content: <HTML>
  <HEAD>
       <TITLE></TITLE>
  </HEAD>
  <BODY STYLE="font: 10pt Times New Roman, Times, Serif">
  
  <P STYLE="margin: 0"></P>
  
  <P STYLE="font: 13.5pt/normal Times New Roman, Times, Serif; margin: 0.25in 0 0; text-align: center"><B>UNITED STATES </B></P>
  
  <P STYLE="font: 13.5pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B>SECURITIES AND EXCHANGE COMMISSION
  </B></P>
  
  <P STYLE="font: 12pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B>Washington, D.C. 20549 </B></P>
  
  <P STYLE="font: 18pt/normal Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center"><B>FORM 10-Q </B></P>
  
  <P STYLE="font: 7.5pt/normal Times New Roman, Times, Serif; margin: 9pt 0 0">(Mark One)</P>
  
  <TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%">
  <TR STYLE="vertical-align: top">
      <TD STYLE="width: 0px">&nbsp;</TD>
      <TD STYLE="width: 33px; font: 10pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 10pt Wingdings"><B>x</B></FONT></TD>
      <TD STYLE="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 </B></FONT></TD></TR>
  </TABLE>
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center">For the quarterly period ended
  June 30, 2014</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center">or</P>
  
  <TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%">
  <TR STYLE="vertical-align: top">
      <TD STYLE="width: 0px">&nbsp;</TD>
      <TD STYLE="width: 33px; padding-top: 9pt; font: 10pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 10pt Wingdings"><B>&#168;</B></FONT></TD>
      <TD STYLE="padding-top: 9pt; font: 10pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 </B></FONT></TD></TR>
  </TABLE>
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center">For the transition period to</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center">Commission File Number 814-00098</P>
  
  <P STYLE="font: 24pt/normal Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center"><B>EQUUS TOTAL RETURN, INC. </B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B>(Exact name of registrant as specified
  in its charter) </B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
      <TD STYLE="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center; width: 50%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>Delaware</B></FONT></TD>
      <TD STYLE="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center; width: 50%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>76-0345915</B></FONT></TD></TR>
  <TR STYLE="vertical-align: top">
      <TD>
          <P STYLE="font: 7.5pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B>(State or other jurisdiction of</B></P>
          <P STYLE="font: 7.5pt/normal Times New Roman, Times, Serif; margin: 0 0 0.75pt; text-align: center"><B>incorporation or organization)</B></P></TD>
      <TD>
          <P STYLE="font: 7.5pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B>(I.R.S. Employer</B></P>
          <P STYLE="font: 7.5pt/normal Times New Roman, Times, Serif; margin: 0 0 0.75pt; text-align: center"><B>Identification No.)</B></P></TD></TR>
  <TR>
      <TD>&nbsp;</TD>
      <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
      <TD STYLE="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>Eight Greenway Plaza, Suite 930 Houston, Texas</B></FONT></TD>
      <TD STYLE="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>77046</B></FONT></TD></TR>
  <TR STYLE="vertical-align: top">
      <TD STYLE="font: 7.5pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><FONT STYLE="font: 7.5pt Times New Roman, Times, Serif"><B>(Address of principal executive offices)</B></FONT></TD>
      <TD STYLE="font: 7.5pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><FONT STYLE="font: 7.5pt Times New Roman, Times, Serif"><B>(Zip Code)</B></FONT></TD></TR>
  </TABLE>
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center"><B>Registrant&rsquo;s telephone
  number, including area code: (713) 529-0900 </B></P>
  
  <P STYLE="font: 10pt/normal Calibri, Helvetica, Sans-Serif; margin: 9pt 0 0; text-indent: 24.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Indicate
  by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
  Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and
  (2) has been subject to such filing requirements for the past 90 days. Yes </FONT><FONT STYLE="font-family: Wingdings">x</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif">
  No </FONT><FONT STYLE="font-family: Wingdings">&#168;</FONT></P>
  
  <P STYLE="font: 10pt/normal Calibri, Helvetica, Sans-Serif; margin: 9pt 0 0; text-indent: 24.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Indicate
  by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive
  Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (&sect;232.405 of this chapter) during the
  preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes </FONT><FONT STYLE="font-family: Wingdings">&#168;</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif">
  No </FONT><FONT STYLE="font-family: Wingdings">&#168;</FONT></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 9pt 0 0; text-indent: 24.5pt">Indicate by check mark whether
  the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of &ldquo;accelerated
  filer and large accelerated filer&rdquo; in Rule 12b-2 of the Exchange Act.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
      <TD STYLE="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Large accelerated filer </FONT><FONT STYLE="font: 10pt Wingdings">&#168;</FONT></TD>
      <TD STYLE="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Accelerated filer </FONT><FONT STYLE="font: 10pt Wingdings">&#168;</FONT></TD>
      <TD STYLE="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Non-accelerated filer </FONT><FONT STYLE="font: 10pt Wingdings">x</FONT></TD>
      <TD STYLE="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Smaller Reporting Company </FONT><FONT STYLE="font: 10pt Wingdings">&#168;</FONT><FONT STYLE="font: 10pt Times New Roman, Times, Serif"> </FONT></TD></TR>
  </TABLE>
  <P STYLE="font: 10pt/normal Calibri, Helvetica, Sans-Serif; margin: 9pt 0 0; text-indent: 24.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Indicate
  by check mark whether the registrant is a shell company. Yes </FONT><FONT STYLE="font-family: Wingdings">&#168;</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif">
  No </FONT><FONT STYLE="font-family: Wingdings">x</FONT></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 9pt 0 0; text-indent: 24.5pt">There were 12,673,646 shares of
  the registrant&rsquo;s common stock, $.001 par value, outstanding, as of August 14, 2014.</P>
  
  
  <!-- Field: Page; Sequence: 1 -->
      <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="#TableOfContents" 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; Options: Hidden -->&nbsp;<!-- 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: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">EQUUS TOTAL RETURN, INC.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">(A Delaware Corporation)</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><A NAME="TableOfContents"></A>INDEX</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse; font-family: Calibri, Helvetica, Sans-Serif">
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="padding-left: 0.1in">&nbsp;</TD>
      <TD STYLE="padding-left: 0.1in; text-align: center; font-size: 7.5pt; line-height: 115%"><FONT STYLE="font: 7.5pt Times New Roman, Times, Serif"><B>PAGE</B></FONT></TD></TR>
  <TR>
      <TD STYLE="vertical-align: top; padding-left: 12pt; text-indent: -12pt; font-size: 10pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><A HREF="#a_001">PART I. FINANCIAL INFORMATION</A></FONT></TD>
      <TD STYLE="vertical-align: bottom; padding-left: 0.1in">&nbsp;</TD></TR>
  <TR>
      <TD STYLE="vertical-align: top; padding-left: 0.5in; text-indent: -12pt; font-size: 10pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><A HREF="#a_002">Item 1. Financial Statements</A></FONT></TD>
      <TD STYLE="vertical-align: bottom; padding-left: 0.1in">&nbsp;</TD></TR>
  <TR>
      <TD STYLE="vertical-align: top; padding-left: 60pt; text-indent: -12pt; font-size: 10pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><A HREF="#a_003">Balance Sheets</A></FONT><FONT STYLE="font: 10pt Times New Roman, Times, Serif"> </FONT></TD>
      <TD NOWRAP STYLE="vertical-align: bottom; font-size: 10pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">3</FONT></TD></TR>
  <TR>
      <TD STYLE="vertical-align: top; padding-left: 60pt; text-indent: -12pt; font-size: 10pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><A HREF="#a_004">Statements of Operations</A></FONT><FONT STYLE="font: 10pt Times New Roman, Times, Serif"> </FONT></TD>
      <TD NOWRAP STYLE="vertical-align: bottom; font-size: 10pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">4</FONT></TD></TR>
  <TR>
      <TD STYLE="vertical-align: top; padding-left: 60pt; text-indent: -12pt; font-size: 10pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><A HREF="#a_005">Statements of Changes in Net Assets</A></FONT><FONT STYLE="font: 10pt Times New Roman, Times, Serif"> </FONT></TD>
      <TD NOWRAP STYLE="vertical-align: bottom; font-size: 10pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">5</FONT></TD></TR>
  <TR>
      <TD STYLE="vertical-align: top; padding-left: 60pt; text-indent: -12pt; font-size: 10pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><A HREF="#a_006">Statements of Cash Flows</A></FONT><FONT STYLE="font: 10pt Times New Roman, Times, Serif"> </FONT></TD>
      <TD NOWRAP STYLE="vertical-align: bottom; font-size: 10pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">6</FONT></TD></TR>
  <TR>
      <TD STYLE="vertical-align: top; padding-left: 60pt; text-indent: -12pt; font-size: 10pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><A HREF="#a_007">Supplemental Information&mdash;Selected Per Share Data and Ratios</A></FONT><FONT STYLE="font: 10pt Times New Roman, Times, Serif"> </FONT></TD>
      <TD NOWRAP STYLE="vertical-align: bottom; font-size: 10pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">7</FONT></TD></TR>
  <TR>
      <TD STYLE="vertical-align: top; padding-left: 60pt; text-indent: -12pt; font-size: 10pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><A HREF="#a_008">Schedules of Investments</A></FONT><FONT STYLE="font: 10pt Times New Roman, Times, Serif"> </FONT></TD>
      <TD NOWRAP STYLE="vertical-align: bottom; font-size: 10pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">8</FONT></TD></TR>
  <TR>
      <TD STYLE="vertical-align: top; padding-left: 60pt; text-indent: -12pt; font-size: 10pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><A HREF="#a_009">Notes to Financial Statements</A></FONT><FONT STYLE="font: 10pt Times New Roman, Times, Serif"> </FONT></TD>
      <TD NOWRAP STYLE="vertical-align: bottom; font-size: 10pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">12</FONT></TD></TR>
  <TR>
      <TD STYLE="vertical-align: top; padding-left: 0.5in; text-indent: -12pt; font-size: 10pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><A HREF="#a_010">Item 2. Management&rsquo;s Discussion and Analysis of Financial Condition and Results of Operations</A></FONT><FONT STYLE="font: 10pt Times New Roman, Times, Serif"> </FONT></TD>
      <TD NOWRAP STYLE="vertical-align: bottom; font-size: 10pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">24</FONT></TD></TR>
  <TR>
      <TD STYLE="vertical-align: top; padding-left: 0.5in; text-indent: -12pt; font-size: 10pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><A HREF="#a_011">Item 3. Quantitative and Qualitative Disclosure about Market Risk</A></FONT><FONT STYLE="font: 10pt Times New Roman, Times, Serif"> </FONT></TD>
      <TD NOWRAP STYLE="vertical-align: bottom; font-size: 10pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">29</FONT></TD></TR>
  <TR>
      <TD STYLE="vertical-align: top; padding-left: 0.5in; text-indent: -12pt; font-size: 10pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><A HREF="#a_012">Item 4. Controls and Procedures</A></FONT><FONT STYLE="font: 10pt Times New Roman, Times, Serif"> </FONT></TD>
      <TD NOWRAP STYLE="vertical-align: bottom; font-size: 10pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">30</FONT></TD></TR>
  <TR>
      <TD STYLE="vertical-align: top; padding-left: 12pt; text-indent: -12pt; font-size: 10pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><A HREF="#a_013">PART II. OTHER INFORMATION</A></FONT></TD>
      <TD STYLE="vertical-align: bottom; padding-left: 0.1in">&nbsp;</TD></TR>
  <TR>
      <TD STYLE="vertical-align: top; padding-left: 0.5in; text-indent: -12pt; font-size: 10pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><A HREF="#a_014">Item 1. Legal Proceedings</A></FONT><FONT STYLE="font: 10pt Times New Roman, Times, Serif"> </FONT></TD>
      <TD NOWRAP STYLE="vertical-align: bottom; font-size: 10pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">30</FONT></TD></TR>
  <TR>
      <TD STYLE="vertical-align: top; padding-left: 0.5in; text-indent: -12pt; font-size: 10pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><A HREF="#a_015">Item 1A. Risk Factors</A></FONT><FONT STYLE="font: 10pt Times New Roman, Times, Serif"> </FONT></TD>
      <TD NOWRAP STYLE="vertical-align: bottom; font-size: 10pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">31</FONT></TD></TR>
  <TR>
      <TD STYLE="vertical-align: top; padding-left: 0.5in; text-indent: -12pt; font-size: 10pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><A HREF="#a_016">Item 6. Exhibits</A></FONT><FONT STYLE="font: 10pt Times New Roman, Times, Serif"> </FONT></TD>
      <TD NOWRAP STYLE="vertical-align: bottom; font-size: 10pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">33</FONT></TD></TR>
  <TR>
      <TD STYLE="vertical-align: top; padding-left: 12pt; text-indent: -12pt; font-size: 10pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><A HREF="#a_017">SIGNATURE</A></FONT><FONT STYLE="font: 10pt Times New Roman, Times, Serif"> </FONT></TD>
      <TD NOWRAP STYLE="vertical-align: bottom; font-size: 10pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">34</FONT></TD></TR>
  <TR>
      <TD STYLE="vertical-align: top; padding-left: 12pt">&nbsp;</TD>
      <TD NOWRAP STYLE="vertical-align: bottom; padding-bottom: 0.75pt">&nbsp;</TD></TR>
  </TABLE>
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 6pt">&nbsp;</P>
  
  
  <!-- Field: Page; Sequence: 2 -->
      <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="#TableOfContents" 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 -->2<!-- 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: 10pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><U>EQUUS TOTAL RETURN, INC. </U></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><A NAME="a_003"></A><U>BALANCE SHEETS </U></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B><U><A NAME="a_001"></A>Part I. Financial Information</U></B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B><U><A NAME="a_002"></A>Item 1. Financial Statements </U></B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 100%">
  <TR STYLE="vertical-align: bottom">
      <TD>&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">June 30, <BR>2014</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">December 31, <BR>2013</TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD>&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center">(Unaudited)</TD><TD>&nbsp;</TD>
      <TD COLSPAN="3">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="font: bold 10pt Times New Roman, Times, Serif">(in thousands, except per share amounts)</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: rgb(204,238,255)">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-left: 5.4pt">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="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 5.4pt">Investments in portfolio securities at fair value:</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="width: 70%; font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 5.4pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Control investments (cost at $15,928 and $15,789 respectively)</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 12%; font: 10pt Times New Roman, Times, Serif; text-align: right">12,044</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 12%; font: 10pt Times New Roman, Times, Serif; text-align: right">11,105</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 5.4pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Affiliate investments (cost at $350 and $350 respectively)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">968</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">250</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt; padding-left: 5.4pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-affiliate investments (cost at $6,896 and $1,321 respectively)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">7,202</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">2,149</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 5.4pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total investments in portfolio securities at fair value</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">20,214</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">13,504</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 5.4pt">Cash and cash equivalents</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">17,198</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">19,065</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 5.4pt">Restricted cash and temporary cash investments</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">15,150</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 5.4pt">Accounts receivable from investments</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">574</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">372</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 5.4pt">Accrued interest receivable</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">391</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">228</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt; padding-left: 5.4pt">Accounts receivable and other</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">26</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">30</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 5.4pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total assets</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">38,403</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">48,349</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 5.4pt">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="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 5.4pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable and accrued liabilities</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">300</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">106</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 5.4pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable to related parties</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">62</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">26</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt; padding-left: 5.4pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Borrowing under margin account</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">15,000</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 5.4pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">362</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">15,132</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="padding-left: 5.4pt">&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="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 5.4pt">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; padding-left: 5.4pt">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt; padding-left: 5.4pt">Net assets</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">38,041</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">33,217</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="padding-left: 5.4pt">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 5.4pt">Net assets consist of:</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-left: 5.4pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Common stock, par value</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">13</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">10</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-left: 5.4pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Capital in excess of par value</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">56,049</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">51,701</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 5.4pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Undistributed
      net capital losses</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(15,721</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(14,538</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 5.4pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Undistributed net capital gains</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">660</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt; padding-left: 5.4pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unrealized depreciation of portfolio securities, net</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(2,960</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(3,956</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt; padding-left: 5.4pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total net assets</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">38,041</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">33,217</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; padding-left: 5.4pt">Shares of common stock issued and outstanding, $.001 par value, 50,000 shares authorized</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">12,674</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">10,562</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; padding-left: 5.4pt">Shares of preferred stock issued and outstanding, $.001 par value, 5,000 shares authorized</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; padding-left: 5.4pt">Net asset value per share</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">3.00</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">3.14</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
  </TABLE>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center">The accompanying notes are an integral
  part of these financial statements.</P>
  
  
  <!-- Field: Page; Sequence: 3 -->
      <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="#TableOfContents" 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 -->3<!-- 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: 10pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><U>EQUUS TOTAL RETURN, INC.</U></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><A NAME="a_004"></A><U>STATEMENTS OF OPERATIONS </U></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">(Unaudited)</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 100%">
  <TR STYLE="vertical-align: bottom">
      <TD>&nbsp;</TD><TD STYLE="font: bold 9pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="7" STYLE="font: bold 9pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Three months ended June 30,</TD><TD STYLE="font: bold 9pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="7" STYLE="font: bold 9pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Six months ended June 30,</TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="font: bold 9pt Times New Roman, Times, Serif">(in thousands, except per share amounts)</TD><TD STYLE="font: bold 9pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font: bold 9pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">2014</TD><TD STYLE="font: bold 9pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font: bold 9pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">2013</TD><TD STYLE="font: bold 9pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font: bold 9pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">2014</TD><TD STYLE="font: bold 9pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font: bold 9pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">2013</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left; padding-left: 5.4pt">Investment income:</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left; padding-left: 5.4pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest income (loss), net:</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%; font: 9pt Times New Roman, Times, Serif; text-align: left; padding-left: 5.4pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Control investments</TD><TD STYLE="width: 1%; font: 9pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="width: 1%; font: 9pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 10%; font: 9pt Times New Roman, Times, Serif; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="width: 1%; font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font: 9pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="width: 1%; font: 9pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 10%; font: 9pt Times New Roman, Times, Serif; text-align: right">(25</TD><TD STYLE="width: 1%; font: 9pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="width: 1%; font: 9pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="width: 1%; font: 9pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 10%; font: 9pt Times New Roman, Times, Serif; text-align: right">198</TD><TD STYLE="width: 1%; font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font: 9pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="width: 1%; font: 9pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 10%; font: 9pt Times New Roman, Times, Serif; text-align: right">(157</TD><TD STYLE="width: 1%; font: 9pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 9pt Times New Roman, Times, Serif; padding-bottom: 1pt; padding-left: 5.4pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-affiliate investments</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 9pt Times New Roman, Times, Serif; text-align: right">64</TD><TD STYLE="padding-bottom: 1pt; font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 9pt Times New Roman, Times, Serif; text-align: right">40</TD><TD STYLE="padding-bottom: 1pt; font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 9pt Times New Roman, Times, Serif; text-align: right">122</TD><TD STYLE="padding-bottom: 1pt; font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 9pt Times New Roman, Times, Serif; text-align: right">76</TD><TD STYLE="padding-bottom: 1pt; font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left; padding-left: 5.4pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
      interest income (loss)</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: right">64</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: right">15</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: right">320</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: right">(81</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt; padding-left: 5.4pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest from temporary cash investments</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 9pt Times New Roman, Times, Serif; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 9pt Times New Roman, Times, Serif; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 9pt Times New Roman, Times, Serif; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 9pt Times New Roman, Times, Serif; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left; padding-left: 5.4pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
      investment income (loss)</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: right">64</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: right">15</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: right">320</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: right">(81</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="padding-left: 5.4pt">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 9pt Times New Roman, Times, Serif; padding-left: 5.4pt">Expenses:</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left; padding-left: 5.4pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Professional fees</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: right">237</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: right">391</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: right">528</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: right">659</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left; padding-left: 5.4pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Compensation expense</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: right">225</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: right">228</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: right">437</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: right">467</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left; padding-left: 5.4pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;General and administrative expense</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: right">69</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: right">34</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: right">169</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: right">72</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left; padding-left: 5.4pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Director fees and expenses</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: right">161</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: right">144</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: right">257</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: right">246</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left; padding-left: 5.4pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Mailing, printing and other expenses</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: right">77</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: right">52</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: right">98</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: right">75</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 9pt Times New Roman, Times, Serif; padding-left: 5.4pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Taxes</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: right">8</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: right">3</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: right">14</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: right">8</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt; padding-left: 5.4pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Settlement expense</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 9pt Times New Roman, Times, Serif; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 9pt Times New Roman, Times, Serif; text-align: right">527</TD><TD STYLE="padding-bottom: 1pt; font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 9pt Times New Roman, Times, Serif; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 9pt Times New Roman, Times, Serif; text-align: right">527</TD><TD STYLE="padding-bottom: 1pt; font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt; padding-left: 5.4pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total expenses</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 9pt Times New Roman, Times, Serif; text-align: right">777</TD><TD STYLE="padding-bottom: 1pt; font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 9pt Times New Roman, Times, Serif; text-align: right">1,379</TD><TD STYLE="padding-bottom: 1pt; font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 9pt Times New Roman, Times, Serif; text-align: right">1,503</TD><TD STYLE="padding-bottom: 1pt; font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 9pt Times New Roman, Times, Serif; text-align: right">2,054</TD><TD STYLE="padding-bottom: 1pt; font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="padding-left: 5.4pt">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: right">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: right">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, 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="font: 9pt Times New Roman, Times, Serif; text-align: left; padding-left: 5.4pt">Net investment loss</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: right">(713</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: right">(1,364</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: right">(1,183</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: right">(2,135</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="padding-left: 5.4pt">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left; padding-left: 5.4pt">Net realized gain (loss):</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 9pt Times New Roman, Times, Serif; padding-bottom: 1pt; padding-left: 5.4pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-affiliate investments</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 9pt Times New Roman, Times, Serif; text-align: right">660</TD><TD STYLE="padding-bottom: 1pt; font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 9pt Times New Roman, Times, Serif; text-align: right">(1,795</TD><TD STYLE="padding-bottom: 1pt; font: 9pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 9pt Times New Roman, Times, Serif; text-align: right">660</TD><TD STYLE="padding-bottom: 1pt; font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 9pt Times New Roman, Times, Serif; text-align: right">(1,795</TD><TD STYLE="padding-bottom: 1pt; font: 9pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left; padding-left: 5.4pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net realized gain (loss)</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: right">660</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: right">(1,795</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: right">660</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: right">(1,795</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="padding-left: 5.4pt">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left; padding-left: 5.4pt">Net unrealized depreciation of portfolio securities:</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 9pt Times New Roman, Times, Serif; padding-left: 5.4pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;End of period</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: right">(2,960</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: right">(16,000</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: right">(2,960</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: right">(16,000</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 9pt Times New Roman, Times, Serif; padding-bottom: 1pt; padding-left: 5.4pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Beginning of period</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 9pt Times New Roman, Times, Serif; text-align: right">(4,024</TD><TD STYLE="padding-bottom: 1pt; font: 9pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 9pt Times New Roman, Times, Serif; text-align: right">(17,910</TD><TD STYLE="padding-bottom: 1pt; font: 9pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 9pt Times New Roman, Times, Serif; text-align: right">(3,956</TD><TD STYLE="padding-bottom: 1pt; font: 9pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 9pt Times New Roman, Times, Serif; text-align: right">(17,222</TD><TD STYLE="padding-bottom: 1pt; font: 9pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt; padding-left: 5.4pt">Net change in unrealized depreciation of portfolio securities</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 9pt Times New Roman, Times, Serif; text-align: right">1,064</TD><TD STYLE="padding-bottom: 1pt; font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 9pt Times New Roman, Times, Serif; text-align: right">1,910</TD><TD STYLE="padding-bottom: 1pt; font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 9pt Times New Roman, Times, Serif; text-align: right">996</TD><TD STYLE="padding-bottom: 1pt; font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 9pt Times New Roman, Times, Serif; text-align: right">1,222</TD><TD STYLE="padding-bottom: 1pt; font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 9pt Times New Roman, Times, Serif; padding-left: 5.4pt">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt; padding-left: 5.4pt">Net increase (decrease) in net assets resulting from operations</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font: 9pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 9pt Times New Roman, Times, Serif; text-align: right">1,011</TD><TD STYLE="padding-bottom: 2.5pt; font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font: 9pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 9pt Times New Roman, Times, Serif; text-align: right">(1,249</TD><TD STYLE="padding-bottom: 2.5pt; font: 9pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font: 9pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 9pt Times New Roman, Times, Serif; text-align: right">473</TD><TD STYLE="padding-bottom: 2.5pt; font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font: 9pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 9pt Times New Roman, Times, Serif; text-align: right">(2,708</TD><TD STYLE="padding-bottom: 2.5pt; font: 9pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 9pt Times New Roman, Times, Serif; padding-left: 5.4pt">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 9pt Times New Roman, Times, Serif; text-align: left; padding-left: 5.4pt">Net increase (decrease) in net assets resulting from operations per share:</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="font: 9pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt; padding-left: 5.4pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Basic and diluted</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font: 9pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 9pt Times New Roman, Times, Serif; text-align: right">0.09</TD><TD STYLE="padding-bottom: 2.5pt; font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font: 9pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 9pt Times New Roman, Times, Serif; text-align: right">(0.11</TD><TD STYLE="padding-bottom: 2.5pt; font: 9pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font: 9pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 9pt Times New Roman, Times, Serif; text-align: right">0.04</TD><TD STYLE="padding-bottom: 2.5pt; font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font: 9pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 9pt Times New Roman, Times, Serif; text-align: right">(0.25</TD><TD STYLE="padding-bottom: 2.5pt; font: 9pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 9pt Times New Roman, Times, Serif; padding-left: 5.4pt">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><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="font: 9pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt; padding-left: 5.4pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Basic and diluted</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 9pt Times New Roman, Times, Serif; text-align: right">11,676</TD><TD STYLE="padding-bottom: 2.5pt; font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 9pt Times New Roman, Times, Serif; text-align: right">10,562</TD><TD STYLE="padding-bottom: 2.5pt; font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 9pt Times New Roman, Times, Serif; text-align: right">11,122</TD><TD STYLE="padding-bottom: 2.5pt; font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 9pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 9pt Times New Roman, Times, Serif; text-align: right">10,562</TD><TD STYLE="padding-bottom: 2.5pt; font: 9pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
  </TABLE>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center">The accompanying notes are an integral
  part of these financial statements.</P>
  
  
  <!-- Field: Page; Sequence: 4 -->
      <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="#TableOfContents" 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 -->4<!-- 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: 10pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><U>EQUUS TOTAL RETURN, INC. </U></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><A NAME="a_005"></A><U>STATEMENTS OF CHANGES IN NET ASSETS
  </U></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">(Unaudited)</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 100%">
  <TR STYLE="vertical-align: bottom">
      <TD>&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="7" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Six months ended June 30,</TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="font: bold 10pt Times New Roman, Times, Serif">(in thousands)</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">2014</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">2013</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="width: 63%; font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 5.4pt">&nbsp;Net increase (decrease) in net assets resulting from operations</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 12%; font: 10pt Times New Roman, Times, Serif; text-align: right">473</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 12%; font: 10pt Times New Roman, Times, Serif; text-align: right">(2,708</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt; padding-left: 5.4pt">&nbsp;Shares issued for portfolio securities</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">4,351</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 5.4pt">&nbsp;Increase (decrease) in net assets</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">4,824</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(2,708</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt; padding-left: 5.4pt">&nbsp;Net assets at beginning of period</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">33,217</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">32,875</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt; padding-left: 5.4pt">&nbsp;Net assets at end of period</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">38,041</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">30,167</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
  </TABLE>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center">The accompanying notes are an integral
  part of these financial statements.</P>
  
  
  <!-- Field: Page; Sequence: 5 -->
      <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="#TableOfContents" 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 -->5<!-- 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: 10pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><U>EQUUS TOTAL RETURN, INC. </U></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><U><A NAME="a_006"></A>STATEMENTS OF CASH FLOWS </U></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">(Unaudited)</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 100%">
  <TR STYLE="vertical-align: bottom">
      <TD>&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="7" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Six months ended June 30,</TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="font: bold 10pt Times New Roman, Times, Serif">(in thousands)</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">2014</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">2013</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 5.4pt">Cash flows from operating activities:</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="width: 70%; font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 5.4pt">Net increase (decrease) in net assets resulting from operations</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 12%; font: 10pt Times New Roman, Times, Serif; text-align: right">473</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 12%; font: 10pt Times New Roman, Times, Serif; text-align: right">(2,708</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 5.4pt">Adjustments to reconcile net
      increase (decrease) in net assets resulting from operations to net cash</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 5.4pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(used in) provided by operating activities:</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 5.4pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net realized (gain) loss</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(660</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">1,795</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 5.4pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net change in unrealized depreciation of portfolio securities</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(996</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(1,222</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 5.4pt">Changes in operating assets and liabilities:</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 5.4pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchase of portfolio securities</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(647</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(169</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 5.4pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net proceeds from dispositions of portfolio securities</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">62</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 5.4pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Principal payments received from portfolio securities</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">9</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 5.4pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Sales of temporary cash investments, net</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">15,149</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 5.4pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Increase in accounts receivable from investments</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(202</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(267</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 5.4pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Decrease in accounts receivable and other</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">4</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 5.4pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Increase (decrease) in accrued interest receivable</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(280</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">112</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 5.4pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Increase in accounts payable and accrued liabilities</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">194</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">24</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt; padding-left: 5.4pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Increase in accounts payable to related parties</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">36</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">43</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 5.4pt">Net cash (used in) provided by operating activities</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">13,133</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(2,383</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 5.4pt">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="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt; padding-left: 5.4pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Repayments under margin account</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(15,000</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt; padding-left: 5.4pt">Net cash used in financing activities</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(15,000</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 5.4pt">Net decrease increase in cash and cash equivalents</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(1,867</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(2,383</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt; padding-left: 5.4pt">Cash and cash equivalents at beginning of period</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">19,065</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">23,687</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="padding-left: 5.4pt">&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="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt; padding-left: 5.4pt">Cash and cash equivalents at end of period</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">17,198</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">21,304</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 5.4pt">Non-cash operating and financing activities:</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt; padding-left: 5.4pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shares issued in lieu of cash for portfolio securities</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">4,351</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt; padding-left: 5.4pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued interest or dividends exchanged for portfolio securities</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">117</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="padding-left: 5.4pt">&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="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 5.4pt">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: White">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt; padding-left: 5.4pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income taxes paid</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">11</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">8</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
  </TABLE>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center">The accompanying notes are an integral
  part of these financial statements.</P>
  
  
  <!-- 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="#TableOfContents" 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: 10pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><U>EQUUS TOTAL RETURN, INC. </U></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><A NAME="a_007"></A><U>SUPPLEMENTAL INFORMATION&mdash;SELECTED
  PER SHARE DATA AND RATIOS </U></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">(Unaudited)</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 100%">
  <TR STYLE="vertical-align: bottom">
      <TD>&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="7" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Six months ended June 30,</TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD>&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">2014</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">2013</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="width: 70%; font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 5.4pt">Investment income (loss)</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 12%; font: 10pt Times New Roman, Times, Serif; text-align: right">0.03</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 12%; font: 10pt Times New Roman, Times, Serif; text-align: right">(0.01</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt; padding-left: 5.4pt">Expenses</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(0.14</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(0.19</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 5.4pt">Net investment loss</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(0.11</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(0.20</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="padding-left: 5.4pt">&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="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 5.4pt">Net realized gain (loss)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">0.06</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(0.17</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt; padding-left: 5.4pt">Net change
      in unrealized depreciation of portfolio securities</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">0.09</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">0.12</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 5.4pt">Net increase (decrease) in net assets resulting from operations</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">0.04</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(0.25</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 5.4pt">Capital transactions:</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 5.4pt">&nbsp;&nbsp;Shares issued for portfolio securities</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">0.39</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt; padding-left: 5.4pt">&nbsp;&nbsp;Dilutive effect of shares issued</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(0.57</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt; padding-left: 5.4pt">Decrease in net assets resulting from capital transactions</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(0.18</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 5.4pt">Net decrease in net assets</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(0.14</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(0.25</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt; padding-left: 5.4pt">Net assets at beginning of period</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">3.14</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">3.11</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt; padding-left: 5.4pt">Net assets at end of period, basic and diluted</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">3.00</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">2.86</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-left: 5.4pt">Weighted average number of shares outstanding during period,</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 5.4pt; padding-bottom: 2.5pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;in
      thousands (basic and diluted)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; border-bottom: Black 2.5pt double">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right; border-bottom: Black 2.5pt double">11,122</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; border-bottom: Black 2.5pt double">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right; border-bottom: Black 2.5pt double">10,562</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-left: 5.4pt">Market price per share:</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: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; padding-left: 5.4pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Beginning of period</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">1.92</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">2.36</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; padding-left: 5.4pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;End of period</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">2.48</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">1.91</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 5.4pt">Selected information and ratios:</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: 13pt; padding-left: 5.4pt">Ratio of expenses to average net assets</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">4.56</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">%</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">6.52</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: 13pt; padding-left: 5.4pt">Ratio of net investment loss to average net assets</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(3.58</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">%)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(6.77</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">%)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: 13pt; padding-left: 5.4pt">Ratio of net increase (decrease) in net assets resulting from operations to average net assets</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">1.30</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">%</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(8.59</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">%)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 5.4pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total return on market price <SUP>(1)</SUP></FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">29.17</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">%</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(19.07</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">%)</TD></TR>
  </TABLE>
  
  <P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 9pt 0 0"><FONT STYLE="font-size: 7pt"><SUP>(1)</SUP></FONT><FONT STYLE="font-size: 8pt">
  Total return = [(ending market price per share - beginning price per share) / beginning market price per share</FONT><FONT STYLE="font-size: 9pt">].</FONT></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center">The accompanying notes are an integral
  part of these financial statements.</P>
  
  
  <!-- 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="#TableOfContents" 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: 10pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B><U>EQUUS TOTAL RETURN, INC. </U></B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B><U><A NAME="a_008"></A>SCHEDULE OF INVESTMENTS </U></B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B><U>JUNE 30, 2014</U> </B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B>(Unaudited) </B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B><I>(in thousands, except share data)</I></B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B><I>&nbsp;</I></B></P>
  
  <TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="vertical-align: bottom; font: 7pt/115% Calibri, Helvetica, Sans-Serif; width: 28%"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"><B>Name&nbsp;and&nbsp;Location&nbsp;of
      </B></FONT></TD>
      <TD NOWRAP STYLE="width: 9%; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="width: 10%; font: 7.5pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"><B>&nbsp;Date&nbsp;of&nbsp;Initial
      </B></FONT></TD>
      <TD NOWRAP STYLE="width: 20%; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="width: 1%"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD NOWRAP STYLE="width: 10%; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="width: 1%"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="width: 10%; font: 7.5pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"><B>&nbsp;Cost
      of </B></FONT></TD>
      <TD STYLE="width: 1%"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD NOWRAP STYLE="width: 10%; font: 7.5pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"><B>&nbsp;Fair
      </B></FONT></TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="vertical-align: bottom; font: 7pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"><B>Portfolio&nbsp;Company
      </B></FONT></TD>
      <TD NOWRAP STYLE="font: 7.5pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-decoration: none; text-align: center"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"><B>&nbsp;Industry
      </B></FONT></TD>
      <TD NOWRAP STYLE="font: 7.5pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-decoration: none; text-align: center"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"><B>&nbsp;Investment
      </B></FONT></TD>
      <TD NOWRAP STYLE="font: 7.5pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-decoration: none; text-align: center"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"><B>&nbsp;Investment
      </B></FONT></TD>
      <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD NOWRAP STYLE="font: 7.5pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-decoration: none; text-align: center"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"><B>&nbsp;Principal
      </B></FONT></TD>
      <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD NOWRAP STYLE="font: 7.5pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-decoration: none; text-align: center"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"><B>&nbsp;Investment
      </B></FONT></TD>
      <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="font: 7.5pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-decoration: none; text-align: center"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"><B>Value<SUP>(1)</SUP></B></FONT></TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD COLSPAN="2" STYLE="vertical-align: bottom; font: 7pt/115% Calibri, Helvetica, Sans-Serif; border-bottom: Black 1pt solid; border-top: Black 1pt solid"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"><B>Control
      Investments:&nbsp;&nbsp;Majority-owned <SUP>(3)</SUP>: </B></FONT></TD>
      <TD NOWRAP STYLE="font: 9pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; border-bottom: Black 1pt solid; border-top: Black 1pt solid"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD NOWRAP STYLE="font: 9pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; border-bottom: Black 1pt solid; border-top: Black 1pt solid"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: Black 1pt solid; border-top: Black 1pt solid"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD NOWRAP STYLE="font: 9pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; border-bottom: Black 1pt solid; border-top: Black 1pt solid"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: Black 1pt solid; border-top: Black 1pt solid"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD NOWRAP STYLE="font: 9pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; border-bottom: Black 1pt solid; border-top: Black 1pt solid"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: Black 1pt solid; border-top: Black 1pt solid"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD NOWRAP STYLE="font: 9pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; border-bottom: Black 1pt solid; border-top: Black 1pt solid"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="background-color: rgb(204,238,255)">
      <TD STYLE="padding-right: 5.4pt; padding-left: 0"><P STYLE="font: 7.5pt/normal Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-size: 7pt">Equus
  Energy, LLC</FONT></P>
          <P STYLE="font: 7.5pt/normal Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-size: 7pt">Houston, TX</FONT></P></TD>
      <TD STYLE="font: 7.5pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; vertical-align: top"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">Energy
      </FONT></TD>
      <TD NOWRAP STYLE="font: 7.5pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; vertical-align: top"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">December
      2011</FONT></TD>
      <TD STYLE="font: 7.5pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; vertical-align: top"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">Member
      interest (100%) </FONT></TD>
      <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="text-align: center; vertical-align: top"><FONT STYLE="font-size: 7pt">$&nbsp;</FONT></TD>
      <TD NOWRAP STYLE="font: 7.5pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; vertical-align: top"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7,050
      </FONT></TD>
      <TD STYLE="text-align: center; vertical-align: top"><FONT STYLE="font-size: 7pt">&nbsp;$</FONT></TD>
      <TD STYLE="vertical-align: top; font: 7pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8,800
  </FONT></TD></TR>
  <TR STYLE="background-color: White">
      <TD STYLE="padding-right: 5.4pt; padding-left: 0; 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</FONT></P>
                                                        <P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 7pt">Houston,
                                           TX</FONT></P></TD>
      <TD STYLE="font: 7.5pt/115% Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; vertical-align: top; border-top: Black 1pt solid; border-bottom: Black 1pt solid">Media</TD>
      <TD NOWRAP STYLE="font: 7.5pt/115% Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; vertical-align: top; border-top: Black 1pt solid; border-bottom: Black 1pt solid">January 2007</TD>
      <TD STYLE="font: 7.5pt/115% Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; vertical-align: top; border-top: Black 1pt solid; border-bottom: Black 1pt solid">Member
      interest (100%)</TD>
      <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid">&nbsp;</TD>
      <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; border-top: Black 1pt solid; border-bottom: Black 1pt solid">&nbsp;</TD>
      <TD STYLE="text-align: center; vertical-align: top; border-top: Black 1pt solid; border-bottom: Black 1pt solid">&nbsp;</TD>
      <TD NOWRAP STYLE="font: 7.5pt/115% Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; vertical-align: top; border-top: Black 1pt solid; border-bottom: Black 1pt solid">3,000</TD>
      <TD STYLE="text-align: center; vertical-align: top; border-top: Black 1pt solid; border-bottom: Black 1pt solid">&nbsp;</TD>
      <TD STYLE="vertical-align: top; font: 7pt/115% Times New Roman, Times, Serif; text-align: right; border-top: Black 1pt solid; border-bottom: Black 1pt solid">216 </TD></TR>
  <TR STYLE="background-color: rgb(204,238,255)">
      <TD STYLE="padding-right: 5.4pt; padding-left: 0; text-align: left; vertical-align: top"><P STYLE="font: 7.5pt/normal Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-size: 7pt">Spectrum Management,
          LLC</FONT></P>
          <P STYLE="font: 7.5pt/normal Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-size: 7pt">Carrolton, TX</FONT></P></TD>
      <TD STYLE="font: 7.5pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">Business
      products and services </FONT></TD>
      <TD NOWRAP STYLE="font: 7.5pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; vertical-align: top"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">December&nbsp;1999
      </FONT></TD>
      <TD STYLE="font: 7.5pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; vertical-align: top"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">285,000
      units of Class&nbsp;A member interest (92.1%/82.5% fully diluted) </FONT></TD>
      <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD NOWRAP STYLE="font: 7.5pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; vertical-align: top"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,850
      </FONT></TD>
      <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="vertical-align: top; font: 7pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-
      </FONT></TD></TR>
  <TR STYLE="background-color: rgb(204,238,255)">
      <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="font: 7.5pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">16%
      subordinated promissory note due 11/11 <SUP>(2)</SUP></FONT></TD>
      <TD STYLE="text-align: center; vertical-align: top"><FONT STYLE="font-size: 7pt">&nbsp;$</FONT></TD>
      <TD NOWRAP STYLE="font: 7.5pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; vertical-align: top"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3,028
  </FONT></TD>
      <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD NOWRAP STYLE="font: 7.5pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; vertical-align: top"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3,028
      </FONT></TD>
      <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="vertical-align: top; font: 7pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3,028
      </FONT></TD></TR>
  <TR STYLE="background-color: rgb(204,238,255)">
      <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="border-top: Black 1pt solid"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD NOWRAP STYLE="font: 7.5pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; vertical-align: top; border-top: Black 1pt solid"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5,878
      </FONT></TD>
      <TD STYLE="border-top: Black 1pt solid"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="vertical-align: top; font: 7pt/115% Calibri, Helvetica, Sans-Serif; text-align: right; border-top: Black 1pt solid"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3,028
      </FONT></TD></TR>
  <TR>
      <TD COLSPAN="4" STYLE="vertical-align: bottom; font: 7.5pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 0; border-top: Black 1pt solid; border-bottom: Black 1pt solid"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"><B>Total
      Control Investments: Majority-owned (represents 59.6% of total investments at fair value) </B></FONT></TD>
      <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="vertical-align: top; font: 7.5pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; border-top: Black 1pt solid; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center; vertical-align: top"><FONT STYLE="font-size: 7pt">&nbsp;$</FONT></TD>
      <TD NOWRAP STYLE="text-align: right; font: 7.5pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; border-top: Black 1pt solid; border-bottom: Black 1pt solid; vertical-align: top"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15,928
  </B></FONT></TD>
      <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center; vertical-align: top"><FONT STYLE="font-size: 7pt">$&nbsp;</FONT></TD>
      <TD STYLE="vertical-align: top; font: 7pt/115% Calibri, Helvetica, Sans-Serif; text-align: right; border-top: Black 1pt solid; border-bottom: Black 1pt solid"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12,044
  </B></FONT></TD></TR>
  <TR STYLE="background-color: rgb(204,238,255)">
      <TD STYLE="font: 7.5pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 0"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"><B>Affiliate
      Investments <SUP>(4)</SUP>: </B></FONT></TD>
      <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: top">
      <TD STYLE="padding-right: 5.4pt; padding-left: 0; border-top: Black 1pt solid; border-bottom: Black 1pt solid"><P STYLE="font: 7.5pt/normal Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-size: 7pt">PalletOne, Inc.</FONT></P>
          <P STYLE="font: 7.5pt/normal Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-size: 7pt">Bartow, FL</FONT></P></TD>
      <TD STYLE="font: 7.5pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; border-top: Black 1pt solid; border-bottom: Black 1pt solid"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">Shipping
      products and services </FONT></TD>
      <TD NOWRAP STYLE="font: 7.5pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; border-top: Black 1pt solid; border-bottom: Black 1pt solid"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">October
      2001 </FONT></TD>
      <TD STYLE="font: 7.5pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; border-top: Black 1pt solid; border-bottom: Black 1pt solid"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">350,000&nbsp;shares&nbsp;of&nbsp;common
      stock (18.7%) </FONT></TD>
      <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; border-top: Black 1pt solid; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center; vertical-align: top"><FONT STYLE="font-size: 7pt">&nbsp;$</FONT></TD>
      <TD NOWRAP STYLE="font: 7.5pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: right; vertical-align: top"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;350
  </FONT></TD>
      <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center; vertical-align: top"><FONT STYLE="font-size: 7pt">$&nbsp;</FONT></TD>
      <TD STYLE="vertical-align: top; font: 7pt/115% Calibri, Helvetica, Sans-Serif; text-align: right; border-top: Black 1pt solid; border-bottom: Black 1pt solid"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;968
  </FONT></TD></TR>
  <TR STYLE="background-color: rgb(204,238,255)">
      <TD COLSPAN="4" STYLE="font: 7.5pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 0"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"><B>Total
      Affiliate Investments (represents 4.8% of total investments at fair value) </B></FONT></TD>
      <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="font: 4pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="text-align: center; vertical-align: top"><FONT STYLE="font-size: 7pt">&nbsp;$</FONT></TD>
      <TD NOWRAP STYLE="font: 7.5pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; vertical-align: top"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"><B>&nbsp;&nbsp;&nbsp;&nbsp;
  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;350 </B></FONT></TD>
      <TD STYLE="text-align: center; vertical-align: top"><FONT STYLE="font-size: 7pt">$</FONT></TD>
      <TD STYLE="vertical-align: top; font: 7pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;968
  </B></FONT></TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD COLSPAN="4" STYLE="font: 7.5pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 0; border-top: Black 1pt solid; border-bottom: Black 1pt solid"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"><B>Non-Affiliate
      Investments (less than 5% owned):</B></FONT></TD>
      <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="font: 7.5pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; border-top: Black 1pt solid; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="font: 7.5pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; border-top: Black 1pt solid; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="font: 7.5pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; border-top: Black 1pt solid; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="background-color: rgb(204,238,255)">
      <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 0"><P STYLE="font: 7.5pt/normal Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-size: 7pt">MVC Capital, Inc.</FONT></P>
          <P STYLE="font: 7.5pt/normal Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-size: 7pt">Purchase, NY</FONT></P></TD>
      <TD STYLE="vertical-align: top; font: 7.5pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">Financial
      services</FONT></TD>
      <TD NOWRAP STYLE="vertical-align: top; font: 7.5pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">May
      2014</FONT></TD>
      <TD STYLE="vertical-align: top; font: 7.5pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">395,839&nbsp;shares&nbsp;of&nbsp;common
      stock (1.7%) <SUP>(5)</SUP></FONT></TD>
      <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="text-align: center; vertical-align: top"><FONT STYLE="font-size: 7pt">&nbsp;$</FONT></TD>
      <TD NOWRAP STYLE="text-align: right; font: 7.5pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; vertical-align: top"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5,584
  </FONT></TD>
      <TD STYLE="text-align: center; vertical-align: top"><FONT STYLE="font-size: 7pt">$&nbsp;</FONT></TD>
      <TD STYLE="vertical-align: top; font: 7pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5,126
  </FONT></TD></TR>
  <TR STYLE="vertical-align: top">
      <TD STYLE="padding-right: 5.4pt; padding-left: 0; border-top: Black 1pt solid; border-bottom: Black 1pt solid"><P STYLE="font: 7.5pt/normal Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-size: 7pt">Orco Property Group</FONT></P>
          <P STYLE="font: 7.5pt/normal Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-size: 7pt">Paris, France</FONT></P></TD>
      <TD STYLE="font: 7.5pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; border-top: Black 1pt solid; border-bottom: Black 1pt solid"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">Real
      estate</FONT></TD>
      <TD NOWRAP STYLE="font: 7.5pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; border-top: Black 1pt solid; border-bottom: Black 1pt solid"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">April
      2011</FONT></TD>
      <TD STYLE="font: 7.5pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; border-top: Black 1pt solid; border-bottom: Black 1pt solid"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">10%
      promissory note due 2/18 <SUP>(2)</SUP></FONT></TD>
      <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7pt">&nbsp;$</FONT></TD>
      <TD NOWRAP STYLE="font: 7.5pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: right; vertical-align: top"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;812
  </FONT></TD>
      <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD NOWRAP STYLE="font: 7.5pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: right; vertical-align: top"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;812
      </FONT></TD>
      <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="vertical-align: top; font: 7pt/115% Calibri, Helvetica, Sans-Serif; text-align: right; border-top: Black 1pt solid; border-bottom: Black 1pt solid"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,576
      </FONT></TD></TR>
  <TR STYLE="background-color: rgb(204,238,255)">
      <TD STYLE="padding-right: 5.4pt; padding-left: 0; text-align: left; vertical-align: top"><P STYLE="font: 7.5pt/normal Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-size: 7pt">Security Monitor Holding,
          LLC</FONT></P>
          <P STYLE="font: 7.5pt/normal Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-size: 7pt">Boston, MA</FONT></P></TD>
      <TD STYLE="font: 7.5pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">Business
      products and services </FONT></TD>
      <TD STYLE="font: 7.5pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; vertical-align: top"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">November
      2013</FONT></TD>
      <TD STYLE="font: 7.5pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; vertical-align: top"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">14%
      promissory note due 6/14 <SUP>(2)</SUP></FONT></TD>
      <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD NOWRAP STYLE="font: 7.5pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; vertical-align: top"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;500
      </FONT></TD>
      <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD NOWRAP STYLE="font: 7.5pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; vertical-align: top"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;500
      </FONT></TD>
      <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="vertical-align: top; font: 7pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;500
      </FONT></TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD COLSPAN="4" STYLE="font: 7.5pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 0; border-top: Black 1pt solid; border-bottom: Black 1pt solid"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"><B>Total
      Non-Affiliate Investments (represents 35.6% of total investments at fair value)</B></FONT></TD>
      <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="font: 7.5pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; border-top: Black 1pt solid; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7pt">&nbsp;$</FONT></TD>
      <TD NOWRAP STYLE="font: 7.5pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: right; vertical-align: top"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"><B>&nbsp;
  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6,896 </B></FONT></TD>
      <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7pt">$&nbsp;</FONT></TD>
      <TD STYLE="vertical-align: top; font: 7pt/115% Calibri, Helvetica, Sans-Serif; text-align: right; border-top: Black 1pt solid; border-bottom: Black 1pt solid"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"><B>&nbsp;&nbsp;
  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;7,202 </B></FONT></TD></TR>
  <TR STYLE="background-color: rgb(204,238,255)">
      <TD STYLE="font: 7.5pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 0; border-bottom: Black 1pt solid"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"><B>Total
      Investment in Portfolio Securities</B></FONT></TD>
      <TD STYLE="font: 7.5pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="font: 7.5pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="font: 7.5pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="font: 7.5pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: center; vertical-align: top"><FONT STYLE="font-size: 7pt">&nbsp;$</FONT></TD>
      <TD NOWRAP STYLE="font: 7.5pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; border-bottom: Black 1pt solid; text-align: right; vertical-align: top"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;23,174
  </B></FONT></TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: center; vertical-align: top"><FONT STYLE="font-size: 7pt">$&nbsp;</FONT></TD>
      <TD STYLE="vertical-align: top; font: 7pt/115% Calibri, Helvetica, Sans-Serif; text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20,214
  </B></FONT></TD></TR>
  </TABLE>
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%">
  <TR STYLE="vertical-align: top">
      <TD STYLE="font: 7.5pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 7.5pt Times New Roman, Times, Serif"><SUP>(1) </SUP></FONT></TD>
      <TD STYLE="font: 7.5pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 7.5pt Times New Roman, Times, Serif">See Note 3 to the financial statements, Valuation of Investments.</FONT></TD></TR>
  <TR STYLE="vertical-align: top">
      <TD STYLE="font: 7.5pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 7.5pt Times New Roman, Times, Serif"><SUP>(2) </SUP></FONT></TD>
      <TD STYLE="font: 7.5pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 7.5pt Times New Roman, Times, Serif">Income-producing.</FONT></TD></TR>
  <TR STYLE="vertical-align: top">
      <TD STYLE="font: 7.5pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 7.5pt Times New Roman, Times, Serif"><SUP>(3) </SUP></FONT></TD>
      <TD STYLE="font: 7.5pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 7.5pt Times New Roman, Times, Serif">Majority owned investments are generally defined under the Investment Company Act of 1940 as companies in which we own more than 50% of the voting securities of the company.</FONT></TD></TR>
  <TR STYLE="vertical-align: top">
      <TD STYLE="font: 7.5pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 7.5pt Times New Roman, Times, Serif"><SUP>(4) </SUP></FONT></TD>
      <TD STYLE="font: 7.5pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 7.5pt Times New Roman, Times, Serif">Affiliate investments are generally defined under the Investment Company Act of 1940 as companies in which we own at least 5% but not more than 25% voting securities of the company.</FONT></TD></TR>
  </TABLE>
  
  <TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%">
  <TR STYLE="vertical-align: top">
      <TD STYLE="font: 7.5pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 7.5pt Times New Roman, Times, Serif"><SUP>(5) </SUP></FONT></TD>
      <TD STYLE="font: 7.5pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 7.5pt Times New Roman, Times, Serif">Pursuant
      to a Share Exchange Agreement between the Fund and MVC dated May 14, 2014, MVC has the right to rescind the Agreement
      and     cancel the Share Exchange if Equus does not complete a &ldquo;reorganization&rdquo; (as defined under Section
      2(a)(33) of the 1940 Act) within 12 months of the date of the Agreement.</FONT></TD></TR>
  </TABLE>
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">The accompanying notes are an integral
  part of these financial statements.</P>
  
  
  <!-- Field: Page; Sequence: 8 -->
      <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="#TableOfContents" 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 -->8<!-- 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: 10pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B><U>EQUUS TOTAL RETURN, INC. </U></B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B><U>SCHEDULE OF INVESTMENTS &ndash;
  (Continued) </U></B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B><U>JUNE 30, 2014 </U></B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B>(Unaudited) </B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Except for our holding of notes
  issued by Orco Property Group S.A. (&ldquo;OPG&rdquo;) and shares of MVC Capital, Inc. (&ldquo;MVC&rdquo;), substantially all of our
  portfolio securities are restricted from public sale without prior registration under the Securities Act of 1933 or other
  relevant foreign regulatory authority. We negotiate certain aspects of the method and timing of the disposition of our
  investment in each portfolio company, including registration rights and related costs.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">We may invest up to 30% of our assets
  in non-qualifying portfolio investments, as permitted by the Investment Company Act of 1940 (hereafter, the &ldquo;1940 Act&rdquo;).
  Specifically, we may invest up to 30% of our assets in entities that are not considered &ldquo;eligible portfolio companies&rdquo;
  (as defined in the 1940 Act), including companies located outside of the United States, entities that are operating pursuant to
  certain exceptions under the 1940 Act, and publicly-traded entities with a market capitalization exceeding $250 million. As of
  June 30, 2014, except for our holdings in OPG and MVC, all of our investments are in enterprises
  that are considered eligible portfolio companies under the 1940 Act. We provide significant managerial assistance to portfolio
  companies that comprise 64.4% of the total value of the investments in portfolio securities as of June 30, 2014.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Our investments in portfolio securities
  consist of the following types of securities as of June 30, 2014 (in thousands):</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 100%">
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Type of Securities</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Cost</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Fair Value</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>Fair Value as <BR>Percentage of <BR>Net Assets</B></FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="width: 46%; font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 5.4pt">Limited liability company investments</TD><TD STYLE="width: 5%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 11%; font: 10pt Times New Roman, Times, Serif; text-align: right">12,900</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 5%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 11%; font: 10pt Times New Roman, Times, Serif; text-align: right">9,016</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 5%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 11%; font: 10pt Times New Roman, Times, Serif; text-align: right">23.7</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 5.4pt">Secured and subordinated debt</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">4,340</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">5,104</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">13.4</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 5.4pt; padding-bottom: 1pt">Common stock</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right; border-bottom: Black 1pt solid">5,934</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right; border-bottom: Black 1pt solid">6,094</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right; border-bottom: Black 1pt solid">16.0</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; border-bottom: Black 1pt solid">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 2.5pt; padding-left: 5.4pt">Total</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">23,174</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">20,214</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">53.1</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">%</TD></TR>
  </TABLE>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 40.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 40.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Interest payments are being received
  and/or accrued on notes with a fair value of $2.1 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/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">The following is a summary by industry
  of the Fund&rsquo;s investments in portfolio securities as of June 30, 2014 (in thousands):</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 100%">
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Industry</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Fair Value</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid"><P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font: bold 10pt Times New Roman, Times, Serif">Fair Value as</FONT></P>
                                                                                                                                <P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font: bold 10pt Times New Roman, Times, Serif">Percentage of</FONT></P>
                                                                                                                                <P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 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%; font: 10pt Times New Roman, Times, Serif; padding-left: 5.4pt">Energy</TD><TD STYLE="width: 8%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 12%; font: 10pt Times New Roman, Times, Serif; text-align: right">8,800</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; font: 10pt Times New Roman, Times, Serif; text-align: right">23.1</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 5.4pt">Financial services</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">5,126</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">13.5</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 5.4pt">Business products and services</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">3,528</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">9.3</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 5.4pt">Real estate</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">1,576</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">4.1</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 5.4pt">Shipping products and services</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">968</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">2.5</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt; padding-left: 5.4pt">Media</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">216</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">0.6</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; padding-left: 5.4pt">Total</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">20,214</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">53.1</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">%</TD></TR>
  </TABLE>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 94.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">The accompanying notes are an integral
  part of these financial statements.</P>
  
  
  <!-- Field: Page; Sequence: 9 -->
      <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="#TableOfContents" 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 -->9<!-- 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: 10pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B><U>EQUUS TOTAL RETURN, INC.</U></B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B><U>SCHEDULE OF INVESTMENTS </U></B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B><U>DECEMBER 31, 2013</U></B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B><I>(in thousands, except share data)</I></B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></P>
  
  <TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse">
  <TR>
      <TD STYLE="vertical-align: bottom; width: 27%"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="vertical-align: bottom; width: 10%"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="vertical-align: bottom; width: 10%"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="vertical-align: bottom; width: 20%"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="text-align: center; width: 1%; vertical-align: top"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="vertical-align: bottom; width: 10%"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="text-align: center; width: 1%; vertical-align: top"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="vertical-align: bottom; width: 10%"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="text-align: center; width: 1%; vertical-align: top"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="vertical-align: bottom; width: 10%"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD></TR>
  <TR>
      <TD STYLE="vertical-align: bottom; font: 7pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"><B>Name
      and Location of </B></FONT></TD>
      <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="vertical-align: bottom; font: 7pt/0 Calibri, Helvetica, Sans-Serif; text-align: center"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"><B>Date
      of Initial </B></FONT></TD>
      <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="text-align: center; vertical-align: top"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="text-align: center; vertical-align: top"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="vertical-align: bottom; font: 7pt/0 Calibri, Helvetica, Sans-Serif; text-align: center"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"><B>Cost
      of </B></FONT></TD>
      <TD STYLE="text-align: center; vertical-align: top"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="vertical-align: bottom; font: 7pt/0 Calibri, Helvetica, Sans-Serif; text-align: center"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"><B>Fair
      </B></FONT></TD></TR>
  <TR>
      <TD STYLE="vertical-align: bottom; font: 7pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"><B>Portfolio
      Company </B></FONT></TD>
      <TD STYLE="vertical-align: bottom; font: 7pt/0 Calibri, Helvetica, Sans-Serif; text-decoration: none; text-align: center"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"><B>Industry
      </B></FONT></TD>
      <TD STYLE="vertical-align: bottom; font: 7pt/0 Calibri, Helvetica, Sans-Serif; text-decoration: none; text-align: center"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"><B>Investment
      </B></FONT></TD>
      <TD STYLE="vertical-align: bottom; font: 7pt/0 Calibri, Helvetica, Sans-Serif; text-decoration: none; text-align: center"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"><B>Investment
      </B></FONT></TD>
      <TD STYLE="text-align: center; vertical-align: top"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="vertical-align: bottom; font: 7pt/0 Calibri, Helvetica, Sans-Serif; text-decoration: none; text-align: center"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"><B>Principal
      </B></FONT></TD>
      <TD STYLE="text-align: center; vertical-align: top"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="vertical-align: bottom; font: 7pt/0 Calibri, Helvetica, Sans-Serif; text-decoration: none; text-align: center"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"><B>Investment
      </B></FONT></TD>
      <TD STYLE="text-align: center; vertical-align: top"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="vertical-align: bottom; font: 7pt/0 Calibri, Helvetica, Sans-Serif; text-decoration: none; text-align: center"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"><B>Value<SUP>(1)</SUP></B></FONT></TD></TR>
  <TR>
      <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; font: 7pt/115% Calibri, Helvetica, Sans-Serif; border-top: Black 1pt solid"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"><B>Control
      Investments: Majority-owned <SUP>(3)</SUP>: </B></FONT></TD>
      <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; border-top: Black 1pt solid"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; border-top: Black 1pt solid"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="text-align: center; border-bottom: Black 1pt solid; vertical-align: top; border-top: Black 1pt solid"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; border-top: Black 1pt solid"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="text-align: center; border-bottom: Black 1pt solid; vertical-align: top; border-top: Black 1pt solid"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; border-top: Black 1pt solid"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="text-align: center; border-bottom: Black 1pt solid; vertical-align: top; border-top: Black 1pt solid"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; border-top: Black 1pt solid"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="background-color: rgb(204,238,255)">
      <TD><P STYLE="font: 7pt/normal Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-size: 7pt">Equus Energy, LLC</FONT></P>
          <P STYLE="font: 7pt/normal Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-size: 7pt">Houston, TX</FONT></P></TD>
      <TD STYLE="vertical-align: top; font: 7pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">Energy
      </FONT></TD>
      <TD STYLE="vertical-align: top; font: 7pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">December
      2011</FONT></TD>
      <TD STYLE="vertical-align: top; font: 7pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">Member
      interest (100%) </FONT></TD>
      <TD STYLE="text-align: center; vertical-align: top"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="vertical-align: top; font: 7pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">$
      </FONT></TD>
      <TD STYLE="vertical-align: top; font: 7pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">7,050&nbsp;&nbsp;
      </FONT></TD>
      <TD STYLE="vertical-align: top; font: 7pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">$</FONT></TD>
      <TD STYLE="vertical-align: top; font: 7pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">8,000</FONT></TD></TR>
  <TR STYLE="vertical-align: top">
      <TD STYLE="border-top: black 1pt solid; border-bottom: black 1pt solid; font: 7pt/115% Times New Roman, Times, Serif"><P STYLE="font: 7pt/normal Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">Equus
                                                                                                                            Media Development Company, LLC</FONT></P>
                                                                                                                            <P STYLE="font: 7pt/normal Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"></FONT><FONT STYLE="font: 7pt Times New Roma</P>
                                                                                                                            <P STYLE=">Houston, TX</FONT></P></TD>
      <TD STYLE="border-top: black 1pt solid; border-bottom: black 1pt solid; font: 7pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">Media
                                           </FONT></TD>
      <TD STYLE="border-top: black 1pt solid; border-bottom: black 1pt solid; font: 7pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">January
      2007 </FONT></TD>
      <TD STYLE="border-top: black 1pt solid; border-bottom: black 1pt solid; font: 7pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">Member
      interest (100%) </FONT></TD>
      <TD STYLE="border-top: black 1pt solid; border-bottom: black 1pt solid; text-align: center; vertical-align: top"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="border-top: black 1pt solid; border-bottom: black 1pt solid"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="border-top: black 1pt solid; border-bottom: black 1pt solid; text-align: center; vertical-align: top"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="border-top: black 1pt solid; border-bottom: black 1pt solid; font: 7pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">3,000&nbsp;&nbsp;
      </FONT></TD>
      <TD STYLE="border-top: black 1pt solid; border-bottom: black 1pt solid; text-align: center; vertical-align: top"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="border-top: black 1pt solid; border-bottom: black 1pt solid; font: 7pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">216</FONT></TD></TR>
  <TR STYLE="background-color: rgb(204,238,255)">
      <TD STYLE="vertical-align: top"><P STYLE="font: 7pt/normal Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-size: 7pt">Spectrum Management,
          LLC</FONT></P>
          <P STYLE="font: 7pt/normal Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-size: 7pt">Carrolton, TX</FONT></P></TD>
      <TD STYLE="vertical-align: top; font: 7pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">Business
      products and services </FONT></TD>
      <TD STYLE="vertical-align: top; font: 7pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">December
      1999 </FONT></TD>
      <TD STYLE="font: 7pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">285,000 units
      of Class A member interest (92.1%/82.5% fully diluted) </FONT></TD>
      <TD STYLE="text-align: center; vertical-align: top"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="text-align: center; vertical-align: top"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="vertical-align: top; font: 7pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">2,850&nbsp;&nbsp;
      </FONT></TD>
      <TD STYLE="text-align: center; vertical-align: top"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="vertical-align: top; font: 7pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">-</FONT></TD></TR>
  <TR STYLE="background-color: rgb(204,238,255)">
      <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="font: 7pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">16% subordinated
      promissory note due 11/11 <SUP>(2)</SUP></FONT></TD>
      <TD STYLE="vertical-align: top; font: 7pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">$</FONT></TD>
      <TD STYLE="vertical-align: top; font: 7pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">2,889&nbsp;&nbsp;
      </FONT></TD>
      <TD STYLE="text-align: center; border-bottom: black 1pt solid; vertical-align: top"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="vertical-align: top; border-bottom: black 1pt solid; font: 7pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">2,889&nbsp;&nbsp;
      </FONT></TD>
      <TD STYLE="text-align: center; border-bottom: black 1pt solid; vertical-align: top"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="vertical-align: top; border-bottom: black 1pt solid; font: 7pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">2,889</FONT></TD></TR>
  <TR STYLE="background-color: rgb(204,238,255)">
      <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="text-align: center; vertical-align: top"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="text-align: center; vertical-align: top"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="font: 7pt/115% Calibri, Helvetica, Sans-Serif; text-align: right; vertical-align: top"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">5,739&nbsp;&nbsp;
      </FONT></TD>
      <TD STYLE="text-align: center; vertical-align: top"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="font: 7pt/115% Calibri, Helvetica, Sans-Serif; text-align: right; vertical-align: top"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">2,889</FONT></TD></TR>
  <TR>
      <TD COLSPAN="5" STYLE="vertical-align: bottom; border-top: black 1pt solid; border-bottom: black 1pt solid; font: 7pt/0 Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"><B>Total
      Control Investments: Majority-owned (represents 39.0% of total investments at fair value) </B></FONT></TD>
      <TD STYLE="vertical-align: top; border-top: black 1pt solid; border-bottom: black 1pt solid"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="vertical-align: bottom; border-top: black 1pt solid; border-bottom: black 1pt solid; font: 7pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">$
      </FONT></TD>
      <TD STYLE="vertical-align: bottom; border-top: black 1pt solid; border-bottom: black 1pt solid; font: 7pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"><B>15,789&nbsp;&nbsp;
      </B></FONT></TD>
      <TD STYLE="vertical-align: bottom; border-top: black 1pt solid; border-bottom: black 1pt solid; font: 7pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">$</FONT></TD>
      <TD STYLE="vertical-align: bottom; border-top: black 1pt solid; border-bottom: black 1pt solid; font: 7pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"><B>11,105</B></FONT></TD></TR>
  <TR STYLE="background-color: rgb(204,238,255)">
      <TD STYLE="border-bottom: black 1pt solid; font: 7pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"><B>Affiliate
      Investments <SUP>(4)</SUP>: </B></FONT></TD>
      <TD STYLE="border-bottom: black 1pt solid"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: black 1pt solid"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: black 1pt solid"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="text-align: center; border-bottom: black 1pt solid; vertical-align: top"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: black 1pt solid"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="text-align: center; border-bottom: black 1pt solid; vertical-align: top"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: black 1pt solid"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="text-align: center; border-bottom: black 1pt solid; vertical-align: top"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: black 1pt solid"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: top">
      <TD STYLE="border-bottom: black 1pt solid"><P STYLE="font: 7pt/normal Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-size: 7pt">PalletOne, Inc.</FONT></P>
          <P STYLE="font: 7pt/normal Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-size: 7pt">Bartow, FL</FONT></P></TD>
      <TD STYLE="border-bottom: black 1pt solid; font: 7pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">Shipping
      products and services </FONT></TD>
      <TD STYLE="border-bottom: black 1pt solid; font: 7pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">October
      2001 </FONT></TD>
      <TD STYLE="border-bottom: black 1pt solid; font: 7pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">350,000
      shares of common stock (18.7%) </FONT></TD>
      <TD STYLE="border-bottom: black 1pt solid; text-align: center; vertical-align: top"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: black 1pt solid"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: black 1pt solid; font: 7pt/115% Calibri, Helvetica, Sans-Serif; text-align: center; vertical-align: top"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">$
      </FONT></TD>
      <TD STYLE="border-bottom: black 1pt solid; font: 7pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">350&nbsp;&nbsp;
      </FONT></TD>
      <TD STYLE="border-bottom: black 1pt solid; font: 7pt/115% Calibri, Helvetica, Sans-Serif; text-align: center; vertical-align: top"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">$</FONT></TD>
      <TD STYLE="border-bottom: black 1pt solid; font: 7pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">250</FONT></TD></TR>
  <TR STYLE="background-color: rgb(204,238,255)">
      <TD COLSPAN="4" STYLE="border-bottom: black 1pt solid; font: 7pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"><B>Total
      Affiliate Investments (represents 0.9% of total investments at fair value) </B></FONT></TD>
      <TD STYLE="text-align: center; border-bottom: black 1pt solid; vertical-align: top"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: black 1pt solid"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="vertical-align: top; border-bottom: black 1pt solid; font: 7pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">$
      </FONT></TD>
      <TD STYLE="border-bottom: black 1pt solid; font: 7pt/115% Calibri, Helvetica, Sans-Serif; text-align: right; vertical-align: top"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"><B>350&nbsp;&nbsp;
      </B></FONT></TD>
      <TD STYLE="vertical-align: top; border-bottom: black 1pt solid; font: 7pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">$</FONT></TD>
      <TD STYLE="border-bottom: black 1pt solid; font: 7pt/115% Calibri, Helvetica, Sans-Serif; text-align: right; vertical-align: top"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"><B>250</B></FONT></TD></TR>
  <TR>
      <TD COLSPAN="4" STYLE="vertical-align: bottom; border-bottom: black 1pt solid; font: 7pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"><B>Non-Affiliate
      Investments (less than 5% owned):</B></FONT></TD>
      <TD STYLE="text-align: center; border-bottom: black 1pt solid; vertical-align: top"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="vertical-align: bottom; border-bottom: black 1pt solid"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="text-align: center; border-bottom: black 1pt solid; vertical-align: top"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="vertical-align: bottom; border-bottom: black 1pt solid"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="text-align: center; border-bottom: black 1pt solid; vertical-align: top"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="vertical-align: bottom; border-bottom: black 1pt solid"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="background-color: rgb(204,238,255)">
      <TD><P STYLE="font: 7pt/normal Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-size: 7pt">Orco Property Group</FONT></P>
          <P STYLE="font: 7pt/normal Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-size: 7pt">Paris, France</FONT></P></TD>
      <TD STYLE="vertical-align: top; font: 7pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">Real
      estate</FONT></TD>
      <TD STYLE="vertical-align: top; font: 7pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">April
      2011</FONT></TD>
      <TD STYLE="vertical-align: top; font: 7pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">73,666
      shares common stock</FONT></TD>
      <TD STYLE="text-align: center; vertical-align: top"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="vertical-align: top; font: 7pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">$
      </FONT></TD>
      <TD STYLE="vertical-align: top; font: 7pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">125&nbsp;&nbsp;
      </FONT></TD>
      <TD STYLE="vertical-align: top; font: 7pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">$
      </FONT></TD>
      <TD STYLE="vertical-align: top; font: 7pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">169</FONT></TD></TR>
  <TR STYLE="background-color: rgb(204,238,255)">
      <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="font: 7pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">10% promissory
      note due 2/18 <SUP>(2)</SUP></FONT></TD>
      <TD STYLE="vertical-align: top; font: 7pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">$</FONT></TD>
      <TD STYLE="font: 7pt/115% Calibri, Helvetica, Sans-Serif; text-align: right; vertical-align: top"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">696&nbsp;&nbsp;
      </FONT></TD>
      <TD STYLE="text-align: center; border-bottom: black 1pt solid; vertical-align: top"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: black 1pt solid; font: 7pt/115% Calibri, Helvetica, Sans-Serif; text-align: right; vertical-align: top"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">696&nbsp;&nbsp;
      </FONT></TD>
      <TD STYLE="text-align: center; border-bottom: black 1pt solid; vertical-align: top"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: black 1pt solid; font: 7pt/115% Calibri, Helvetica, Sans-Serif; text-align: right; vertical-align: top"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">1,480</FONT></TD></TR>
  <TR STYLE="background-color: rgb(204,238,255)">
      <TD STYLE="border-bottom: black 1pt solid"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: black 1pt solid"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: black 1pt solid"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: black 1pt solid"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="text-align: center; border-bottom: black 1pt solid; vertical-align: top"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: black 1pt solid"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="text-align: center; border-bottom: black 1pt solid; vertical-align: top"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: black 1pt solid; font: 7pt/115% Calibri, Helvetica, Sans-Serif; text-align: right; vertical-align: top"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">821&nbsp;&nbsp;
      </FONT></TD>
      <TD STYLE="text-align: center; border-bottom: black 1pt solid; vertical-align: top"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: black 1pt solid; font: 7pt/115% Calibri, Helvetica, Sans-Serif; text-align: right; vertical-align: top"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">1,649</FONT></TD></TR>
  <TR STYLE="vertical-align: top">
      <TD><P STYLE="font: 7pt/normal Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-size: 7pt">Security Monitor Holdings,
          LLC</FONT></P>
          <P STYLE="font: 7pt/normal Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-size: 7pt">Boston, MA</FONT></P></TD>
      <TD STYLE="font: 7pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">Business products
      and services </FONT></TD>
      <TD STYLE="font: 7pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">November
      2013</FONT></TD>
      <TD STYLE="font: 7pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">14% promissory
      note due 5/14 <SUP>(2)</SUP></FONT></TD>
      <TD STYLE="text-align: center; vertical-align: top"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="font: 7pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">500&nbsp;&nbsp;
      </FONT></TD>
      <TD STYLE="text-align: center; vertical-align: top"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="font: 7pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">500&nbsp;&nbsp;
      </FONT></TD>
      <TD STYLE="text-align: center; vertical-align: top"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="font: 7pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">500</FONT></TD></TR>
  <TR STYLE="background-color: rgb(204,238,255)">
      <TD COLSPAN="4" STYLE="border-top: black 1pt solid; border-bottom: black 1pt solid; font: 7pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"><B>Total
      Non-Affiliate Investments (represents 7.5% of total investments at fair value)</B></FONT></TD>
      <TD STYLE="text-align: center; border-top: black 1pt solid; border-bottom: black 1pt solid; vertical-align: top"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="border-top: black 1pt solid; border-bottom: black 1pt solid"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="vertical-align: top; border-top: black 1pt solid; border-bottom: black 1pt solid; font: 7pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">$
      </FONT></TD>
      <TD STYLE="border-top: black 1pt solid; border-bottom: black 1pt solid; font: 7pt/115% Calibri, Helvetica, Sans-Serif; text-align: right; vertical-align: top"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"><B>1,321&nbsp;&nbsp;
      </B></FONT></TD>
      <TD STYLE="vertical-align: top; border-top: black 1pt solid; border-bottom: black 1pt solid; font: 7pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">$</FONT></TD>
      <TD STYLE="border-top: black 1pt solid; border-bottom: black 1pt solid; font: 7pt/115% Calibri, Helvetica, Sans-Serif; text-align: right; vertical-align: top"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"><B>2,149</B></FONT></TD></TR>
  <TR>
      <TD STYLE="vertical-align: bottom; border-bottom: black 1pt solid; font: 7pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"><B>Total
      Investment in Portfolio Securities</B></FONT></TD>
      <TD STYLE="vertical-align: bottom; border-bottom: black 1pt solid"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="vertical-align: bottom; border-bottom: black 1pt solid"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="vertical-align: bottom; border-bottom: black 1pt solid"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="text-align: center; border-bottom: black 1pt solid; vertical-align: top"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="vertical-align: bottom; border-bottom: black 1pt solid"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="vertical-align: top; border-bottom: black 1pt solid; font: 7pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">$
      </FONT></TD>
      <TD STYLE="vertical-align: top; border-bottom: black 1pt solid; font: 7pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"><B>17,460&nbsp;&nbsp;
      </B></FONT></TD>
      <TD STYLE="text-align: center; border-bottom: black 1pt solid; vertical-align: top"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="vertical-align: top; border-bottom: black 1pt solid; font: 7pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"><B>13,504</B></FONT></TD></TR>
  <TR STYLE="background-color: rgb(204,238,255)">
      <TD STYLE="font: 7pt/115% Calibri, Helvetica, Sans-Serif; border-bottom: Black 1pt solid"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"><B>Temporary
      Cash Investments</B></FONT></TD>
      <TD STYLE="border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="text-align: center; border-bottom: Black 1pt solid; vertical-align: top"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="text-align: center; border-bottom: Black 1pt solid; vertical-align: top"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="text-align: center; border-bottom: Black 1pt solid; vertical-align: top"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD></TR>
  <TR>
      <TD STYLE="font: 7pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">U.S. Treasury
      Bill</FONT></TD>
      <TD STYLE="font: 7pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">Government</FONT></TD>
      <TD STYLE="font: 7pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">December 2013</FONT></TD>
      <TD STYLE="font: 7pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">U.S. Treasury
      Bill 0%     2/14</FONT></TD>
      <TD STYLE="text-align: center; vertical-align: top"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="font: 7pt/115% Calibri, Helvetica, Sans-Serif; text-align: right; vertical-align: top"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">15,000
      &nbsp;</FONT></TD>
      <TD STYLE="vertical-align: top; font: 7pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">$
      </FONT></TD>
      <TD STYLE="font: 7pt/115% Calibri, Helvetica, Sans-Serif; text-align: right; vertical-align: top"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">15,000&nbsp;&nbsp;
      </FONT></TD>
      <TD STYLE="vertical-align: top; font: 7pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">$</FONT></TD>
      <TD STYLE="font: 7pt/115% Calibri, Helvetica, Sans-Serif; text-align: right; vertical-align: top"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">15,000</FONT></TD></TR>
  <TR STYLE="background-color: rgb(204,238,255)">
      <TD COLSPAN="4" STYLE="vertical-align: bottom; border-top: black 1pt solid; border-bottom: black 1pt solid; font: 7pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"><B>Total
      Temporary Cash Investments (represents 52.6% of total investments at fair value)</B></FONT></TD>
      <TD STYLE="text-align: center; border-top: black 1pt solid; border-bottom: black 1pt solid; vertical-align: top"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="text-align: right; border-top: black 1pt solid; border-bottom: black 1pt solid; vertical-align: bottom"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="vertical-align: bottom; border-top: black 1pt solid; border-bottom: black 1pt solid; font: 7pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">$
      </FONT></TD>
      <TD STYLE="vertical-align: bottom; border-top: black 1pt solid; border-bottom: black 1pt solid; font: 7pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"><B>15,000&nbsp;&nbsp;
      </B></FONT></TD>
      <TD STYLE="vertical-align: bottom; border-top: black 1pt solid; border-bottom: black 1pt solid; font: 7pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">$</FONT></TD>
      <TD STYLE="vertical-align: bottom; border-top: black 1pt solid; border-bottom: black 1pt solid; font: 7pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"><B>15,000</B></FONT></TD></TR>
  <TR>
      <TD STYLE="border-bottom: black 1pt solid; font: 7pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"><B>Total
      Investments</B></FONT></TD>
      <TD STYLE="border-bottom: black 1pt solid"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: black 1pt solid"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: black 1pt solid"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="text-align: center; border-bottom: black 1pt solid; vertical-align: top"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: black 1pt solid; text-align: center; vertical-align: middle"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
      <TD STYLE="vertical-align: middle; border-bottom: black 1pt solid; font: 7pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">$
      </FONT></TD>
      <TD STYLE="border-bottom: black 1pt solid; font: 7pt/115% Calibri, Helvetica, Sans-Serif; text-align: right; vertical-align: middle"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"><B>32,460&nbsp;&nbsp;
      </B></FONT></TD>
      <TD STYLE="vertical-align: middle; border-bottom: black 1pt solid; font: 7pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">$</FONT></TD>
      <TD STYLE="border-bottom: black 1pt solid; font: 7pt/115% Calibri, Helvetica, Sans-Serif; text-align: right; vertical-align: bottom"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"><B>28,504</B></FONT></TD></TR>
  </TABLE>
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>
  
  <TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%">
  <TR STYLE="vertical-align: top">
      <TD STYLE="width: 1%; font: 7.5pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 7.5pt Times New Roman, Times, Serif"><SUP>(1) </SUP></FONT></TD>
      <TD STYLE="width: 99%; font: 7.5pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 7.5pt Times New Roman, Times, Serif">See Note 3 to the financial statements, Valuation of Investments.</FONT></TD></TR>
  <TR STYLE="vertical-align: top">
      <TD STYLE="font: 7.5pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 7.5pt Times New Roman, Times, Serif"><SUP>(2) </SUP></FONT></TD>
      <TD STYLE="font: 7.5pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 7.5pt Times New Roman, Times, Serif">Income-producing.</FONT></TD></TR>
  <TR STYLE="vertical-align: top">
      <TD STYLE="font: 7.5pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 7.5pt Times New Roman, Times, Serif"><SUP>(3) </SUP></FONT></TD>
      <TD STYLE="font: 7.5pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 7.5pt Times New Roman, Times, Serif">Majority owned investments are generally defined under the Investment Company Act of 1940 as companies in which we own more than 50% of the voting securities of the company.</FONT></TD></TR>
  <TR STYLE="vertical-align: top">
      <TD STYLE="font: 7.5pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 7.5pt Times New Roman, Times, Serif"><SUP>(4) </SUP></FONT></TD>
      <TD STYLE="font: 7.5pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 7.5pt Times New Roman, Times, Serif">Affiliate investments are generally defined under the Investment Company Act of 1940 as companies in which we own at least 5% but not more than 25% voting securities of the company.</FONT></TD></TR>
  </TABLE>
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">The accompanying notes are an integral
  part of these financial statements.</P>
  
  
  <!-- Field: Page; Sequence: 10 -->
      <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="#TableOfContents" 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 -->10<!-- 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: 10pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B><U>EQUUS TOTAL RETURN, INC.</U></B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B><U>SCHEDULE OF INVESTMENTS &ndash;
  (Continued)</U></B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B><U>DECEMBER 31, 2013</U></B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B>(in thousands, except share data)</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Except for our holding of notes and
  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/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">We may invest up to 30% of our assets
  in non-qualifying portfolio investments, as permitted by the 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/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Our investments in portfolio securities
  consist of the following types of securities as of December 31, 2013 (in thousands):</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 100%">
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Type of Securities</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Cost</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Fair Value</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Fair Value as <BR>Percentage of <BR>Net Assets</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="width: 46%; font: 10pt Times New Roman, Times, Serif; text-align: left">Limited liability company investments</TD><TD STYLE="width: 5%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 11%; font: 10pt Times New Roman, Times, Serif; text-align: right">12,900</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 5%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 11%; font: 10pt Times New Roman, Times, Serif; text-align: right">8,216</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 5%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 11%; font: 10pt Times New Roman, Times, Serif; text-align: right">24.7</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Secured and subordinated debt</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">4,085</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">4,869</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">14.7</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt">Common stock</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">475</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">419</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">1.3</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 2.5pt">Total</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">17,460</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">13,504</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">40.7</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">%</TD></TR>
  </TABLE>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">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/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">The following is a summary by industry
  of our investments in portfolio securities as of December 31, 2013 (in thousands):</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 100%">
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Industry</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Fair Value</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Fair Value as <BR>Percentage of <BR>Net Assets</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="width: 56%; font: 10pt Times New Roman, Times, Serif">Energy</TD><TD STYLE="width: 8%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 12%; font: 10pt Times New Roman, Times, Serif; text-align: right">8,000</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; font: 10pt Times New Roman, Times, Serif; text-align: right">24.1</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Business products and services</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">3,389</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">10.2</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Real estate</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">1,649</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">5.0</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Shipping products and services</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">250</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">0.8</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">Media</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">216</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">0.6</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">Total</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">13,504</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">40.7</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">%</TD></TR>
  </TABLE>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">The accompanying notes are an integral
  part of these financial statements.</P>
  
  
  <!-- Field: Page; Sequence: 11 -->
      <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="#TableOfContents" 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 -->11<!-- 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: 10pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B><U>EQUUS TOTAL RETURN, INC.</U></B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B><U><A NAME="a_009"></A>NOTES TO FINANCIAL STATEMENTS </U></B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B><U>JUNE 30, 2014 </U></B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B>(Unaudited)</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%">
  <TR STYLE="vertical-align: top">
      <TD STYLE="width: 24px">&nbsp;</TD>
      <TD STYLE="width: 24px; font: 11pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>(1)</B></FONT></TD>
      <TD STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; text-decoration: underline"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B><U>Description of Business and Basis of Presentation </U></B></FONT></TD></TR>
  </TABLE>
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>Description of Business</B>&mdash;
  Equus Total Return, Inc. (<I>&ldquo;we,&rdquo; &ldquo;us,&rdquo; &ldquo;our,&rdquo; &ldquo;Equus,&rdquo; the &ldquo;Company,&rdquo;
  and the &ldquo;Fund</I>&rdquo;), a Delaware corporation, was formed by Equus Investments II, L.P. (the &ldquo;Partnership&rdquo;)
  on August 16, 1991. On July 1, 1992, the Partnership was reorganized and all of the assets and liabilities of the Partnership were
  transferred to the Fund in exchange for shares of common stock of the Fund. Our shares trade on the New York Stock Exchange under
  the symbol &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/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">We attempt to maximize the return to
  stockholders in the form of current investment income and long-term capital gains by investing in the debt and equity securities
  of companies with a total enterprise value of between $5.0 million and $75.0 million, although we may engage in transactions with
  smaller or larger investee companies from time to time. We seek to invest primarily in companies pursuing growth either through
  acquisition or organically, leveraged buyouts, management buyouts and recapitalizations of existing businesses or special situations.
  Our income-producing investments consist principally of debt securities including subordinate debt, debt convertible into common
  or preferred stock, or debt combined with warrants and common and preferred stock. Debt and preferred equity financing may also
  be used to create long-term capital appreciation through the exercise and sale of warrants received in connection with the financing.
  We seek to achieve capital appreciation by making investments in equity and equity-oriented securities issued by privately-owned
  companies in transactions negotiated directly with such companies. Given market conditions over the past several years and the
  performance of our portfolio, our management and Board of Directors believe it is prudent to continue to review alternatives to
  refine and further clarify the current strategies.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; 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/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.35pt"><B>Basis of Presentation</B>&mdash;In
  accordance with Article 6 of Regulation S-X under the Securities Act of 1933 and Securities Exchange Act of 1934, we do not consolidate
  portfolio company investments, including those in which we have a controlling interest. Our interim unaudited financial statements
  were prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP, for interim
  financial information and in accordance with the requirements of reporting on Form 10-Q and Article 10 of Regulation S-X, under
  the Securities Exchange Act of 1934, as amended. Accordingly, they are unaudited and exclude some disclosures required for annual
  financial statements. Management believes it has made all adjustments, consisting solely of normal recurring accruals, necessary
  for the fair presentation of these interim financial statements.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.35pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">The results of operations for
  the three and six months ended June 30, 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 31, 2013, as filed
  with the Securities and Exchange Commission (&ldquo;SEC&rdquo;).</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  
  <!-- Field: Page; Sequence: 12 -->
      <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="#TableOfContents" 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 -->12<!-- 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: 11pt/115% Calibri, Helvetica, Sans-Serif; margin: 0 0 10pt">&nbsp;</P>
  
  <TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%">
  <TR STYLE="vertical-align: top">
      <TD STYLE="width: 24px">&nbsp;</TD>
      <TD STYLE="width: 24px; font: 11pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>(2)</B></FONT></TD>
      <TD STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; text-decoration: underline"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B><U>Liquidity and Financing Arrangements </U></B></FONT></TD></TR>
  </TABLE>
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>Liquidity</B>&mdash;There are several
  factors that may materially affect our liquidity during the reasonably foreseeable future. We view this period as the twelve month
  period from the date of the financial statements in this Form 10-Q, <I>i.e</I>., the period through June 30, 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 follow-on investments, if any, through the next twelve months.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>Cash and Cash Equivalents</B>&mdash;As
  of June 30, 2014, we had cash and cash equivalents of $17.2 million. We had $20.2 million of our net assets of $38.0 million invested
  in portfolio securities.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">As of December 31, 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 percentage of qualifying investments 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/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>Dividends</B>&mdash; We will pay
  out net investment income and/or realized capital gains, if any, on an annual basis as required under the 1940 Act.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>Investment Commitments</B>&mdash;As
  of June 30, 2014, we had no outstanding commitments to our portfolio company investments.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Under certain circumstances, we may
  be called on to make follow-on investments in certain portfolio companies. If we do not have sufficient funds to make follow-on
  investments, the portfolio company in need of the investment may be negatively impacted. Also, our equity interest in the estimated
  fair value of the portfolio company could be reduced.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>RIC Borrowings, Restricted Cash and
  Temporary Cash Investments</B>&mdash;We may periodically borrow sufficient funds to maintain the Fund&rsquo;s RIC status by utilizing
  a margin account with a securities brokerage firm. There is no assurance that such arrangement will be available in the future.
  If we are unable to borrow funds to make qualifying investments, we may no longer qualify as a RIC. We would then be subject to
  corporate income tax on the Fund&rsquo;s net investment income and realized capital gains, and distributions to stockholders would
  be subject to income tax as ordinary dividends. Failure to continue to qualify as a RIC could be materially adverse to us and our
  stockholders.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">We had no RIC borrowings or restricted
  cash as of June 30, 2014.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">As of December 31, 2013, we borrowed
  $15.0 million to maintain our RIC status by utilizing a margin account with a securities brokerage
  firm. We collateralized such borrowings with restricted cash and temporary cash investments in U.S. Treasury bills of $15.2 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/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>Certain Risks and Uncertainties</B>&mdash;
  Economic conditions since 2008 and resulting market dislocations have resulted in a significant decline in the availability of
  debt and equity for smaller and medium-sized enterprises. 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 six 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 below net asset value. Because
  of these challenges, our near-term strategies shifted from originating debt and equity investments to preserving liquidity necessary
  to meet our operational needs. Key initiatives that we have previously undertaken to provide necessary liquidity include monetizations,
  the suspension of dividends and the internalization of management. Although we cannot assure you that such initiatives will be
  sufficient, we believe we have sufficient liquidity to meet our 2014 operating requirements.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>
  
  
  <!-- Field: Page; Sequence: 13 -->
      <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="#TableOfContents" 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 -->13<!-- 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: 11pt/115% Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>
  
  <TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%">
  <TR STYLE="vertical-align: top">
      <TD STYLE="width: 24px">&nbsp;</TD>
      <TD STYLE="width: 24px; font: 11pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>(3)</B></FONT></TD>
      <TD STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; text-decoration: underline"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B><U>Significant Accounting Policies </U></B></FONT></TD></TR>
  </TABLE>
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">The following is a summary of significant
  accounting policies followed by the Fund in the preparation of its financial statements:</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>Use of Estimates</B>&mdash;The preparation
  of financial statements in accordance with GAAP requires us to make estimates and assumptions that affect the reported amounts
  and disclosures in the financial statements. Although we believe the estimates and assumptions used in preparing these financial
  statements and related notes are reasonable in light of known facts and circumstances, actual results could differ from those estimates.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>Valuation of Investments</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/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><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/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><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/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><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 securities
  represented 14.0% and 11.0% of our investments in portfolio securities as of June 30, 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/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">During the 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,  changes in general market conditions, or a default by the issuer). 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/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>Market approach</B>&mdash;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 (&ldquo;EBITDA&rdquo;) generated by the company for the trailing twelve month period. Adjustments
  to the company&rsquo;s EBITDA, including those for non-recurring items, may be considered. Multiples are estimated based on current
  market conditions and past experience in the private company marketplace and are subjective in nature. We will apply liquidity
  and other discounts 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/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>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. 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>
  
  
  <!-- Field: Page; Sequence: 14 -->
      <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="#TableOfContents" 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 -->14<!-- 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: 10pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>Asset approach&mdash;</B>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&rsquo;s inability to meet future obligations; or 4) the portfolio company&rsquo;s reorganization or bankruptcy.
  Consideration is also given as to whether a liquidation event would be orderly or forced.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">We base adjustments upon such factors
  as the portfolio company&rsquo;s earnings, cash flow and net worth, the market prices for similar securities of comparable companies,
  an assessment of the company&rsquo;s current and future financial prospects and various other factors and assumptions. In the case
  of unsuccessful 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/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Our general intent is to hold our loans
  to maturity when appraising our privately held debt investments. As such, we believe that the fair value will not exceed the cost
  of the investment. However, in addition to the previously described analysis involving allocation of value to the debt instrument,
  we perform a yield analysis to determine if a debt security has been impaired.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">The 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/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Calibri, Helvetica, Sans-Serif; margin: 0; text-indent: 24.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Because
  of the inherent uncertainty of the valuation of portfolio securities which do not have readily ascertainable market values,
  amounting to $15.1 million and $13.3 million as of June 30, 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 June 30, 2014, one of our portfolio investments, 395,839 common shares of MVC was publicly listed on the NYSE and our
  holding of &euro;1,200,790 [$1.5 million] in 6-year notes of OPG was publicly listed on the Luxembourg Stock Exchange. As of
  December 31, 2013, the 73,666 ordinary shares of OPG were publicly listed on the NYSE Euronext Paris Exchange, and our
  holding of &euro;1,200,790 [$1.5 million] in 6-year OPG Notes was  listed on the Luxembourg Stock Exchange. On April 3, 2014,
  we sold all of our 73,666 remaining shares of OPG, wherein we received $61,867 in net proceeds and reported a realized loss
  of $0.06 million. However, during the six months ended June 30, 2014 and the year ended December 31,
  2013,  there had been no significant trading activity in the OPG Notes.</FONT></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">We adjust our net asset value for the
  changes in the value of our publicly held securities, if applicable, and material changes in the value of private securities, generally
  determined on a quarterly basis or as announced in a press release, and reports those amounts to Lipper Analytical Services, Inc.
  Our net asset value appears in various publications, including <I>Barron&rsquo;s </I>and <I>The Wall Street Journal</I>.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><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/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>Investment Transactions</B>&mdash;Investment
  transactions are recorded on the accrual method. Realized gains and losses on investments sold are computed on a specific identification
  basis.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">We classify our investments in accordance
  with the requirements of the 1940 Act. Under the 1940 Act, &ldquo;Control Investments&rdquo; are defined as investments in companies
  in which 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/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"></P>
  
  <!-- Field: Page; Sequence: 15 -->
      <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="#TableOfContents" 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 -->15<!-- Field: /Sequence --></TD><TD STYLE="text-align: right; width: 33%">&nbsp;</TD></TR></TABLE></DIV>
      <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
      <!-- Field: /Page -->
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>Interest Income Recognition</B>&mdash;We
  record interest income, adjusted for amortization of premium and accretion of discount, on an accrual basis to the extent that
  we expect to collect such amounts. We 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/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>Payment in Kind
  Interest (PIK)</B>&mdash;We have loans in our portfolio that may pay PIK interest. We add PIK interest, if any, computed at
  the contractual rate specified in each loan agreement, to the principal balance of the loan and record it as interest income.
  To maintain our status as a RIC, we may be required to 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/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>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 &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/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>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/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">All corporations incorporated in the
  State of Delaware are required to file an Annual Report and to pay a franchise tax. As a result, we paid Delaware Franchise tax
  in the amount of $0.01 million for the year ended December 31, 2013.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">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 Texas state income tax for the year ended December 31, 2013.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><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/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">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/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">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/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">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/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">We will record unrealized depreciation
  on investments when we determine that the fair value of a security is less than its cost basis, and will record unrealized appreciation
  when we determine that the fair value is greater than its cost basis.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  
  <!-- Field: Page; Sequence: 16 -->
      <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="#TableOfContents" 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 -->16<!-- 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: 10pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">As of June 30, 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 (unaudited):</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 100%">
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="font: bold 8pt Times New Roman, Times, Serif; 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; font-weight: bold">Fair Value Measurements as
      of June 30, 2014</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="font: italic bold 8pt Times New Roman, Times, Serif; border-bottom: Black 1pt solid">(in thousands)</TD><TD STYLE="font: bold 8pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font: bold 8pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Total</TD><TD STYLE="font: bold 8pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font: bold 8pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Quoted Prices in <BR>Active Markets <BR>for Identical <BR>Assets <BR>(Level 1)</TD><TD STYLE="font: bold 8pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font: bold 8pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Significant Other <BR>Observable <BR>Inputs <BR>(Level 2)</TD><TD STYLE="font: bold 8pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font: bold 8pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Significant <BR>Unobservable <BR>Inputs <BR>(Level 3)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif">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><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: 10pt Times New Roman, Times, Serif">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="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 10pt; width: 40%">Control investments</TD><TD STYLE="width: 3%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 10%; font: 10pt Times New Roman, Times, Serif; text-align: right">12,044</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 3%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 10%; font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 3%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 10%; font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 3%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 10%; font: 10pt Times New Roman, Times, Serif; text-align: right">12,044</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 10pt">Affiliate investments</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">968</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">968</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 10pt">Non-affiliate investments</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">7,202</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">5,126</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">2,076</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif">Total investments</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">20,214</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">5,126</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">15,088</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
  </TABLE>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">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/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 100%">
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="font: bold 8pt Times New Roman, Times, Serif; text-align: center"></TD><TD STYLE="padding-bottom: 1pt; text-align: center; vertical-align: bottom"><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: italic bold 8pt Times New Roman, Times, Serif; border-bottom: Black 1pt solid">(in thousands)</TD><TD STYLE="font: bold 8pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font: bold 8pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Total</TD><TD STYLE="font: bold 8pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font: bold 8pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Quoted Prices in <BR>Active Markets <BR>for Identical <BR>l Assets <BR>(Level 1)</TD><TD STYLE="font: bold 8pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font: bold 8pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Significant Other <BR>Observable Input <BR>(Level 2)</TD><TD STYLE="font: bold 8pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font: bold 8pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Significant <BR>Unobservable <BR>Inputs <BR>(Level 3)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif">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><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: 10pt Times New Roman, Times, Serif">Investments:</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="width: 40%; font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 10pt">Control investments</TD><TD STYLE="width: 3%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 10%; font: 10pt Times New Roman, Times, Serif; text-align: right">11,105</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 3%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 10%; font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 3%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 10%; font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 3%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 10%; font: 10pt Times New Roman, Times, Serif; text-align: right">11,105</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 10pt">Affiliate investments</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">250</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">250</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt; padding-left: 10pt">Non-affiliate investments</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">2,149</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">169</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">1,980</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Total investments</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">13,504</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">169</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">13,335</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt">Temporary cash investments</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">15,150</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">15,150</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt">Total investments and temporary cash investments</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">28,654</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">15,319</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">13,335</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
  </TABLE>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">The following table provides a reconciliation
  of fair value changes during the six months ended June 30, 2014 for all investments for which we determine fair value using unobservable
  (Level 3) factors (unaudited):</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 100%">
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="font: bold 8pt Times New Roman, Times, Serif; 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; font-weight: bold; text-decoration: none">Fair value measurements using
      significant unobservable inputs (Level 3)</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="font: italic bold 8pt Times New Roman, Times, Serif; border-bottom: Black 1pt solid">(in thousands)</TD><TD STYLE="font: bold 8pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font: bold 8pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Control <BR>Investments</TD><TD STYLE="font: bold 8pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font: bold 8pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Affiliate <BR>Investments</TD><TD STYLE="font: bold 8pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font: bold 8pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Non-affiliate <BR>Investments</TD><TD STYLE="font: bold 8pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font: bold 8pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Total</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 40%">Fair value as of December&nbsp;31, 2013</TD><TD STYLE="width: 3%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 10%; font: 10pt Times New Roman, Times, Serif; text-align: right">11,105</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 3%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 10%; font: 10pt Times New Roman, Times, Serif; text-align: right">250</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 3%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 10%; font: 10pt Times New Roman, Times, Serif; text-align: right">1,980</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 3%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 10%; font: 10pt Times New Roman, Times, Serif; text-align: right">13,335</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif">Realized losses</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(63</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(63</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif">Change in unrealized appreciation (depreciation)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">800</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">718</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(21</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">1,497</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif">Purchases of portfolio securities</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">139</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">117</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">256</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif">Proceeds from sales/dispositions</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">63</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">63</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif">Fair value as of June 30, 2014 (unaudited)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">12,044</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">968</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">2,076</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">15,088</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
  </TABLE>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  
  <!-- Field: Page; Sequence: 17 -->
      <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="#TableOfContents" 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 -->17<!-- 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: 10pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">The following table provides a reconciliation
  of fair value changes during the six months ended June 30, 2013 for all investments for which we determine fair value using unobservable
  (Level 3) factors (unaudited):</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 100%">
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="font: bold 8pt Times New Roman, Times, Serif; text-align: center"></TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="15" STYLE="text-align: center; vertical-align: bottom; border-bottom: Black 1pt solid"><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: italic bold 8pt Times New Roman, Times, Serif; border-bottom: Black 1pt solid">(in thousands)</TD><TD STYLE="font: bold 8pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font: bold 8pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Control Investments</TD><TD STYLE="font: bold 8pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font: bold 8pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Affiliate <BR>Investments</TD><TD STYLE="font: bold 8pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font: bold 8pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Non-affiliate <BR>Investments</TD><TD STYLE="font: bold 8pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font: bold 8pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Total</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 40%">Fair value as of December&nbsp;31, 2012</TD><TD STYLE="width: 3%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 10%; font: 10pt Times New Roman, Times, Serif; text-align: right">7,419</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 3%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 10%; font: 10pt Times New Roman, Times, Serif; text-align: right">150</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 3%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 10%; font: 10pt Times New Roman, Times, Serif; text-align: right">1,425</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 3%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 10%; font: 10pt Times New Roman, Times, Serif; text-align: right">8,994</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif">Realized losses</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(1,795</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(1,795</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif">Change in unrealized appreciation (depreciation)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(531</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">1,777</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">1,246</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif">Purchases of portfolio securities</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">169</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">169</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif">Proceeds from sales/dispositions</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(9</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(9</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif">Fair value as of June 30, 2013 (unaudited)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">7,057</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">150</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">1,398</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">8,605</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
  </TABLE>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>Significant Unobservable Inputs</B>
  &mdash; Our investment portfolio is not composed of homogeneous debt and equity securities that can be valued with a small number
  of inputs. Instead, the majority of our investment portfolio is composed of complex debt and equity securities with distinct contract
  terms and conditions. As such, our valuation of each investment in our portfolio is unique and complex, often factoring in numerous
  different inputs, including historical and forecasted financial and operational performance of the portfolio company, project cash
  flows, market multiples comparable market transactions, the priority of our securities compared with those of other investors,
  credit risk, interest rates, independent valuations and reviews and other inputs.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal 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 June 30, 2014 (unaudited):</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%">
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="padding-bottom: 1pt; padding-left: 5.4pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="padding-bottom: 1pt; padding-left: 5.4pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="padding-bottom: 1pt; padding-left: 5.4pt">&nbsp;</TD><TD STYLE="font: bold 8pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: bold 8pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD COLSPAN="5" STYLE="border-bottom: Black 1pt solid; font: bold 8pt Times New Roman, Times, Serif; text-align: center; vertical-align: bottom"><FONT STYLE="font: 8pt Times New Roman, Times, Serif"><B>Range</B></FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: italic bold 8pt Times New Roman, Times, Serif; text-decoration: none; text-align: left; border-bottom: Black 1pt solid; padding-left: 5.4pt">(in thousands)</TD><TD STYLE="font: bold 8pt Times New Roman, Times, Serif; text-decoration: none; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: bold 8pt Times New Roman, Times, Serif; text-decoration: none; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: bold 8pt Times New Roman, Times, Serif; text-decoration: none; text-align: center"><FONT STYLE="font: 8pt Times New Roman, Times, Serif"><B>Fair Value</B></FONT></TD><TD STYLE="padding-bottom: 1pt; font: bold 8pt Times New Roman, Times, Serif; text-decoration: none; text-align: left">&nbsp;</TD><TD STYLE="font: bold 8pt Times New Roman, Times, Serif; text-decoration: none; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="font: bold 8pt Times New Roman, Times, Serif; text-decoration: none; text-align: center; border-bottom: Black 1pt solid; padding-left: 5.4pt">Valuation Techniques</TD><TD STYLE="font: bold 8pt Times New Roman, Times, Serif; text-decoration: none; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="font: bold 8pt Times New Roman, Times, Serif; text-decoration: none; text-align: center; border-bottom: Black 1pt solid; padding-left: 5.4pt; vertical-align: bottom">Unobservable Inputs</TD><TD STYLE="font: bold 8pt Times New Roman, Times, Serif; text-decoration: none; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: bold 8pt Times New Roman, Times, Serif; text-decoration: none; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: bold 8pt Times New Roman, Times, Serif; text-decoration: none; text-align: center; vertical-align: bottom"><FONT STYLE="font: 8pt Times New Roman, Times, Serif"><B>Minimum</B></FONT></TD><TD STYLE="padding-bottom: 1pt; font: bold 8pt Times New Roman, Times, Serif; text-decoration: none; text-align: left">&nbsp;</TD><TD STYLE="font: bold 8pt Times New Roman, Times, Serif; text-decoration: none; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: bold 8pt Times New Roman, Times, Serif; text-decoration: none; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: bold 8pt Times New Roman, Times, Serif; text-decoration: none; text-align: center; vertical-align: bottom"><FONT STYLE="font: 8pt Times New Roman, Times, Serif"><B>Maximum</B></FONT></TD><TD STYLE="padding-bottom: 1pt; font: bold 8pt Times New Roman, Times, Serif; text-decoration: none; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="width: 26%; font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 5.4pt">Secured and subordinated debt</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 10%; font: 10pt Times New Roman, Times, Serif; text-align: right">5,104</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="width: 22%; font: 10pt Times New Roman, Times, Serif; text-align: center; padding-left: 5.4pt">Yield analysis</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="width: 15%; font: 10pt Times New Roman, Times, Serif; text-align: center; padding-left: 5.4pt">Market interest rate</TD><TD STYLE="width: 1%; font: 8pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="width: 1%; font: 8pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; font: 8pt Times New Roman, Times, Serif; text-align: right">2.5</TD><TD STYLE="width: 1%; font: 8pt Times New Roman, Times, Serif; text-align: left">%</TD><TD STYLE="width: 1%; font: 8pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="width: 1%; font: 8pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; font: 8pt Times New Roman, Times, Serif; text-align: right">10.5</TD><TD STYLE="width: 1%; font: 8pt Times New Roman, Times, Serif; text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="padding-left: 5.4pt">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-left: 5.4pt">Yield analysis</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-left: 5.4pt">Discount for lack of marketability</TD><TD STYLE="font: 8pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 8pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 8pt Times New Roman, Times, Serif; text-align: right">2.5</TD><TD STYLE="font: 8pt Times New Roman, Times, Serif; text-align: left">%</TD><TD STYLE="font: 8pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 8pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 8pt Times New Roman, Times, Serif; text-align: right">12.0</TD><TD STYLE="font: 8pt Times New Roman, Times, Serif; text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="padding-left: 5.4pt">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-left: 5.4pt">Yield analysis</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-left: 5.4pt">Discount for lack of marketability</TD><TD STYLE="font: 8pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 8pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 8pt Times New Roman, Times, Serif; text-align: right">7.2</TD><TD STYLE="font: 8pt Times New Roman, Times, Serif; text-align: left">%</TD><TD STYLE="font: 8pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 8pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 8pt Times New Roman, Times, Serif; text-align: right">25</TD><TD STYLE="font: 8pt Times New Roman, Times, Serif; text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="padding-left: 5.4pt">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-left: 5.4pt">Yield analysis</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-left: 5.4pt">Control premium</TD><TD STYLE="font: 8pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 8pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 8pt Times New Roman, Times, Serif; text-align: right">12</TD><TD STYLE="font: 8pt Times New Roman, Times, Serif; text-align: left">%</TD><TD STYLE="font: 8pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 8pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 8pt Times New Roman, Times, Serif; text-align: right">171</TD><TD STYLE="font: 8pt Times New Roman, Times, Serif; text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="padding-left: 5.4pt">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-left: 5.4pt">New transaction</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-left: 5.4pt">Discount</TD><TD STYLE="font: 8pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 8pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 8pt Times New Roman, Times, Serif; text-align: right">0</TD><TD STYLE="font: 8pt Times New Roman, Times, Serif; text-align: left">%</TD><TD STYLE="font: 8pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 8pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 8pt Times New Roman, Times, Serif; text-align: right">100</TD><TD STYLE="font: 8pt Times New Roman, Times, Serif; text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="padding-left: 5.4pt">&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="padding-left: 5.4pt">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="padding-left: 5.4pt">&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="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 5.4pt">Common stock</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">968</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-left: 5.4pt">Income/market approach</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-left: 5.4pt">Market multiple/discount for lack of marketability/control premium</TD><TD STYLE="font: 8pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 8pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 8pt Times New Roman, Times, Serif; text-align: right">0</TD><TD STYLE="font: 8pt Times New Roman, Times, Serif; text-align: left">%</TD><TD STYLE="font: 8pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 8pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 8pt Times New Roman, Times, Serif; text-align: right">100</TD><TD STYLE="font: 8pt Times New Roman, Times, Serif; text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="padding-left: 5.4pt">&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="padding-left: 5.4pt">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="padding-left: 5.4pt">&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="padding-left: 5.4pt">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-left: 5.4pt">Asset approach</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-left: 5.4pt">Recovery rate</TD><TD STYLE="font: 8pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 8pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 8pt Times New Roman, Times, Serif; text-align: right">0</TD><TD STYLE="font: 8pt Times New Roman, Times, Serif; text-align: left">%</TD><TD STYLE="font: 8pt Times New Roman, Times, Serif">&nbsp;</TD>
      <TD STYLE="font: 8pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 8pt Times New Roman, Times, Serif; text-align: right">100</TD><TD STYLE="font: 8pt Times New Roman, Times, Serif; text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt; padding-left: 5.4pt">Limited liability company investments</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">9,016</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1pt; padding-left: 5.4pt">Income/market approach</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1pt; padding-left: 5.4pt">Reserve adjustment factors</TD><TD STYLE="font: 8pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="padding-bottom: 1pt; font: 8pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font: 8pt Times New Roman, Times, Serif; text-align: right">75</TD><TD STYLE="padding-bottom: 1pt; font: 8pt Times New Roman, Times, Serif; text-align: left">%</TD><TD STYLE="font: 8pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="padding-bottom: 1pt; font: 8pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font: 8pt Times New Roman, Times, Serif; text-align: right">100</TD><TD STYLE="padding-bottom: 1pt; font: 8pt Times New Roman, Times, Serif; text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="padding-left: 5.4pt">&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="padding-left: 5.4pt">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="padding-left: 5.4pt">&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="padding-bottom: 2.5pt; padding-left: 5.4pt">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">15,088</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="padding-bottom: 2.5pt; padding-left: 5.4pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="padding-bottom: 2.5pt; padding-left: 5.4pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; 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="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
  </TABLE>
  
  
  <!-- Field: Page; Sequence: 18 -->
      <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="#TableOfContents" 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 -->18<!-- 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: 11pt/115% Calibri, Helvetica, Sans-Serif; margin: 0 0 10pt">&nbsp;</P>
  
  <TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%">
  <TR STYLE="vertical-align: top">
      <TD STYLE="width: 24px">&nbsp;</TD>
      <TD STYLE="width: 24px; font: 11pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>(4)</B></FONT></TD>
      <TD STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; text-decoration: underline"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B><U>Related Party Transactions and Agreements </U></B></FONT></TD></TR>
  </TABLE>
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Except as noted below, as compensation
  for services to the Fund, each Independent Director receives an annual fee of $20,000 paid quarterly in arrears, a fee of $2,000
  for each meeting of the Board of Directors attended in person, a fee of $1,000 for participation in each telephonic meeting of
  the Board and a fee of $1,000 for each committee meeting attended, and reimbursement of all out-of-pocket expenses relating to
  attendance at such meetings. A quarterly fee of $15,000 is paid to the Chairman of the Audit Committee and a quarterly fee of $3,750
  is paid to the Chairman of the Independent Directors. We may also pay other one-time or recurring fees to members of our Board
  of Directors in special circumstances. None of our interested directors receive annual fees for their service on the Board of Directors.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">In 2011, Equus Energy, LLC, a wholly-owned
  subsidiary of the Fund, entered into a consulting agreement with Global Energy Associates, LLC (&ldquo;Global Energy&rdquo;) to
  provide consulting services for energy related investments. Henry W. Hankinson, Director, is a managing partner and co-founder
  of Global Energy. Payments to Global Energy totaled $37,500 for each of the six months ended June 30, 2014 and 2013.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">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/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%">
  <TR STYLE="vertical-align: top">
      <TD STYLE="width: 24px">&nbsp;</TD>
      <TD STYLE="width: 24px; font: 11pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>(5)</B></FONT></TD>
      <TD STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; text-decoration: underline"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B><U>Dividends</U> </B></FONT></TD></TR>
  </TABLE>
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">We will pay out net investment income
  and/or realized capital gains, if any, on an annual basis as required under the 1940 Act.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%">
  <TR STYLE="vertical-align: top">
      <TD STYLE="width: 24px">&nbsp;</TD>
      <TD STYLE="width: 24px; font: 11pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>(6)</B></FONT></TD>
      <TD STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; text-decoration: underline"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B><U>Portfolio Securities </U></B></FONT></TD></TR>
  </TABLE>
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">On April 3, 2014, we
  sold all of our 73,666 remaining shares of OPG, wherein we received $61,867 in net proceeds and reported a realized loss of
  $0.06 million.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 10pt; text-indent: 24.5pt">During the six months
  ended June, 2014, we capitalized legal and consulting expenses of $0.1 million relating to Spectrum Management. We also
  received a semi-annual interest payment of $0.04 million in cash and $0.1 million in the form of PIK&rsquo;d interest in
  respect of our &euro;1.2 million [$1.5 million] in OPG notes. On May 14, 2014, we  sold to MVC 2,112,000 shares of the
  Fund&rsquo;s common stock in exchange for 395,839 shares of MVC. (see <I>Plan of Reorganization</I> below).</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 10pt; text-indent: 24.5pt">During the six months
  ended June, 2014, we realized net capital gains of $0.7 million related to our Share Exchange with MVC (see <I>Plan of Reorganization</I> below).</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Net unrealized depreciation on investments
  decreased $1.0 million during the six months ended June 30, 2014, to a net unrealized depreciation of $3.0 million. Such decrease
  in unrealized depreciation is largely due to the following changes:</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
  <TD STYLE="width: 24.5pt"></TD><TD STYLE="width: 36pt"><FONT STYLE="font-size: 10pt">(i)</FONT></TD><TD><FONT STYLE="font-size: 10pt">Increase in fair value of our holding in Equus Energy, LLC of $0.8 million due to an
                                                                                                      increase in comparable transactions for mineral leases, continued improved economic conditions, industry outlook, pricing
                                                                                                      assumptions, as                                                                                                     well as
                                                                                                      additional                                                                                                     proved
                                                                                                      reserves                                                                                                           from new
                                                                                                      drilling and                                                                                                     recompletion
                                                                                                      activities.</FONT></TD></TR></TABLE>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
  <TD STYLE="width: 24.5pt"></TD><TD STYLE="width: 36pt"><FONT STYLE="font-size: 10pt">(ii)</FONT></TD><TD><FONT STYLE="font-size: 10pt">Increase in fair value of our shareholding in PalletOne, Inc. of $0.7 million due to an
                                                                                                       improvement in the industry sector for packaging companies and continued revenue and earnings growth. </FONT></TD></TR></TABLE>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
  <TD STYLE="width: 24.5pt"></TD><TD STYLE="width: 36pt"><FONT STYLE="font-size: 10pt">(iii)</FONT></TD><TD><FONT STYLE="font-size: 10pt">Decrease in fair value of our</FONT> shareholding in MVC of $0.4 million due to a
                                                                                                        difference                                                                                                       between our
                                                                                                        cost                                                                                                       basis
                                                                                                        in the MVC shares and the closing trading price of the MVC shares on June 30, 2014. Our cost basis included
                                                                                                        the closing trading price of the shares on
                                                                                                        May                                                                                                                     14,
                                                                                                        2014 (the closing date of the Share Exchange) as well as capitalized transaction costs of $0.5 million incurred in connection
                                                                                                        with the                                                                                                       Share
                                                                                                        Exchange.</TD></TR></TABLE>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">During the six months ended June 30,
  2013, we capitalized legal and consulting expenses of $0.2 million relating to Spectrum Management, LLC. We also received a semi-annual
  interest payment of $0.03 million and a 5.75% partial principal repayment of $0.01 million in respect of our &euro;1.2 million
  [$1.5 million] in OPG notes.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">During the six months ended June 30,
  2013, we realized capital losses of $1.8 million due to the asset sale of The Bradshaw Group to PartsNow! LLC. The structure and
  pricing of the transaction was such that only the Class A preferred shareholders received any proceeds. There were no proceeds
  to the other equity classes, including the Classes B, D, and E preferred stock and warrants owned by the Fund. The Fund invested
  in Bradshaw in May 2000 and the Fund&rsquo;s investment has been valued at $0 since 2002.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"></P>
  
  <!-- Field: Page; Sequence: 19 -->
      <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="#TableOfContents" 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 -->19<!-- Field: /Sequence --></TD><TD STYLE="text-align: right; width: 33%">&nbsp;</TD></TR></TABLE></DIV>
      <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
      <!-- Field: /Page -->
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Net unrealized depreciation on investments
  decreased to $16.0 million during the six months ended June 30, 2013, from a net unrealized depreciation of $17.2 million.&nbsp;
  Such decrease in unrealized depreciation is largely due to the following changes:</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
  <TD STYLE="width: 24.5pt"></TD><TD STYLE="width: 36pt"><FONT STYLE="font-size: 10pt">(i)</FONT></TD><TD><FONT STYLE="font-size: 10pt">Decrease in fair value of our holding in Equus Energy, LLC of $0.1 million due to operating expenses.</FONT></TD></TR></TABLE>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 0 60.5pt; text-indent: 0.5in"></P>
  
  
  
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
  <TD STYLE="width: 24.5pt"></TD><TD STYLE="width: 36pt"><FONT STYLE="font-size: 10pt">(ii)</FONT></TD><TD><FONT STYLE="font-size: 10pt">Decrease in fair value of our holdings in Spectrum Management, LLC of $0.3 million due to a decline
  in operating performance and $0.2 million in capitalized legal and consulting expenses. </FONT></TD></TR></TABLE>
  
  <P STYLE="font: 10pt/115% Times New Roman, Times, Serif; margin: 0 0 0 0.5in">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
  <TD STYLE="width: 24.5pt"></TD><TD STYLE="width: 36pt"><FONT STYLE="font-size: 10pt">(iii)</FONT></TD><TD><FONT STYLE="font-size: 10pt">Transfer of unrealized loss to realized loss of our holding in The Bradshaw Group (&ldquo;Bradshaw&rdquo;)
  of $1.8 million upon the asset sale of the investment.</FONT></TD></TR></TABLE>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>
  
  <TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%">
  <TR STYLE="vertical-align: top">
      <TD STYLE="width: 24px">&nbsp;</TD>
      <TD STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; width: 24px"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>(7)</B></FONT></TD>
      <TD STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; text-decoration: underline"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B><U>Plan
      of Reorganization - Share Exchange with MVC Capital</U> </B></FONT></TD></TR>
  </TABLE>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 22.5pt 0 0; text-indent: 24.5pt">On May 14, 2014, we announced
  that the Fund intended to effect a reorganization pursuant to Section 2(a)(33) of the 1940 Act. As a first step to consummating
  the reorganization, we sold to MVC 2,112,000 newly-issued shares of the Fund&rsquo;s common stock in exchange for 395,839 shares
  of MVC (such transaction is hereinafter referred to as the &ldquo;Share Exchange&rdquo;). MVC is a business development company
  traded on the New York Stock Exchange that provides long-term debt and equity investment capital to fund growth, acquisitions and
  recapitalizations of companies in a variety of industries. The Share Exchange was calculated based on the Fund&rsquo;s and MVC&rsquo;s
  respective net asset value per share. The number of MVC shares received by Equus represents approximately 1.73% of MVC&rsquo;s
  total outstanding shares of common stock.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 22.5pt 0 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 22.5pt 0 0; text-indent: 24.5pt"></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 22.5pt 0 0; text-indent: 24.5pt">Our shares were issued at
  the EQS closing stock price on May 14, 2014. The investment in MVC was recorded at MVC&rsquo;s closing stock price on the same
  date. This transaction resulted in a realized gain of $0.7 million.</P>
  
  
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 22.5pt 0 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 22.5pt 0 0; text-indent: 24.5pt">Pursuant to the terms of
  a Share Exchange Agreement, dated May 14, 2014, entered into by Equus and MVC which memorialized the Exchange, we intend to finalize
  the reorganization by pursuing a merger or consolidation with MVC, or a subsidiary of MVC, or one or more of MVC&rsquo;s portfolio
  companies (the &ldquo;Consolidation&rdquo;). Absent Equus merging or consolidating with/into MVC, our current intention is for
  Equus to (i) consummate the Consolidation, (ii) terminate its election to be classified as a business development company under
  the 1940 Act, and (iii) be restructured as a publicly-traded operating company focused on the energy and/or financial services
  sector.</P>
  
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>
  
  <TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%">
  <TR STYLE="vertical-align: top">
      <TD STYLE="width: 24px">&nbsp;</TD>
      <TD STYLE="width: 24px; font: 11pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>(8)</B></FONT></TD>
      <TD STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; text-decoration: underline"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B><U>Equus Energy, LLC</U> </B></FONT></TD></TR>
  </TABLE>
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">Equus Energy, 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 132 producing and non-producing oil and gas wells. The working
  interests include associated development rights of approximately 21,620 acres situated on 13 separate properties in Texas and Oklahoma.
  The working interests range from a <I>de minimus</I> amount to 50% of the leasehold that includes these wells.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.35pt">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 third 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/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.35pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">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/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</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="#TableOfContents" 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>
      <DIV STYLE="page-break-before: always; margin-top: 6pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
      <!-- Field: /Page -->
  
  <P STYLE="font: 10pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/115% Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Below is summarized consolidated financial information for Equus Energy as of June 30, 2014 and December 31,
  2013 and for the three and &nbsp;six months ended June, 2014 and 2013, respectively, (in thousands).</P>
  
  <P STYLE="font: 10pt/115% Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 100%">
  <TR STYLE="vertical-align: bottom">
      <TD COLSPAN="9" STYLE="font: bold 8pt Book Antiqua, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">EQUUS
      ENERGY LLC</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD COLSPAN="9" STYLE="font: bold 8pt Book Antiqua, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">BALANCE
      SHEETS</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD COLSPAN="9" STYLE="font: bold 8pt Book Antiqua, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">(Unaudited)</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="font: bold 8pt Book Antiqua, Times, Serif; text-align: center"></TD><TD STYLE="font: bold 8pt Book Antiqua, Times, Serif; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD COLSPAN="3" STYLE="font: bold 8pt Book Antiqua, Times, Serif; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">June
      30, <BR>2014</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD COLSPAN="3" STYLE="text-align: center; vertical-align: middle; border-bottom: Black 1pt solid"><FONT STYLE="font: 8pt Times New Roman, Times, Serif"><B>December
      31, </B></FONT><FONT STYLE="font-family: Times New Roman, Times, Serif"><BR><FONT STYLE="font-size: 8pt"><B>2013</B></FONT></FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: bold 8pt Book Antiqua, Times, Serif; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Assets</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: left; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Current
      assets:</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="width: 56%; font: 8pt Book Antiqua, Times, Serif; padding-left: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Cash
      and cash equivalents</FONT></TD><TD STYLE="width: 8%; font: 8pt Book Antiqua, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="width: 1%; font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="width: 12%; font: 8pt Book Antiqua, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">427</FONT></TD><TD STYLE="width: 1%; font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 8%; font: 8pt Book Antiqua, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="width: 1%; font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="width: 12%; font: 8pt Book Antiqua, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">486</FONT></TD><TD STYLE="width: 1%; font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: left; padding-left: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Accounts
      receivable</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">208</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">288</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: left; padding-left: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"></FONT>Prepaid expenses</TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font: 8pt Book Antiqua, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">92</FONT></TD><TD STYLE="padding-bottom: 1pt; font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font: 8pt Book Antiqua, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&mdash;&nbsp;&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt; font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: left; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Total
      current assets</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">727</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">774</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: left; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Oil
      and gas properties</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">7,801</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">7,700</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: left; padding-bottom: 1pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Less:
      accumulated depletion, depreciation and amortization</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font: 8pt Book Antiqua, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">(1,475</FONT></TD><TD STYLE="padding-bottom: 1pt; font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">)</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font: 8pt Book Antiqua, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">(983</FONT></TD><TD STYLE="padding-bottom: 1pt; font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">)</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: left; padding-bottom: 1pt; padding-left: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Net
      oil and gas properties</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font: 8pt Book Antiqua, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">6,326</FONT></TD><TD STYLE="padding-bottom: 1pt; font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font: 8pt Book Antiqua, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">6,717</FONT></TD><TD STYLE="padding-bottom: 1pt; font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: left; padding-left: 5.4pt; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Other
      non-current investment</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">178</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: left; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">&mdash;&nbsp;&nbsp;</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: left; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: left; padding-bottom: 2.5pt; padding-left: 20pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Total
      assets</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; font: 8pt Book Antiqua, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">7,231</FONT></TD><TD STYLE="padding-bottom: 2.5pt; font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; font: 8pt Book Antiqua, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">7,491</FONT></TD><TD STYLE="padding-bottom: 2.5pt; font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: bold 8pt Book Antiqua, Times, Serif; text-align: left; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Liabilities
      and members' capital</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: left; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Current
      liabilities:</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: left; padding-left: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Accounts
      payable and other</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">109</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">324</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: left; padding-bottom: 1pt; padding-left: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Due
      to affiliate</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font: 8pt Book Antiqua, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">566</FONT></TD><TD STYLE="padding-bottom: 1pt; font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font: 8pt Book Antiqua, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">364</FONT></TD><TD STYLE="padding-bottom: 1pt; font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: left; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Total
      current liabilities</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">675</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"></FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">688</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: left; padding-bottom: 1pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Asset
      retirement obligations</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font: 8pt Book Antiqua, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">181</FONT></TD><TD STYLE="padding-bottom: 1pt; font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font: 8pt Book Antiqua, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">178</FONT></TD><TD STYLE="padding-bottom: 1pt; font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: left; padding-bottom: 1pt; padding-left: 20pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Total
      liabilities</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font: 8pt Book Antiqua, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">856</FONT></TD><TD STYLE="padding-bottom: 1pt; font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font: 8pt Book Antiqua, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">866</FONT></TD><TD STYLE="padding-bottom: 1pt; font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: left; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Members'
      capital</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: left; padding-bottom: 1pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Total
      members' capital</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font: 8pt Book Antiqua, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">6,375</FONT></TD><TD STYLE="padding-bottom: 1pt; font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font: 8pt Book Antiqua, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">6,625</FONT></TD><TD STYLE="padding-bottom: 1pt; font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: left; padding-bottom: 2.5pt; padding-left: 20pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Total
      liabilities and members' capital</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; font: 8pt Book Antiqua, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">7,231</FONT></TD><TD STYLE="padding-bottom: 2.5pt; font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; font: 8pt Book Antiqua, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">7,491</FONT></TD><TD STYLE="padding-bottom: 2.5pt; font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
  </TABLE>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 49.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  
  <!-- Field: Page; Sequence: 21 -->
      <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="#TableOfContents" 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 -->21<!-- 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: 10pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">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/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 100%">
  <TR STYLE="vertical-align: bottom">
      <TD COLSPAN="17" STYLE="font: bold 8pt Book Antiqua, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">EQUUS
      ENERGY, LLC</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD COLSPAN="17" STYLE="font: bold 8pt Book Antiqua, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">STATEMENTS
      OF OPERATIONS</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD COLSPAN="17" STYLE="font: bold 8pt Book Antiqua, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">(Unaudited)</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD COLSPAN="17"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font: bold 8pt Book Antiqua, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD COLSPAN="7" STYLE="font: bold 8pt Book Antiqua, Times, Serif; text-align: center; vertical-align: bottom"><FONT STYLE="font-family: Times New Roman, Times, Serif">Three
      months ended June 30</FONT>,</TD><TD STYLE="font: bold 8pt Book Antiqua, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD COLSPAN="7" STYLE="font: bold 8pt Book Antiqua, Times, Serif; text-align: center; vertical-align: bottom"><FONT STYLE="font-family: Times New Roman, Times, Serif">Six
      months ended June 30,</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font: bold 8pt Book Antiqua, Times, Serif; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD COLSPAN="3" STYLE="font: bold 8pt Book Antiqua, Times, Serif; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">2014</FONT></TD><TD STYLE="font: bold 8pt Book Antiqua, Times, Serif; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD COLSPAN="3" STYLE="font: bold 8pt Book Antiqua, Times, Serif; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">2013</FONT></TD><TD STYLE="font: bold 8pt Book Antiqua, Times, Serif; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD COLSPAN="3" STYLE="font: bold 8pt Book Antiqua, Times, Serif; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">2014</FONT></TD><TD STYLE="font: bold 8pt Book Antiqua, Times, Serif; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD COLSPAN="3" STYLE="font: bold 8pt Book Antiqua, Times, Serif; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">2013</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD COLSPAN="3"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD COLSPAN="3"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD COLSPAN="3"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD COLSPAN="3"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="width: 42%; font: 8pt Book Antiqua, Times, Serif; text-align: left; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Operating
      revenue</FONT></TD><TD STYLE="width: 1%; font: 8pt Book Antiqua, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="width: 1%; font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="width: 10%; font: 8pt Book Antiqua, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">532</FONT></TD><TD STYLE="width: 1%; font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 3%; font: 8pt Book Antiqua, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="width: 1%; font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="width: 10%; font: 8pt Book Antiqua, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">601</FONT></TD><TD STYLE="width: 1%; font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 3%; font: 8pt Book Antiqua, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="width: 1%; font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="width: 10%; font: 8pt Book Antiqua, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">1,072</FONT></TD><TD STYLE="width: 1%; font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 3%; font: 8pt Book Antiqua, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="width: 1%; font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="width: 10%; font: 8pt Book Antiqua, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">1,206</FONT></TD><TD STYLE="width: 1%; font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: left; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Operating
      expenses</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: left; padding-left: 35.85pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Direct
      operating expenses</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">261</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">324</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">596</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">652</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: left; padding-left: 35.85pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Depletion,
      depreciation, amortization and accretion</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">298</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">195</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">494</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">518</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: left; padding-bottom: 1pt; padding-left: 35.85pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">General
      and administrative</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font: 8pt Book Antiqua, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">80</FONT></TD><TD STYLE="padding-bottom: 1pt; font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font: 8pt Book Antiqua, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">(28</FONT></TD><TD STYLE="padding-bottom: 1pt; font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">)</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font: 8pt Book Antiqua, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">232</FONT></TD><TD STYLE="padding-bottom: 1pt; font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font: 8pt Book Antiqua, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">159</FONT></TD><TD STYLE="padding-bottom: 1pt; font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: left; padding-left: 71.85pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Total
      operating expenses</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">640</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">491</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">1,322</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">1,328</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: left; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Operating
      income (loss) before income tax expense</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">(108</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">)</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">110</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">(250</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">)</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">(122</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">)</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: left; padding-bottom: 1pt; padding-left: 35.85pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Income
      tax</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font: 8pt Book Antiqua, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&mdash;&nbsp;&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt; font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font: 8pt Book Antiqua, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">8</FONT></TD><TD STYLE="padding-bottom: 1pt; font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font: 8pt Book Antiqua, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&mdash;&nbsp;&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt; font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font: 8pt Book Antiqua, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">8</FONT></TD><TD STYLE="padding-bottom: 1pt; font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 8pt Book Antiqua, Times, Serif; text-align: left; padding-bottom: 2.5pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Net
      income (loss)</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; font: 8pt Book Antiqua, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">(108</FONT></TD><TD STYLE="padding-bottom: 2.5pt; font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">)</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; font: 8pt Book Antiqua, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">102</FONT></TD><TD STYLE="padding-bottom: 2.5pt; font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; font: 8pt Book Antiqua, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">(250</FONT></TD><TD STYLE="padding-bottom: 2.5pt; font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">)</FONT></TD><TD STYLE="font: 8pt Book Antiqua, Times, Serif; padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; font: 8pt Book Antiqua, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">(130</FONT></TD><TD STYLE="padding-bottom: 2.5pt; font: 8pt Book Antiqua, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">)</FONT></TD></TR>
  </TABLE>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>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/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">The capitalized costs of oil
  and gas properties, plus estimated future development costs relating to proved reserves and estimated cost of dismantlement
  and abandonment, net of salvage value, are amortized on a unit-of-production method over the estimated productive life of
  the proved oil and gas reserves. Unevaluated oil and gas properties are excluded from this calculation. Depletion,
  depreciation and amortization expense for the Company&rsquo;s oil and gas properties totaled $0.3 million and $0.2 million
  for the three months ended June 30, 2014 and 2013, respectively and $0.5 million for the six months ended June 30, 2014 and
  2013, respectively.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  
  <!-- Field: Page; Sequence: 22 -->
      <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="#TableOfContents" 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 -->22<!-- 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: 10pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Capitalized oil and gas property costs
  are limited to an amount (the ceiling limitation) equal to the sum of the following:</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
  <TD STYLE="width: 24.5pt"></TD><TD STYLE="width: 34pt">(a)</TD><TD>As of June 30, 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%;</TD></TR></TABLE>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 0 58.5pt; text-indent: -34pt">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
  <TD STYLE="width: 24.5pt"></TD><TD STYLE="width: 34pt">(b)</TD><TD>The cost of investments in unproved and unevaluated properties excluded from the costs being amortized; and</TD></TR></TABLE>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 0 58.5pt; text-indent: -34pt">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
  <TD STYLE="width: 24.5pt"></TD><TD STYLE="width: 34pt">(c)</TD><TD>The lower of cost or estimated fair value of unproved properties included in the costs being amortized.</TD></TR></TABLE>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">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 the six months ended June
  30, 2014 and 2013.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">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.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B><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/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt; 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/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B><U>Asset Retirement Obligations</U></B>
  - The fair value of asset retirement obligations are recorded in the period in which they are incurred if a reasonable estimate
  of fair value can be made, and the corresponding cost is capitalized as part of the carrying amount of the related long-lived asset.
  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. Fair value, to the extent possible, should include a market risk premium for unforeseeable
  circumstances. 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. The liability is accreted to its then present value each period, and the capitalized cost
  is depleted or amortized over the estimated recoverable reserves using the units-of-production method.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%">
  <TR STYLE="vertical-align: top">
      <TD STYLE="width: 24px">&nbsp;</TD>
      <TD STYLE="width: 24px; font: 11pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>(8)</B></FONT></TD>
      <TD STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; text-decoration: underline"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B><U>Subsequent Events</U> </B></FONT></TD></TR>
  </TABLE>
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Management performed an evaluation of
  the Fund&rsquo;s activity through the date the financial statements were issued, noting there were no subsequent events.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B>&nbsp;</B></P>
  
  
  <!-- Field: Page; Sequence: 23 -->
      <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="#TableOfContents" 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 -->23<!-- 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: 10pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><A NAME="a_010"></A><B><U>Item 2.</U> <U>Management&rsquo;s Discussion and Analysis
  of Financial Condition and Results of Operations Overview </U></B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">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/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">We attempt to maximize the return to
  stockholders in the form of current investment income and long-term capital gains by investing in the debt and equity securities
  of companies with a total enterprise value of between $5.0 million and $75.0 million, although we may engage in transactions with
  smaller or larger investee companies from time to time. We seek to invest primarily in companies pursuing growth either through
  acquisition or organically, leveraged buyouts, management buyouts and recapitalizations of existing businesses or special situations.
  Our income-producing investments consist principally of debt securities including subordinate debt, debt convertible into common
  or preferred stock, or debt combined with warrants and common and preferred stock. Debt and preferred equity financing may also
  be used to create long-term capital appreciation through the exercise and sale of warrants received in connection with the financing.
  We seek to achieve capital appreciation by making investments in equity and equity-oriented securities issued by privately-owned
  companies in transactions negotiated directly with such companies. Given market conditions over the past several years and the
  performance of our portfolio, our management and Board of Directors believe it is prudent to continue to review alternatives to
  refine and further clarify the current strategies.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; 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: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 22.5pt 0 0; text-indent: 24.5pt"><B>Plan of Reorganization
  </B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 22.5pt 0 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 22.5pt 0 0; text-indent: 24.5pt">On May 14, 2014,
  we announced that the Fund intended to effect a reorganization pursuant to Section 2(a)(33) of the 1940 Act. As a first step
  to consummating the reorganization, we sold to MVC 2,112,000 newly-issued shares of the Fund&rsquo;s common stock in
  exchange for 395,839 shares of MVC (such transaction is hereinafter referred to as the &ldquo;Share Exchange&rdquo;). MVC is
  a business development company traded on the New York Stock Exchange that provides long-term debt and equity investment
  capital to fund growth, acquisitions and recapitalizations of companies in a variety of industries. The Share Exchange was
  calculated based on the Fund&rsquo;s and MVC&rsquo;s respective net asset value per share. The number of MVC shares received
  by Equus represents approximately 1.73% of MVC&rsquo;s total outstanding shares of common stock. The number of Equus shares
  sold to MVC pursuant to the Share Exchange represents approximately 16.7% of our issued and outstanding shares of common
  stock at June 30, 2014.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 22.5pt 0 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 22.5pt 0 0; text-indent: 24.5pt">Pursuant to the terms of
  a Share Exchange Agreement, dated May 14, 2014, entered into by Equus and MVC which memorialized the Exchange, we intend to finalize
  the reorganization by pursuing a merger or consolidation with MVC, or a subsidiary of MVC, or one or more of MVC&rsquo;s portfolio
  companies (the &ldquo;Consolidation&rdquo;). Absent Equus merging or consolidating with/into MVC, our current intention is for
  Equus to (i) consummate the Consolidation, (ii) terminate its election to be classified as a business development company under
  the 1940 Act, and (iii) be restructured as a publicly-traded operating company focused on the energy and/or financial services
  sector.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 22.5pt 0 0; text-indent: 24.5pt"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 22.5pt 0 0; text-indent: 24.5pt"></P>
  
  
  <!-- Field: Page; Sequence: 24 -->
      <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="#TableOfContents" 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 -->24<!-- 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: 10pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 22.5pt 0 0; text-indent: 24.5pt"><B>Critical Accounting Policies
  </B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 22.5pt 0 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; 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/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>Valuation of Investments</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/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><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/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><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/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><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 14.0% and 11.0% of our investments in portfolio securities as of June 30, 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/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">During the 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/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>Market approach</B>&mdash;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 (&ldquo;EBITDA&rdquo;) generated by the company for the trailing twelve month period. Adjustments
  to the company&rsquo;s EBITDA, including those for non-recurring items, may be considered. Multiples are estimated based on current
  market conditions and past experience in the private company marketplace and are subjective in nature. We will apply liquidity
  and other discounts 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/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>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. 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/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  
  <!-- Field: Page; Sequence: 25 -->
      <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="#TableOfContents" 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 -->25<!-- 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: 10pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>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 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/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">We base adjustments upon such factors
  as the portfolio company&rsquo;s earnings, cash flow and net worth, the market prices for similar securities of comparable companies,
  an assessment of the company&rsquo;s current and future financial prospects and various other factors and assumptions. In the case
  of unsuccessful 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/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Our general intent is to hold our loans
  to maturity when appraising our privately held debt investments. As such, we believe that the fair value will not exceed the cost
  of the investment. However, in addition to the previously described analysis involving allocation of value to the debt instrument,
  we perform a yield analysis to determine if a debt security has been impaired.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">The 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/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Because
  of the inherent uncertainty of the valuation of portfolio securities which do not have readily ascertainable market values,
  amounting to $15.1 million and $13.3 million as of June 30, 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 June 30, 2014, one of our portfolio investments, 395,839 common shares of MVC was publicly listed on the NYSE and our
  holding of &euro;1,200,790 [$1.5 million] in 6-year Orco Property Group, S.A. (&ldquo;OPG&rdquo;) Notes was publicly listed
  on the Luxembourg Stock Exchange. As of December 31, 2013,  the 73,666 ordinary shares of
  OPG were publicly listed on the NYSE Euronext Paris Exchange, and our holding of &euro;1,200,790 [$1.5 million] in 6-year OPG Notes was listed on the Luxembourg Stock Exchange. On April 3, 2014, we sold all of our 73,666
  remaining shares of OPG, wherein we received $61,867 in net proceeds and reported a realized loss of $0.06 million. However,
  during the six months ended June 30, 2014 and year the ended December 31, 2013,  there had been no significant
  trading activity in the OPG Notes.</FONT></P>
  
  <P STYLE="font: 10pt/normal Calibri, Helvetica, Sans-Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">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. Our net asset value appears in various publications, including Barron&rsquo;s and <I>The Wall Street Journal</I>.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>Federal Income Taxes </B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">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 &ldquo;<I>Subsequent Events</I>&rdquo;
  and &ldquo;<I>Risk Factors</I>&rdquo; below.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  
  <!-- Field: Page; Sequence: 26 -->
      <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="#TableOfContents" 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 -->26<!-- 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: 10pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>Interest Income Recognition</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">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/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>Payment in Kind Interest </B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">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  may be
  required to 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/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>Current Market Conditions </B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">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. Bureau of Economic Analysis reported a decrease of 2.1% in real GDP during the first quarter of 2014
  and an increase of 4.0% for the second quarter of 2014. The U.S. Congressional Budget Office is forecasting continued growth in
  2014 (3.1%), with a projected unemployment rate exceeding 6.0% until 2017. The U.S. housing market has also largely recovered from
  its nadir of 2009. Nevertheless, 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/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">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 half 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, and are looking to continue this trend throughout
  2014.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">During the second quarter of 2014, our
  net asset value decreased to $3.00 per share from $3.09 per share. As of June 30, 2014, the closing price of our common stock closed
  was $2.48, which is a discount of approximately 17.4% to our net asset value.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">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/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>Liquidity and Capital Resources </B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">We generate cash primarily from maturities,
  sales of securities and borrowings, as well as capital gains realized upon the sale of portfolio investments. We use cash primarily
  to make additional investments, either in new companies or as follow-on investments in the existing portfolio companies and to
  pay the dividends to our stockholders.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Because of the nature and size of the
  portfolio investments, we may periodically borrow funds to make qualifying investments to maintain our tax status as a RIC. We
  often borrow such funds by utilizing a margin account with a securities brokerage firm. There is no assurance that such arrangement
  will be available in the future. If the Fund is unable to borrow funds to make qualifying investments, it may no longer qualify
  as a RIC. The Fund would then be subject to corporate income tax on its net investment income and realized capital gains, and distributions
  to stockholders would be subject to income tax as ordinary dividends.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  
  <!-- Field: Page; Sequence: 27 -->
      <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="#TableOfContents" 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 -->27<!-- 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: 10pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">The Fund has the ability to borrow funds
  and issue forms of senior securities representing indebtedness or stock, such as preferred stock, subject to certain restrictions.
  Net taxable investment income and net taxable realized gains from the sales of portfolio investments are intended to be distributed
  at least annually, to the extent such amounts are not reserved for payment of expenses and contingencies or to make follow-on or
  new investments.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">The Fund reserves the right to retain
  net long-term capital gains in excess of net short-term capital losses for reinvestment or to pay contingencies and expenses. Such
  retained amounts, if any, will be taxable to the Fund as long-term capital gains and stockholders will be able to claim their proportionate
  share of the federal income taxes paid on such gains as a credit against their own federal income tax liabilities. Stockholders
  will also be entitled to increase the adjusted tax basis of their Fund shares by the difference between their undistributed capital
  gains and their tax credit.</P>
  
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">We are evaluating the impact of current
  market conditions on our portfolio company valuations and their ability to provide current income. We have followed valuation techniques
  in a consistent manner; however, we are cognizant of current market conditions that might affect future valuations of portfolio
  securities. We believe that our operating cash flow and cash on hand will be sufficient to meet operating requirements and to finance
  routine capital expenditures through the next twelve months.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B>Results of Operations </B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B>Investment Income and Expense </B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Net investment gain (loss) was
  $0.7 million and ($1.4)&nbsp;million for the three months ended June 30, 2014 and 2013, respectively and $1.2 million and
  $2.1 million for the six months ended June 30, 2014 and, 2013, respectively. The decrease in net investment loss generated at
  June 30, 2014 compared to June 30, 2013 is due primarily to increase in total investment income and a decrease in settlement
  expense.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">Total investment income (loss)
  from portfolio securities was $0.06 million and $0.01 million for the three months ended June 30, 2014 and 2013,
  respectively, and $0.3 million and ($0.1) million for the six months ended June 30, 2014 and 2013, respectively. The
  increase was primarily due to the increase in income producing investments, along with the impairment of accrued interest
  receivable of Spectrum Management, LLC at June 30, 2013.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Excluding the $0.5 million in settlement expense
  that was incurred at June 30, 2013, total expenses were relatively unchanged  for the three months and six months ended June 30,
  2014 and June 30, 2013, respectively.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B>Realized Gains and Losses on Sales of Portfolio Securities</B></P>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">On April 3, 2014, we
  sold all of our 73,666 remaining shares of OPG, wherein we received $61,867 in net proceeds and reported a realized loss of
  $0.06 million.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 10pt; text-indent: 24.5pt">During the six months ended
  June, 2014, we capitalized legal and consulting expenses of $0.1 million relating to Spectrum Management. We also received a semi-annual
  interest payment of $0.04 million in cash and $0.1 million in the form of PIK&rsquo;d interest in respect of our &euro;1.2 million
  [$1.5 million] in OPG notes. On May 14, 2014, we sold to MVC 2,112,000 shares of the Fund&rsquo;s common stock in exchange for
  395,839 shares of MVC. (see <I>Plan of Reorganization</I> below).</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">During the six months
  ended June, 2014, we realized net capital gains of $0.7 million related to our Share Exchange with MVC (see <I>Plan of Reorganization</I> below).</P>
  
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">During the six months ended June 30,
  2013, we realized capital losses of $1.8 million due to the asset sale of The Bradshaw Group (&ldquo;Bradshaw&rdquo;) to PartsNow!
  LLC. The structure and pricing of the transaction was such that only the Class A preferred shareholders received any proceeds.
  There were no proceeds to the other equity classes, including the Classes B, D, and E preferred stock and warrants owned by the
  Fund. The Fund invested in Bradshaw in May 2000 and the Fund&rsquo;s investment has been valued at $0 since 2002.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B>Changes in Unrealized Appreciation/Depreciation of Portfolio
  Securities </B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Net unrealized depreciation on investments
  decreased $1.0 million during the six months ended June 30, 2014, to a net unrealized depreciation of $3.0 million. Such decrease
  in unrealized depreciation is largely due to the following changes:</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
  <TD STYLE="width: 24.5pt"></TD><TD STYLE="width: 36pt"><FONT STYLE="font-size: 10pt">(i)</FONT></TD><TD><FONT STYLE="font-size: 10pt">Increase in fair value of our holding in Equus Energy, LLC of $0.8 million due to an
                                                                                                      increase in comparable transactions for mineral leases, continued improved economic conditions, industry outlook, pricing
                                                                                                      assumptions, as                                                                                                     well as
                                                                                                      additional                                                                                                     proved
                                                                                                      reserves                                                                                                           from new
                                                                                                      drilling and                                                                                                     recompletion
                                                                                                      activities.</FONT></TD></TR></TABLE>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"></P>
  
  
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  
  
  
  
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 0 60.5pt; text-indent: 0.5in"></P>
  
  
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"></P>
  
  
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"></P>
  
  <!-- Field: Page; Sequence: 28 -->
      <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="#TableOfContents" 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 -->28<!-- Field: /Sequence --></TD><TD STYLE="text-align: right; width: 33%">&nbsp;</TD></TR></TABLE></DIV>
      <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
      <!-- Field: /Page -->
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"></P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
  <TD STYLE="width: 24.5pt"></TD><TD STYLE="width: 36pt"><FONT STYLE="font-size: 10pt">(ii)</FONT></TD><TD><FONT STYLE="font-size: 10pt">Increase in fair value of our shareholding in PalletOne, Inc. of $0.7 million due to an
                                                                                                       improvement in the industry sector for packaging companies and continued revenue and earnings growth. </FONT></TD></TR></TABLE>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
  <TD STYLE="width: 24.5pt"></TD><TD STYLE="width: 36pt"><FONT STYLE="font-size: 10pt">(iii)</FONT></TD><TD><FONT STYLE="font-size: 10pt">Decrease in fair value of our</FONT> shareholding in MVC of $0.4 million due to a
                                                                                                        difference                                                                                                       between our
                                                                                                        cost                                                                                                       basis
                                                                                                        in the MVC shares and the closing trading price of the MVC shares on June 30, 2014. Our cost basis included
                                                                                                        the closing trading price of the shares on
                                                                                                        May                                                                                                                     14,
                                                                                                        2014 (the closing date of the Share Exchange) as well as capitalized transaction costs of $0.5 million incurred in connection
                                                                                                        with the                                                                                                       Share
                                                                                                        Exchange.</TD></TR></TABLE>
  
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Net unrealized depreciation on investments
  decreased to $16.0 million during the six months ended June 30, 2013, from a net unrealized depreciation of $17.2 million.&nbsp;
  Such decrease in unrealized depreciation is largely due to the following changes:</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
  <TD STYLE="width: 24.5pt"></TD><TD STYLE="width: 36pt"><FONT STYLE="font-size: 10pt">(i)</FONT></TD><TD><FONT STYLE="font-size: 10pt">Decrease in fair value of our holding in Equus Energy, LLC of $0.1 million due to operating expenses.</FONT></TD></TR></TABLE>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 0 60.5pt; text-indent: 0.5in">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
  <TD STYLE="width: 24.5pt"></TD><TD STYLE="width: 36pt"><FONT STYLE="font-size: 10pt">(ii)</FONT></TD><TD><FONT STYLE="font-size: 10pt">Decrease in fair value of our holdings in Spectrum Management, LLC of $0.3 million due to a decline
  in operating performance and $0.2 million in capitalized legal and consulting expenses. </FONT></TD></TR></TABLE>
  
  <P STYLE="font: 10pt/115% Times New Roman, Times, Serif; margin: 0 0 0 0.5in">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
  <TD STYLE="width: 24.5pt"></TD><TD STYLE="width: 36pt"><FONT STYLE="font-size: 10pt">(iii)</FONT></TD><TD><FONT STYLE="font-size: 10pt">Transfer of unrealized loss to realized loss of our holding in The Bradshaw Group (&ldquo;Bradshaw&rdquo;)
  of $1.8 million upon the asset sale of the investment.</FONT></TD></TR></TABLE>
  
  
  
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B>Dividends </B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">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/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B>Portfolio Securities </B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">During the six months ended June
  30, 2013, we capitalized legal and consulting expenses of $0.2 million relating to Spectrum Management, LLC. We also received
  a semi-annual interest payment of $0.03 million and a 5.75% partial principal repayment of $0.01 million in respect of our
  &euro;1.2 million [$1.5 million] in OPG notes. On May 14, 2014, we sold to MVC 2,112,000 shares of the Fund&rsquo;s common
  stock in exchange for 395,839 shares of MVC (see Plan of Reorganization above).</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">During the six months ended June 30,
  2013, we capitalized legal and consulting expenses of $0.2 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/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B><U STYLE="text-decoration: none">Subsequent Events</U> </B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Management performed an evaluation of
  the Fund&rsquo;s activity through the date the financial statements were issued, noting that there were no subsequent events.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B><A NAME="a_011"></A><U>Item 3. Quantitative and Qualitative Disclosure about
  Market Risk </U></B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">We are subject to financial market risks,
  including changes in interest rates with respect to investments in debt securities and outstanding debt payable, as well as changes
  in marketable equity security prices. In the future, in addition to our investment in 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/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Our investments in portfolio securities
  consist of some fixed-rate debt securities. Since the debt securities are generally priced at a fixed rate, changes in interest
  rates do not directly affect interest income. In addition, changes in market interest rates are not typically a significant factor
  in the determination of fair value of these debt securities, since the securities are generally held to maturity. We determine
  their fair values based on the terms of the relevant debt security and the financial condition of the issuer.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">A major portion of our investment portfolio
  consists of debt and equity investments in private companies. Modest changes in public market equity prices generally do not significantly
  impact the estimated fair value of these investments. However, significant changes in market equity prices can have a longer-term
  effect on valuations of private companies, which could affect the carrying value and the amount and timing of gains or losses realized
  on these investments. A small portion of the investment portfolio 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/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  
  <!-- Field: Page; Sequence: 29 -->
      <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="#TableOfContents" 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 -->29<!-- 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: 10pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">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 23.1%
  of the net asset value and 43.5% of our investments in portfolio company securities (at fair value) as of June 30, 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/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 55.05pt; text-indent: -55.1pt"><A NAME="a_012"></A><B><U>Item 4. Controls
  and Procedures </U></B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 55.05pt; text-indent: -55.1pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">The Fund maintains disclosure controls
  and other procedures that are designed to ensure that information required to be disclosed by the Fund in the reports that it files
  or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC&rsquo;s
  rules and forms, and that such information is accumulated and communicated to the Fund&rsquo;s management, including its Chief
  Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.</P>
  
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">The Fund&rsquo;s management, with the
  participation of the Fund&rsquo;s Chief Executive Officer and Chief Financial Officer, have evaluated the effectiveness of the
  design and operations of the Fund&rsquo;s &ldquo;disclosure controls and procedures&rdquo; (as defined in Rule 13a-15(e) under
  the Securities Exchange Act of 1934) as of June 30, 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 June 30,
  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/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><A NAME="a_013"></A><B><U>Part II. Other Information </U></B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 55.05pt; text-indent: -55.1pt"><FONT STYLE="background-color: White"><B>&nbsp;</B></FONT></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 55.05pt; text-indent: -55.1pt"><B><A NAME="a_014"></A><U>Item 1. Legal Proceedings
  </U></B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 55.05pt; text-indent: -55.1pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>Champion Window Arbitration 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/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">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/115% Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">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/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">In 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/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Atrium and Champion recently disclosed
  damages in the range of $5.8 to $6.0 million. The claimed damages include a $2.0 million fine paid to ICE, fees and costs incurred
  in responding to ICE&rsquo;s investigation, and additional labor charges allegedly incurred by Atrium and Champion to comply with
  federal law in their hiring practices.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  
  <!-- Field: Page; Sequence: 30 -->
      <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="#TableOfContents" 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 -->30<!-- 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: 10pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; 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/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">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/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>Indemnification Settlement</B>&mdash;Effective
  June 13, 2013, the Fund entered into a settlement agreement with Sam Douglass, a former director and executive officer of the Fund,
  in respect of a claim for indemnification pursuant to the General Corporation Law of Delaware and an indemnification agreement
  entered into by the Fund with Mr. Douglass on May 3, 2001. The settlement agreement provides for the reimbursement to Mr. Douglass
  of actual expenses incurred, excluding any fines or penalties, in connection with an enforcement action initiated by the Securities
  and Exchange Commission against Mr. Douglass in 2009. The settlement payment of $125,000 was made on June 24, 2013.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>Lawsuit Settlement</B>&mdash;On August
  12, 2012, Paula Douglass filed a lawsuit against the Fund and members of the Board of Directors in the District Court of Harris
  County, Texas. Ms. Douglass&rsquo; complaint alleged various causes of action, including minority shareholder oppression, dilution,
  and breach of fiduciary duty, and sought unspecified damages and attorney&rsquo;s fees. Effective June 13, 2013, the Fund entered
  into a settlement agreement with Ms. Douglass, Sam Douglass, as well as certain trusts controlled by them. Pursuant to the settlement
  agreement and in view of the estimated costs of protracted litigation and the associated disruption to the operations of the Fund,
  the Board of Directors approved a payment of $402,254, in complete settlement of the lawsuit, as being in the best interests of
  the Fund and its shareholders. The settlement payment was made on July 30, 2013. Ms. Douglass filed a motion to dismiss the lawsuit
  with prejudice on August 8, 2013.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">From time to time, the Fund is also
  a party to certain proceedings incidental to the normal course of our business including the enforcement of our rights under contracts
  with our portfolio companies. While the outcome of these legal proceedings cannot at this time be predicted with certainty, we
  do not expect that these proceedings will have a material effect upon the Fund&rsquo;s financial condition or results of operations.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"><B><U><A NAME="a_015"></A>Item 1A. Risk Factors </U></B></P>
  
  <P STYLE="font: 10pt/normal 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: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal 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: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal 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. 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 &ldquo;<I>Plan of Reorganization</I>&rdquo; on page above.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B><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: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">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 &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 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: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"></P>
  
  
  <!-- Field: Page; Sequence: 31 -->
      <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="#TableOfContents" 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 -->31<!-- 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: 10pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B><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: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal 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. 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.&nbsp;</P>
  
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">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/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Readers should carefully consider these
  risks and all other information contained in the annual report on Form 10-K, including the Fund&rsquo;s financial statements and
  the related notes thereto. The risks and uncertainties described below are not the only ones facing the Fund. 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/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"></P>
  
  <!-- Field: Page; Sequence: 32 -->
      <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="#TableOfContents" 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 -->32<!-- Field: /Sequence --></TD><TD STYLE="text-align: right; width: 33%">&nbsp;</TD></TR></TABLE></DIV>
      <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
      <!-- Field: /Page -->
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"><A NAME="a_016"></A><B><U>Item 6. Exhibits </U></B></P>
  
  <TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%">
  <TR STYLE="vertical-align: top">
      <TD STYLE="width: 0px">&nbsp;</TD>
      <TD STYLE="width: 33px; padding-top: 4.5pt; font: 10pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">3.</FONT></TD>
      <TD STYLE="padding-top: 4.5pt; font: 10pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Articles of Incorporation and by-laws</FONT></TD></TR>
  </TABLE>
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>
  
  <TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%">
  <TR STYLE="vertical-align: top">
      <TD STYLE="width: 41px">&nbsp;</TD>
      <TD STYLE="width: 41px; padding-top: 4.5pt; font: 10pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">(a)</FONT></TD>
      <TD STYLE="padding-top: 4.5pt; font: 10pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Restated Certificate of Incorporation of the Fund, as amended. [Incorporated by reference to Exhibit 3(a) to Registrant&rsquo;s Annual Report on Form 10-K for the year ended December 31, 2007]</FONT></TD></TR>
  </TABLE>
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>
  
  <TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%">
  <TR STYLE="vertical-align: top">
      <TD STYLE="width: 41px">&nbsp;</TD>
      <TD STYLE="width: 41px; font: 10pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">(b)</FONT></TD>
      <TD STYLE="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Certificate of Merger dated June 30, 1993, between the Fund and Equus Investments Incorporated [Incorporated by reference to Exhibit 3(c) to Registrant&rsquo;s Annual Report on Form 10-K for the year ended December 31, 2007]</FONT></TD></TR>
  </TABLE>
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>
  
  <TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%">
  <TR STYLE="vertical-align: top">
      <TD STYLE="width: 41px">&nbsp;</TD>
      <TD STYLE="width: 41px; font: 10pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">(c)</FONT></TD>
      <TD STYLE="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Amended and Restated Bylaws of the Fund. [Incorporated by reference to Exhibit 3(b) to Registrant&rsquo;s Current Report on Form 8-K filed on June 30, 2014.]</FONT></TD></TR>
  </TABLE>
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>
  
  <TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%">
  <TR STYLE="vertical-align: top">
      <TD STYLE="width: 0px">&nbsp;</TD>
      <TD STYLE="width: 33px; font: 10pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">10.</FONT></TD>
      <TD STYLE="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Material Contracts.</FONT></TD></TR>
  </TABLE>
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>
  
  <TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%">
  <TR STYLE="vertical-align: top">
      <TD STYLE="width: 41px">&nbsp;</TD>
      <TD STYLE="width: 41px; padding-top: 4.5pt; font: 10pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">(c)</FONT></TD>
      <TD STYLE="padding-top: 4.5pt; font: 10pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Safekeeping Agreement between the Fund and Amegy Bank dated August 16, 2008. [Incorporated by reference to Exhibit 10(c) to Registrant&rsquo;s Annual Report on Form 10-K for the year ended December 31, 2008.]</FONT></TD></TR>
  </TABLE>
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>
  
  <TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%">
  <TR STYLE="vertical-align: top">
      <TD STYLE="width: 41px">&nbsp;</TD>
      <TD STYLE="width: 41px; padding-top: 4.5pt; font: 10pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">(d)</FONT></TD>
      <TD STYLE="padding-top: 4.5pt; font: 10pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Form of Indemnification Agreement between the Fund and its directors and certain officers. [Incorporated by reference to Exhibit 10(d) to Registrant&rsquo;s Annual Report on Form 10-K for the year ended December 31, 2011.]</FONT></TD></TR>
  </TABLE>
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>
  
  <TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%">
  <TR STYLE="vertical-align: top">
      <TD STYLE="width: 41px">&nbsp;</TD>
      <TD STYLE="width: 41px; padding-top: 4.5pt; font: 10pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">(e)</FONT></TD>
      <TD STYLE="padding-top: 4.5pt; font: 10pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Form of Release Agreement between the Fund and certain of its officers and former officers. [Incorporated by reference to Exhibit 10(h) to Registrant&rsquo;s Annual Report on Form 10-K for the year ended December 31, 2004.]</FONT></TD></TR>
  </TABLE>
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>
  
  <TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%">
  <TR STYLE="vertical-align: top">
      <TD STYLE="width: 41px">&nbsp;</TD>
      <TD STYLE="width: 41px; padding-top: 4.5pt; font: 10pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">(f)</FONT></TD>
      <TD STYLE="padding-top: 4.5pt; font: 10pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Code of Ethics of the Fund (Rule 17j-1) [Incorporated by reference to Exhibit 10(f) to Registrant&rsquo;s Annual Report on Form 10-K for the year ended December 31, 2009.]</FONT></TD></TR>
  </TABLE>
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>
  
  <TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%">
  <TR STYLE="vertical-align: top">
      <TD STYLE="width: 41px">&nbsp;</TD>
      <TD STYLE="width: 41px; padding-top: 4.5pt; font: 10pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">(g)</FONT></TD>
      <TD STYLE="padding-top: 4.5pt; font: 10pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Share Exchange Agreement between the Fund and MVC Capital, Inc., dated May 14, 2014. [Incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K, filed on May 15, 2014.]</FONT></TD></TR>
  </TABLE>
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>
  
  <TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%">
  <TR STYLE="vertical-align: top">
      <TD STYLE="width: 0px">&nbsp;</TD>
      <TD STYLE="width: 33px; font: 10pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">31.</FONT></TD>
      <TD STYLE="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Rule 13a-14(a)/15d-14(a) Certifications</FONT></TD></TR>
  </TABLE>
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>
  
  <TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%">
  <TR STYLE="vertical-align: top">
      <TD STYLE="width: 41px">&nbsp;</TD>
      <TD STYLE="width: 41px; padding-top: 4.5pt; font: 10pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">1.</FONT></TD>
      <TD STYLE="padding-top: 4.5pt; font: 10pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: blue"><A HREF="ex311_ceocert.htm">Certification by Chief Executive Officer</A></FONT></TD></TR>
  </TABLE>
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>
  
  <TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%">
  <TR STYLE="vertical-align: top">
      <TD STYLE="width: 41px">&nbsp;</TD>
      <TD STYLE="width: 41px; padding-top: 4.5pt; font: 10pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">2.</FONT></TD>
      <TD STYLE="padding-top: 4.5pt; font: 10pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: blue"><A HREF="ex312_cfocert.htm">Certification by Chief Financial Officer</A></FONT></TD></TR>
  </TABLE>
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>
  
  <TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%">
  <TR STYLE="vertical-align: top">
      <TD STYLE="width: 0px">&nbsp;</TD>
      <TD STYLE="width: 33px; font: 10pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">32.</FONT></TD>
      <TD STYLE="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Section 1350 Certifications</FONT></TD></TR>
  </TABLE>
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>
  
  <TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%">
  <TR STYLE="vertical-align: top">
      <TD STYLE="width: 41px">&nbsp;</TD>
      <TD STYLE="width: 41px; padding-top: 4.5pt; font: 10pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">1.</FONT></TD>
      <TD STYLE="padding-top: 4.5pt; font: 10pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: blue"><A HREF="ex321_ceocert.htm">Certification by Chief Executive Officer</A></FONT></TD></TR>
  </TABLE>
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>
  
  <TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%">
  <TR STYLE="vertical-align: top">
      <TD STYLE="width: 41px">&nbsp;</TD>
      <TD STYLE="width: 41px; padding-top: 4.5pt; font: 10pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">2.</FONT></TD>
      <TD STYLE="padding-top: 4.5pt; font: 10pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: blue"><A HREF="ex322_cfocert.htm">Certification by Chief Financial Officer</A></FONT></TD></TR>
  </TABLE>
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 6pt">&nbsp;</P>
  
  
  <!-- Field: Page; Sequence: 33 -->
      <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="#TableOfContents" 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 -->33<!-- 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: 10pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><A NAME="a_017"></A>SIGNATURE</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Pursuant to the requirements of Section
  13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has caused this report to be signed by the undersigned, thereunto
  duly authorized.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse">
  <TR>
      <TD STYLE="vertical-align: top; padding-left: 0.1in">&nbsp;</TD>
      <TD STYLE="vertical-align: bottom; width: 1%; padding-left: 0.1in">&nbsp;</TD>
      <TD STYLE="vertical-align: bottom; width: 62%; padding-right: -184.55pt; padding-left: 153.05pt; font: 10pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">EQUUS TOTAL RETURN, INC.</FONT></TD></TR>
  <TR>
      <TD>&nbsp;</TD>
      <TD>&nbsp;</TD>
      <TD>&nbsp;</TD></TR>
  </TABLE>
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 9pt 0 0">Date: August 14, 2014</P>
  
  <TABLE CELLSPACING="0" CELLPADDING="0" ALIGN="RIGHT" STYLE="width: 35%; border-collapse: collapse">
  <TR>
      <TD STYLE="width: 100%">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
      <TD STYLE="border-bottom: Black 1pt solid; font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">/s/ John A. Hardy</FONT></TD></TR>
  <TR STYLE="vertical-align: top">
      <TD STYLE="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>John A. Hardy</B></FONT></TD></TR>
  <TR STYLE="vertical-align: top">
      <TD STYLE="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>Chief Executive Officer</B></FONT></TD></TR>
  </TABLE><BR STYLE="clear: both">
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 6pt">&nbsp;</P>
  
  
  <!-- Field: Page; Sequence: 34 -->
      <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="#TableOfContents" 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 -->34<!-- 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: 10pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"><B>&nbsp;</B></P>
  
  
  
  <P STYLE="margin: 0"></P>
  
  </BODY>
  </HTML>
metadata_documents: [{"type": "10-Q", "sequence": "1", "filename": "f10q_equus063014.htm", "description": "FORM 10-Q", "secsgml_size_bytes": 575279}]
metadata_filer: {"company-data": {"conformed-name": "EQUUS TOTAL RETURN, INC.", "cik": "0000878932", "irs-number": "760345915", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "10-Q", "act": "34", "file-number": "814-00098", "film-number": "141042811"}, "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
  June 30, 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 August 14, 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
  Schedules of Investments
  8
  Notes to Financial Statements
  12
  Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
  24
  Item 3. Quantitative and Qualitative Disclosure about Market Risk
  29
  Item 4. Controls and Procedures
  30
  PART II. OTHER INFORMATION
  Item 1. Legal Proceedings
  30
  Item 1A. Risk Factors
  31
  Item 6. Exhibits
  33
  SIGNATURE
  34
  Table of Contents
  2
  EQUUS TOTAL RETURN, INC.
  BALANCE SHEETS
  Part I. Financial Information
  Item 1. Financial Statements
  June 30,
  2014
  December 31,
  2013
  (Unaudited)
  (in thousands, except per share amounts)
  Assets
  Investments in portfolio securities at fair value:
  Control investments (cost at $15,928 and $15,789 respectively)
  $
  12,044
  $
  11,105
  Affiliate investments (cost at $350 and $350 respectively)
  968
  250
  Non-affiliate investments (cost at $6,896 and $1,321 respectively)
  7,202
  2,149
  Total investments in portfolio securities at fair value
  20,214
  13,504
  Cash and cash equivalents
  17,198
  19,065
  Restricted cash and temporary cash investments
  —
  15,150
  Accounts receivable from investments
  574
  372
  Accrued interest receivable
  391
  228
  Accounts receivable and other
  26
  30
  Total assets
  38,403
  48,349
  Liabilities and net assets
  Accounts payable and accrued liabilities
  300
  106
  Accounts payable to related parties
  62
  26
  Borrowing under margin account
  —
  15,000
  Total liabilities
  362
  15,132
  Commitments and contingencies
  Net assets
  $
  38,041
  $
  33,217
  Net assets consist of:
  Common stock, par value
  $
  13
  $
  10
  Capital in excess of par value
  56,049
  51,701
  Undistributed
      net capital losses
  (15,721
  )
  (14,538
  )
  Undistributed net capital gains
  660
  —
  Unrealized depreciation of portfolio securities, net
  (2,960
  )
  (3,956
  )
  Total net assets
  $
  38,041
  $
  33,217
  Shares of common stock issued and outstanding, $.001 par value, 50,000 shares authorized
  12,674
  10,562
  Shares of preferred stock issued and outstanding, $.001 par value, 5,000 shares authorized
  —
  —
  Net asset value per share
  $
  3.00
  $
  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 June 30,
  Six months ended June 30,
  (in thousands, except per share amounts)
  2014
  2013
  2014
  2013
  Investment income:
  Interest income (loss), net:
  Control investments
  $
  —
  $
  (25
  )
  $
  198
  $
  (157
  )
  Non-affiliate investments
  64
  40
  122
  76
  Total
      interest income (loss)
  64
  15
  320
  (81
  )
  Interest from temporary cash investments
  —
  —
  —
  —
  Total
      investment income (loss)
  64
  15
  320
  (81
  )
  Expenses:
  Professional fees
  237
  391
  528
  659
  Compensation expense
  225
  228
  437
  467
  General and administrative expense
  69
  34
  169
  72
  Director fees and expenses
  161
  144
  257
  246
  Mailing, printing and other expenses
  77
  52
  98
  75
  Taxes
  8
  3
  14
  8
  Settlement expense
  —
  527
  —
  527
  Total expenses
  777
  1,379
  1,503
  2,054
  Net investment loss
  (713
  )
  (1,364
  )
  (1,183
  )
  (2,135
  )
  Net realized gain (loss):
  Non-affiliate investments
  660
  (1,795
  )
  660
  (1,795
  )
  Net realized gain (loss)
  660
  (1,795
  )
  660
  (1,795
  )
  Net unrealized depreciation of portfolio securities:
  End of period
  (2,960
  )
  (16,000
  )
  (2,960
  )
  (16,000
  )
  Beginning of period
  (4,024
  )
  (17,910
  )
  (3,956
  )
  (17,222
  )
  Net change in unrealized depreciation of portfolio securities
  1,064
  1,910
  996
  1,222
  Net increase (decrease) in net assets resulting from operations
  $
  1,011
  $
  (1,249
  )
  $
  473
  $
  (2,708
  )
  Net increase (decrease) in net assets resulting from operations per share:
  Basic and diluted
  $
  0.09
  $
  (0.11
  )
  $
  0.04
  $
  (0.25
  )
  Weighted average number of shares outstanding
      during     period:
  Basic and diluted
  11,676
  10,562
  11,122
  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)
  Six months ended June 30,
  (in thousands)
  2014
  2013
  Net increase (decrease) in net assets resulting from operations
  $
  473
  $
  (2,708
  )
  Shares issued for portfolio securities
  4,351
  —
  Increase (decrease) in net assets
  4,824
  (2,708
  )
  Net assets at beginning of period
  33,217
  32,875
  Net assets at end of period
  $
  38,041
  $
  30,167
  The accompanying notes are an integral
  part of these financial statements.
  Table of Contents
  5
  EQUUS TOTAL RETURN, INC.
  STATEMENTS OF CASH FLOWS
  (Unaudited)
  Six months ended June 30,
  (in thousands)
  2014
  2013
  Cash flows from operating activities:
  Net increase (decrease) in net assets resulting from operations
  $
  473
  $
  (2,708
  )
  Adjustments to reconcile net
      increase (decrease) in net assets resulting from operations to net cash
  (used in) provided by operating activities:
  Net realized (gain) loss
  (660
  )
  1,795
  Net change in unrealized depreciation of portfolio securities
  (996
  )
  (1,222
  )
  Changes in operating assets and liabilities:
  Purchase of portfolio securities
  (647
  )
  (169
  )
  Net proceeds from dispositions of portfolio securities
  62
  —
  Principal payments received from portfolio securities
  —
  9
  Sales of temporary cash investments, net
  15,149
  —
  Increase in accounts receivable from investments
  (202
  )
  (267
  )
  Decrease in accounts receivable and other
  4
  —
  Increase (decrease) in accrued interest receivable
  (280
  )
  112
  Increase in accounts payable and accrued liabilities
  194
  24
  Increase in accounts payable to related parties
  36
  43
  Net cash (used in) provided by operating activities
  13,133
  (2,383
  )
  Cash flows from financing activities:
  Repayments under margin account
  (15,000
  )
  —
  Net cash used in financing activities
  (15,000
  )
  —
  Net decrease increase in cash and cash equivalents
  (1,867
  )
  (2,383
  )
  Cash and cash equivalents at beginning of period
  19,065
  23,687
  Cash and cash equivalents at end of period
  $
  17,198
  $
  21,304
  Non-cash operating and financing activities:
  Shares issued in lieu of cash for portfolio securities
  $
  4,351
  $
  —
  Accrued interest or dividends exchanged for portfolio securities
  $
  117
  $
  —
  Supplemental disclosure of cash flow information:
  Income taxes paid
  $
  11
  $
  8
  The accompanying notes are an integral
  part of these financial statements.
  Table of Contents
  6
  EQUUS TOTAL RETURN, INC.
  SUPPLEMENTAL INFORMATION—SELECTED
  PER SHARE DATA AND RATIOS
  (Unaudited)
  Six months ended June 30,
  2014
  2013
  Investment income (loss)
  $
  0.03
  $
  (0.01
  )
  Expenses
  (0.14
  )
  (0.19
  )
  Net investment loss
  (0.11
  )
  (0.20
  )
  Net realized gain (loss)
  0.06
  (0.17
  )
  Net change
      in unrealized depreciation of portfolio securities
  0.09
  0.12
  Net increase (decrease) in net assets resulting from operations
  0.04
  (0.25
  )
  Capital transactions:
  Shares issued for portfolio securities
  0.39
  —
  Dilutive effect of shares issued
  (0.57
  )
  —
  Decrease in net assets resulting from capital transactions
  (0.18
  )
  —
  Net decrease in net assets
  (0.14
  )
  (0.25
  )
  Net assets at beginning of period
  3.14
  3.11
  Net assets at end of period, basic and diluted
  $
  3.00
  $
  2.86
  Weighted average number of shares outstanding during period,
  in
      thousands (basic and diluted)
  11,122
  10,562
  Market price per share:
  Beginning of period
  $
  1.92
  $
  2.36
  End of period
  $
  2.48
  $
  1.91
  Selected information and ratios:
  Ratio of expenses to average net assets
  4.56
  %
  6.52
  %
  Ratio of net investment loss to average net assets
  (3.58
  %)
  (6.77
  %)
  Ratio of net increase (decrease) in net assets resulting from operations to average net assets
  1.30
  %
  (8.59
  %)
  Total return on market price
  (1)
  29.17
  %
  (19.07
  %)
  (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
  JUNE 30, 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
  $
  8,800
  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)
  $
  3,028
  3,028
  3,028
  5,878
  3,028
  Total
      Control Investments: Majority-owned (represents 59.6% of total investments at fair value)
  $
  15,928
  $
  12,044
  Affiliate
      Investments
  (4)
  :
  PalletOne, Inc.
  Bartow, FL
  Shipping
      products and services
  October
      2001
  350,000 shares of common
      stock (18.7%)
  $
  350
  $
  968
  Total
      Affiliate Investments (represents 4.8% of total investments at fair value)
  $
  350
  $
  968
  Non-Affiliate
      Investments (less than 5% owned):
  MVC Capital, Inc.
  Purchase, NY
  Financial
      services
  May
      2014
  395,839 shares of common
      stock (1.7%)
  (5)
  $
  5,584
  $
  5,126
  Orco Property Group
  Paris, France
  Real
      estate
  April
      2011
  10%
      promissory note due 2/18
  (2)
  $
  812
  812
  1,576
  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 35.6% of total investments at fair value)
  $
  6,896
  $
  7,202
  Total
      Investment in Portfolio Securities
  $
  23,174
  $
  20,214
  (1)
  See Note 3 to the financial statements, Valuation of Investments.
  (2)
  Income-producing.
  (3)
  Majority owned investments are generally defined under the Investment Company Act of 1940 as companies in which we own more than 50% of the voting securities of the company.
  (4)
  Affiliate investments are generally defined under the Investment Company Act of 1940 as companies in which we own at least 5% but not more than 25% voting securities of the company.
  (5)
  Pursuant
      to a Share Exchange Agreement between the Fund and MVC dated May 14, 2014, MVC has the right to rescind the Agreement
      and     cancel the Share Exchange if Equus does not complete a "reorganization" (as defined under Section
      2(a)(33) of the 1940 Act) within 12 months of the date of the Agreement.
  The accompanying notes are an integral
  part of these financial statements.
  Table of Contents
  8
  EQUUS TOTAL RETURN, INC.
  SCHEDULE OF INVESTMENTS –
  (Continued)
  JUNE 30, 2014
  (Unaudited)
  Except for our holding of notes
  issued by Orco Property Group S.A. ("OPG") and shares of MVC Capital, Inc. ("MVC"), substantially all of our
  portfolio securities are restricted from public sale without prior registration under the Securities Act of 1933 or other
  relevant foreign regulatory authority. We negotiate certain aspects of the method and timing of the disposition of our
  investment in each portfolio company, including registration rights and related costs.
  We may invest up to 30% of our assets
  in non-qualifying portfolio investments, as permitted by the Investment Company Act of 1940 (hereafter, the "1940 Act").
  Specifically, we may invest up to 30% of our assets in entities that are not considered "eligible portfolio companies"
  (as defined in the 1940 Act), including companies located outside of the United States, entities that are operating pursuant to
  certain exceptions under the 1940 Act, and publicly-traded entities with a market capitalization exceeding $250 million. As of
  June 30, 2014, except for our holdings in OPG and MVC, all of our investments are in enterprises
  that are considered eligible portfolio companies under the 1940 Act. We provide significant managerial assistance to portfolio
  companies that comprise 64.4% of the total value of the investments in portfolio securities as of June 30, 2014.
  Our investments in portfolio securities
  consist of the following types of securities as of June 30, 2014 (in thousands):
  Type of Securities
  Cost
  Fair Value
  Fair Value as
  Percentage of
  Net Assets
  Limited liability company investments
  $
  12,900
  $
  9,016
  23.7
  %
  Secured and subordinated debt
  4,340
  5,104
  13.4
  %
  Common stock
  5,934
  6,094
  16.0
  %
  Total
  $
  23,174
  $
  20,214
  53.1
  %
  Interest payments are being received
  and/or accrued on notes with a fair value of $2.1 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 June 30, 2014 (in thousands):
  Industry
  Fair Value
  Fair Value as
  Percentage of
  Net
  Assets
  Energy
  $
  8,800
  23.1
  %
  Financial services
  5,126
  13.5
  %
  Business products and services
  3,528
  9.3
  %
  Real estate
  1,576
  4.1
  %
  Shipping products and services
  968
  2.5
  %
  Media
  216
  0.6
  %
  Total
  $
  20,214
  53.1
  %
  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 (18.7%)
  $
  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 Holdings,
          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
  U.S. Treasury
      Bill 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 notes and
  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
  JUNE 30, 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 and six months ended June 30, 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 June 30, 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 follow-on investments, if any, through the next twelve months.
  Cash and Cash Equivalents
  —As
  of June 30, 2014, we had cash and cash equivalents of $17.2 million. We had $20.2 million of our net assets of $38.0 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 percentage of qualifying investments 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 June 30, 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 June 30, 2014.
  As of December 31, 2013, we borrowed
  $15.0 million to maintain our RIC status by utilizing a margin account with a securities brokerage
  firm. We collateralized such borrowings with restricted cash and temporary cash investments in U.S. Treasury bills of $15.2 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 for smaller and medium-sized enterprises. 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 six 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 below net asset value. Because
  of these challenges, our near-term strategies shifted from originating debt and equity investments to preserving liquidity necessary
  to meet our operational needs. Key initiatives that we have previously undertaken to provide necessary liquidity include monetizations,
  the suspension of dividends and the internalization of management. Although we cannot assure you that such initiatives will be
  sufficient, we believe we have sufficient liquidity to meet our 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 securities
  represented 14.0% and 11.0% of our investments in portfolio securities as of June 30, 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,  changes in general market conditions, or a default by the issuer). 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 $15.1 million and $13.3 million as of June 30, 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 June 30, 2014, one of our portfolio investments, 395,839 common shares of MVC was publicly listed on the NYSE and our
  holding of €1,200,790 [$1.5 million] in 6-year notes of OPG was publicly listed on the Luxembourg Stock Exchange. As of
  December 31, 2013, the 73,666 ordinary shares of OPG were publicly listed on the NYSE Euronext Paris Exchange, and our
  holding of €1,200,790 [$1.5 million] in 6-year OPG Notes was  listed on the Luxembourg Stock Exchange. On April 3, 2014,
  we sold all of our 73,666 remaining shares of OPG, wherein we received $61,867 in net proceeds and reported a realized loss
  of $0.06 million. However, during the six months ended June 30, 2014 and the year ended December 31,
  2013,  there had been no significant trading activity in the OPG Notes.
  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.
  Our net asset value appears 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.
  Table of Contents
  15
  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 (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 may be required to 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 Texas 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 June 30, 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 (unaudited):
  Fair Value Measurements as
      of June 30, 2014
  (in thousands)
  Total
  Quoted Prices in
  Active Markets
  for Identical
  Assets
  (Level 1)
  Significant Other
  Observable
  Inputs
  (Level 2)
  Significant
  Unobservable
  Inputs
  (Level 3)
  Assets
  Investments:
  Control investments
  $
  12,044
  $
  —
  $
  —
  $
  12,044
  Affiliate investments
  968
  —
  —
  968
  Non-affiliate investments
  7,202
  —
  5,126
  2,076
  Total investments
  $
  20,214
  $
  —
  $
  5,126
  $
  15,088
  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
  l Assets
  (Level 1)
  Significant Other
  Observable Input
  (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 six months ended June 30, 2014 for all investments for which we determine fair value using unobservable
  (Level 3) factors (unaudited):
  Fair value measurements using
      significant unobservable inputs (Level 3)
  (in thousands)
  Control
  Investments
  Affiliate
  Investments
  Non-affiliate
  Investments
  Total
  Fair value as of December 31, 2013
  $
  11,105
  $
  250
  $
  1,980
  $
  13,335
  Realized losses
  —
  —
  (63
  )
  (63
  )
  Change in unrealized appreciation (depreciation)
  800
  718
  (21
  )
  1,497
  Purchases of portfolio securities
  139
  —
  117
  256
  Proceeds from sales/dispositions
  —
  —
  63
  63
  Fair value as of June 30, 2014 (unaudited)
  $
  12,044
  $
  968
  $
  2,076
  $
  15,088
  Table of Contents
  17
  The following table provides a reconciliation
  of fair value changes during the six months ended June 30, 2013 for all investments for which we determine fair value using unobservable
  (Level 3) factors (unaudited):
  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
  Realized losses
  —
  —
  (1,795
  )
  (1,795
  )
  Change in unrealized appreciation (depreciation)
  (531
  )
  —
  1,777
  1,246
  Purchases of portfolio securities
  169
  —
  —
  169
  Proceeds from sales/dispositions
  —
  —
  (9
  )
  (9
  )
  Fair value as of June 30, 2013 (unaudited)
  $
  7,057
  $
  150
  $
  1,398
  $
  8,605
  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 June 30, 2014 (unaudited):
  Range
  (in thousands)
  Fair Value
  Valuation Techniques
  Unobservable Inputs
  Minimum
  Maximum
  Secured and subordinated debt
  $
  5,104
  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
  968
  Income/market approach
  Market multiple/discount for lack of marketability/control premium
  0
  %
  100
  %
  Asset approach
  Recovery rate
  0
  %
  100
  %
  Limited liability company investments
  9,016
  Income/market approach
  Reserve adjustment factors
  75
  %
  100
  %
  $
  15,088
  Table of Contents
  18
  (4)
  Related Party Transactions and Agreements
  Except as noted below, as compensation
  for services to the Fund, each Independent Director receives an annual fee of $20,000 paid quarterly in arrears, a fee of $2,000
  for each meeting of the Board of Directors attended in person, a fee of $1,000 for participation in each telephonic meeting of
  the Board and a fee of $1,000 for each committee meeting attended, and reimbursement of all out-of-pocket expenses relating to
  attendance at such meetings. A quarterly fee of $15,000 is paid to the Chairman of the Audit Committee and a quarterly fee of $3,750
  is paid to the Chairman of the Independent Directors. We may also pay other one-time or recurring fees to members of our Board
  of Directors in special circumstances. None of our interested directors receive annual fees for their service on the Board of Directors.
  In 2011, Equus Energy, LLC, a wholly-owned
  subsidiary of the Fund, entered into a consulting agreement with Global Energy Associates, LLC ("Global Energy") to
  provide consulting services for energy related investments. Henry W. Hankinson, Director, is a managing partner and co-founder
  of Global Energy. Payments to Global Energy totaled $37,500 for each of the six months ended June 30, 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
  On April 3, 2014, we
  sold all of our 73,666 remaining shares of OPG, wherein we received $61,867 in net proceeds and reported a realized loss of
  $0.06 million.
  During the six months
  ended June, 2014, we capitalized legal and consulting expenses of $0.1 million relating to Spectrum Management. We also
  received a semi-annual interest payment of $0.04 million in cash and $0.1 million in the form of PIK'd interest in
  respect of our €1.2 million [$1.5 million] in OPG notes. On May 14, 2014, we  sold to MVC 2,112,000 shares of the
  Fund's common stock in exchange for 395,839 shares of MVC. (see
  Plan of Reorganization
  below).
  During the six months
  ended June, 2014, we realized net capital gains of $0.7 million related to our Share Exchange with MVC (see
  Plan of Reorganization
  below).
  Net unrealized depreciation on investments
  decreased $1.0 million during the six months ended June 30, 2014, to a net unrealized depreciation of $3.0 million. Such decrease
  in unrealized depreciation is largely due to the following changes:
  (i)
  Increase in fair value of our holding in Equus Energy, LLC of $0.8 million due to an
                                                                                                      increase in comparable transactions for mineral leases, continued improved economic conditions, industry outlook, pricing
                                                                                                      assumptions, as                                                                                                     well as
                                                                                                      additional                                                                                                     proved
                                                                                                      reserves                                                                                                           from new
                                                                                                      drilling and                                                                                                     recompletion
                                                                                                      activities.
  (ii)
  Increase in fair value of our shareholding in PalletOne, Inc. of $0.7 million due to an
                                                                                                       improvement in the industry sector for packaging companies and continued revenue and earnings growth.
  (iii)
  Decrease in fair value of our
  shareholding in MVC of $0.4 million due to a
                                                                                                        difference                                                                                                       between our
                                                                                                        cost                                                                                                       basis
                                                                                                        in the MVC shares and the closing trading price of the MVC shares on June 30, 2014. Our cost basis included
                                                                                                        the closing trading price of the shares on
                                                                                                        May                                                                                                                     14,
                                                                                                        2014 (the closing date of the Share Exchange) as well as capitalized transaction costs of $0.5 million incurred in connection
                                                                                                        with the                                                                                                       Share
                                                                                                        Exchange.
  During the six months ended June 30,
  2013, we capitalized legal and consulting expenses of $0.2 million relating to Spectrum Management, LLC. We also received a semi-annual
  interest payment of $0.03 million and a 5.75% partial principal repayment of $0.01 million in respect of our €1.2 million
  [$1.5 million] in OPG notes.
  During the six months ended June 30,
  2013, we realized capital losses of $1.8 million due to the asset sale of The Bradshaw Group to PartsNow! LLC. The structure and
  pricing of the transaction was such that only the Class A preferred shareholders received any proceeds. There were no proceeds
  to the other equity classes, including the Classes B, D, and E preferred stock and warrants owned by the Fund. The Fund invested
  in Bradshaw in May 2000 and the Fund's investment has been valued at $0 since 2002.
  Table of Contents
  19
  Net unrealized depreciation on investments
  decreased to $16.0 million during the six months ended June 30, 2013, from a net unrealized depreciation of $17.2 million. 
  Such decrease in unrealized depreciation is largely due to the following changes:
  (i)
  Decrease in fair value of our holding in Equus Energy, LLC of $0.1 million due to operating expenses.
  (ii)
  Decrease in fair value of our holdings in Spectrum Management, LLC of $0.3 million due to a decline
  in operating performance and $0.2 million in capitalized legal and consulting expenses.
  (iii)
  Transfer of unrealized loss to realized loss of our holding in The Bradshaw Group ("Bradshaw")
  of $1.8 million upon the asset sale of the investment.
  (7)
  Plan
      of Reorganization - Share Exchange with MVC Capital
  On May 14, 2014, we announced
  that the Fund intended to effect a reorganization pursuant to Section 2(a)(33) of the 1940 Act. As a first step to consummating
  the reorganization, we sold to MVC 2,112,000 newly-issued shares of the Fund's common stock in exchange for 395,839 shares
  of MVC (such transaction is hereinafter referred to as the "Share Exchange"). MVC is a business development company
  traded on the New York Stock Exchange that provides long-term debt and equity investment capital to fund growth, acquisitions and
  recapitalizations of companies in a variety of industries. The Share Exchange was calculated based on the Fund's and MVC's
  respective net asset value per share. The number of MVC shares received by Equus represents approximately 1.73% of MVC's
  total outstanding shares of common stock.
  Our shares were issued at
  the EQS closing stock price on May 14, 2014. The investment in MVC was recorded at MVC's closing stock price on the same
  date. This transaction resulted in a realized gain of $0.7 million.
  Pursuant to the terms of
  a Share Exchange Agreement, dated May 14, 2014, entered into by Equus and MVC which memorialized the Exchange, we intend to finalize
  the reorganization by pursuing a merger or consolidation with MVC, or a subsidiary of MVC, or one or more of MVC's portfolio
  companies (the "Consolidation"). Absent Equus merging or consolidating with/into MVC, our current intention is for
  Equus to (i) consummate the Consolidation, (ii) terminate its election to be classified as a business development company under
  the 1940 Act, and (iii) be restructured as a publicly-traded operating company focused on the energy and/or financial services
  sector.
  (8)
  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 132 producing and non-producing oil and gas wells. The working
  interests include associated development rights of approximately 21,620 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 third 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
  20
  Below is summarized consolidated financial information for Equus Energy as of June 30, 2014 and December 31,
  2013 and for the three and  six months ended June, 2014 and 2013, respectively, (in thousands).
  EQUUS
      ENERGY LLC
  BALANCE
      SHEETS
  (Unaudited)
  June
      30,
  2014
  December
      31,
  2013
  Assets
  Current
      assets:
  Cash
      and cash equivalents
  $
  427
  $
  486
  Accounts
      receivable
  208
  288
  Prepaid expenses
  92
  —
  Total
      current assets
  727
  774
  Oil
      and gas properties
  7,801
  7,700
  Less:
      accumulated depletion, depreciation and amortization
  (1,475
  )
  (983
  )
  Net
      oil and gas properties
  6,326
  6,717
  Other
      non-current investment
  178
  —
  Total
      assets
  $
  7,231
  $
  7,491
  Liabilities
      and members' capital
  Current
      liabilities:
  Accounts
      payable and other
  $
  109
  $
  324
  Due
      to affiliate
  566
  364
  Total
      current liabilities
  675
  688
  Asset
      retirement obligations
  181
  178
  Total
      liabilities
  856
  866
  Members'
      capital
  Total
      members' capital
  6,375
  6,625
  Total
      liabilities and members' capital
  $
  7,231
  $
  7,491
  Table of Contents
  21
  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.
  EQUUS
      ENERGY, LLC
  STATEMENTS
      OF OPERATIONS
  (Unaudited)
  Three
      months ended June 30
  ,
  Six
      months ended June 30,
  2014
  2013
  2014
  2013
  Operating
      revenue
  $
  532
  $
  601
  $
  1,072
  $
  1,206
  Operating
      expenses
  Direct
      operating expenses
  261
  324
  596
  652
  Depletion,
      depreciation, amortization and accretion
  298
  195
  494
  518
  General
      and administrative
  80
  (28
  )
  232
  159
  Total
      operating expenses
  640
  491
  1,322
  1,328
  Operating
      income (loss) before income tax expense
  (108
  )
  110
  (250
  )
  (122
  )
  Income
      tax
  —
  8
  —
  8
  Net
      income (loss)
  $
  (108
  )
  $
  102
  $
  (250
  )
  $
  (130
  )
  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 $0.3 million and $0.2 million
  for the three months ended June 30, 2014 and 2013, respectively and $0.5 million for the six months ended June 30, 2014 and
  2013, respectively.
  Table of Contents
  22
  Capitalized oil and gas property costs
  are limited to an amount (the ceiling limitation) equal to the sum of the following:
  (a)
  As of June 30, 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 the six months ended June
  30, 2014 and 2013.
  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.
  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 there were no subsequent events.
  Table of Contents
  23
  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.
  Plan of Reorganization
  On May 14, 2014,
  we announced that the Fund intended to effect a reorganization pursuant to Section 2(a)(33) of the 1940 Act. As a first step
  to consummating the reorganization, we sold to MVC 2,112,000 newly-issued shares of the Fund's common stock in
  exchange for 395,839 shares of MVC (such transaction is hereinafter referred to as the "Share Exchange"). MVC is
  a business development company traded on the New York Stock Exchange that provides long-term debt and equity investment
  capital to fund growth, acquisitions and recapitalizations of companies in a variety of industries. The Share Exchange was
  calculated based on the Fund's and MVC's respective net asset value per share. The number of MVC shares received
  by Equus represents approximately 1.73% of MVC's total outstanding shares of common stock. The number of Equus shares
  sold to MVC pursuant to the Share Exchange represents approximately 16.7% of our issued and outstanding shares of common
  stock at June 30, 2014.
  Pursuant to the terms of
  a Share Exchange Agreement, dated May 14, 2014, entered into by Equus and MVC which memorialized the Exchange, we intend to finalize
  the reorganization by pursuing a merger or consolidation with MVC, or a subsidiary of MVC, or one or more of MVC's portfolio
  companies (the "Consolidation"). Absent Equus merging or consolidating with/into MVC, our current intention is for
  Equus to (i) consummate the Consolidation, (ii) terminate its election to be classified as a business development company under
  the 1940 Act, and (iii) be restructured as a publicly-traded operating company focused on the energy and/or financial services
  sector.
  Table of Contents
  24
  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.
  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 14.0% and 11.0% of our investments in portfolio securities as of June 30, 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.
  Table of Contents
  25
  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 $15.1 million and $13.3 million as of June 30, 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 June 30, 2014, one of our portfolio investments, 395,839 common shares of MVC was publicly listed on the NYSE and our
  holding of €1,200,790 [$1.5 million] in 6-year Orco Property Group, S.A. ("OPG") Notes was publicly listed
  on the Luxembourg Stock Exchange. As of December 31, 2013,  the 73,666 ordinary shares of
  OPG were publicly listed on the NYSE Euronext Paris Exchange, and our holding of €1,200,790 [$1.5 million] in 6-year OPG Notes was listed on the Luxembourg Stock Exchange. On April 3, 2014, we sold all of our 73,666
  remaining shares of OPG, wherein we received $61,867 in net proceeds and reported a realized loss of $0.06 million. However,
  during the six months ended June 30, 2014 and year the ended December 31, 2013,  there had been no significant
  trading activity in the OPG Notes.
  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. Our net asset value appears 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
  " below.
  Table of Contents
  26
  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  may be
  required to 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. Bureau of Economic Analysis reported a decrease of 2.1% in real GDP during the first quarter of 2014
  and an increase of 4.0% for the second quarter of 2014. The U.S. Congressional Budget Office is forecasting continued growth in
  2014 (3.1%), with a projected unemployment rate exceeding 6.0% until 2017. The U.S. housing market has also largely recovered from
  its nadir of 2009. Nevertheless, 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.
  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 half 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, and are looking to continue this trend throughout
  2014.
  During the second quarter of 2014, our
  net asset value decreased to $3.00 per share from $3.09 per share. As of June 30, 2014, the closing price of our common stock closed
  was $2.48, which is a discount of approximately 17.4% 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.
  Table of Contents
  27
  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 gain (loss) was
  $0.7 million and ($1.4) million for the three months ended June 30, 2014 and 2013, respectively and $1.2 million and
  $2.1 million for the six months ended June 30, 2014 and, 2013, respectively. The decrease in net investment loss generated at
  June 30, 2014 compared to June 30, 2013 is due primarily to increase in total investment income and a decrease in settlement
  expense.
  Total investment income (loss)
  from portfolio securities was $0.06 million and $0.01 million for the three months ended June 30, 2014 and 2013,
  respectively, and $0.3 million and ($0.1) million for the six months ended June 30, 2014 and 2013, respectively. The
  increase was primarily due to the increase in income producing investments, along with the impairment of accrued interest
  receivable of Spectrum Management, LLC at June 30, 2013.
  Excluding the $0.5 million in settlement expense
  that was incurred at June 30, 2013, total expenses were relatively unchanged  for the three months and six months ended June 30,
  2014 and June 30, 2013, respectively.
  Realized Gains and Losses on Sales of Portfolio Securities
  On April 3, 2014, we
  sold all of our 73,666 remaining shares of OPG, wherein we received $61,867 in net proceeds and reported a realized loss of
  $0.06 million.
  During the six months ended
  June, 2014, we capitalized legal and consulting expenses of $0.1 million relating to Spectrum Management. We also received a semi-annual
  interest payment of $0.04 million in cash and $0.1 million in the form of PIK'd interest in respect of our €1.2 million
  [$1.5 million] in OPG notes. On May 14, 2014, we sold to MVC 2,112,000 shares of the Fund's common stock in exchange for
  395,839 shares of MVC. (see
  Plan of Reorganization
  below).
  During the six months
  ended June, 2014, we realized net capital gains of $0.7 million related to our Share Exchange with MVC (see
  Plan of Reorganization
  below).
  During the six months ended June 30,
  2013, we realized capital losses of $1.8 million due to the asset sale of The Bradshaw Group ("Bradshaw") to PartsNow!
  LLC. The structure and pricing of the transaction was such that only the Class A preferred shareholders received any proceeds.
  There were no proceeds to the other equity classes, including the Classes B, D, and E preferred stock and warrants owned by the
  Fund. The Fund invested in Bradshaw in May 2000 and the Fund's investment has been valued at $0 since 2002.
  Changes in Unrealized Appreciation/Depreciation of Portfolio
  Securities
  Net unrealized depreciation on investments
  decreased $1.0 million during the six months ended June 30, 2014, to a net unrealized depreciation of $3.0 million. Such decrease
  in unrealized depreciation is largely due to the following changes:
  (i)
  Increase in fair value of our holding in Equus Energy, LLC of $0.8 million due to an
                                                                                                      increase in comparable transactions for mineral leases, continued improved economic conditions, industry outlook, pricing
                                                                                                      assumptions, as                                                                                                     well as
                                                                                                      additional                                                                                                     proved
                                                                                                      reserves                                                                                                           from new
                                                                                                      drilling and                                                                                                     recompletion
                                                                                                      activities.
  Table of Contents
  28
  (ii)
  Increase in fair value of our shareholding in PalletOne, Inc. of $0.7 million due to an
                                                                                                       improvement in the industry sector for packaging companies and continued revenue and earnings growth.
  (iii)
  Decrease in fair value of our
  shareholding in MVC of $0.4 million due to a
                                                                                                        difference                                                                                                       between our
                                                                                                        cost                                                                                                       basis
                                                                                                        in the MVC shares and the closing trading price of the MVC shares on June 30, 2014. Our cost basis included
                                                                                                        the closing trading price of the shares on
                                                                                                        May                                                                                                                     14,
                                                                                                        2014 (the closing date of the Share Exchange) as well as capitalized transaction costs of $0.5 million incurred in connection
                                                                                                        with the                                                                                                       Share
                                                                                                        Exchange.
  Net unrealized depreciation on investments
  decreased to $16.0 million during the six months ended June 30, 2013, from a net unrealized depreciation of $17.2 million. 
  Such decrease in unrealized depreciation is largely due to the following changes:
  (i)
  Decrease in fair value of our holding in Equus Energy, LLC of $0.1 million due to operating expenses.
  (ii)
  Decrease in fair value of our holdings in Spectrum Management, LLC of $0.3 million due to a decline
  in operating performance and $0.2 million in capitalized legal and consulting expenses.
  (iii)
  Transfer of unrealized loss to realized loss of our holding in The Bradshaw Group ("Bradshaw")
  of $1.8 million upon the asset sale of the investment.
  Dividends
  We will pay out net investment income
  and/or realized capital gains, if any, on an annual basis as required under the Investment Company Act of 1940.
  Portfolio Securities
  During the six months ended June
  30, 2013, we capitalized legal and consulting expenses of $0.2 million relating to Spectrum Management, LLC. We also received
  a semi-annual interest payment of $0.03 million and a 5.75% partial principal repayment of $0.01 million in respect of our
  €1.2 million [$1.5 million] in OPG notes. On May 14, 2014, we sold to MVC 2,112,000 shares of the Fund's common
  stock in exchange for 395,839 shares of MVC (see Plan of Reorganization above).
  During the six months ended June 30,
  2013, we capitalized legal and consulting expenses of $0.2 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 that there were no subsequent events.
  Item 3. Quantitative and Qualitative Disclosure about
  Market Risk
  We are subject to financial market risks,
  including changes in interest rates with respect to investments in debt securities and outstanding debt payable, as well as changes
  in marketable equity security prices. In the future, in addition to our investment in 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.
  Table of Contents
  29
  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 23.1%
  of the net asset value and 43.5% of our investments in portfolio company securities (at fair value) as of June 30, 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 June 30, 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 June 30,
  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.
  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 recently disclosed
  damages in the range of $5.8 to $6.0 million. The claimed damages include a $2.0 million fine paid to ICE, fees and costs incurred
  in responding to ICE's investigation, and additional labor charges allegedly incurred by Atrium and Champion to comply with
  federal law in their hiring practices.
  Table of Contents
  30
  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.
  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 "
  Plan of Reorganization
  " on page above.
  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.
  Table of Contents
  31
  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
  32
  Item 6. Exhibits
  3.
  Articles of Incorporation and by-laws
  (a)
  Restated Certificate of Incorporation of the Fund, as amended. [Incorporated by reference to Exhibit 3(a) to Registrant's Annual Report on Form 10-K for the year ended December 31, 2007]
  (b)
  Certificate of Merger dated June 30, 1993, between the Fund and Equus Investments Incorporated [Incorporated by reference to Exhibit 3(c) to Registrant's Annual Report on Form 10-K for the year ended December 31, 2007]
  (c)
  Amended and Restated Bylaws of the Fund. [Incorporated by reference to Exhibit 3(b) to Registrant's Current Report on Form 8-K filed on June 30, 2014.]
  10.
  Material Contracts.
  (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
  Table of Contents
  33
  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: August 14, 2014
  /s/ John A. Hardy
  John A. Hardy
  Chief Executive Officer
  Table of Contents
  34