalties, costs or fees associated with the investigation by ICE.
  Table of Contents
  28
  On March 16, 2012, Atrium and Champion filed
  a claim with the American Arbitration Association in Dallas, Texas, against Equus and a number of the other sellers under the SPA.
  In September 2013, all of Atrium and Champion's claims including claims against its former officers described above, were
  also consolidated in the Arbitration Action.
  In the Arbitration Action, Atrium and Champion
  seek damages arising from Equus' and the other sellers' indemnity obligations set forth in the SPA. Atrium claims
  it is entitled to indemnification under the SPA for costs it has incurred in responding to an ongoing investigation by ICE. Atrium
  entered into a Non-Prosecution Agreement with ICE. It appears that one condition of the Non-Prosecution Agreement required Atrium
  to pay ICE $2,000,000. Atrium and Champion asserted two counts of breach of contract against Equus, both arising out of the alleged
  obligation to indemnify Atrium and Champion pursuant to certain provisions of the SPA. Atrium and Champion also asserted claims
  for fraudulent inducement against two former officers and directors of Champion. Through the arbitration, Atrium and Champion
  seek to recover an unspecified amount in the form of alleged "losses, damages, assessments, penalties, interest, reasonable
  attorneys' and accountants' fees, settlement costs, and other costs and expenses arising directly or indirectly out
  of or incident to," the alleged breach of the indemnity provisions in the SPA. As a consequence of their fraudulent inducement
  claim against the two former officers and directors, Atrium and Champion alternatively seek equitable rescission of the SPA and
  exemplary damages from the two former officers and directors.
  Atrium and Champion have yet to specify the
  amount of damages they seek from Equus or the other sellers pursuant to the alleged indemnity obligations under the SPA. Atrium
  and Champion have disclosed the payment of $2 million to ICE to resolve the investigation and avoid prosecution for their hiring
  practices.
  We filed an answer to Atrium and Champion's
  claims on December 6, 2013. In our answer, we denied that we owed any indemnity obligations to Atrium or Champion and further denied
  that the Fund is in any way liable to Atrium or Champion. To the extent Atrium and Champion are able to establish a right to an
  indemnity, we will further contest the amount of the claimed indemnity, inasmuch as we believe (among other defenses) that the
  indemnity obligation can only exist, if at all, with respect to damages arising as a direct and proximate result of employees who
  were hired prior to the closing date of the 2006 sale of Champion and remained in continuous employment after the 2006 sale, and
  not to any employee who may have been hired in the six years after the sale.
  While we believe the Atrium claim is without
  merit and we intend to continue to vigorously dispute the claim, there is a reasonable possibility of an adverse ruling which may
  require the Fund to indemnify Atrium. If Equus is required to indemnify Atrium and Champion, we estimate that such indemnity obligation
  could vary from $2.0 million to $3.0 million. Pursuant to the SPA, the indemnification obligation of Equus and the other sellers
  is several and not joint, and any such indemnity, however uncertain, would likely be reduced proportionately to our percentage
  ownership in Champion at the time of sale, which was 31.5% of Champion's shares outstanding.
  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.
  Table of Contents
  29
  Item 1A.
  Risk Factors
  In addition to the various risks identified
  in the Fund's Annual Report on Form 10-K for the year ended December 31, 2013, filed on March 31, 2014, are the following:
  If we reorganize as an operating
  company, we will likely not continue to qualify as a RIC under the Code.
  On May 15, 2014, we announced that we
  had adopted a Plan of Reorganization (also referred to hereinafter as the "Plan") within the meaning of Section 2(a)(33)
  of the 1940 Act.  The Plan contemplates the possible merger of the Fund with and into another BDC, or the restructuring of
  the Fund as an operating company no longer subject to the 1940 Act.  If we were to reorganize as an operating company, we
  may lose our status as a RIC.  If we fail to qualify as a RIC, we will be subject to corporate income tax, which would substantially
  reduce the amount of income we might otherwise distribute to our shareholders.  See "
  Subsequent Events
  "
  on page 27.
  If we reorganize as an operating
  company, we will not continue to operate as a BDC.
  We have elected to be classified as a
  BDC under the 1940 Act.  In connection with our announcement on May 15, 2014 to effect a Plan of Reorganization, if we effect
  a reorganization of the Fund into an operating company, we will seek to terminate our BDC classification.  If we were to terminate
  our election to be classified as a BDC and were still determined by the Securities and Exchange Commission to constitute an "investment
  company," we would be subject to significantly greater regulatory requirements and constraints than under which we presently
  operate, the result of which would  have a material adverse effect on our results and financial condition.
  If we reorganize as an operating
  company, we may not be able to utilize our capital losses.
  As of March 31, 2014, we have incurred
  cumulative capital losses of $32.5 million, of which $15.6 million will begin expiring after 2017, with the remainder carried over
  indefinitely.  Pursuant to the Plan of Reorganization announced on May 15, 2014, we may reorganize as an operating company. 
  If we reorganize as an operating company, we may lose our ability to offset future income against our cumulative capital losses,
  including capital losses that would otherwise continue past 2017.  If we reorganized as an operating company and were unable
  to offset future income against these capital losses, the result could have a material adverse effect on our future operating results
  and our financial condition.
  Other than the foregoing, there have
  been no material changes to the Fund's risk factors from the disclosure set forth in the Annual Report on Form 10-K for
  the year ended December 31, 2013.
  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
  30
  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 December 16, 2010.]w
  10.
  Material Contracts.
  (c)
  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.]
  (d)
  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.]
  (e)
  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.]
  (f)
  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.]
  (g)
  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
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  31
  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.
  EQUUS TOTAL RETURN, INC.
  Date: May 15, 2014
  /s/ John A. Hardy
  John A. Hardy
  Chief Executive Officer
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  32