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  <P STYLE="font: 13.5pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B>UNITED STATES </B></P>
  
  <P STYLE="font: 13.5pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B>SECURITIES AND EXCHANGE COMMISSION
  </B></P>
  
  <P STYLE="font: 12pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B>Washington, D.C. 20549 </B></P>
  
  <P STYLE="font: 18pt/normal Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center"><B>FORM 10-Q </B></P>
  
  <P STYLE="font: 7.5pt/normal Times New Roman, Times, Serif; margin: 9pt 0 0">(Mark One)</P>
  
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      <td style="width: 0px; font: 11pt/115% Calibri, Helvetica, Sans-Serif">&nbsp;</td>
      <td style="width: 33px; font: 11pt/115% Calibri, Helvetica, Sans-Serif"><font style="font-family: MS Gothic, Helvetica, Sans-Serif; font-size: 10pt">&#9746;</font></td>
      <td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><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
  March 31, 2016</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="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <tr style="vertical-align: top">
      <td style="width: 0px; line-height: 115%">&nbsp;</td>
      <td style="width: 33px; padding-top: 9pt; line-height: 115%"><font style="font-family: MS Mincho; font-size: 10pt">&#9744;</font></td>
      <td style="padding-top: 9pt; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 </b></font></td></tr>
  </table>
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center">For the transition period to</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center">Commission File Number 814-00098</P>
  
  <P STYLE="font: 24pt/normal Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center"><B>EQUUS TOTAL RETURN, INC. </B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B>(Exact name of registrant as specified
  in its charter) </B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in">&nbsp;</P>
  
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      <td style="width: 50%; font: 11pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Delaware</b></font></td>
      <td style="width: 50%; font: 11pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>76-0345915</b></font></td></tr>
  <tr style="vertical-align: top">
      <td>
          <P STYLE="font: 7.5pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>(State or other jurisdiction of</b></P>
          <P STYLE="font: 7.5pt/normal Times New Roman, Times, Serif; margin: 0 0 0.75pt; text-align: center"><b>incorporation or organization)</b></P></td>
      <td>
          <P STYLE="font: 7.5pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>(I.R.S. Employer</b></P>
          <P STYLE="font: 7.5pt/normal Times New Roman, Times, Serif; margin: 0 0 0.75pt; text-align: center"><b>Identification No.)</b></P></td></tr>
  <tr>
      <td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif">&nbsp;</td>
      <td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif">&nbsp;</td></tr>
  <tr style="vertical-align: top">
      <td>
          <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>700 Louisiana St., 48<sup>th</sup>
          Floor</b></P>
          <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Houston, Texas</b></P></td>
      <td>
          <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in"><b>&nbsp;</b></P>
          <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>77002</b></P></td></tr>
  <tr style="vertical-align: top">
      <td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 7.5pt"><b>(Address of principal executive offices)</b></font></td>
      <td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 7.5pt"><b>(Zip Code)</b></font></td></tr>
  </table>
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 7.5pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B>(Former Name, Former Address and
  Former Fiscal Year, if Changed Since Last Report)</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center; text-indent: 0.5in"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center"><B>Registrant&rsquo;s telephone
  number, including area code: (713) 529-0900 </B></P>
  
  <P STYLE="font: 10pt/normal Calibri, Helvetica, Sans-Serif; margin: 9pt 0 0; text-indent: 24.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Indicate
  by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
  Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and
  (2) has been subject to such filing requirements for the past 90 days. Yes </FONT><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9746;</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif">
  No </FONT><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9744;</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 &#9744;</FONT><FONT STYLE="font-family: Wingdings">
  </FONT><FONT STYLE="font-family: Times New Roman, Times, Serif">No &#9744;</FONT></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 9pt 0 0; text-indent: 24.5pt">Indicate by check mark whether
  the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of &ldquo;accelerated
  filer and large accelerated filer&rdquo; in Rule 12b-2 of the Exchange Act.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
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  <tr style="vertical-align: top">
      <td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Large
      accelerated filer &#9744;</FONT></td>
      <td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Accelerated
      filer &#9744;</FONT></td>
      <td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Non-accelerated
      filer &#9746;</FONT></td>
      <td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Smaller
      Reporting Company &#9744; </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 &#9744; No &#9746;</FONT></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 9pt 0 0; text-indent: 24.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">There
  were 12,673,646 shares of the registrant&rsquo;s common stock, $.001 par value, outstanding, as of May 11, 2016.</FONT></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 0.4in; text-indent: 0.5in">&nbsp;</P>
  
  
  <!-- Field: Page; Sequence: 1 -->
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      <!-- Field: /Page -->
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 10pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">EQUUS TOTAL RETURN, INC.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">(A Delaware Corporation)</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><A NAME="Index" TITLE="Index"></A>INDEX</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: bottom">
      <td style="line-height: 115%">&nbsp;</td>
      <td style="text-align: center; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 7.5pt"><b>PAGE</b></font></td></tr>
  <tr>
      <td style="vertical-align: top; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="#a_001">PART I. FINANCIAL INFORMATION</A></font></td>
      <td style="vertical-align: bottom; line-height: 115%">&nbsp;</td></tr>
  <tr>
      <td style="vertical-align: top; text-indent: 0.5in; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="#a_002">Item 1. Financial Statements</A></font></td>
      <td style="vertical-align: bottom; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">3</font></td></tr>
  <tr>
      <td style="vertical-align: top; text-indent: 1in; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="#a_003">Balance Sheets</A></font><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </font></td>
      <td nowrap style="vertical-align: bottom; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">3</font></td></tr>
  <tr>
      <td style="vertical-align: top; text-indent: 1in; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="#a_004">Statements of Operations</A></font><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </font></td>
      <td nowrap style="vertical-align: bottom; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4</font></td></tr>
  <tr>
      <td style="vertical-align: top; text-indent: 1in; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="#a_005">Statements of Changes in Net Assets</A></font><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </font></td>
      <td nowrap style="vertical-align: bottom; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">5</font></td></tr>
  <tr>
      <td style="vertical-align: top; text-indent: 1in; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="#a_006">Statements of Cash Flows</A></font><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </font></td>
      <td nowrap style="vertical-align: bottom; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">6</font></td></tr>
  <tr>
      <td style="vertical-align: top; text-indent: 1in; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="#a_007">Supplemental Information&mdash;Selected Per Share Data and Ratios</A></font><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </font></td>
      <td nowrap style="vertical-align: bottom; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">7</font></td></tr>
  <tr>
      <td style="vertical-align: top; text-indent: 1in; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="#a_008">Schedules of Investments</A></font><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </font></td>
      <td nowrap style="vertical-align: bottom; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">8</font></td></tr>
  <tr>
      <td style="vertical-align: top; text-indent: 1in; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="#a_009">Notes to Financial Statements</A></font><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </font></td>
      <td nowrap style="vertical-align: bottom; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">12</font></td></tr>
  <tr>
      <td style="vertical-align: top; text-indent: 0.5in; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="#a_010">Item 2. Management&rsquo;s Discussion and Analysis of Financial Condition and Results of Operations</A></font><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </font></td>
      <td nowrap style="vertical-align: bottom; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">27</font></td></tr>
  <tr>
      <td style="vertical-align: top; text-indent: 0.5in; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="#a_011">Item 3. Quantitative and Qualitative Disclosure about Market Risk</A></font><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </font></td>
      <td nowrap style="vertical-align: bottom; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">33</font></td></tr>
  <tr>
      <td style="vertical-align: top; text-indent: 0.5in; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="#a_012">Item 4. Controls and Procedures</A></font><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </font></td>
      <td nowrap style="vertical-align: bottom; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">33</font></td></tr>
  <tr>
      <td style="vertical-align: top; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="#a_013">PART II. OTHER INFORMATION</A></font></td>
      <td style="vertical-align: bottom; line-height: 115%">&nbsp;</td></tr>
  <tr>
      <td style="vertical-align: top; text-indent: 0.5in; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="#a_014">Item 1. Legal Proceedings</A></font><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </font></td>
      <td nowrap style="vertical-align: bottom; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">34</font></td></tr>
  <tr>
      <td style="vertical-align: top; text-indent: 0.5in; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="#a_015">Item 1A. Risk Factors</A></font><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </font></td>
      <td nowrap style="vertical-align: bottom; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">34</font></td></tr>
  <tr>
      <td style="vertical-align: top; text-indent: 0.5in; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="#a_016">Item 6. Exhibits</A></font><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </font></td>
      <td nowrap style="vertical-align: bottom; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">35</font></td></tr>
  <tr>
      <td style="vertical-align: top; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="#a_017">SIGNATURE</A></font><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </font></td>
      <td nowrap style="vertical-align: bottom; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">36</font></td></tr>
  <tr>
      <td style="vertical-align: top; line-height: 115%">&nbsp;</td>
      <td nowrap style="vertical-align: bottom; line-height: 115%">&nbsp;</td></tr>
  </table>
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 6pt; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 6pt; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 6pt; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 6pt; text-indent: 0.5in">&nbsp;</P>
  
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  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 6pt; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 6pt; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 6pt; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 6pt; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 6pt; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 6pt; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 6pt; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 6pt; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 6pt; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 6pt; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 6pt; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 6pt; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 0.4in; text-indent: 0.5in">&nbsp;</P>
  
  
  <!-- Field: Page; Sequence: 2 -->
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  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 10pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><U>EQUUS TOTAL RETURN, INC. </U></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><U><A NAME="a_003"></A>BALANCE SHEETS </U></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><U>(Unaudited)</U></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B><U><A NAME="a_001"></A>Part I. Financial Information</U></B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><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; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center"></P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><P STYLE="margin-top: 0; margin-bottom: 0">March 31,</P>
                                                                                  <P STYLE="margin-top: 0; margin-bottom: 0">2016</P></TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><P STYLE="margin-top: 0; margin-bottom: 0">December 31,</P>
                                                                                  <P STYLE="margin-top: 0; margin-bottom: 0">2015</P></TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="font-weight: bold">(in thousands, except per share amounts)</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-weight: bold">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD>Assets</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
      <TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: right">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
      <TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: right">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">Investments in portfolio securities at fair value:</TD><TD STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Arial, Helvetica, Sans-Serif; text-align: right">&nbsp;</TD><TD STYLE="font: 10pt Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="width: 70%; text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Control investments (cost at $10,050 and $10,050 respectively)</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">4,715</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">5,715</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Affiliate investments (cost at $350 and $350 respectively)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11,600</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9,600</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-affiliate investments - related party (cost at $5,829 and $5,698 respectively)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,267</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,159</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-affiliate investments (cost at $2,940 and $915 respectively)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">2,940</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">915</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total investments in portfolio securities at fair value</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">22,522</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">19,389</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">Temporary cash investments</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">15,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">15,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">Cash and cash equivalents</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">14,430</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">17,036</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">Restricted cash</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">149</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">150</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">Accounts receivable from investments</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">611</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">614</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">Accrued interest receivable</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">214</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">128</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">Accrued dividend receivable</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">130</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-bottom: 1pt">Accounts receivable and other</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">40</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">83</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total assets</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">52,966</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">52,530</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">Liabilities and net assets</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable and accrued liabilities</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">349</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">36</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable to related parties</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">68</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">186</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Borrowing under margin account</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">14,999</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">15,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">15,416</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">15,222</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">Commitments and contingencies (See Note 2)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-bottom: 2.5pt">Net assets</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">37,550</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">37,308</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">Net assets consist of:</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Common stock, par value</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">13</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">13</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Capital in excess of par value</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">54,224</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">54,226</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Undistributed net investment losses</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(20,040</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(19,307</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Undistributed net capital gains</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unrealized appreciation (depreciation) of portfolio securities, net</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,915</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,915</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unrealized depreciation of portfolio securities - related party, net</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(2,562</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(2,539</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total net assets</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">37,550</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">37,308</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="padding-bottom: 2.5pt">Shares of common stock issued and outstanding, $.001 par value, 50,000 shares authorized</TD><TD STYLE="font-size: 11.5pt; padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font-size: 11.5pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">12,674</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 11.5pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 11.5pt; padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font-size: 11.5pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">12,674</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 11.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="padding-bottom: 2.5pt">Shares of preferred stock issued and outstanding, $.001 par value, 5,000 shares authorized</TD><TD STYLE="font-size: 11.5pt; padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font-size: 11.5pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 11.5pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 11.5pt; padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font-size: 11.5pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 11.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="padding-bottom: 2.5pt">Net asset value per share</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">2.96</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">2.94</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
  </TABLE>
  
  
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center">The accompanying notes are an
  integral part of these financial statements.</P>
  
  
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  <P STYLE="font: 10pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><U>EQUUS TOTAL RETURN, INC.</U></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><U><A NAME="a_004"></A>STATEMENTS OF OPERATIONS </U></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">(Unaudited)&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center"></P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="7" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Three Months Ended March 31,</TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="font-weight: bold">(in thousands, except per share amounts)</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2016</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2015</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">Investment income:</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
      <TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: right">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest and dividend income:</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
      <TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: right">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="width: 70%; text-align: left; padding-bottom: 1pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-affiliate investments</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="width: 1%; border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="width: 12%; border-bottom: Black 1pt solid; text-align: right">136</TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="width: 1%; border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="width: 12%; border-bottom: Black 1pt solid; text-align: right">44</TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total interest and dividend income</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">136</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">44</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest from temporary cash investments</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">2</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total investment income</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">138</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">44</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD>Expenses:</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Compensation expense</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">272</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">624</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Professional fees</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">368</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">327</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Director fees and expenses</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">120</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">95</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;General and administrative expense</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">84</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">41</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Mailing, printing and other expenses</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">26</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">23</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Taxes</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest expense</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total expenses</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">871</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,118</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-bottom: 1pt">Net investment loss</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(733</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(1,074</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">Net realized gain (loss):</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
      <TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: right">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Control investments</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,850</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-affiliate investments</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">372</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Temporary cash investments</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(2</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(5</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net realized loss</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(2</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(2,483</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD>&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
      <TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: right">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">Net unrealized appreciation (depreciation) of portfolio securities:</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
      <TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: right">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;End of period</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,915</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,023</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="padding-bottom: 1pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Beginning of period</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">4,915</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(1,840</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-bottom: 1pt">Net change in unrealized appreciation (depreciation) of portfolio securities</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">2,863</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">Net unrealized depreciation of portfolio securities - related party:</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
      <TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: right">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;End of period</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,562</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,870</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="padding-bottom: 1pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Beginning of period</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(2,539</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(1,725</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-bottom: 1pt">Net change in unrealized depreciation of portfolio securities - related party</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(23</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(145</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD>&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
      <TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: right">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
      <TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: right">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-bottom: 2.5pt">Net increase (decrease) in net assets resulting from operations</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">242</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(839</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD>&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
      <TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: right">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
      <TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: right">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">Net increase (decrease) in net assets resulting from operations per share:</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
      <TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: right">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Basic and diluted</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">0.02</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(0.07</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">Weighted average shares outstanding:</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
      <TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: right">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Basic and diluted</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">12,674</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">12,674</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
  </TABLE>
  
  
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center">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="border-collapse: collapse; width: 100%; font-size: 10pt"><TR STYLE="vertical-align: top; text-align: left"><TD STYLE="width: 33%">&nbsp;</TD><TD STYLE="width: 34%; text-align: center"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->4<!-- Field: /Sequence --></TD><TD STYLE="width: 33%; text-align: right">&nbsp;</TD></TR></TABLE></DIV>
      <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font-size: 10pt"><TR STYLE="vertical-align: top; text-align: left"><TD STYLE="width: 100%"><A HREF="#Index" TITLE="Index" STYLE="font-style: italic">Index</A>&nbsp;</TD></TR></TABLE></DIV>
      <!-- Field: /Page -->
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 0.4in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><U>EQUUS TOTAL RETURN, INC. </U></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><A NAME="a_005"></A><U>STATEMENTS OF CHANGES IN NET ASSETS
  </U></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">(Unaudited)</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"></P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <TR STYLE="vertical-align: bottom">
      <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="7" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Three months ended March 31,</TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="font-weight: bold">(in thousands)</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2016</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2015</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="width: 63%; text-align: left">&nbsp;Net increase (decrease) in net assets resulting from operations</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">242</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">(839</TD><TD STYLE="width: 1%; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;Net assets at beginning of period</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">37,308</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">36,201</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;Net assets at end of period</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">37,550</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">35,362</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
  </TABLE>
  
  
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"></P>
  
  <P STYLE="font: 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">&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">&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: 0 0 10pt; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 10pt; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 10pt; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 10pt; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 10pt; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 10pt; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 10pt; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center">The accompanying notes are an integral
  part of these financial statements.</P>
  
  
  <!-- Field: Page; Sequence: 5 -->
      <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font-size: 10pt"><TR STYLE="vertical-align: top; text-align: left"><TD STYLE="width: 33%">&nbsp;</TD><TD STYLE="width: 34%; text-align: center"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->5<!-- Field: /Sequence --></TD><TD STYLE="width: 33%; text-align: right">&nbsp;</TD></TR></TABLE></DIV>
      <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font-size: 10pt"><TR STYLE="vertical-align: top; text-align: left"><TD STYLE="width: 100%"><A HREF="#Index" TITLE="Index" STYLE="font-style: italic">Index</A>&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_006"></A><U>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; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0; text-align: center"></P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="7" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Three months ended March 31,</TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="font-size: 10pt; font-weight: bold">(in thousands)</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2016</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2015</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">Reconciliation of 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 STYLE="font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
      <TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: right">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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 STYLE="font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
      <TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: right">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="width: 70%; text-align: left">Net increase (decrease)  in net assets resulting from operations</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">242</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">(839</TD><TD STYLE="width: 1%; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net
      cash (used in) provided by operating activities:</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
      <TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: right">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif">&nbsp;</TD>
      <TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: right">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net realized loss</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,483</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net change in unrealized depreciation of portfolio securities</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,000</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,863</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net change in unrealized depreciation of portfolio securities - related party</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">23</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">145</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">Changes in operating assets and liabilities:</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchase of portfolio securities</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,000</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net proceeds from dispositions of portfolio securities</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">372</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Principal payments received from portfolio securities</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,255</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Sales of temporary cash investments, net</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">15,144</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Decrease (increase) in accounts receivable from
      investments</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Increase in accrued interest receivable</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(111</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(181</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Decrease in accounts receivable and other</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">43</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">92</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Increase (decrease) in accounts payable and accrued liabilities</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">313</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(442</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Decrease) increase  in accounts
      payable to related parties</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(118</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">109</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">Net cash (used in) provided by operating activities</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,605</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">18,273</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">Cash flows from financing activities:</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Borrowings under margin account</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">14,999</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Repayments under margin account</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(15,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(14,999</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-bottom: 1pt">Net cash used in financing activities</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(1</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(14,999</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">Net (decrease) increase in cash and cash equivalents</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,606</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,274</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-bottom: 1pt">Cash and cash equivalents at beginning of period</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">17,036</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">15,697</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-bottom: 2.5pt">Cash and cash equivalents at end of period</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">14,430</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">18,971</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">Non-cash operating and financing activities:</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued interest or dividends exchanged for portfolio securities</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">25</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">915</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued interest or dividends exchanged for portfolio securities - related party</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">130</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">54</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">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="text-align: left; padding-bottom: 2.5pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest paid</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">1</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">1</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income taxes paid</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">4</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">7</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
  </TABLE>
  
  
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0; text-align: center"></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>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 10pt; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 10pt; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 10pt; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 10pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 10pt">&nbsp;</P>
  
  
  <!-- Field: Page; Sequence: 6 -->
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      <!-- 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_007"></A>SUPPLEMENTAL INFORMATION&mdash;SELECTED
  PER SHARE DATA AND RATIOS </U></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">(Unaudited)</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 9pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: center; text-indent: 0.5in; color: red"></P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="7" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Three months ending March 31,</TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid; vertical-align: bottom">2016</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt; text-align: center; vertical-align: bottom">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid; vertical-align: bottom">2015</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="width: 70%; text-align: left">Investment income</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">0.01</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="padding-bottom: 1pt">Expenses</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">0.07</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">0.09</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">Net investment loss</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(0.06</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(0.09</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">Net realized loss</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(0.20</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">Net change in unrealized appreciation</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.08</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.23</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-bottom: 1pt">Net change in unrealized depreciation - related party</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(0.01</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">Net increase (decrease) in net assets</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.02</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(0.07</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-bottom: 1pt">Net assets at beginning of period</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">2.94</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">2.86</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-bottom: 2.5pt">Net assets at end of period, basic and diluted</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">2.96</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">2.79</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD>Weighted average number of shares outstanding during period,</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;in thousands</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">12,674</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">12,674</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD>Market price per share:</TD><TD STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Arial, Helvetica, Sans-Serif; text-align: right">&nbsp;</TD><TD STYLE="font: 10pt Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</TD>
      <TD STYLE="font: 10pt Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Arial, Helvetica, Sans-Serif; text-align: right">&nbsp;</TD><TD STYLE="font: 10pt Arial, Helvetica, Sans-Serif; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Beginning of period</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1.79</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">2.10</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;End of period</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1.60</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1.95</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">Selected information and ratios:</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Ratio of expenses to average net assets</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2.33</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3.12</TD><TD STYLE="text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Ratio of net investment loss to average net assets</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1.96</TD><TD STYLE="text-align: left">%)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(3.00</TD><TD STYLE="text-align: left">%)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-left: 24px">Ratio of net increase (decrease) in net assets resulting from operations to average net assets</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.65</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2.34</TD><TD STYLE="text-align: left">%)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font-weight: normal; font-style: normal; text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total return on market price <font style="font-family: Times New Roman, Times, Serif; font-size: 10pt; font-weight: normal; font-style: normal"><sup>(1)</sup></font></TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(10.61</TD><TD STYLE="text-align: left">%)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(7.14</TD><TD STYLE="text-align: left">%)</TD></TR>
  </TABLE>
  
  
  
  <P STYLE="font: 9pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: center; text-indent: 0.5in; color: red"><B>&nbsp;</B></P>
  
  <P STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center"><FONT STYLE="font-size: 7pt"><SUP>(1)</SUP></FONT><FONT STYLE="font-size: 8pt">
  Total return = [(ending market price per share - beginning price per share) / beginning market price per share</FONT><FONT STYLE="font-size: 9pt">].</FONT></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center; text-indent: 0.5in">&nbsp;&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center">The accompanying notes are an integral
  part of these financial statements.</P>
  
  
  <!-- Field: Page; Sequence: 7 -->
      <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font-size: 10pt"><TR STYLE="vertical-align: top; text-align: left"><TD STYLE="width: 33%">&nbsp;</TD><TD STYLE="width: 34%; text-align: center"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->7<!-- Field: /Sequence --></TD><TD STYLE="width: 33%; text-align: right">&nbsp;</TD></TR></TABLE></DIV>
      <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font-size: 10pt"><TR STYLE="vertical-align: top; text-align: left"><TD STYLE="width: 100%"><A HREF="#Index" TITLE="Index" STYLE="font-style: italic">Index</A>&nbsp;</TD></TR></TABLE></DIV>
      <!-- Field: /Page -->
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 10pt"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B><U>EQUUS TOTAL RETURN, INC. </U></B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B><A NAME="a_008"></A><U>SCHEDULE OF INVESTMENTS </U></B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B><U>MARCH 31, 2016 </U></B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0"><B>(Unaudited) </B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B><I>(in thousands, except share data)</I></B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B><I>&nbsp;</I></B></P>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0; text-align: center"></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in"><B><I></I></B></P>
  
  <TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; border-collapse: collapse; font: normal 7.5pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
      <TD STYLE="font-weight: bold; width: 32%">Name&nbsp;and&nbsp;Location&nbsp;of</td>
      <TD STYLE="font: 10pt Arial, Helvetica, Sans-Serif; text-align: center; width: 7%">&nbsp;</td>
      <TD STYLE="font-weight: bold; width: 7%; text-align: center; vertical-align: bottom">Date&nbsp;of&nbsp;Initial</td>
      <TD STYLE="font: 10pt Arial, Helvetica, Sans-Serif; text-align: right; width: 20%">&nbsp;</td>
      <TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="font: 10pt Arial, Helvetica, Sans-Serif; text-align: right; width: 12%">&nbsp;</td>
      <TD STYLE="width: 1%; text-align: center; vertical-align: top">&nbsp;</TD>
      <TD STYLE="font-weight: bold; text-align: center; width: 13%">&nbsp;Cost of&nbsp;</td>
      <TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="font-weight: bold; text-align: center; width: 6%">&nbsp;Fair&nbsp;</td></tr>
  <tr style="vertical-align: bottom">
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid; text-align: left; vertical-align: bottom">Portfolio&nbsp;Company</td>
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom">Industry</td>
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom">Investment</td>
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom">Investment</td>
      <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD>
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom">Principal</td>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom">&nbsp;</TD>
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom">Investment</td>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom">&nbsp;</TD>
      <TD STYLE="font-weight: bold; text-decoration: none; border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom">Value<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 7.5pt; font-style: normal"><B><SUP>(1)</SUP></B></FONT></td></tr>
  <tr style="vertical-align: bottom">
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid">Control Investments:&nbsp;&nbsp;Majority-owned <FONT STYLE="font: normal 7.5pt Times New Roman, Times, Serif"><b><sup>(3)</sup></b></font><b><font style="font-family: Times New Roman, Times, Serif; font-size: 7.5pt; font-style: normal">:</font></b></td>
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid; text-align: center">&nbsp;</td>
      <TD STYLE="font: bold 9pt Arial, Helvetica, Sans-Serif; border-bottom: Black 1pt solid; text-align: center">&nbsp;</td>
      <TD STYLE="font-size: 9pt; font-weight: bold; border-bottom: Black 1pt solid; text-align: center">&nbsp;</td>
      <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD>
      <TD STYLE="font-size: 9pt; font-weight: bold; border-bottom: Black 1pt solid; text-align: center">&nbsp;</td>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: center; vertical-align: top">&nbsp;</TD>
      <TD STYLE="font: bold 9pt Arial, Helvetica, Sans-Serif; border-bottom: Black 1pt solid; text-align: right">&nbsp;</td>
      <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD>
      <TD STYLE="font: bold 9pt Arial, Helvetica, Sans-Serif; border-bottom: Black 1pt solid; text-align: right">&nbsp;</td></tr>
  <TR STYLE="background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left"><P STYLE="margin-top: 0; margin-bottom: 0"><B STYLE="font-style: normal; font-weight: normal">Equus Energy, LLC</B></P>
                                   <P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-style: normal"><B STYLE="font-style: normal; font-weight: normal">Houston, TX</B></FONT></P></td>
      <TD STYLE="text-align: center; vertical-align: top"><B STYLE="font-style: normal; font-weight: normal">&nbsp;Energy&nbsp;</B></td>
      <TD STYLE="text-align: center; vertical-align: top"><B STYLE="font-style: normal; font-weight: normal">&nbsp;December 2011&nbsp;</B></td>
      <TD STYLE="text-align: center; vertical-align: top"><B STYLE="font-style: normal; font-weight: normal">&nbsp;Member interest (100%)&nbsp;</B></td>
      <TD><B>&nbsp;</B></TD>
      <TD STYLE="font-size: 4pt; text-align: right"><B>&nbsp;</B></td>
      <TD STYLE="text-align: center; vertical-align: top"><B>$</B></TD>
      <TD STYLE="text-align: right; border-top-color: Black; border-top-width: 0.5pt; vertical-align: top"><B STYLE="font-style: normal; font-weight: normal">&nbsp;&nbsp;&nbsp;7,050&nbsp;&nbsp;</B></td>
      <TD STYLE="text-align: center; vertical-align: top"><B>$</B></TD>
      <TD STYLE="text-align: right; border-top-color: Black; border-top-width: 0.5pt; vertical-align: top"><B STYLE="font-style: normal; font-weight: normal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4,500</B></td></tr>
  <tr style="vertical-align: top">
      <TD STYLE="text-align: left"><P STYLE="margin-top: 0; margin-bottom: 0"><B STYLE="font-style: normal; font-weight: normal">Equus Media Development Company, LLC</B></P>
                                   <P STYLE="margin-top: 0; margin-bottom: 0"><B STYLE="font-style: normal; font-weight: normal">Houston, TX</B></P></td>
      <TD STYLE="text-align: center"><B STYLE="font-style: normal; font-weight: normal">&nbsp;Media&nbsp;</B></td>
      <TD STYLE="text-align: center"><B STYLE="font-style: normal; font-weight: normal">&nbsp;January 2007&nbsp;</B></td>
      <TD><B STYLE="font-style: normal; font-weight: normal">&nbsp;Member interest (100%)&nbsp;</B></td>
      <TD><B>&nbsp;</B></TD>
      <TD STYLE="font-size: 4pt; text-align: right"><B>&nbsp;</B></td>
      <TD STYLE="text-align: center; vertical-align: top"><B>&nbsp;</B></TD>
      <TD STYLE="text-align: right; vertical-align: top"><B STYLE="font-style: normal; font-weight: normal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3,000&nbsp;&nbsp;</B></td>
      <TD STYLE="text-align: right; vertical-align: top"><B>&nbsp;</B></TD>
      <TD STYLE="text-align: right; vertical-align: top"><B STYLE="font-style: normal; font-weight: normal">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;215</B></td></tr>
  <TR STYLE="background-color: rgb(204,238,255)">
      <TD COLSPAN="4" STYLE="font-weight: bold; vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: left">Total Control Investments: Majority-owned (represents 12.6% of total investments at fair value)</td>
      <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid">&nbsp;</TD>
      <TD STYLE="font-weight: bold; vertical-align: top; border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: right">&nbsp;</td>
      <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center; vertical-align: top">$</TD>
      <TD STYLE="font-weight: bold; vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: right">&nbsp;10,050&nbsp;&nbsp;</td>
      <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid">$</TD>
      <TD STYLE="font-weight: bold; vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4,715</td></tr>
  <tr style="vertical-align: bottom">
      <TD STYLE="font-weight: bold">Affiliate Investments <font style="font-family: Times New Roman, Times, Serif; font-size: 7.5pt; font-style: normal"><b><sup>(4)</sup>:</b></font></td>
      <TD STYLE="font-weight: bold; text-align: center">&nbsp;</td>
      <TD STYLE="font-weight: bold; text-align: center">&nbsp;</td>
      <TD STYLE="font-weight: bold; text-align: right">&nbsp;</td>
      <TD>&nbsp;</TD>
      <TD STYLE="font-weight: bold; text-align: right">&nbsp;</td>
      <TD STYLE="text-align: center; vertical-align: top">&nbsp;</TD>
      <TD STYLE="font-weight: bold; text-align: right">&nbsp;</td>
      <TD>&nbsp;</TD>
      <TD STYLE="font-weight: bold; text-align: right">&nbsp;</td></tr>
  <TR STYLE="background-color: rgb(204,238,255)">
      <TD STYLE="border-top: Black 1pt solid; text-align: left; vertical-align: top"><P STYLE="margin-top: 0; margin-bottom: 0">PalletOne, Inc.</P>
                                                                   <P STYLE="margin-top: 0; margin-bottom: 0">Bartow, FL</P></td>
      <TD STYLE="border-top: Black 1pt solid; text-align: center">&nbsp;Shipping products and services&nbsp;</td>
      <TD STYLE="border-top: Black 1pt solid; text-align: center; vertical-align: top">&nbsp;October 2001&nbsp;</td>
      <TD STYLE="border-top: Black 1pt solid; text-align: left; vertical-align: top">&nbsp;350,000&nbsp;shares&nbsp;of&nbsp;common stock (18.7%)&nbsp;</td>
      <TD STYLE="border-top: Black 1pt solid">&nbsp;</TD>
      <TD STYLE="font-size: 4pt; text-align: right; border-top: Black 1pt solid">&nbsp;</td>
      <TD STYLE="border-top: Black 1pt solid; text-align: center; vertical-align: top">$</TD>
      <TD STYLE="text-align: right; border-top: Black 1pt solid; vertical-align: top">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;350&nbsp;&nbsp;</td>
      <TD STYLE="border-top: Black 1pt solid; text-align: center; vertical-align: top">$</TD>
      <TD STYLE="text-align: right; border-top: Black 1pt solid; vertical-align: top">&nbsp;&nbsp;&nbsp;&nbsp;11,600</td></tr>
  <tr style="vertical-align: bottom">
      <TD COLSPAN="4" STYLE="font-weight: bold; border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: left">Total Affiliate Investments (represents 30.9% of total investments at fair value)</td>
      <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid">&nbsp;</TD>
      <TD STYLE="font-size: 4pt; border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: right"></td>
      <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center; vertical-align: top">$</TD>
      <TD STYLE="font-weight: bold; border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;350&nbsp;&nbsp;</td>
      <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid">$</TD>
      <TD STYLE="font-weight: bold; border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11,600</td></tr>
  <TR STYLE="background-color: rgb(204,238,255)">
      <TD COLSPAN="4" STYLE="font-weight: bold; border-bottom: Black 1pt solid">Non-Affiliate Investments - Related Party (less than 5% owned):</td>
      <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD>
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid">&nbsp;</td>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: center; vertical-align: top">&nbsp;</TD>
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid">&nbsp;</td>
      <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD>
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid">&nbsp;</td></tr>
  <tr>
      <TD STYLE="vertical-align: top"><P STYLE="margin-top: 0; margin-bottom: 0">MVC Capital, Inc.</P>
                                      <P STYLE="margin-top: 0; margin-bottom: 0">Purchase, NY</P></td>
      <TD STYLE="vertical-align: top; text-align: center">Financial services</td>
      <TD STYLE="vertical-align: top; text-align: center">May 2014</td>
      <TD STYLE="vertical-align: top">445,744 shares of common stock (1.7%)</td>
      <TD>&nbsp;</TD>
      <TD STYLE="font-weight: bold; vertical-align: bottom">&nbsp;</td>
      <TD STYLE="text-align: center; vertical-align: top">$</TD>
      <TD STYLE="vertical-align: top; text-align: right">&nbsp;&nbsp;&nbsp;&nbsp;5,829&nbsp;&nbsp;</td>
      <TD STYLE="text-align: left; vertical-align: top">$</TD>
      <TD STYLE="vertical-align: top; text-align: right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3,267</td></tr>
  <TR STYLE="background-color: rgb(204,238,255)">
      <TD COLSPAN="4" STYLE="font-weight: bold; border-top: Black 1pt solid; border-bottom: Black 1pt solid">Total Non-Affiliate Investments - Related Party (represents 8.7% of total investments at fair value)</td>
      <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid">&nbsp;</TD>
      <TD STYLE="font-weight: bold; border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: left">&nbsp;</td>
      <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom">$</TD>
      <TD STYLE="font-weight: bold; border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: right">&nbsp;&nbsp;&nbsp;5,829&nbsp;&nbsp;</td>
      <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom">$</TD>
      <TD STYLE="font-weight: bold; border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3,267</td></tr>
  <tr style="vertical-align: bottom">
      <TD COLSPAN="4" STYLE="font-weight: bold; border-bottom: Black 1pt solid">Non-Affiliate Investments (less than 5% owned):</td>
      <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD>
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid">&nbsp;</td>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: center; vertical-align: top">&nbsp;</TD>
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid">&nbsp;</td>
      <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD>
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid">&nbsp;</td></tr>
  <TR STYLE="background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; vertical-align: top"><P STYLE="margin-top: 0; margin-bottom: 0">5<font style="font-family: Times New Roman, Times, Serif; font-size: 7.5pt; font-weight: normal; font-style: normal"><sup>TH</sup> Element Tracking, LLC</FONT></P>
                                                                   <P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font: normal 7.5pt Times New Roman, Times, Serif">Boston, MA</font></P></td>
      <TD STYLE="text-align: center">Business products and services</td>
      <TD STYLE="text-align: center; vertical-align: top">January 2015</td>
      <TD STYLE="text-align: left; vertical-align: top">14% promissory note due 7/16 <font style="font-family: Times New Roman, Times, Serif; font-size: 7.5pt; font-weight: normal; font-style: normal"><sup>(2)</sup></font></td>
      <TD STYLE="text-align: center; vertical-align: top">$</TD>
      <TD STYLE="text-align: right; vertical-align: top">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;940</td>
      <TD STYLE="text-align: center; vertical-align: top">&nbsp;</TD>
      <TD STYLE="text-align: right; vertical-align: top">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;940&nbsp;&nbsp;</td>
      <TD>&nbsp;</TD>
      <TD STYLE="text-align: right; vertical-align: top">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;940</td></tr>
  <tr style="vertical-align: top">
      <TD>Biogenic Reagents, LLC</td>
      <TD STYLE="text-align: center">Energy</td>
      <TD STYLE="text-align: center">January 2016</td>
      <TD>16% promissory note due 5/16 <font style="font-family: Times New Roman, Times, Serif; font-size: 7.5pt; font-weight: normal; font-style: normal"><sup>(2)</sup></font></td>
      <TD>&nbsp;</TD>
      <TD STYLE="text-align: right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,000</td>
      <TD STYLE="text-align: center; vertical-align: top">&nbsp;</TD>
      <TD STYLE="text-align: right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,000&nbsp;&nbsp;</td>
      <TD>&nbsp;</TD>
      <TD STYLE="text-align: right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,000</td></tr>
  <TR STYLE="background-color: rgb(204,238,255)">
      <TD STYLE="vertical-align: top">Minneapolis, MN</td>
      <TD STYLE="vertical-align: top; text-align: center">&nbsp;</td>
      <TD STYLE="vertical-align: top; text-align: center">&nbsp;</td>
      <TD STYLE="font: 10pt Arial, Helvetica, Sans-Serif; vertical-align: bottom">&nbsp;</td>
      <TD>&nbsp;</TD>
      <TD STYLE="font: 10pt Arial, Helvetica, Sans-Serif; vertical-align: bottom">&nbsp;</td>
      <TD STYLE="text-align: center; vertical-align: top">&nbsp;</TD>
      <TD STYLE="font: 10pt Arial, Helvetica, Sans-Serif; vertical-align: bottom">&nbsp;</td>
      <TD>&nbsp;</TD>
      <TD STYLE="font: 10pt Arial, Helvetica, Sans-Serif; vertical-align: bottom">&nbsp;</td></tr>
  <tr style="vertical-align: bottom">
      <TD COLSPAN="4" STYLE="font-weight: bold; border-top: Black 1pt solid; border-bottom: Black 1pt solid">Total Non-Affiliate Investments (represents 7.8% of total investments at fair value)</td>
      <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid">&nbsp;</TD>
      <TD STYLE="font-weight: bold; border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: left">&nbsp;</td>
      <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom">$</TD>
      <TD STYLE="font-weight: bold; border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: right">&nbsp;&nbsp;&nbsp;2,940&nbsp;&nbsp;</td>
      <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom">$</TD>
      <TD STYLE="font-weight: bold; border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: right">&nbsp;&nbsp;&nbsp;&nbsp;2,940</td></tr>
  <TR STYLE="background-color: rgb(204,238,255)">
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid">Total Investment in Portfolio Securities</td>
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid; text-align: center">&nbsp;</td>
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid; text-align: center">&nbsp;</td>
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid">&nbsp;</td>
      <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD>
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid; text-align: left">&nbsp;</td>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom">$</TD>
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid; text-align: right">&nbsp;&nbsp;&nbsp;19,169&nbsp;&nbsp;</td>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom">$</TD>
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid; text-align: right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;22,522</td></tr>
  <tr style="vertical-align: bottom">
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid">Temporary Cash Investments</td>
      <TD STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">&nbsp;</td>
      <TD STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">&nbsp;</td>
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid">&nbsp;</td>
      <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD>
      <TD STYLE="font-weight: bold; text-align: left; border-bottom: Black 1pt solid">&nbsp;</td>
      <TD STYLE="text-align: center; vertical-align: top; border-bottom: Black 1pt solid">&nbsp;</TD>
      <TD STYLE="font-weight: bold; text-align: right; border-bottom: Black 1pt solid">&nbsp;</td>
      <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD>
      <TD STYLE="font-weight: bold; text-align: right; border-bottom: Black 1pt solid">&nbsp;</td></tr>
  <TR STYLE="background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">U.S. Treasury Bill</td>
      <TD STYLE="text-align: center">Government</td>
      <TD STYLE="text-align: center">April 2016</td>
      <TD>UST 0% 4/16</td>
      <TD STYLE="text-align: center; vertical-align: bottom">$</TD>
      <TD STYLE="text-align: right">15,000</td>
      <TD STYLE="text-align: center; vertical-align: top">&nbsp;</TD>
      <TD STYLE="text-align: right">15,000&nbsp;&nbsp;</td>
      <TD>&nbsp;</TD>
      <TD STYLE="text-align: right">15,000</td></tr>
  <TR STYLE="background-color: White">
      <TD COLSPAN="4" STYLE="font-weight: bold; border-top: Black 1pt solid; border-bottom: Black 1pt solid">Total Temporary Cash Investments (represents 40.0% of total investments at fair value)</td>
      <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid">&nbsp;</TD>
      <TD STYLE="font-weight: bold; border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: left">&nbsp;</td>
      <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom">$</TD>
      <TD STYLE="font-weight: bold; border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: right">15,000&nbsp;&nbsp;</td>
      <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom">$</TD>
      <TD STYLE="font-weight: bold; border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: right">15,000</td></tr>
  <TR STYLE="background-color: rgb(204,238,255)">
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid">Total Investments</td>
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid; text-align: center">&nbsp;</td>
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid; text-align: center">&nbsp;</td>
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid">&nbsp;</td>
      <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD>
      <TD STYLE="font-weight: bold; text-align: left; border-bottom: Black 1pt solid">&nbsp;</td>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom">$</TD>
      <TD STYLE="font-weight: bold; text-align: right; border-bottom: Black 1pt solid">&nbsp;&nbsp;34,169&nbsp;&nbsp;</td>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom">$</TD>
      <TD STYLE="font-weight: bold; text-align: right; border-bottom: Black 1pt solid">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;37,522</td></tr>
  </table>
  
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0; text-align: center; text-indent: 0.5in">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <tr style="vertical-align: top">
      <td style="line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 7.5pt"><sup>(1) </sup></font></td>
      <td style="line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 7.5pt">See Note 3 to the financial statements, Valuation of Investments.</font></td></tr>
  <tr style="vertical-align: top">
      <td style="line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 7.5pt"><sup>(2) </sup></font></td>
      <td style="line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 7.5pt">Income-producing.</font></td></tr>
  <tr style="vertical-align: top">
      <td style="line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 7.5pt"><sup>(3) </sup></font></td>
      <td style="line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 7.5pt">Majority owned investments are generally defined under the Investment Company Act of 1940 as companies in which we own more than 50% of the voting securities of the company.</font></td></tr>
  <tr style="vertical-align: top">
      <td style="line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 7.5pt"><sup>(4) </sup></font></td>
      <td style="line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 7.5pt">Affiliate investments are generally defined under the Investment Company Act of 1940 as companies in which we own at least 5% but not more than 25% voting securities of the company.</font></td></tr>
  <tr style="vertical-align: top">
      <td style="line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 7.5pt"><sup>&nbsp;</sup></font></td>
      <td>&nbsp;</td></tr>
  <tr style="vertical-align: top">
      <td style="line-height: 115%">&nbsp;</td>
      <td style="line-height: 115%">&nbsp;</td></tr>
  <tr style="vertical-align: top">
      <td style="line-height: 115%">&nbsp;</td>
      <td style="line-height: 115%">&nbsp;</td></tr>
  </table>
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">The accompanying notes are an integral
  part of these financial statements.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 0.4in; text-indent: 0.5in">&nbsp;</P>
  
  
  <!-- Field: Page; Sequence: 8 -->
      <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font-size: 10pt"><TR STYLE="vertical-align: top; text-align: left"><TD STYLE="width: 33%">&nbsp;</TD><TD STYLE="width: 34%; text-align: center"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->8<!-- Field: /Sequence --></TD><TD STYLE="width: 33%; text-align: right">&nbsp;</TD></TR></TABLE></DIV>
      <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font-size: 10pt"><TR STYLE="vertical-align: top; text-align: left"><TD STYLE="width: 100%"><A HREF="#Index" TITLE="Index" STYLE="font-style: italic">Index</A>&nbsp;</TD></TR></TABLE></DIV>
      <!-- Field: /Page -->
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 10pt"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B><U>EQUUS TOTAL RETURN, INC. </U></B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B><U>SCHEDULE OF INVESTMENTS &ndash;
  (Continued) </U></B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B><U>MARCH 31, 2016 </U></B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B>(Unaudited) </B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Except for our holding of shares of
  MVC Capital, Inc. (&ldquo;MVC&rdquo;), substantially all of our portfolio securities are restricted from public sale without prior
  registration under the Securities Act of 1933 (hereafter, the &ldquo;Securities Act&rdquo;). 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
  March 31, 2016, except for our shares of MVC, all of our investments are in enterprises that are considered eligible portfolio
  companies under the 1940 Act. We provide significant managerial assistance to portfolio companies that comprise 29.8% of the total
  value of the investments in portfolio securities as of March 31, 2016.</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 March 31, 2016 (in thousands):</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 9pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-indent: 24.5pt; color: red"><B></B></P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 80%; font: 10pt Times New Roman, Times, Serif">
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Type of Securities</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Cost</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Fair Value</TD><TD STYLE="font-weight: bold; font-style: normal; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-weight: bold; font-style: normal; text-align: center; border-bottom: Black 1pt solid"><P STYLE="margin-top: 0; margin-bottom: 0">Fair Value as</P>
                                                                                  <P STYLE="margin-top: 0; margin-bottom: 0">Percentage of</P>
                                                                                  <P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font: normal 10pt Times New Roman, Times, Serif"><b><U STYLE="text-decoration: none">Net Assets</u></b></font></P></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="width: 46%; text-align: left">Limited liability company investments</TD><TD STYLE="width: 5%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 11%; text-align: right">10,050</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 5%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 11%; text-align: right">4,715</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 5%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 11%; text-align: right">12.6</TD><TD STYLE="width: 1%; text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">Secured and subordinated debt</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,940</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,940</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7.8</TD><TD STYLE="text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">Common stock</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,179</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">14,867</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">39.6</TD><TD STYLE="text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: center; padding-bottom: 2.5pt">Total</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">19,169</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">22,522</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">60.0</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: left">%</TD></TR>
  </TABLE>
  
  
  
  <P STYLE="font: 9pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-indent: 24.5pt; color: red"><B></B></P>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0; text-align: center; text-indent: 24.5pt"></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">The following is a summary by industry
  of the Fund&rsquo;s investments in portfolio securities as of March 31, 2016 (in thousands):</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"></P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 80%; font: 10pt Times New Roman, Times, Serif">
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Industry</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Fair Value</TD><TD STYLE="font-weight: bold; font-style: normal; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-weight: bold; font-style: normal; text-align: center; border-bottom: Black 1pt solid"><P STYLE="margin-top: 0; margin-bottom: 0">Fair Value as</P>
                                                                                  <P STYLE="margin-top: 0; margin-bottom: 0">Percentage of</P>
                                                                                  <P STYLE="margin-top: 0; margin-bottom: 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 11pt; font-style: normal"><b><U STYLE="font-size: 10pt; text-decoration: none">Net Assets</u></b></font></P></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="width: 56%; text-align: left">Shipping products and services</TD><TD STYLE="width: 8%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">11,600</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">30.9</TD><TD STYLE="width: 1%; text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD>Energy</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,500</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">17.3</TD><TD STYLE="text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">Financial services</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,267</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8.7</TD><TD STYLE="text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">Business products and services</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">940</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2.5</TD><TD STYLE="text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD>Media</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">215</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.6</TD><TD STYLE="text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="padding-bottom: 2.5pt">Total</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">22,522</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">60.0</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: left">%</TD></TR>
  </TABLE>
  
  
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"></P>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0; text-align: center"></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: 9 -->
      <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font-size: 10pt"><TR STYLE="vertical-align: top; text-align: left"><TD STYLE="width: 33%">&nbsp;</TD><TD STYLE="width: 34%; text-align: center"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->9<!-- Field: /Sequence --></TD><TD STYLE="width: 33%; text-align: right">&nbsp;</TD></TR></TABLE></DIV>
      <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font-size: 10pt"><TR STYLE="vertical-align: top; text-align: left"><TD STYLE="width: 100%"><A HREF="#Index" TITLE="Index" STYLE="font-style: italic">Index</A>&nbsp;</TD></TR></TABLE></DIV>
      <!-- Field: /Page -->
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 10pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B><U>EQUUS TOTAL RETURN, INC.</U></B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B><U>SCHEDULE OF INVESTMENTS </U></B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B><U>DECEMBER 31, 2015</U></B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B><U>(Unaudited)</U></B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B><I>(in thousands, except share data)</I></B></P>
  
  <P STYLE="font: 7pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0; text-indent: 0.5in"></P>
  
  <TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 8pt Times New Roman, Times, Serif; width: 100%; background-color: white; border-collapse: collapse">
  <tr style="vertical-align: bottom">
      <TD STYLE="font-weight: bold; width: 34%"><FONT STYLE="font-size: 7.5pt">Name&nbsp;and&nbsp;Location&nbsp;of</FONT></td>
      <TD STYLE="font: 10pt Arial, Helvetica, Sans-Serif; text-align: center; width: 5%; vertical-align: bottom"><FONT STYLE="font-size: 7.5pt">&nbsp;</FONT></td>
      <TD STYLE="font-weight: bold; width: 12%; text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 7.5pt">Date&nbsp;of&nbsp;Initial</FONT></td>
      <TD STYLE="font: 10pt Arial, Helvetica, Sans-Serif; text-align: right; width: 18%"><FONT STYLE="font-size: 7.5pt">&nbsp;</FONT></td>
      <TD STYLE="width: 1%; text-align: center; vertical-align: top"><FONT STYLE="font-size: 7.5pt">&nbsp;</FONT></TD>
      <TD STYLE="font: 10pt Arial, Helvetica, Sans-Serif; text-align: right; width: 8%"><FONT STYLE="font-size: 7.5pt">&nbsp;</FONT></td>
      <TD STYLE="width: 1%; text-align: center; vertical-align: top"><FONT STYLE="font-size: 7.5pt">&nbsp;</FONT></TD>
      <TD STYLE="font-weight: bold; text-align: center; width: 10%"><FONT STYLE="font-size: 7.5pt">Cost of&nbsp;</FONT></td>
      <TD STYLE="width: 1%; text-align: center; vertical-align: top"><FONT STYLE="font-size: 7.5pt">&nbsp;</FONT></TD>
      <TD STYLE="font-weight: bold; text-align: center; width: 10%"><FONT STYLE="font-size: 7.5pt">Fair&nbsp;</FONT></td></tr>
  <tr style="vertical-align: bottom">
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7.5pt">Portfolio&nbsp;Company</FONT></td>
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 7.5pt">Industry</FONT></td>
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 7.5pt">Investment</FONT></td>
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 7.5pt">Investment</FONT></td>
      <TD STYLE="text-align: center; vertical-align: top; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7.5pt">&nbsp;</FONT></TD>
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 7.5pt">Principal</FONT></td>
      <TD STYLE="text-align: center; vertical-align: top; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7.5pt">&nbsp;</FONT></TD>
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 7.5pt">Investment</FONT></td>
      <TD STYLE="text-align: center; vertical-align: top; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7.5pt">&nbsp;</FONT></TD>
      <TD STYLE="font-weight: bold; text-decoration: none; border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 7.5pt">Value<FONT STYLE="font-family: Times New Roman, Times, Serif; font-style: normal"><B><SUP>(1)</SUP></B></FONT></FONT></td></tr>
  <tr style="vertical-align: bottom">
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7.5pt">Control Investments:&nbsp;&nbsp;Majority-owned
      <FONT STYLE="font-family: Times New Roman, Times, Serif; font-style: normal"><B><SUP>(3)</SUP>:</B></FONT></FONT></td>
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 7.5pt">&nbsp;</FONT></td>
      <TD STYLE="font: bold 9pt Arial, Helvetica, Sans-Serif; border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 7.5pt">&nbsp;</FONT></td>
      <TD STYLE="font-size: 9pt; font-weight: bold; border-bottom: Black 1pt solid; text-align: center"><FONT STYLE="font-size: 7.5pt">&nbsp;</FONT></td>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: center; vertical-align: top"><FONT STYLE="font-size: 7.5pt">&nbsp;</FONT></TD>
      <TD STYLE="font-size: 9pt; font-weight: bold; border-bottom: Black 1pt solid; text-align: center"><FONT STYLE="font-size: 7.5pt">&nbsp;</FONT></td>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: center; vertical-align: top"><FONT STYLE="font-size: 7.5pt">&nbsp;</FONT></TD>
      <TD STYLE="font: bold 9pt Arial, Helvetica, Sans-Serif; border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 7.5pt">&nbsp;</FONT></td>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: center; vertical-align: top"><FONT STYLE="font-size: 7.5pt">&nbsp;</FONT></TD>
      <TD STYLE="font: bold 9pt Arial, Helvetica, Sans-Serif; border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 7.5pt">&nbsp;</FONT></td></tr>
  <TR STYLE="background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left"><P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 7.5pt">Equus Energy, LLC</FONT></P>
                                   <P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 7.5pt">Houston, TX</FONT></P></td>
      <TD STYLE="text-align: center; vertical-align: top"><FONT STYLE="font-size: 7.5pt">Energy&nbsp;</FONT></td>
      <TD STYLE="text-align: center; vertical-align: top"><FONT STYLE="font-size: 7.5pt">December 2011&nbsp;</FONT></td>
      <TD STYLE="text-align: left; vertical-align: top"><FONT STYLE="font-size: 7.5pt">Member interest (100%)&nbsp;</FONT></td>
      <TD STYLE="text-align: center; vertical-align: top"><FONT STYLE="font-size: 7.5pt">&nbsp;</FONT></TD>
      <TD STYLE="font-size: 4pt; text-align: right"><FONT STYLE="font-size: 7.5pt">&nbsp;</FONT></td>
      <TD STYLE="text-align: center; vertical-align: top"><FONT STYLE="font-size: 7.5pt">$</FONT></TD>
      <TD STYLE="text-align: right; border-top-color: Black; border-top-width: 0.5pt; vertical-align: top"><FONT STYLE="font-size: 7.5pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7,050
      &nbsp;</FONT></td>
      <TD STYLE="text-align: center; vertical-align: top"><FONT STYLE="font-size: 7.5pt">$</FONT></TD>
      <TD STYLE="text-align: right; border-top-color: Black; border-top-width: 0.5pt; vertical-align: top"><FONT STYLE="font-size: 7.5pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5,500</FONT></td></tr>
  <tr style="vertical-align: top">
      <TD STYLE="text-align: left"><P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 7.5pt">Equus Media Development
                                   Company, LLC</FONT></P>
                                   <P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 7.5pt">Houston, TX</FONT></P></td>
      <TD STYLE="text-align: center; vertical-align: top"><FONT STYLE="font-size: 7.5pt">Media&nbsp;</FONT></td>
      <TD STYLE="text-align: center; vertical-align: top"><FONT STYLE="font-size: 7.5pt">January 2007&nbsp;</FONT></td>
      <TD><FONT STYLE="font-size: 7.5pt">Member interest (100%)&nbsp;</FONT></td>
      <TD STYLE="text-align: center; vertical-align: top"><FONT STYLE="font-size: 7.5pt">&nbsp;</FONT></TD>
      <TD STYLE="font-size: 4pt; text-align: right"><FONT STYLE="font-size: 7.5pt">&nbsp;</FONT></td>
      <TD STYLE="text-align: center; vertical-align: top"><FONT STYLE="font-size: 7.5pt">&nbsp;</FONT></TD>
      <TD STYLE="text-align: right"><FONT STYLE="font-size: 7.5pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3,000 &nbsp;</FONT></td>
      <TD STYLE="text-align: center; vertical-align: top"><FONT STYLE="font-size: 7.5pt">&nbsp;</FONT></TD>
      <TD STYLE="text-align: right"><FONT STYLE="font-size: 7.5pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;215</FONT></td></tr>
  <TR STYLE="background-color: rgb(204,238,255)">
      <TD COLSPAN="4" STYLE="font-weight: bold; vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 7.5pt">Total
      Control Investments: Majority-owned (represents 16.6% of total investments at fair value)</FONT></td>
      <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center; vertical-align: top"><FONT STYLE="font-size: 7.5pt">&nbsp;</FONT></TD>
      <TD STYLE="font-weight: bold; vertical-align: top; border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 7.5pt">&nbsp;</FONT></td>
      <TD STYLE="text-align: center; vertical-align: top; border-top: Black 1pt solid; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7.5pt"><B>$</B></FONT></TD>
      <TD STYLE="font-weight: bold; vertical-align: top; border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 7.5pt">&nbsp;10,050
      &nbsp;</FONT></td>
      <TD STYLE="text-align: center; vertical-align: top; border-top: Black 1pt solid; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7.5pt"><B>$</B></FONT></TD>
      <TD STYLE="font-weight: bold; vertical-align: top; border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 7.5pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5,715</FONT></td></tr>
  <tr style="vertical-align: bottom">
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7.5pt">Affiliate Investments <FONT STYLE="font-family: Times New Roman, Times, Serif; font-style: normal"><B><SUP>(4)</SUP>:</B></FONT></FONT></td>
      <TD STYLE="font-weight: bold; text-align: center; vertical-align: bottom; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7.5pt">&nbsp;</FONT></td>
      <TD STYLE="font-weight: bold; text-align: center; vertical-align: bottom; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7.5pt">&nbsp;</FONT></td>
      <TD STYLE="font-weight: bold; text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7.5pt">&nbsp;</FONT></td>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: center; vertical-align: top"><FONT STYLE="font-size: 7.5pt">&nbsp;</FONT></TD>
      <TD STYLE="font-weight: bold; text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7.5pt">&nbsp;</FONT></td>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: center; vertical-align: top"><FONT STYLE="font-size: 7.5pt">&nbsp;</FONT></TD>
      <TD STYLE="font-weight: bold; text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7.5pt">&nbsp;</FONT></td>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: center; vertical-align: top"><FONT STYLE="font-size: 7.5pt">&nbsp;</FONT></TD>
      <TD STYLE="font-weight: bold; text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7.5pt">&nbsp;</FONT></td></tr>
  <TR STYLE="background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; vertical-align: top"><P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 7.5pt">PalletOne,
                                           Inc.</FONT></P>
          <P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 7.5pt">Bartow, FL</FONT></P></td>
      <TD STYLE="text-align: center; vertical-align: top"><FONT STYLE="font-size: 7.5pt">Shipping products and services&nbsp;</FONT></td>
      <TD STYLE="text-align: center; vertical-align: top"><FONT STYLE="font-size: 7.5pt">October 2001&nbsp;</FONT></td>
      <TD STYLE="text-align: left; vertical-align: top"><FONT STYLE="font-size: 7.5pt">350,000&nbsp;shares&nbsp;of&nbsp;common stock
      (18.8%)&nbsp;</FONT></td>
      <TD STYLE="text-align: center; vertical-align: top"><FONT STYLE="font-size: 7.5pt">&nbsp;</FONT></TD>
      <TD STYLE="font-size: 4pt; text-align: right"></td>
      <TD STYLE="text-align: center; vertical-align: top"><FONT STYLE="font-size: 7.5pt">$</FONT></TD>
      <TD STYLE="text-align: right; border-top-color: Black; border-top-width: 0.5pt; vertical-align: top"><FONT STYLE="font-size: 7.5pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;350
      &nbsp;</FONT></td>
      <TD STYLE="text-align: center; vertical-align: top"><FONT STYLE="font-size: 7.5pt">$</FONT></TD>
      <TD STYLE="text-align: right; border-top-color: Black; border-top-width: 0.5pt; vertical-align: top"><FONT STYLE="font-size: 7.5pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9,600</FONT></td></tr>
  <tr style="vertical-align: bottom">
      <TD COLSPAN="4" STYLE="font-weight: bold; border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 7.5pt">Total
      Affiliate Investments (represents 27.9% of total investments at fair value)</FONT></td>
      <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center; vertical-align: top"><FONT STYLE="font-size: 7.5pt">&nbsp;</FONT></TD>
      <TD STYLE="font-size: 4pt; border-bottom: Black 1pt solid; text-align: right; border-top: Black 1pt solid"><FONT STYLE="font-size: 7.5pt">&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: 7.5pt"><B>$</B></FONT></TD>
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid; text-align: right; border-top: Black 1pt solid"><FONT STYLE="font-size: 7.5pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;350
      &nbsp;</FONT></td>
      <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center; vertical-align: top"><FONT STYLE="font-size: 7.5pt"><B>$</B></FONT></TD>
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid; text-align: right; border-top: Black 1pt solid"><FONT STYLE="font-size: 7.5pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9,600</FONT></td></tr>
  <TR STYLE="background-color: rgb(204,238,255)">
      <TD COLSPAN="4" STYLE="font-weight: bold; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7.5pt">Non-Affiliate Investments
      - Related Party (less than 5% owned):</FONT></td>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: center; vertical-align: top"><FONT STYLE="font-size: 7.5pt">&nbsp;</FONT></TD>
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7.5pt">&nbsp;</FONT></td>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: center; vertical-align: top"><FONT STYLE="font-size: 7.5pt">&nbsp;</FONT></TD>
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7.5pt">&nbsp;</FONT></td>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: center; vertical-align: top"><FONT STYLE="font-size: 7.5pt">&nbsp;</FONT></TD>
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7.5pt">&nbsp;</FONT></td></tr>
  <tr>
      <TD STYLE="vertical-align: top"><P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 7.5pt">MVC Capital, Inc.</FONT></P>
                                      <P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 7.5pt">Purchase, NY</FONT></P></td>
      <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 7.5pt">Financial services</FONT></td>
      <TD STYLE="text-align: center; vertical-align: top"><FONT STYLE="font-size: 7.5pt">September 2014</FONT></td>
      <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 7.5pt">428,662 shares of common stock (1.7%)</FONT></td>
      <TD STYLE="text-align: center; vertical-align: top"><FONT STYLE="font-size: 7.5pt">&nbsp;</FONT></TD>
      <TD STYLE="font-weight: bold; vertical-align: bottom"><FONT STYLE="font-size: 7.5pt">&nbsp;</FONT></td>
      <TD STYLE="text-align: center; vertical-align: top"><FONT STYLE="font-size: 7.5pt">$</FONT></TD>
      <TD STYLE="vertical-align: top; text-align: right"><FONT STYLE="font-size: 7.5pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5,698
      &nbsp;</FONT></td>
      <TD STYLE="text-align: center; vertical-align: top"><FONT STYLE="font-size: 7.5pt">$</FONT></TD>
      <TD STYLE="vertical-align: top; text-align: right"><FONT STYLE="font-size: 7.5pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3,159</FONT></td></tr>
  <TR STYLE="background-color: rgb(204,238,255)">
      <TD COLSPAN="4" STYLE="font-weight: bold; border-top: Black 1pt solid; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7.5pt">Total
      Non-Affiliate Investments - Related Party (represents 9.2% of total investments at fair value)</FONT></td>
      <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center; vertical-align: top"><FONT STYLE="font-size: 7.5pt">&nbsp;</FONT></TD>
      <TD STYLE="font-weight: bold; border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 7.5pt">&nbsp;</FONT></td>
      <TD STYLE="text-align: center; vertical-align: top; border-top: Black 1pt solid; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7.5pt"><B>$</B></FONT></TD>
      <TD STYLE="font-weight: bold; border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: right; vertical-align: top"><FONT STYLE="font-size: 7.5pt">&nbsp;&nbsp;5,698
      &nbsp;</FONT></td>
      <TD STYLE="text-align: center; vertical-align: top; border-top: Black 1pt solid; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7.5pt"><B>$</B></FONT></TD>
      <TD STYLE="font-weight: bold; border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: right; vertical-align: top"><FONT STYLE="font-size: 7.5pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3,159</FONT></td></tr>
  <tr style="vertical-align: bottom">
      <td colspan="4" style="font-weight: bold; border-bottom: Black 0.5pt solid"><FONT STYLE="font-size: 7.5pt">Non-Affiliate Investments
      (less than 5% owned):</FONT></td>
      <TD STYLE="text-align: center; vertical-align: top"><FONT STYLE="font-size: 7.5pt">&nbsp;</FONT></TD>
      <TD STYLE="font-weight: bold"><FONT STYLE="font-size: 7.5pt">&nbsp;</FONT></td>
      <TD STYLE="text-align: center; vertical-align: top"><FONT STYLE="font-size: 7.5pt">&nbsp;</FONT></TD>
      <TD STYLE="font-weight: bold"><FONT STYLE="font-size: 7.5pt">&nbsp;</FONT></td>
      <TD STYLE="text-align: center; vertical-align: top"><FONT STYLE="font-size: 7.5pt">&nbsp;</FONT></TD>
      <TD STYLE="font-weight: bold"><FONT STYLE="font-size: 7.5pt">&nbsp;</FONT></td></tr>
  <TR STYLE="background-color: rgb(204,238,255)">
      <TD STYLE="border-top: Black 1pt solid; text-align: left; vertical-align: top"><P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 7.5pt">5<FONT STYLE="font-family: Times New Roman, Times, Serif; font-weight: normal; font-style: normal"><SUP>TH
                                           </SUP>Element Tracking, LLC</FONT></FONT></P>
                                                                   <P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 7.5pt; font-weight: normal; font-style: normal; font-variant: normal">Boston,
                                           MA</FONT></P></td>
      <TD STYLE="border-top: Black 1pt solid; text-align: center; vertical-align: top"><FONT STYLE="font-size: 7.5pt">Business products
      and services</FONT></td>
      <TD STYLE="border-top: Black 1pt solid; text-align: center; vertical-align: top"><FONT STYLE="font-size: 7.5pt">January 2015</FONT></td>
      <TD STYLE="border-top: Black 1pt solid; text-align: left; vertical-align: top"><FONT STYLE="font-size: 7.5pt">14% promissory
      note due 1/16 <FONT STYLE="font-family: Times New Roman, Times, Serif; font-weight: normal; font-style: normal"><SUP>(2)</SUP></FONT></FONT></td>
      <TD STYLE="border-top: Black 1pt solid; text-align: center; vertical-align: top"><FONT STYLE="font-size: 7.5pt">$</FONT></TD>
      <TD STYLE="border-top: Black 1pt solid; text-align: right; vertical-align: top"><FONT STYLE="font-size: 7.5pt">&nbsp;&nbsp;915</FONT></td>
      <TD STYLE="border-top: Black 1pt solid; text-align: center; vertical-align: top"></TD>
      <TD STYLE="border-top: Black 1pt solid; text-align: right; vertical-align: top"><FONT STYLE="font-size: 7.5pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;915
      &nbsp;</FONT></td>
      <TD STYLE="border-top: Black 1pt solid; text-align: center; vertical-align: top"><FONT STYLE="font-size: 7.5pt">&nbsp;</FONT></TD>
      <TD STYLE="border-top: Black 1pt solid; text-align: right; vertical-align: top"><FONT STYLE="font-size: 7.5pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;915</FONT></td></tr>
  <tr style="vertical-align: bottom">
      <TD COLSPAN="4" STYLE="font-weight: bold; border-top: Black 1pt solid; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7.5pt">Total
      Non-Affiliate Investments (represents 2.7% of total investments at fair value)</FONT></td>
      <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center; vertical-align: top"><FONT STYLE="font-size: 7.5pt">&nbsp;</FONT></TD>
      <TD STYLE="font-weight: bold; border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 7.5pt">&nbsp;</FONT></td>
      <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center; vertical-align: top"><FONT STYLE="font-size: 7.5pt"><B>$</B></FONT></TD>
      <TD STYLE="font-weight: bold; border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 7.5pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;915
      &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: 7.5pt"><B>$</B></FONT></TD>
      <TD STYLE="font-weight: bold; border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 7.5pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;915</FONT></td></tr>
  <TR STYLE="background-color: rgb(204,238,255)">
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7.5pt">Total Investment in Portfolio
      Securities</FONT></td>
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 7.5pt">&nbsp;</FONT></td>
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 7.5pt">&nbsp;</FONT></td>
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7.5pt">&nbsp;</FONT></td>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: center; vertical-align: top"><FONT STYLE="font-size: 7.5pt">&nbsp;</FONT></TD>
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 7.5pt">&nbsp;</FONT></td>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: center; vertical-align: top"><FONT STYLE="font-size: 7.5pt"><B>$</B></FONT></TD>
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid; text-align: right; vertical-align: top"><FONT STYLE="font-size: 7.5pt">&nbsp;&nbsp;17,013
      &nbsp;</FONT></td>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: center; vertical-align: top"><FONT STYLE="font-size: 7.5pt"><B>$</B></FONT></TD>
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid; text-align: right; vertical-align: top"><FONT STYLE="font-size: 7.5pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19,389</FONT></td></tr>
  <tr style="vertical-align: bottom">
      <TD STYLE="font-weight: bold"><FONT STYLE="font-size: 7.5pt">Temporary Cash Investments</FONT></td>
      <TD STYLE="font-weight: bold; text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 7.5pt">&nbsp;</FONT></td>
      <TD STYLE="font-weight: bold; text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 7.5pt">&nbsp;</FONT></td>
      <TD STYLE="font-weight: bold"><FONT STYLE="font-size: 7.5pt">&nbsp;</FONT></td>
      <TD STYLE="text-align: center; vertical-align: top"><FONT STYLE="font-size: 7.5pt">&nbsp;</FONT></TD>
      <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 7.5pt">&nbsp;</FONT></td>
      <TD STYLE="text-align: center; vertical-align: top"><FONT STYLE="font-size: 7.5pt">&nbsp;</FONT></TD>
      <TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 7.5pt">&nbsp;</FONT></td>
      <TD STYLE="text-align: center; vertical-align: top"><FONT STYLE="font-size: 7.5pt">&nbsp;</FONT></TD>
      <TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 7.5pt">&nbsp;</FONT></td></tr>
  <TR STYLE="background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; border-top: Black 1pt solid"><FONT STYLE="font-size: 7.5pt">U.S. Treasury Bill</FONT></td>
      <TD STYLE="text-align: center; vertical-align: bottom; border-top: Black 1pt solid"><FONT STYLE="font-size: 7.5pt">Government</FONT></td>
      <TD STYLE="text-align: center; vertical-align: bottom; border-top: Black 1pt solid"><FONT STYLE="font-size: 7.5pt">December
      2015</FONT></td>
      <TD STYLE="border-top: Black 1pt solid"><FONT STYLE="font-size: 7.5pt">UST 0% 1/16</FONT></td>
      <TD STYLE="border-top: Black 1pt solid; text-align: center; vertical-align: top"><FONT STYLE="font-size: 7.5pt">$</FONT></TD>
      <TD STYLE="text-align: right; border-top: Black 1pt solid"><FONT STYLE="font-size: 7.5pt">15,000</FONT></td>
      <TD STYLE="border-top: Black 1pt solid; text-align: center; vertical-align: top"><FONT STYLE="font-size: 7.5pt">&nbsp;</FONT></TD>
      <TD STYLE="text-align: right; border-top: Black 1pt solid"><FONT STYLE="font-size: 7.5pt">15,000 &nbsp;</FONT></td>
      <TD STYLE="border-top: Black 1pt solid; text-align: center; vertical-align: top"><FONT STYLE="font-size: 7.5pt">&nbsp;</FONT></TD>
      <TD STYLE="text-align: right; border-top: Black 1pt solid"><FONT STYLE="font-size: 7.5pt">15,000</FONT></td></tr>
  <tr style="vertical-align: bottom">
      <TD COLSPAN="4" STYLE="font-weight: bold; border-top: Black 1pt solid; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7.5pt">Total
      Temporary Cash Investments (represents 43.6% of total investments at fair value)</FONT></td>
      <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center; vertical-align: top"><FONT STYLE="font-size: 7.5pt">&nbsp;</FONT></TD>
      <TD STYLE="font-weight: bold; border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 7.5pt">&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: 7.5pt"><B>$</B></FONT></TD>
      <TD STYLE="font-weight: bold; border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 7.5pt">15,000
      &nbsp;</FONT></td>
      <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center; vertical-align: top"><FONT STYLE="font-size: 7.5pt"><B>$</B></FONT></TD>
      <TD STYLE="font-weight: bold; border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 7.5pt">15,000</FONT></td></tr>
  <TR STYLE="background-color: rgb(204,238,255)">
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7.5pt">Total Investments</FONT></td>
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 7.5pt">&nbsp;</FONT></td>
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 7.5pt">&nbsp;</FONT></td>
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7.5pt">&nbsp;</FONT></td>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: center; vertical-align: top"><FONT STYLE="font-size: 7.5pt">&nbsp;</FONT></TD>
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 7.5pt">&nbsp;</FONT></td>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: center; vertical-align: top"><FONT STYLE="font-size: 7.5pt"><B>$</B></FONT></TD>
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 7.5pt">&nbsp;&nbsp;32,013
      &nbsp;</FONT></td>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: center; vertical-align: top"><FONT STYLE="font-size: 7.5pt"><B>$</B></FONT></TD>
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 7.5pt">&nbsp;&nbsp;&nbsp;34,389</FONT></td></tr>
  </table>
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <tr style="vertical-align: top">
      <td style="line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 7.5pt"><sup>(1) </sup></font></td>
      <td style="line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 7.5pt">See Note 3 to the financial statements, Valuation of Investments.</font></td></tr>
  <tr style="vertical-align: top">
      <td style="line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 7.5pt"><sup>(2) </sup></font></td>
      <td style="line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 7.5pt">Income-producing.</font></td></tr>
  <tr style="vertical-align: top">
      <td style="line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 7.5pt"><sup>(3) </sup></font></td>
      <td style="line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 7.5pt">Majority owned investments are generally defined under the Investment Company Act of 1940 as companies in which we own more than 50% of the voting securities of the company.</font></td></tr>
  <tr style="vertical-align: top">
      <td style="line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 7.5pt"><sup>(4) </sup></font></td>
      <td style="line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 7.5pt">Affiliate investments are generally defined under the Investment Company Act of 1940 as companies in which we own at least 5% but not more than 25% voting securities of the company.</font></td></tr>
  </table>
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 13.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">The accompanying notes are an integral
  part of these financial statements.</P>
  
  
  <!-- Field: Page; Sequence: 10 -->
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      <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font-size: 10pt"><TR STYLE="vertical-align: top; text-align: left"><TD STYLE="width: 100%"><A HREF="#Index" TITLE="Index" STYLE="font-style: italic">Index</A>&nbsp;</TD></TR></TABLE></DIV>
      <!-- Field: /Page -->
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 10pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B>EQUUS TOTAL RETURN, INC.</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B>SCHEDULE OF INVESTMENTS &ndash; (Continued)</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B>DECEMBER 31, 2015</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B>(Unaudited)</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Except for our holding of shares of
  MVC Capital, Inc. (&ldquo;MVC&rdquo;), substantially all of our portfolio securities are restricted from public sale without prior
  registration under the Securities Act of 1933 (hereafter, the &ldquo;Securities Act&rdquo;). 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
  December 31, 2015, except for our shares of MVC, all of our investments are in enterprises that are considered eligible portfolio
  companies under the 1940 Act. We provide significant managerial assistance to portfolio companies that comprise 29.5% of the total
  value of the investments in portfolio securities as of December 31, 2015.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Our investments in portfolio securities
  consist of the following types of securities as of December 31, 2015 (in thousands):</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"></P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 90%; font: 10pt Times New Roman, Times, Serif">
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Type of Securities</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Cost</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Fair Value</TD><TD STYLE="font-weight: bold; font-style: normal; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-weight: bold; font-style: normal; text-align: center; border-bottom: Black 1pt solid"><P STYLE="margin-top: 0; margin-bottom: 0">Fair Value as</P>
                                                                                                                        <P STYLE="margin-top: 0; margin-bottom: 0">Percentage of <FONT STYLE="font: normal 10pt Times New Roman, Times, Serif"><b></B></FONT></P>
                                                                                  <P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; font-style: normal; font-variant: normal"><B>Net
  Assets</B></FONT></P></TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: center">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="width: 46%; text-align: left">Limited liability company investments</TD><TD STYLE="width: 5%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 11%; text-align: right">10,050</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 5%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 11%; text-align: right">5,715</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 5%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 11%; text-align: right">15.3</TD><TD STYLE="width: 1%; text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">Secured and subordinated debt</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">915</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">915</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2.5</TD><TD STYLE="text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">Common stock</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,048</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">12,759</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">34.2</TD><TD STYLE="text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: center; padding-bottom: 2.5pt">Total</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">17,013</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">19,389</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">52.0</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: left">%</TD></TR>
  </TABLE>
  
  
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"></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 December 31, 2015 (in thousands):</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>&nbsp;</B></P>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 10pt; text-align: center"></P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 70%; font: 10pt Times New Roman, Times, Serif">
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Industry</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Fair Value</TD><TD STYLE="font-weight: bold; font-style: normal; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-weight: bold; font-style: normal; text-align: center; border-bottom: Black 1pt solid"><P STYLE="margin-top: 0; margin-bottom: 0">Fair Value as</P>
                                                                                                                        <P STYLE="margin-top: 0; margin-bottom: 0">Percentage of <FONT STYLE="font: normal 10pt Times New Roman, Times, Serif"><b><U STYLE="text-decoration: none"></U></B></FONT></P>
                                                                                  <P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font: normal 10pt Times New Roman, Times, Serif"><B><U STYLE="text-decoration: none">Net Assets</u></b></font></P></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="width: 56%; text-align: left">Shipping products and services</TD><TD STYLE="width: 8%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">9,600</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">25.7</TD><TD STYLE="width: 1%; text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD>Energy</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,500</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">14.7</TD><TD STYLE="text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">Financial services</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,159</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8.5</TD><TD STYLE="text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">Business products and services</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">915</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2.5</TD><TD STYLE="text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="padding-bottom: 1pt">Media</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">215</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">0.6</TD><TD STYLE="text-align: left; border-bottom: Black 1pt solid">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="padding-bottom: 2.5pt">Total</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">19,389</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">52.0</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: left">%</TD></TR>
  </TABLE>
  
  
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 10pt; text-align: center"></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 10pt"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 0.4in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">The accompanying notes are an integral
  part of these financial statements.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 0.4in; text-indent: 0.5in"><B>&nbsp;</B></P>
  
  
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  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 10pt"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B><U>EQUUS TOTAL RETURN, INC.</U></B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B><A NAME="a_009"></A><U>NOTES TO FINANCIAL STATEMENTS </U></B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B><U>MARCH 31, 2016 </U></B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in"><B>(Unaudited)</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <tr style="vertical-align: top">
      <td style="width: 24px; line-height: 115%">&nbsp;</td>
      <td style="width: 24px; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>(1)</b></font></td>
      <td style="text-decoration: underline; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><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> -
  Equus Total Return, Inc. (<I>&ldquo;we,&rdquo; &ldquo;us,&rdquo; &ldquo;our,&rdquo; &ldquo;Equus&rdquo; the
  &ldquo;Company&rdquo; and the &ldquo;Fund</I>&rdquo;), a Delaware corporation, was formed by Equus Investments II, L.P. (the
  &ldquo;Partnership&rdquo;) on August 16, 1991. On July 1, 1992, the Partnership was reorganized and all of the assets and
  liabilities of the Partnership were transferred to the Fund in exchange for shares of common stock of the Fund. Our shares
  trade on the New York Stock Exchange under the symbol EQS. On August 11, 2006, our shareholders approved the change of the
  Fund&rsquo;s investment strategy to a total return investment objective. This strategy seeks to provide the highest total
  return, consisting of capital appreciation and current income. In connection with this strategic investment change, the
  shareholders also approved the change of name from Equus II Incorporated to Equus Total Return, Inc.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">We attempt to maximize the return to
  stockholders in the form of current investment income and long-term capital gains by investing in the debt and equity securities
  of companies with a total enterprise value of between $5.0 million and $75.0 million, although we may engage in transactions with
  smaller or larger investee companies from time to time. We seek to invest primarily in companies pursuing growth either through
  acquisition or organically, leveraged buyouts, management buyouts and recapitalizations of existing businesses or special situations.
  Our income-producing investments consist principally of debt securities including subordinate debt, debt convertible into common
  or preferred stock, or debt combined with warrants and common and preferred stock. Debt and preferred equity financing may also
  be used to create long-term capital appreciation through the exercise and sale of warrants received in connection with the financing.
  We seek to achieve capital appreciation by making investments in equity and equity-oriented securities issued by privately-owned
  companies (or smaller public companies) in transactions negotiated directly with such companies. Given market conditions over the
  past several years and the performance of our portfolio, our Management and Board of Directors believe it prudent to continue to
  review alternatives to refine and further clarify the current strategies.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">We elected to be treated as a business
  development company (&ldquo;BDC&rdquo;) under the 1940 Act. We currently qualify as a regulated investment company (&ldquo;RIC&rdquo;)
  for federal income tax purposes and, therefore, are not required to pay corporate income taxes on any income or gains that we distribute
  to our stockholders. We have certain wholly owned taxable subsidiaries (&ldquo;Taxable Subsidiaries&rdquo;) each of which holds
  one or more portfolio investments listed on our Schedules of Investments. The purpose of these Taxable Subsidiaries is to permit
  us to hold certain income-producing investments or portfolio companies organized as limited liability companies, or LLCs, (or other
  forms of pass-through entities) and still satisfy the RIC tax requirement that at least 90% of our gross revenue for income tax
  purposes must consist of investment income. Absent the Taxable Subsidiaries, a portion of the gross income of these income-producing
  investments or of any LLC (or other pass-through entity) portfolio investment, as the case may be, would flow through directly
  to us for the 90% test. To the extent that such income did not consist of investment income, it could jeopardize our ability to
  qualify as a RIC and, therefore, cause us to incur significant federal income taxes. The income of the LLCs (or other pass-through
  entities) owned by Taxable Subsidiaries is taxed to the Taxable Subsidiaries and does not flow through to us, thereby helping us
  preserve our RIC status and resultant tax advantages. We do not consolidate the Taxable Subsidiaries for income tax purposes and
  they may generate income tax expense because of the Taxable Subsidiaries&rsquo; ownership of the portfolio companies. We reflect
  any such income tax expense on our Statements of Operations.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.35pt"><B>Basis of Presentation</B>&mdash;In
  accordance with Article 6 of Regulation S-X under the Securities Act of 1933 and the Securities Exchange Act of 1934, we do not
  consolidate portfolio company investments, including those in which we have a controlling interest. Our interim unaudited financial
  statements were prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP,
  for interim financial information and in accordance with the requirements of reporting on Form 10-Q and Article 10 of Regulation
  S-X, under the Securities Exchange Act of 1934, as amended. Accordingly, they are unaudited and exclude some disclosures required
  for annual financial statements. Management believes it has made all adjustments, consisting solely of normal recurring accruals,
  necessary for the fair presentation of these interim financial statements.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.35pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">The results of operations for the three
  months ended March 31, 2016 are not necessarily indicative of results that ultimately may be achieved for the remainder of the
  year. The interim unaudited financial statements and notes thereto should be read in conjunction with the financial statements
  and notes thereto included in the Fund&rsquo;s Annual Report on Form 10-K for the fiscal year ended December 31, 2015, 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>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 0 0.4in; text-indent: 0.5in">&nbsp;</P>
  
  
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      <!-- Field: /Page -->
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 10pt">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <tr style="vertical-align: top">
      <td style="width: 24px; line-height: 115%">&nbsp;</td>
      <td style="width: 24px; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>(2)</b></font></td>
      <td style="text-decoration: underline; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><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> -There are
  several factors that may materially affect our liquidity during the reasonably foreseeable future. We view this period as the
  twelve month period from the date of the financial statements in this Form 10-Q, <I>i.e</I>., the period through March 31,
  2016. We are evaluating the impact of current market conditions on our portfolio company valuations and their ability to
  provide current income. We have followed valuation techniques in a consistent manner; however, we are cognizant of current
  market conditions that might affect future valuations of portfolio securities. We believe that our operating cash flow and
  cash on hand will be sufficient to meet operating requirements and to finance routine follow-on investments, if any, through
  the next twelve months.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>Cash and Cash Equivalents</B> -
  As of March 31, 2016, we had cash and cash equivalents of $14.4 million. We had $22.5<FONT STYLE="color: red"> </FONT>million
  of our net assets of $37.6 million invested in portfolio securities. We also had $15.1 million of restricted cash
  and temporary cash investments, including primarily the proceeds of a quarter-end margin loan that we incurred to maintain
  the diversification requirements applicable to a RIC to maintain our pass-through tax treatment. Of this amount, $15.0
  million was invested in U.S. Treasury bills and $0.1 million represented a required 1% brokerage margin deposit. These
  securities were held by a securities brokerage firm and pledged along with other assets to secure repayment of the margin
  loan. The U.S. Treasury bills were sold on April 1, 2016 and we subsequently repaid this margin loan, plus interest, on April
  5, 2016.</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, 2015, we had cash
  and cash equivalents of $17.0 million. We had $19.4 million of our net assets of $37.3 million invested in portfolio securities.
  We also had $15.1 million of temporary cash investments and restricted cash, including primarily the proceeds of a quarter-end
  margin loan that we incurred to maintain the diversification requirements applicable to a RIC. Of this amount, $15.0 million was
  invested in U.S. Treasury bills and $0.1 million represented a required 1% brokerage margin deposit. These securities were held
  by a securities brokerage firm and pledged along with other assets to secure repayment of the margin loan. The U.S. Treasury bills
  were sold on January 4, 2016 and we subsequently repaid this margin loan. The margin interest was paid on February 3, 2016.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>Dividends -</B> 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>As of
  March 31, 2016, 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>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">As of March 31, 2016, we borrowed $15.0
  million to maintain our RIC status by utilizing a margin account with a securities brokerage firm. We collateralized such borrowings
  with restricted cash and temporary cash investments in U.S. Treasury bills of $15.1 million.</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, 2015, we borrowed
  $15.0 million to maintain our RIC status by utilizing a margin account with a securities brokerage firm. We collateralized such
  borrowings with restricted cash and temporary cash investments in U.S. Treasury bills of $15.1 million.</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>
  Market and economic volatility which has become endemic in the past few years has resulted in a relatively limited amount of available
  debt financing for small and medium-sized companies such as Equus and its portfolio companies. Such debt financing generally has
  shorter maturities, higher interest rates and fees, and more restrictive terms than debt facilities available in the past. In addition,
  during these years and continuing into the first three months of 2016, the price of our common stock remained well below our net
  asset value, thereby making it undesirable to issue additional shares of our common stock below net asset value. Because of these
  challenges, our near-term strategies shifted from originating debt and equity investments to preserving liquidity necessary to
  meet our operational needs. Key initiatives that we have previously undertaken to provide necessary liquidity include monetizations,
  the suspension of dividends and the internalization of management. Although we cannot assure you that such initiatives will be
  sufficient, we believe we have sufficient liquidity to meet our operating requirements for the remainder of 2016 and the first
  three months of 2017.</P>
  
  
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      <!-- 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">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <tr style="vertical-align: top">
      <td style="width: 24px; line-height: 115%">&nbsp;</td>
      <td style="width: 24px; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>(3)</b></font></td>
      <td style="text-decoration: underline; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><u>Significant Accounting Policies </u></b></font></td></tr>
  </table>
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">The following is a summary of significant
  accounting policies followed by the Fund in the preparation of its financial statements:</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>Use of Estimates -</B> 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>
  We follow ASC Topic 820 for measuring fair value. Prior to our election to become a BDC, we also followed the guidance in ASC
  Topic 820 in disclosing the fair value reported for all financial instruments that were either impaired or available for sale
  securities, using the definitions provided in Accounting Standards Codification Topic 320, &ldquo;Investments &ndash; Debt
  and Equity Securities&rdquo; (&ldquo;ASC Topic 320&rdquo;). Fair value is the price that would be received to sell an asset
  or paid to transfer a liability in an orderly transaction between market participants at the measurement date and sets out a
  fair value hierarchy. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical
  assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). Inputs are broadly defined under
  ASC Topic 820 as assumptions market participants would use in pricing an asset or liability. The three levels of the fair
  value hierarchy under ASC Topic 820 are described below:</P>
  
  <P STYLE="font: 10.5pt/normal Trebuchet MS, Times, Serif; margin: 0 0 0 0.5in; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Level 1 - Unadjusted quoted prices in
  active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Level 2 Inputs other than quoted prices
  within Level 1 that are observable for the asset or liability, either directly or indirectly; and fair value is determined through
  the use of models or other valuation methodologies.</P>
  
  <P STYLE="font: 10.5pt/normal Trebuchet MS, Times, Serif; margin: 0 0 0 0.5in; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Level 3 - Inputs are unobservable for
  the asset or liability and include situations where there is little, if any, market activity for the asset or liability. The inputs
  into the determination of fair value are based upon the best information under the circumstances and may require significant management
  judgment or estimation.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">We consider a two-step process when
  appraising investments of privately held companies. The first step involves determining the enterprise value of the portfolio company.
  During this step, we consider three different valuation approaches: a market approach, an income approach, and a cost approach.
  The particular facts and circumstances of each portfolio company determine which approach, or combination of approaches, will be
  utilized. The second step when appraising equity investments of privately held companies involves allocating value to the various
  debt and equity securities of the company. We allocate value to these securities based on their relative priorities. For equity
  securities such as warrants, we may also incorporate alternative methodologies including the Black-Scholes Option Pricing Model.
  Yield analysis is also employed to determine if a debt security has been impaired.</P>
  
  <P STYLE="font: 10.5pt/normal Trebuchet MS, Times, Serif; margin: 0 0 0 0.5in; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">In certain cases, the inputs used to
  measure fair value may fall into different levels of the fair value hierarchy. In such cases, an investment&rsquo;s level within
  the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. Our assessment
  of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors
  specific to the investment.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Investments for which prices are not
  observable are generally private investments in the debt and equity securities of operating companies. The primary valuation method
  used to estimate the fair value of these Level 3 investments is the discounted cash flow method (although a liquidation analysis,
  option theoretical, or other methodology may be used when more appropriate). The discounted cash flow approach to determine fair
  value (or a range of fair values) involves applying an appropriate discount rate(s) to the estimated future cash flows using various
  relevant factors depending on investment type, including comparing the latest arm&rsquo;s length or market transactions involving
  the subject security to the selected benchmark credit spread, assumed growth rate (in cash flows), and capitalization rates/multiples
  (for determining terminal values of underlying portfolio companies). The valuation based on the inputs determined to be the most
  reasonable and probable is used as the fair value of the investment. The determination of fair value using these methodologies
  may take into consideration a range of factors including, but not limited to, the price at which the investment was acquired, the
  nature of the investment, local market conditions, trading values on public exchanges for comparable securities, current and projected
  operating performance, financing transactions subsequent to the acquisition of the investment and anticipated financing transactions
  after the valuation date. Application of these valuation methodologies involves a significant degree of judgment by management.
  Fair values of new investments are generally assumed to be equal to their cost to the Company for up to three months after their
  initial purchase.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  
  <!-- Field: Page; Sequence: 14 -->
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      <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font-size: 10pt"><TR STYLE="vertical-align: top; text-align: left"><TD STYLE="width: 100%"><A HREF="#Index" TITLE="Index" STYLE="font-style: italic">Index</A>&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">To assess the reasonableness of the
  discounted cash flow approach, the fair value of equity securities, including warrants, in portfolio companies may also consider
  the market approach&mdash;that is, through analyzing and applying to the underlying portfolio companies, market valuation multiples
  of publicly-traded firms engaged in businesses similar to those of the portfolio companies. The market approach to determining
  the fair value of a portfolio company&rsquo;s equity security (or securities) will typically involve: (1) applying to the portfolio
  company&rsquo;s trailing twelve months (or current year projected) EBITDA a low to high range of enterprise value to EBITDA multiples
  that are derived from an analysis of publicly-traded comparable companies, in order to arrive at a range of enterprise values for
  the portfolio company; (2) subtracting from the range of calculated enterprise values the outstanding balances of any debt or equity
  securities that would be senior in right of payment to the equity securities we hold; and (3) multiplying the range of equity values
  derived therefrom by our ownership share of such equity tranche in order to arrive at a range of fair values for our equity security
  (or securities). Application of these valuation methodologies involves a significant degree of judgment by Management.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Due to the inherent uncertainty of determining
  the fair value of Level 3 investments that do not have a readily available market value, the fair value of the investments may
  differ significantly from the values that would have been used had a ready market existed for such investments and may differ materially
  from the values that may ultimately be received or settled. Further, such investments are generally subject to legal and other
  restrictions or otherwise are less liquid than publicly traded instruments. If we were required to liquidate a portfolio investment
  in a forced or liquidation sale, we might realize significantly less than the value at which such investment had previously been
  recorded. With respect to Level 3 investments, where sufficient market quotations are not readily available or for which no or
  an insufficient number of indicative prices from pricing services or brokers or dealers have been received, we undertake, on a
  quarterly basis, a valuation process as described below:</P>
  
  <P STYLE="font: 10.5pt/normal Trebuchet MS, Times, Serif; margin: 0 0 0 0.5in; text-indent: 0.5in">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="width: 100%; font: 11pt Calibri, Helvetica, Sans-Serif">
  <tr style="vertical-align: top">
      <td style="width: 73px; text-align: right; line-height: 115%">&bull;</td>
      <td style="width: 7px">&nbsp;</td>
      <td style="text-align: justify; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For each debt investment, a basic credit review process is completed. The risk profile on every credit facility is reviewed and either reaffirmed or revised by our Investment Committee.</font></td></tr>
  </table>
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="width: 100%; font: 11pt Calibri, Helvetica, Sans-Serif">
  <tr style="vertical-align: top">
      <td style="width: 73px; text-align: right; line-height: 115%">&bull;</td>
      <td style="width: 7px">&nbsp;</td>
      <td style="text-align: justify; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Each portfolio company or investment is valued by an investment professional</font></td></tr>
  </table>
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="width: 100%; font: 11pt Calibri, Helvetica, Sans-Serif">
  <tr style="vertical-align: top">
      <td style="width: 73px; text-align: right; line-height: 115%">&bull;</td>
      <td style="width: 7px">&nbsp;</td>
      <td style="text-align: justify; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Third party valuation firm(s) are engaged to provide valuation services as requested, by reviewing Management&rsquo;s preliminary valuations and/or analysis of the portfolio investment in question. For investments with a fair value exceeding $2.5 million held for more than 1 year, our Management&rsquo;s preliminary fair value conclusions on each of the Fund&rsquo;s assets for which sufficient market quotations are not readily available is reviewed and assessed by a third-party valuation firm at least once in every 12-month period, and more often as determined by the Audit Committee or required by our valuation policy. Such valuation assessment may be in the form of positive assurance, range of values or another valuation method based on the discretion of our Board.</font></td></tr>
  </table>
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="width: 100%; font: 11pt Calibri, Helvetica, Sans-Serif">
  <tr style="vertical-align: top">
      <td style="width: 73px; text-align: right; line-height: 115%">&bull;</td>
      <td style="width: 7px">&nbsp;</td>
      <td style="text-align: justify; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Audit Committee reviews the preliminary valuations of our Management and independent valuation firms and, if appropriate, recommends the approval of the valuations by the Board.</font></td></tr>
  </table>
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="width: 100%; font: 11pt Calibri, Helvetica, Sans-Serif">
  <tr style="vertical-align: top">
      <td style="width: 73px; text-align: right; line-height: 115%">&bull;</td>
      <td style="width: 7px">&nbsp;</td>
      <td style="text-align: justify; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our Board discusses valuations and determines the fair value of each investment in the portfolio in good faith based on the input of Management, the Audit Committee and, where appropriate, the respective independent valuation firms.</font></td></tr>
  </table>
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">The following sections describe the
  valuation techniques we use to measure different financial instruments at fair value and include the levels within the fair value
  hierarchy in which the financial instruments are categorized.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 10pt; text-indent: 24.5pt"><B>Market approach -</B>
  The market approach typically employed by Management calculates the enterprise value of a company as a multiple of earnings before
  interest, taxes, depreciation and amortization (&ldquo;EBITDA&rdquo;) generated by the company for the trailing twelve month period.
  Adjustments to the company&rsquo;s EBITDA, including those for non-recurring items, may be considered. Multiples are estimated
  based on current market conditions and past experience in the private company marketplace and are subjective in nature. We will
  apply liquidity and other discounts as deemed appropriate to equity valuations where applicable. We may also use, when available,
  third-party transactions in a portfolio company&rsquo;s securities as the basis of valuation (the &ldquo;private market method&rdquo;).
  The private market method will be used only with respect to completed transactions or firm offers made by sophisticated, independent
  investors.<B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>Income approach</B>  - The
  income approach typically utilized by our Management calculates the enterprise value of a company utilizing a discounted cash
  flow model incorporating projected future cash flows of the company. Projected future cash flows consider the historical
  performance of the company as well as current and projected market participant performance. Discount rates are estimated
  based on current market conditions and past experience in the private company marketplace and are subjective in nature. We
  will apply liquidity and other discounts as deemed appropriate to equity valuations where applicable.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>&nbsp;</B></P>
  
  
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      <!-- 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>Asset approach</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 may result in the company&rsquo;s inability to meet future obligations; or 4) the portfolio company&rsquo;s
  reorganization or bankruptcy. Consideration is also given as to whether a liquidation event would be orderly or forced.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">We base adjustments upon such factors
  as the portfolio company&rsquo;s earnings, cash flow and net worth, the market prices for similar securities of comparable companies,
  an assessment of the company&rsquo;s current and future financial prospects and various other factors and assumptions. In the case
  of unsuccessful or substantially declining operations, we may base a portfolio company&rsquo;s fair value upon the company&rsquo;s
  estimated liquidation value. Fair valuations are necessarily subjective, and our estimate of fair value may differ materially from
  amounts actually received upon the disposition of its portfolio securities. Also, any failure by a portfolio company to achieve
  its business plan or obtain and maintain its financing arrangements could result in increased volatility and result in a significant
  and rapid change in its value.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Our general intent is to hold our loans
  to maturity when appraising our privately held debt investments. As such, we believe that the fair value will not exceed the cost
  of the investment. However, in addition to the previously described analysis involving allocation of value to the debt instrument,
  we will often perform a yield analysis to determine if a debt security has been impaired. Certificates of deposit purchased by
  the Fund generally will be valued at their face value, plus interest accrued to the date of valuation.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">For most of our investments, market
  quotations are not available. With respect to investments for which market quotations are not readily available or when such market
  quotations are deemed not to represent fair value, our Board has approved a multi-step valuation process each quarter, as described
  below:</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="width: 100%; font: 11pt Calibri, Helvetica, Sans-Serif">
  <tr style="vertical-align: top">
      <td style="width: 47px; text-align: right; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">1.</font></td>
      <td style="width: 7px">&nbsp;</td>
      <td style="text-align: justify; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Each portfolio company or investment is reviewed by our investment professionals and, where necessary, with independent valuation firms engaged by the Fund;</font></td></tr>
  </table>
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="width: 100%; font: 11pt Calibri, Helvetica, Sans-Serif">
  <tr style="vertical-align: top">
      <td style="width: 47px; text-align: right; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">2.</font></td>
      <td style="width: 7px">&nbsp;</td>
      <td style="text-align: justify; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The independent valuation firms conduct independent valuations and make their own independent assessments;</font></td></tr>
  </table>
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="width: 100%; font: 11pt Calibri, Helvetica, Sans-Serif">
  <tr style="vertical-align: top">
      <td style="width: 47px; text-align: right; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">3.</font></td>
      <td style="width: 7px">&nbsp;</td>
      <td style="text-align: justify; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Audit Committee of our Board reviews and discusses the preliminary valuation of the Fund and that of the independent valuation firms; and</font></td></tr>
  </table>
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="width: 100%; font: 11pt Calibri, Helvetica, Sans-Serif">
  <tr style="vertical-align: top">
      <td style="width: 47px; text-align: right; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.</font></td>
      <td style="width: 7px">&nbsp;</td>
      <td style="text-align: justify; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Board discusses valuations and determines the fair value of each investment in our portfolio in good faith based on the input of our Management, the respective independent valuation firm and the Audit Committee.</font></td></tr>
  </table>
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Investments are valued utilizing a yield
  analysis, enterprise value (&ldquo;EV&rdquo;) analysis, net asset value analysis, liquidation analysis, discounted cash flow analysis,
  or a combination of methods, as appropriate. The yield analysis uses loan spreads and other relevant information implied by market
  data involving identical or comparable assets or liabilities. Under the EV analysis, the EV of a portfolio company is first determined
  and allocated over the portfolio company&rsquo;s securities in order of their preference relative to one another (i.e., &ldquo;waterfall&rdquo;
  allocation). To determine the EV, we typically use a market multiples approach that considers relevant and applicable market trading
  data of guideline public companies, transaction metrics from precedent M&amp;A transactions and/or a discounted cash flow analysis.
  The net asset value analysis is used to derive a value of an underlying investment (such as real estate property) by dividing a
  relevant earnings stream by an appropriate capitalization rate. For this purpose, we consider capitalization rates for similar
  properties as may be obtained from guideline public companies and/or relevant transactions. The liquidation analysis is intended
  to approximate the net recovery value of an investment based on, among other things, assumptions regarding liquidation proceeds
  based on a hypothetical liquidation of a portfolio company&rsquo;s assets. The discounted cash flow analysis uses valuation techniques
  to convert future cash flows or earnings to a range of fair values from which a single estimate may be derived utilizing an appropriate
  discount rate. The measurement is based on the net present value indicated by current market expectations about those future amounts.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">In applying these methodologies, additional
  factors that we consider in fair value pricing our investments may include, as we deem relevant: security covenants, call protection
  provisions, and information rights; the nature and realizable value of any collateral; the portfolio company&rsquo;s ability to
  make payments; the principal markets in which the portfolio company does business; publicly available financial ratios of peer
  companies; the principal market; and enterprise values, among other factors.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Because of the inherent uncertainty
  of the valuation of portfolio securities which do not have readily ascertainable market values, amounting to $19.3 million and
  $16.2 million as of March 31, 2016 and December 31, 2015, respectively, our fair value determinations may materially differ from
  the values that would have been used had a ready market existed for these securities. As of March 31, 2016, one of our portfolio
  investments, 445,744 common shares of MVC, was publicly listed on the NYSE. As of December 31, 2015, one of our portfolio investments,
  428,662 common shares of MVC, was publicly listed on the NYSE.</P>
  
  
  <!-- Field: Page; Sequence: 16 -->
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      <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font-size: 10pt"><TR STYLE="vertical-align: top; text-align: left"><TD STYLE="width: 100%"><A HREF="#Index" TITLE="Index" STYLE="font-style: italic">Index</A>&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">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">We adjust our net asset value for the
  changes in the value of our publicly held securities, if applicable, and material changes in the value of private securities, generally
  determined on a quarterly basis or as announced in a press release, and report those amounts to Lipper Analytical Services, Inc.
  Our net asset value appears in various publications, including <I>Barron&rsquo;s </I>and <I>The Wall Street Journal</I>.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">For loan and debt securities held for
  longer than one year, the Fund will often perform a yield analysis assuming a hypothetical current sale of the security. The yield
  analysis considers changes in interest rates and changes in leverage levels of the portfolio company as compared to the market
  interest rates and leverage levels. Assuming the credit quality of the portfolio company remains stable, the Fund will use the
  value determined by the yield analysis as the fair value for that security.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">We will record unrealized depreciation
  on investments when we determine that the fair value of a security is less than its cost basis, and will record unrealized appreciation
  when we determine that the fair value is greater than its cost basis.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">We assess the levels of the investments
  at each measurement date, and transfers between levels are recognized on the subsequent measurement date closest in time to the
  actual date of the event or change in circumstances that caused the transfer. There were no transfers among Level 1, 2 and 3 for
  the quarter ended March 31, 2016 and the year ended December 31, 2015.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">As of March 31, 2016, 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>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0"></P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="font-size: 8pt; font-weight: bold; text-align: center"></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt"><B>&nbsp;</B></FONT></TD>
      <TD COLSPAN="15" STYLE="text-align: center; vertical-align: bottom; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt"><B>Fair
      Value Measurements as of March 31, 2016</B></FONT></TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="font-weight: bold; font-style: italic; border-bottom: Black 1pt solid">(in thousands)</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Total</TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><P STYLE="margin-top: 0; margin-bottom: 0">Quoted Prices</P>
                                                                                                                    <P STYLE="margin-top: 0; margin-bottom: 0">in Active</P>
                                                                                                                    <P STYLE="margin-top: 0; margin-bottom: 0">Markets for</P>
                                                                                                                    <P STYLE="margin-top: 0; margin-bottom: 0">Identical</P>
                                                                                                                    <P STYLE="margin-top: 0; margin-bottom: 0">Assets</P>
                                                                                  <P STYLE="margin-top: 0; margin-bottom: 0">(Level 1)</P></TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><P STYLE="margin-top: 0; margin-bottom: 0">Significant</P>
                                                                                                                    <P STYLE="margin-top: 0; margin-bottom: 0">Other</P>
                                                                                                                    <P STYLE="margin-top: 0; margin-bottom: 0">Observable</P>
                                                                                                                    <P STYLE="margin-top: 0; margin-bottom: 0">Inputs</P>
                                                                                  <P STYLE="margin-top: 0; margin-bottom: 0">(Level 2)</P></TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><P STYLE="margin-top: 0; margin-bottom: 0">Significant</P>
                                                                                                                    <P STYLE="margin-top: 0; margin-bottom: 0">Unobservable</P>
                                                                                                                    <P STYLE="margin-top: 0; margin-bottom: 0">Inputs</P>
                                                                                  <P STYLE="margin-top: 0; margin-bottom: 0">(Level 3)</P></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD>Assets</TD><TD>&nbsp;</TD>
      <TD 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>&nbsp;&nbsp;Investments:</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="width: 42%; text-align: left; padding-left: 10pt">Control investments</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">4,715</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">4,715</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-left: 10pt">Affiliate investments</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11,600</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11,600</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-left: 10pt">Non-affiliate investments - related party</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,267</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,267</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 10pt">Non-affiliate investments</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">2,940</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">2,940</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">Total investments</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">22,522</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,267</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">19,255</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Temporary cash investments</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">15,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">15,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-bottom: 2.5pt">Total investments and temporary cash investments</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">37,522</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">18,267</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">19,255</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
  </TABLE>
  
  
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0"></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  
  <!-- Field: Page; Sequence: 17 -->
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      <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font-size: 10pt"><TR STYLE="vertical-align: top; text-align: left"><TD STYLE="width: 100%"><A HREF="#Index" TITLE="Index" STYLE="font-style: italic">Index</A>&nbsp;</TD></TR></TABLE></DIV>
      <!-- Field: /Page -->
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 10pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">As of December 31, 2015, investments
  measured at fair value on a recurring basis are categorized in the tables below based on the lowest level of significant input
  to the valuations:</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0; text-indent: 24.5pt"></P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 100%; font: normal 10pt Times New Roman, Times, Serif">
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="font-size: 8pt; font-weight: bold; text-align: center"></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt"><B>&nbsp;</B></FONT></TD>
      <TD COLSPAN="15" STYLE="text-align: center; vertical-align: bottom; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt"><B>Fair
      Value Measurements as of December 31, 2015</B></FONT></TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="font-weight: bold; font-style: italic; border-bottom: Black 1pt solid">(in thousands)</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Total</TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><P STYLE="margin-top: 0; margin-bottom: 0">Quoted
  Prices in Active</P>
                                                                                                                    <P STYLE="margin-top: 0; margin-bottom: 0">Markets
  for</P>
                                                                                                                    <P STYLE="margin-top: 0; margin-bottom: 0">Identical</P>
                                                                                                                    <P STYLE="margin-top: 0; margin-bottom: 0"></P>
                                                                                  <P STYLE="margin-top: 0; margin-bottom: 0">Assets</P>
                                                                                  <P STYLE="margin-top: 0; margin-bottom: 0">(Level 1)</P></TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><P STYLE="margin-top: 0; margin-bottom: 0">Significant</P>
                                                                                                                    <P STYLE="margin-top: 0; margin-bottom: 0">Other</P>
                                                                                                                    <P STYLE="margin-top: 0; margin-bottom: 0">Observable</P>
                                                                                                                    <P STYLE="margin-top: 0; margin-bottom: 0">Inputs</P>
                                                                                  <P STYLE="margin-top: 0; margin-bottom: 0">(Level 2)</P></TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><P STYLE="margin-top: 0; margin-bottom: 0">Significant</P>
                                                                                                                    <P STYLE="margin-top: 0; margin-bottom: 0">Unobservable</P>
                                                                                                                    <P STYLE="margin-top: 0; margin-bottom: 0">Inputs</P>
                                                                                  <P STYLE="margin-top: 0; margin-bottom: 0">(Level 3)</P></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD><B STYLE="font-style: normal; font-weight: normal">Assets</B></TD><TD><B>&nbsp;</B></TD>
      <TD COLSPAN="3"><B>&nbsp;</B></TD><TD><B>&nbsp;</B></TD>
      <TD COLSPAN="3"><B>&nbsp;</B></TD><TD><B>&nbsp;</B></TD>
      <TD COLSPAN="3"><B>&nbsp;</B></TD><TD><B>&nbsp;</B></TD>
      <TD COLSPAN="3"><B>&nbsp;</B></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD>&nbsp;&nbsp;Investments:</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="width: 42%; text-align: left; padding-left: 10pt">Control investments</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">5,715</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">5,715</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-left: 10pt">Affiliate investments</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9,600</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9,600</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-left: 10pt">Non-affiliate investments - related party</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,159</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,159</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 10pt">Non-affiliate investments</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">915</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">915</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">Total investments</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">19,389</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,159</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">16,230</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Temporary cash investments</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">15,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">15,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-bottom: 2.5pt">Total investments and temporary cash investments</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">34,389</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">18,159</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">16,230</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><B>&nbsp;</B></TD></TR>
  </TABLE>
  
  
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-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>
  
  <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 three months ended March 31, 2016 for all investments for which we determine fair value using
  unobservable (Level 3) factors:</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 4.5pt"></P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <TR STYLE="vertical-align: bottom">
      <TD COLSPAN="5">&nbsp;</TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="13" STYLE="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Fair value measurements using significant unobservable inputs (Level 3)</TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD COLSPAN="5" STYLE="font-weight: bold; font-style: italic; border-bottom: Black 1pt solid">(in thousands)</TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Control Investments</TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Affiliate Investments</TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Non-affiliate Investments</TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Total</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="width: 42%">Fair value as of December&nbsp;31, 2015</TD><TD STYLE="width: 1%">&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="width: 3%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">5,715</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">9,600</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">915</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
      <TD STYLE="text-align: right">$16,230</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">Change in unrealized appreciation (depreciation)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,000</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: right">1,000</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-bottom: 1pt">Purchases of portfolio securities</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">2,025</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: right">2,025</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="padding-bottom: 2.5pt">Fair value as of March 31, 2016</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">4,715</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">9,600</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">4,940</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: right">$19,255</TD></TR>
  </TABLE>
  
  
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 4.5pt"></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 4.5pt">&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 three months ended March 31, 2015 for all investments for which we determine fair value using
  unobservable (Level 3) factors:</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0"></P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <TR STYLE="vertical-align: bottom">
      <TD>&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3">&nbsp;</TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="13" STYLE="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Fair value measurements using significant unobservable inputs (Level 3)</TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; font-style: italic">(in thousands)</TD>
      <TD COLSPAN="4" STYLE="border-bottom: Black 1pt solid; font-weight: bold; font-style: italic">&nbsp;</TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Control Investments</TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Affiliate Investments</TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Non-affiliate Investments</TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Total</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="width: 42%">Fair value as of December&nbsp;31, 2014</TD><TD STYLE="width: 1%">&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="width: 3%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">13,173</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">960</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">1,532</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
      <TD STYLE="text-align: right">$15,665</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">Realized gains (losses)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,850</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">372</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: right">(2,478)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">Change in unrealized appreciation (depreciation)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,050</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,248</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(580</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: right">2,718</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">Purchases of portfolio securities</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">54</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: right">54</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-bottom: 1pt">Proceeds from sales/dispositions</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(3,158</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(463</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: right">(3,621)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="padding-bottom: 2.5pt">Fair value as of March 31, 2015</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">9,215</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">2,208</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">915</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: right">$12,338</TD></TR>
  </TABLE>
  
  
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0"></P>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>Foreign Exchange&mdash;</B>We record
  temporary changes in foreign exchange rates of portfolio securities denominated in foreign currencies as changes in fair value.
  These changes are therefore reflected as unrealized gains or losses until realized.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&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>
  
  
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      <!-- Field: /Page -->
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 10pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">We classify our investments in accordance
  with the requirements of the 1940 Act. Under the 1940 Act, &ldquo;Control Investments&rdquo; are defined as investments in companies
  in which the Fund owns more than 25% of the voting securities or maintains greater than 50% of the board representation. Under
  the 1940 Act, &ldquo;Affiliate Investments&rdquo; are defined as those non-control investments in companies in which we own between
  5% and 25% of the voting securities. Under the 1940 Act, &ldquo;Non-affiliate Investments&rdquo; are defined as investments that
  are neither Control Investments nor Affiliate Investments.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">As of March 31, 2016 and December 31,
  2015, we had no outstanding commitments to our portfolio company investments; however, under certain circumstances, we may be called
  on to make follow-on investments in certain portfolio companies. If we do not have sufficient funds to make follow-on investments,
  the portfolio company in need of the investment may be negatively impacted. Also, our equity interest in the estimated fair value
  of the portfolio company could be reduced. Follow-on investments may include capital infusions which are expenditures made directly
  to the portfolio company to ensure that operations are completed, thereby allowing the portfolio company to generate cash flows
  to service their debt.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>Interest Income
  Recognition</B> - We record interest income, adjusted for amortization of premium and accretion of discount, on an accrual
  basis to the extent that we expect to collect such amounts. We accrete or amortize discounts and premiums on securities
  purchased over the life of the respective security using the effective yield method. The amortized cost of investments
  represents the original cost adjusted for the accretion of discount and/or amortization of premium on debt securities. We
  stop accruing interest on investments when we determine that interest is no longer collectible. We may also impair the
  accrued interest when we determine that all or a portion of the current accrual is uncollectible. If we receive any cash
  after determining that interest is no longer collectible, we treat such cash as payment on the principal balance until the
  entire principal balance has been repaid, before we recognize any additional interest income. We will write off uncollectible
  interest upon the occurrence of a definitive event such as a sale, bankruptcy, or reorganization of the relevant portfolio
  interest.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>Payment in Kind
  Interest (PIK)</B> - We have loans in our portfolio that may pay PIK interest. We add PIK interest, if any, computed at the
  contractual rate specified in each loan agreement, to the principal balance of the loan and recorded as interest income. To
  maintain our status as a RIC, we must pay out to stockholders this non-cash source of income in the form of dividends even if
  we have not yet collected any cash in respect of such investments. We will continue to pay out net investment income and/or
  realized capital gains, if any, on an annual basis as required under the Investment Company Act of 1940.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>Cash Flows</B> - For purposes
  of the Statements of Cash Flows, we consider all highly liquid temporary cash investments purchased with an original maturity of
  three months or less to be cash equivalents. We include our investing activities within cash flows from operations. We exclude
  &ldquo;Restricted Cash and Temporary Cash Investments&rdquo; used for purposes of complying with RIC requirements from cash equivalents.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>Taxes</B> - We intend to
  comply with the requirements of the Internal Revenue Code necessary to qualify as a regulated investment company and, as
  such, will not be subject to federal income taxes on otherwise taxable income (including net realized capital gains) which is
  distributed to stockholders. Therefore, no provision for federal income taxes is recorded in the financial statements. We
  borrow money from time to time to maintain our tax status under the Internal Revenue Code as a RIC. See Note 1 for discussion
  of Taxable Subsidiaries and see Note 2 for further discussion of the Fund&rsquo;s RIC borrowings.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">All corporations organized in the State
  of Delaware are required to file an Annual Report and to pay a franchise tax. As a result, we paid Delaware Franchise tax in the
  amount of $0.02 million for the year ended December 31, 2015.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Texas margin tax applies to legal entities
  conducting business in Texas. The margin tax is based on our Texas sourced taxable margin. The tax is calculated by applying a
  tax rate to a base that considers both revenue and expenses and therefore has the characteristics of an income tax. As a result,
  we did not owe state income tax for the year ended December 31, 2015.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>Significant Unobservable Inputs -</B>
  Our investment portfolio is not composed of homogeneous debt and equity securities that can be valued with a small number of inputs.
  Instead, the majority of our investment portfolio is composed of complex debt and equity securities with distinct contract terms
  and conditions. As such, our valuation of each investment in our portfolio is unique and complex, often factoring in numerous different
  inputs, including historical and forecasted financial and operational performance of the portfolio company, project cash flows,
  market multiples comparable market transactions, the priority of our securities compared with those of other investors, credit
  risk, interest rates, independent valuations and reviews and other inputs.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  
  <!-- Field: Page; Sequence: 19 -->
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      <!-- Field: /Page -->
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 10pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">The following table summarizes the significant
  non-observable inputs in the fair value measurements of our Level 3 investments by category of investment and valuation technique
  as of March 31, 2016:</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"></P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <TR STYLE="vertical-align: bottom">
      <TD>&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD>&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD>&nbsp;</TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="7" STYLE="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Range</TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="font-weight: bold; font-style: italic; border-bottom: Black 1pt solid">(in thousands)</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Fair Value</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Valuation Techniques</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Unobservable Inputs</TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Minimum</TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Maximum</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="width: 31%; text-align: left">Secured and subordinated debt</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 8%; text-align: right">2,940</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 18%; text-align: center">Yield-to-maturity</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 20%; text-align: center">Discount for lack of marketability</TD><TD STYLE="width: 1%; font-size: 8pt">&nbsp;</TD>
      <TD STYLE="width: 1%; font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="width: 6%; font-size: 8pt; text-align: right">0</TD><TD STYLE="width: 1%; font-size: 8pt; text-align: left">%</TD><TD STYLE="width: 1%; font-size: 8pt">&nbsp;</TD>
      <TD STYLE="width: 1%; font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="width: 6%; font-size: 8pt; text-align: right">0</TD><TD STYLE="width: 1%; font-size: 8pt; text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">Common stock</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11,600</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: center">Income/Market approach</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: center">EBITDA Multiple/Discount for lack of marketability/Control premium</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
      <TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: right">2.3</TD><TD STYLE="font-size: 8pt; text-align: left">%</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
      <TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: right">24</TD><TD STYLE="font-size: 8pt; text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
      <TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
      <TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: center">Asset approach</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: center">Recovery rate</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
      <TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: right">0</TD><TD STYLE="font-size: 8pt; text-align: left">%</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
      <TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: right">100</TD><TD STYLE="font-size: 8pt; text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-bottom: 1pt">Limited liability company investments</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">4,715</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="text-align: center; padding-bottom: 1pt">Discounted cash flow; Guideline transaction method</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="text-align: center; padding-bottom: 1pt">Reserve adjustment factors</TD><TD STYLE="font-size: 8pt; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: right">75</TD><TD STYLE="padding-bottom: 1pt; font-size: 8pt; text-align: left">%</TD><TD STYLE="font-size: 8pt; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: right">100</TD><TD STYLE="padding-bottom: 1pt; font-size: 8pt; text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: right; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">19,255</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="text-align: right; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="text-align: right; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
  </TABLE>
  
  
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"></P>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">The following table summarizes the significant
  non-observable inputs in the fair value measurements of our level 3 investments by category of investment and valuation technique
  as of December 31, 2015:</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"></P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <TR STYLE="vertical-align: bottom">
      <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD COLSPAN="3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD COLSPAN="7" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 10pt">Range</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="font-weight: bold; font-style: italic; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 10pt">(in thousands)</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 10pt">Fair
      Value</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 10pt">Valuation
      Techniques</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 10pt">Unobservable
      Inputs</FONT></TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 10pt">Minimum</FONT></TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 10pt">Maximum</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="width: 31%; text-align: left"><FONT STYLE="font-size: 10pt">Secured and subordinated debt</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 10pt">$</FONT></TD><TD STYLE="width: 8%; text-align: right"><FONT STYLE="font-size: 10pt">915</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="width: 18%; text-align: center"><FONT STYLE="font-size: 10pt">Yield-to-maturity</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="width: 20%; text-align: center"><FONT STYLE="font-size: 10pt">Discount for lack of marketability</FONT></TD><TD STYLE="width: 1%; font-size: 8pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="width: 1%; font-size: 8pt; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="width: 6%; font-size: 8pt; text-align: right"><FONT STYLE="font-size: 10pt">0</FONT></TD><TD STYLE="width: 1%; font-size: 8pt; text-align: left"><FONT STYLE="font-size: 10pt">%</FONT></TD><TD STYLE="width: 1%; font-size: 8pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="width: 1%; font-size: 8pt; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="width: 6%; font-size: 8pt; text-align: right"><FONT STYLE="font-size: 10pt">0</FONT></TD><TD STYLE="width: 1%; font-size: 8pt; text-align: left"><FONT STYLE="font-size: 10pt">%</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">Common stock</FONT></TD><TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">9,600</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">Income/Market approach</FONT></TD><TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">EBITDA Multiple/Discount for lack of marketability/Control premium</FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="font-size: 8pt; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 8pt; text-align: right"><FONT STYLE="font-size: 10pt">10</FONT></TD><TD STYLE="font-size: 8pt; text-align: left"><FONT STYLE="font-size: 10pt">%</FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="font-size: 8pt; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 8pt; text-align: right"><FONT STYLE="font-size: 10pt">32.5</FONT></TD><TD STYLE="font-size: 8pt; text-align: left"><FONT STYLE="font-size: 10pt">%</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="font-size: 8pt; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 8pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 8pt; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="font-size: 8pt; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 8pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 8pt; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">Asset approach</FONT></TD><TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">Recovery rate</FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="font-size: 8pt; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 8pt; text-align: right"><FONT STYLE="font-size: 10pt">0</FONT></TD><TD STYLE="font-size: 8pt; text-align: left"><FONT STYLE="font-size: 10pt">%</FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="font-size: 8pt; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 8pt; text-align: right"><FONT STYLE="font-size: 10pt">100</FONT></TD><TD STYLE="font-size: 8pt; text-align: left"><FONT STYLE="font-size: 10pt">%</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 10pt">Limited liability company investments</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">5,715</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="text-align: center; padding-bottom: 1pt"><FONT STYLE="font-size: 10pt">Discounted cash flow; Guideline transaction
      method</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="text-align: center; padding-bottom: 1pt"><FONT STYLE="font-size: 10pt">Reserve adjustment factors</FONT></TD><TD STYLE="font-size: 8pt; padding-bottom: 1pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="font-size: 8pt; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt; font-size: 8pt; text-align: right"><FONT STYLE="font-size: 10pt">75</FONT></TD><TD STYLE="padding-bottom: 1pt; font-size: 8pt; text-align: left"><FONT STYLE="font-size: 10pt">%</FONT></TD><TD STYLE="font-size: 8pt; padding-bottom: 1pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="font-size: 8pt; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 8pt; text-align: right"><FONT STYLE="font-size: 10pt">100</FONT></TD><TD STYLE="padding-bottom: 1pt; font-size: 8pt; text-align: left"><FONT STYLE="font-size: 10pt">%</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: right; padding-bottom: 2.5pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-size: 10pt">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 10pt">16,230</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="text-align: right; padding-bottom: 2.5pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="text-align: right; padding-bottom: 2.5pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR></TABLE>
  
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0"></P>
  
  <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <tr style="vertical-align: top">
      <td style="width: 24px; line-height: 115%">&nbsp;</td>
      <td style="width: 24px; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>(4)</b></font></td>
      <td style="text-decoration: underline; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><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 $18,750 for each of the three months ended March 31, 2016 and 2015.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">In respect of services provided to the
  Fund by members of the Board not in connection with their roles and duties as directors, the Fund pays a fixed amount at a rate
  of $250 per hour for services rendered. During the three months ended March 31, 2016 and 2015, we paid Kenneth I. Denos, P.C.,
  a professional corporation owned by Kenneth I. Denos, a director of the Fund, $104,813 and $91,813 respectively, for services provided
  to the Fund.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">.&nbsp;</P>
  
  
  <!-- Field: Page; Sequence: 20 -->
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      <!-- Field: /Page -->
  
  <P STYLE="font: 10pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt">&nbsp;</P>
  
  <TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <TR STYLE="vertical-align: top">
      <TD STYLE="width: 24px; line-height: 115%">&nbsp;</TD>
      <TD STYLE="width: 24px; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>(5)</B></FONT></TD>
      <TD STYLE="text-decoration: underline; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B><U>Dividends </U></B></FONT></TD></TR>
  </TABLE>
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">We will pay out net investment income
  and/or realized capital gains, if any, on an annual basis as required under the 1940 Act.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <TR STYLE="vertical-align: top">
      <TD STYLE="width: 24px; line-height: 115%">&nbsp;</TD>
      <TD STYLE="width: 24px; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>(6)</B></FONT></TD>
      <TD STYLE="text-decoration: underline; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B><U>Portfolio Securities </U></B></FONT></TD></TR>
  </TABLE>
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">On January 29, 2016, we invested $2.0
  million in Biogenic Reagents, LLC (&ldquo;Biogenic&rdquo;) in the form of a senior secured promissory note maturing May 31, 2016
  and bearing cash and PIK interest at the combined rate of 16% per annum. Biogenic is a developer and producer of high value carbon
  products from renewable biomass, headquartered in Minneapolis. The company has developed and commercialized a low-cost platform
  technology to make carbon products such as activated carbon for use in purification of air, water, food and pharmaceuticals and
  agricultural carbon to improve crop production.</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 March 2, 2016, we extended the maturity
  of the 5<SUP>th</SUP> Element Tracking, LLC promissory note to July, 2016 and received fees in the form of a PIK and cash totaling
  $0.05 million.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">During the three months ended March
  31, 2016, we received dividends in the form of additional shares of $0.1 million relating to our shareholding in MVC</P>
  
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">During the three months ended March
  31, 2016, we recorded a net change in unrealized appreciation of $1.0 million, to a net unrealized appreciation of $3.3 million.
  Such change in unrealized appreciation resulted primarily from the following changes:</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <tr style="vertical-align: top">
      <td style="width: 33px; line-height: 115%">&nbsp;</td>
      <td style="width: 48px; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(i)</font></td>
      <td style="line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Increase in the fair value of our shareholding in MVC of $0.1 million due to the receipt of a dividend payment in the form of additional shares of MVC;</font></td></tr>
  </table>
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <tr style="vertical-align: top">
      <TD STYLE="width: 33px; line-height: 115%">&nbsp;</td>
      <TD STYLE="width: 48px; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(ii)</font></td>
      <TD STYLE="line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Increase in fair value of our shareholding in PalletOne, Inc. of $2.0 million due to an overall improvement in comparable industry sectors, as well as continued revenue and earnings growth;</font></td></tr>
  </table>
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <tr style="vertical-align: top">
      <TD STYLE="width: 33px; line-height: 115%">&nbsp;</td>
      <TD STYLE="width: 48px; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(iii)</font></td>
      <TD STYLE="line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Decrease in the fair value of our holdings in Equus Energy, LLC of $1.0 million, principally due to a combination of lower production without a corresponding increase in proved reserves and continued lower short- and long-term prices for crude oil and natural gas.</font></td></tr>
  </table>
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">On January 6, 2015, we sold our interests
  in Spectrum to 5<FONT STYLE="font-variant: small-caps"><SUP>th</SUP></FONT> Element Tracking, LLC (&ldquo;5<FONT STYLE="font-variant: small-caps"><SUP>th</SUP></FONT>
  Element&rdquo;). The purchase price of $3.9 million paid by 5<FONT STYLE="font-variant: small-caps"><SUP> th</SUP></FONT> Element
  consisted of $3.0 million in cash and a 1-year subordinated note in the original principal amount of $0.9 million, bearing interest
  at the rate of 14% per annum. We realized a net capital loss of $2.8 million in connection with the sale of our interest in Spectrum.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Also on January 6, 2015, in connection
  with the sale of our interest in Spectrum, our $0.5 million loan to Security Monitor Holdings, LLC, together with all accrued interest
  amounting to approximately $0.1 million, was repaid.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">On January 30, 2015, we received a partial
  redemption payment in respect of our holding of Notes of Orco Property Group S.A. (&ldquo;OPG Notes&rdquo;) in the amount of &euro;36,587
  [$41,478].</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">On February 20, 2015, we sold our OPG
  Notes at a discount of 23% to their par value, receiving $1.0 million in cash and a realized gain of $0.4 million.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">During the three months ended March
  31, 2015, we recorded a net change in unrealized depreciation of $2.7 million, to a net unrealized depreciation of $0.8 million.
  Such change in unrealized depreciation resulted primarily from the following changes:</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <tr style="vertical-align: top">
      <td style="width: 33px; line-height: 115%">&nbsp;</td>
      <td style="width: 48px; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt; line-height: 91%">(i)</font></td>
      <td style="line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt; line-height: 91%">Decrease in the fair value of our holdings in Equus Energy, LLC of $0.8 million, principally due to a combination of decreased production and declining oil and prices;</font></td></tr>
  </table>
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <tr style="vertical-align: top">
      <td style="width: 33px; line-height: 115%">&nbsp;</td>
      <td style="width: 48px; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt; line-height: 91%">(ii)</font></td>
      <td style="line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt; line-height: 91%">Decrease in the fair value of our shareholding in MVC of $0.1 million due to a decrease in the MVC share price during the quarter;</font></td></tr>
  </table>
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <tr style="vertical-align: top">
      <td style="width: 33px; line-height: 115%">&nbsp;</td>
      <td style="width: 48px; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt; line-height: 91%">(iii)</font></td>
      <td style="line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt; line-height: 91%">Increase in fair value of our shareholding in PalletOne, Inc. of $1.2 million due to an overall improvement in the industry sector for packaging companies, as well as continued revenue and earnings growth; </font></td></tr>
  </table>
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <tr style="vertical-align: top">
      <td style="width: 33px; line-height: 115%">&nbsp;</td>
      <td style="width: 48px; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt; line-height: 91%">(iii)</font></td>
      <td style="line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt; line-height: 91%">Transfer of unrealized depreciation to realized gain on our holding of OPG Notes of $0.4 million in connection with the sale of our interest in the OPG Notes; and,</font></td></tr>
  </table>
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  
  <!-- Field: Page; Sequence: 21 -->
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      <!-- 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: 0.5in">&nbsp;</P>
  
  <TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <TR STYLE="vertical-align: top">
      <TD STYLE="width: 33px; line-height: 115%">&nbsp;</TD>
      <TD STYLE="width: 48px; line-height: 115%"><FONT STYLE="font: 10pt/91% Times New Roman, Times, Serif">(iv)</FONT></TD>
      <TD STYLE="line-height: 115%"><FONT STYLE="font: 10pt/91% Times New Roman, Times, Serif">Transfer of unrealized depreciation to realized loss on our holdings in Spectrum Management, LLC (&ldquo;Spectrum&rdquo;) of $2.9 million in connection with the sale of our interest in Spectrum.</FONT></TD></TR>
  </TABLE>
  <P STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>
  
  <TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <TR STYLE="vertical-align: top">
      <TD STYLE="width: 24px; line-height: 115%">&nbsp;</TD>
      <TD STYLE="width: 24px; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>(7)</B></FONT></TD>
      <TD STYLE="text-decoration: underline; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B><U>Plan of Reorganization - Share Exchange with MVC Capital </U></B></FONT></TD></TR>
  </TABLE>
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">On May 14, 2014, we announced that the
  Fund intended to effect a reorganization pursuant to Section 2(a)(33) of the 1940 Act. As a first step to consummating the reorganization,
  we sold to MVC Capital, Inc. (&ldquo;MVC&rdquo;) 2,112,000 newly-issued shares of the Fund&rsquo;s common stock in exchange for
  395,839 shares of MVC (such transaction is hereinafter referred to as the &ldquo;Share Exchange&rdquo;). MVC is a business development
  company traded on the New York Stock Exchange that provides long-term debt and equity investment capital to fund growth, acquisitions
  and recapitalizations of companies in a variety of industries. The Share Exchange was calculated based on the Fund&rsquo;s and
  MVC&rsquo;s respective net asset value per share. At the time of the Share Exchange, the number of MVC shares received by Equus
  represented approximately 1.73% of MVC&rsquo;s total outstanding shares of common stock.</P>
  
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Pursuant to the terms of a Share Exchange
  Agreement, dated May 12, 2014, entered into by Equus and MVC which memorialized the Share Exchange, we intend to finalize the reorganization
  by pursuing a merger or consolidation with MVC, a subsidiary of MVC, or one or more of MVC&rsquo;s portfolio companies (the &ldquo;Consolidation&rdquo;).
  Absent Equus merging or consolidating with/into MVC or a subsidiary thereof, our current intention is for Equus to (i) consummate
  the Consolidation with a portfolio company of MVC, (ii) terminate its election to be classified as a BDC under the 1940 Act, and
  (iii) be restructured as a publicly-traded operating company focused on the energy and/or financial services sector. Our management
  is currently evaluating these alternatives.</P>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <tr style="vertical-align: top">
      <td style="width: 24px; line-height: 115%">&nbsp;</td>
      <td style="width: 24px; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>(8)</b></font></td>
      <td style="text-decoration: underline; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><u>Equus Energy, LLC</u></b></font></td></tr>
  </table>
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">Equus Energy was formed in November
  2011 as a wholly-owned subsidiary of the Fund to make investments in companies in the energy sector, with particular emphasis on
  income-producing oil &amp; gas properties. In December 2011, we contributed $250,000 to the capital of Equus Energy. On December
  27, 2012, we invested an additional $6.8 million in Equus Energy for the purpose of additional working capital and to fund the
  purchase of $6.6 million in working interests, which presently comprise 130 producing and non-producing oil and gas wells. The
  working interests include associated development rights of approximately 21,220 acres situated on 13 separate properties in Texas
  and Oklahoma. The working interests range from a <I>de minimus</I> amount to 50% of the leasehold that includes these wells.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">The wells are operated by a number of
  experienced operators, including Chevron USA, Inc., which has operating responsibility for all of Equus Energy&rsquo;s 40 producing
  well interests located in the Conger Field, a productive oil and gas field on the edge of the Permian Basin that has experienced
  successful gas and hydrocarbon extraction in multiple formations. Equus Energy, which holds a 50% working interest in each of these
  Conger Field wells, is working with Chevron in a recompletion program of existing Conger Field wells to the Wolfcamp formation,
  a zone containing oil as well as gas and natural gas liquids. Part of Equus Energy&rsquo;s acreage rights described above also
  includes a 50% working interest in possible new drilling to the base of the Canyon formation (approximately 8,500 feet) on 2,400
  acres in the Conger Field. Also included in the interests acquired by Equus Energy are working interests of 7.5% and 2.5% in the
  Burnell and North Pettus Units, respectively, which collectively comprise approximately 13,000 acres located in the area known
  as the &ldquo;Eagle Ford Shale&rdquo; play.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.35pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.35pt"><I>Revenue and Income</I>. During the
  three months ended March 31, 2016, Equus Energy&rsquo;s revenue, operating revenue less direct operating expenses, and net loss
  were $0.01 million, ($0.2) million, and ($0.4) million, respectively, as compared to revenue, operating revenue less direct operating
  expenses, and net income of $0.3 million, $0.02 million, and ( $0.3) million, respectively, for the three months ended March 31,
  2015.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.35pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.35pt"><I>Capital Expenditures</I>. During
  the three months ended March 31, 2016, Equus Energy invested $0.003 million in capital expenditures for small repairs and improvements.
  The operators of the various working interest have communicated their intent to wait until later in 2016, commensurate with an
  anticipated gradual rise in the price of crude oil, to commence new drilling and recompletion projects.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.35pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">We do not consolidate Equus Energy or
  its wholly-owned subsidiaries and accordingly only the value of our investment in Equus Energy is included on our statement of
  assets and liabilities. Our investment in Equus Energy is valued in accordance with our normal valuation procedures and is based
  in part on using a discounted cash flow analysis based on a reserve report prepared for Equus Energy by Lee Keeling &amp; Associates,
  Inc., an independent petroleum engineering firm, the transactions and values of comparable companies in this sector, and the estimated
  value of leasehold mineral interests associated with the acreage held by Equus Energy. A valuation of Equus Energy was performed
  by a third-party valuation firm, who recommended a value range of Equus Energy consistent with the fair value determined by our
  Management (See <I>Schedule of Investments</I><FONT STYLE="background-color: white">)</FONT>.</P>
  
  
  <!-- Field: Page; Sequence: 22 -->
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      <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font-size: 10pt"><TR STYLE="vertical-align: top; text-align: left"><TD STYLE="width: 100%"><A HREF="#Index" TITLE="Index" STYLE="font-style: italic">Index</A>&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">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Below is summarized consolidated financial
  information for Equus Energy as of March 31, 2016 and December 31, 2015 and for the three months ended March 31, 2016 and 2015,
  respectively, (in thousands):</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><U>EQUUS ENERGY, LLC </U></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><U>Condensed Consolidated Balance Sheets</U></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 0 99pt; text-indent: 81pt"></P>
  
  
  
  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 80%">
  <TR STYLE="vertical-align: bottom">
      <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: bold 11pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD COLSPAN="3" STYLE="font: bold 11pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-size: 10pt">March
      31,</FONT></TD><TD STYLE="font: bold 11pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD COLSPAN="3" STYLE="font: bold 11pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-size: 10pt">December
      31,</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: bold 11pt Times New Roman, Times, Serif; padding-bottom: 1pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD COLSPAN="3" STYLE="font: bold 11pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 10pt">2016</FONT></TD><TD STYLE="font: bold 11pt Times New Roman, Times, Serif; padding-bottom: 1pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD COLSPAN="3" STYLE="font: bold 11pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 10pt">2015</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: bold 11pt Times New Roman, Times, Serif; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Assets</FONT></TD><TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 11pt Times New Roman, Times, Serif; text-align: left; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Current
      assets:</FONT></TD><TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="width: 63%; font: 11pt Times New Roman, Times, Serif; text-align: left; padding-left: 22.35pt"><FONT STYLE="font-size: 10pt">Cash
      and cash equivalents</FONT></TD><TD STYLE="width: 1%; font: 11pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="width: 1%; font: 11pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 10pt">$</FONT></TD><TD STYLE="width: 12%; font: 11pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-size: 10pt">178</FONT></TD><TD STYLE="width: 1%; font: 11pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="width: 8%; font: 11pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="width: 1%; font: 11pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 10pt">$</FONT></TD><TD STYLE="width: 12%; font: 11pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-size: 10pt">517</FONT></TD><TD STYLE="width: 1%; font: 11pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 11pt Times New Roman, Times, Serif; text-align: left; padding-left: 22.35pt"><FONT STYLE="font-size: 10pt">Accounts
      receivable</FONT></TD><TD STYLE="font: 11pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="font: 11pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 11pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-size: 10pt">42</FONT></TD><TD STYLE="font: 11pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 11pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="font: 11pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 11pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-size: 10pt">122</FONT></TD><TD STYLE="font: 11pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 11pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt; padding-left: 22.35pt"><FONT STYLE="font-size: 10pt">Other
      current assets</FONT></TD><TD STYLE="font: 11pt Times New Roman, Times, Serif; padding-bottom: 1pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 11pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font: 11pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-size: 10pt">32</FONT></TD><TD STYLE="padding-bottom: 1pt; font: 11pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 11pt Times New Roman, Times, Serif; padding-bottom: 1pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 11pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font: 11pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-size: 10pt">32</FONT></TD><TD STYLE="padding-bottom: 1pt; font: 11pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 11pt Times New Roman, Times, Serif; text-align: left; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Total
      current assets</FONT></TD><TD STYLE="font: 11pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="font: 11pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 11pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-size: 10pt">252</FONT></TD><TD STYLE="font: 11pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 11pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="font: 11pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 11pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-size: 10pt">671</FONT></TD><TD STYLE="font: 11pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 11pt Times New Roman, Times, Serif; text-align: left; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Oil
      and gas properties</FONT></TD><TD STYLE="font: 11pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="font: 11pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 11pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-size: 10pt">8,273</FONT></TD><TD STYLE="font: 11pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 11pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="font: 11pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 11pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-size: 10pt">8,269</FONT></TD><TD STYLE="font: 11pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 11pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Less:
      accumulated depletion, depreciation and amortization</FONT></TD><TD STYLE="font: 11pt Times New Roman, Times, Serif; padding-bottom: 1pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 11pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font: 11pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-size: 10pt">(6,579</FONT></TD><TD STYLE="padding-bottom: 1pt; font: 11pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 10pt">)</FONT></TD><TD STYLE="font: 11pt Times New Roman, Times, Serif; padding-bottom: 1pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 11pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font: 11pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-size: 10pt">(6,516</FONT></TD><TD STYLE="padding-bottom: 1pt; font: 11pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 10pt">)</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 11pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt; padding-left: 22.35pt"><FONT STYLE="font-size: 10pt">Net
      oil and gas properties</FONT></TD><TD STYLE="font: 11pt Times New Roman, Times, Serif; padding-bottom: 1pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 11pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font: 11pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-size: 10pt">1,694</FONT></TD><TD STYLE="padding-bottom: 1pt; font: 11pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 11pt Times New Roman, Times, Serif; padding-bottom: 1pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 11pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font: 11pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-size: 10pt">1,753</FONT></TD><TD STYLE="padding-bottom: 1pt; font: 11pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 11pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt; padding-left: 53.85pt"><FONT STYLE="font-size: 10pt">Total
      assets</FONT></TD><TD STYLE="font: 11pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font: 11pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 10pt">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; font: 11pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-size: 10pt">1,946</FONT></TD><TD STYLE="padding-bottom: 2.5pt; font: 11pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 11pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font: 11pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 10pt">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; font: 11pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-size: 10pt">2,424</FONT></TD><TD STYLE="padding-bottom: 2.5pt; font: 11pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: bold 11pt Times New Roman, Times, Serif; text-align: left; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Liabilities
      and member's capital</FONT></TD><TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 11pt Times New Roman, Times, Serif; text-align: left; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Current
      liabilities:</FONT></TD><TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 11pt Times New Roman, Times, Serif; text-align: left; padding-left: 22.35pt"><FONT STYLE="font-size: 10pt">Accounts
      payable and other</FONT></TD><TD STYLE="font: 11pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="font: 11pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 10pt">$</FONT></TD><TD STYLE="font: 11pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-size: 10pt">163</FONT></TD><TD STYLE="font: 11pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 11pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="font: 11pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 10pt">$</FONT></TD><TD STYLE="font: 11pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-size: 10pt">206</FONT></TD><TD STYLE="font: 11pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 11pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt; padding-left: 22.35pt"><FONT STYLE="font-size: 10pt">Due
      to affiliate</FONT></TD><TD STYLE="font: 11pt Times New Roman, Times, Serif; padding-bottom: 1pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 11pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font: 11pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-size: 10pt">611</FONT></TD><TD STYLE="padding-bottom: 1pt; font: 11pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 11pt Times New Roman, Times, Serif; padding-bottom: 1pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 11pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font: 11pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-size: 10pt">611</FONT></TD><TD STYLE="padding-bottom: 1pt; font: 11pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 11pt Times New Roman, Times, Serif; text-align: left; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Total
      current liabilities</FONT></TD><TD STYLE="font: 11pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="font: 11pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 11pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-size: 10pt">774</FONT></TD><TD STYLE="font: 11pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 11pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="font: 11pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 11pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-size: 10pt">817</FONT></TD><TD STYLE="font: 11pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font: 11pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Asset
      retirement obligations</FONT></TD><TD STYLE="font: 11pt Times New Roman, Times, Serif; padding-bottom: 1pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 11pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font: 11pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-size: 10pt">179</FONT></TD><TD STYLE="padding-bottom: 1pt; font: 11pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 11pt Times New Roman, Times, Serif; padding-bottom: 1pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 11pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font: 11pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-size: 10pt">178</FONT></TD><TD STYLE="padding-bottom: 1pt; font: 11pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 11pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt; padding-left: 10pt"><FONT STYLE="font-size: 10pt">Total
      liabilities</FONT></TD><TD STYLE="font: 11pt Times New Roman, Times, Serif; padding-bottom: 1pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 11pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font: 11pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-size: 10pt">953</FONT></TD><TD STYLE="padding-bottom: 1pt; font: 11pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 11pt Times New Roman, Times, Serif; padding-bottom: 1pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 11pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font: 11pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-size: 10pt">995</FONT></TD><TD STYLE="padding-bottom: 1pt; font: 11pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 11pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt; padding-left: 10pt"><FONT STYLE="font-size: 10pt">Total
      member's equity</FONT></TD><TD STYLE="font: 11pt Times New Roman, Times, Serif; padding-bottom: 1pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 11pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font: 11pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-size: 10pt">993</FONT></TD><TD STYLE="padding-bottom: 1pt; font: 11pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 11pt Times New Roman, Times, Serif; padding-bottom: 1pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: Black 1pt solid; font: 11pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font: 11pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-size: 10pt">1,429</FONT></TD><TD STYLE="padding-bottom: 1pt; font: 11pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font: 11pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt; padding-left: 10pt"><FONT STYLE="font-size: 10pt">Total
      liabilities and member's equity</FONT></TD><TD STYLE="font: 11pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font: 11pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 10pt">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; font: 11pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-size: 10pt">1,946</FONT></TD><TD STYLE="padding-bottom: 2.5pt; font: 11pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 11pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
      <TD STYLE="border-bottom: Black 2.5pt double; font: 11pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 10pt">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; font: 11pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-size: 10pt">2,424</FONT></TD><TD STYLE="padding-bottom: 2.5pt; font: 11pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
  </TABLE>
  
  
  
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 0 0.75in"></P>
  
  
  
  
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.35pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.35pt">Revenue and direct operating expenses
  for the various oil and gas assets included in the accompanying statements represent the net collective working and revenue interests
  acquired by Equus Energy. The revenue and direct operating expenses presented herein relate only to the interests in the producing
  oil and natural gas properties and do not represent all of the oil and natural gas operations of all of these properties. Direct
  operating expenses include lease operating expenses and production and other related taxes. General and administrative expenses,
  depletion, depreciation and amortization (&ldquo;DD&amp;A&rdquo;) of oil and gas properties and federal and state taxes have been
  excluded from direct operating expenses in the accompanying statements of revenues and direct operating expenses because the allocation
  of certain expenses would be arbitrary and would not be indicative of what such costs would have been had Equus Energy been operated
  as a stand-alone entity. The statements of revenue and direct operating expenses presented are not indicative of the financial
  condition or results of operations of Equus Energy on a go forward basis due to changes in the business and the omission of various
  operating expenses.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 10pt">&nbsp;</P>
  
  
  <!-- Field: Page; Sequence: 23 -->
      <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font-size: 10pt"><TR STYLE="vertical-align: top; text-align: left"><TD STYLE="width: 33%">&nbsp;</TD><TD STYLE="width: 34%; text-align: center"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->23<!-- Field: /Sequence --></TD><TD STYLE="width: 33%; text-align: right">&nbsp;</TD></TR></TABLE></DIV>
      <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font-size: 10pt"><TR STYLE="vertical-align: top; text-align: left"><TD STYLE="width: 100%"><A HREF="#Index" TITLE="Index" STYLE="font-style: italic">Index</A>&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 ENERGY, LLC </U></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><U>Condensed Consolidated Statements
  of Operations</U></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0; text-indent: 24.5pt"></P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 80%; font: 10pt Times New Roman, Times, Serif">
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="font-size: 11pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="7" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Three Months Ended March 31,</TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2016</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2015</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="width: 63%; text-align: left">Operating revenue</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">58</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">284</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">Operating expenses</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-left: 10pt">Direct operating expenses</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">262</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">259</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="padding-left: 10pt">Impairment</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-left: 10pt">Depletion, depreciation, amortization and accretion</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">63</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">186</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 10pt">General and administrative</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">169</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">131</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 20pt">Total operating expenses</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">494</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">576</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-bottom: 1pt">Operating loss before income tax expense</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(436</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(292</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-bottom: 2.5pt">Net loss</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(436</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(292</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD></TR>
  </TABLE>
  
  
  
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-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>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><U>EQUUS ENERGY, LLC</U></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><U>Condensed Consolidated Statements
  of Cash Flows</U></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0; text-indent: 45pt"></P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 80%; font: 10pt Times New Roman, Times, Serif">
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="text-align: center; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="7" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Three Months Ending March 31,</TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2016</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt; text-align: center">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2015</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">Cash flows from operating activities:</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
      <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD>&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
      <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="width: 63%; text-align: left">Net loss</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">(436</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 8%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">(292</TD><TD STYLE="width: 1%; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-left: 10pt">Adjustments to reconcile net loss to</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-left: 20pt">net cash (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: White">
      <TD STYLE="text-align: left; padding-left: 30pt">Depletion, depreciation, amortization and accretion</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">63</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">186</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-left: 10pt">Changes in operating assets and liabilities:</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-left: 20pt">Accounts receivable and other current assets</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">80</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">162</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 20pt">Accounts payable and other</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(43</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">11</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 30pt">Net cash (used in) provided by operating activities</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(336</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">67</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">Cash flows from investing activities:</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
      <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
      <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 10pt">Investment in oil &amp; gas properties</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(3</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(45</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 20pt">Net cash used in investing activities</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(3</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(45</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">Net (decrease) increase in cash</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(339</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">22</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-bottom: 1pt">Cash and cash equivalents at beginning of period</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">517</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">613</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-bottom: 2.5pt">Cash and cash equivalents at end of period</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">178</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">635</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
  </TABLE>
  
  
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0; text-indent: 45pt"></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>Critical Accounting Policies
  for Equus Energy </B> - Equus Energy and its wholly-owned subsidiary EQS Energy Holdings, Inc. (collectively, &ldquo;the
  Company&rdquo;) follow the <I>Full Cost Method of Accounting</I> for oil and gas properties. Under the full cost method, all
  costs associated with property acquisition, exploration, and development activities are capitalized. Capitalized costs
  include lease acquisitions, geological and geophysical work, delay rentals, costs of drilling, completing and equipping
  successful and unsuccessful oil and gas wells and related costs. Gains or losses are normally not recognized on the sale or
  other disposition of oil and gas properties. Gains or losses are normally reflected as an adjustment to the full cost
  pool.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  
  <!-- Field: Page; Sequence: 24 -->
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      <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font-size: 10pt"><TR STYLE="vertical-align: top; text-align: left"><TD STYLE="width: 100%"><A HREF="#Index" TITLE="Index" STYLE="font-style: italic">Index</A>&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 capitalized costs of oil and gas
  properties, plus estimated future development costs relating to proved reserves and estimated cost of dismantlement and abandonment,
  net of salvage value, are amortized on a unit-of-production method over the estimated productive life of the proved oil and gas
  reserves. Unevaluated oil and gas properties are excluded from this calculation.&nbsp; Depletion, depreciation, amortization and
  accretion expense for the Company&rsquo;s oil and gas properties totaled $0.06 million and $0.2 million for the three months ended
  March 31, 2016 and March 31, 2015, respectively.</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; text-indent: 24.5pt">Capitalized oil and gas property costs
  are limited to an amount (the ceiling limitation) equal to the sum of the following:</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-indent: 0.5in">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <tr style="vertical-align: top">
      <td style="width: 48px; line-height: 115%">&nbsp;</td>
      <td style="width: 48px; padding-top: 4.5pt; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(a)</font></td>
      <td style="padding-top: 4.5pt; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As of March 31, 2016, the present value of estimated future net revenue from the projected production of proved oil and gas reserves, calculated at the simple arithmetic average, first-day-of-the-month prices during the twelve-month period before the balance sheet date (with consideration of price changes only to the extent provided by contractual arrangements) and a discount factor of 10%;</font></td></tr>
  <tr style="vertical-align: top">
      <td style="line-height: 115%">&nbsp;</td>
      <td style="padding-top: 4.5pt; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(b)</font></td>
      <td style="padding-top: 4.5pt; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The cost of investments in unproved and unevaluated properties excluded from the costs being amortized; and</font></td></tr>
  <tr style="vertical-align: top">
      <td style="line-height: 115%">&nbsp;</td>
      <td style="padding-top: 4.5pt; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(c)</font></td>
      <td style="padding-top: 4.5pt; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The lower of cost or estimated fair value of unproved properties included in the costs being amortized.</font></td></tr>
  </table>
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">When it is determined that oil and gas
  property costs exceed the ceiling limitation, an impairment charge is recorded to reduce its carrying value to the ceiling limitation.&nbsp;
  The Company did not recognize an impairment loss on its oil and gas properties during the three months ended March 31, 2016. However,
  during 2015, the Company recognized an impairment loss of $4.0 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 costs of certain unevaluated leasehold
  acreage and certain wells being drilled are not amortized. The Company excludes all costs until proved reserves are found or until
  it is determined that the costs are impaired. Costs not amortized are periodically assessed for possible impairment or reduction
  in value. If a reduction in value has occurred, costs being amortized are increased accordingly.&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B><U>Revenue Recognition</U> - </B>Revenue
  recognized for oil and natural gas sales under the sales method of accounting. Under this method, revenue recognized on production
  as it is taken and delivered to its purchasers. The volumes sold may be more or less than the volumes entitled to, based on the
  owner&rsquo;s net leasehold interest. These differences result from production imbalances, which are not significant, and are reflected
  as adjustments to proven reserves and future cash flows in the unaudited consolidated financial information included herein.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B><U>Accounting Policy on DD&amp;A</U></B>
  - The Company employs the &ldquo;Units of Production&rdquo; method in calculating depletion of its proved oil and gas properties,
  wherein capitalized costs, as adjusted for future development costs and asset retirement obligations, are amortized over the total
  estimated proved reserves.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B><U>Income Taxes</U></B> - A
  limited liability company is not subject to the payment of federal income taxes as components of its income and expenses flow
  through directly to the members. However, the Company is subject to certain state income taxes. Texas margin tax applies to
  legal entities conducting business in Texas. The margin tax is based on our Texas sourced taxable margin. The tax is
  calculated by applying a tax rate to a base that considers both revenue and expenses and therefore has the characteristics of
  an income tax. Taxable Subsidiaries may generate income tax expense because of the Taxable Subsidiaries&rsquo; ownership of
  the portfolio companies. We reflect any such income tax expense on our Statements of Operations.&nbsp; As of March 31, 2016
  and March 31, 2015, the Company recorded $0 in federal income taxes.&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B><U>Asset Retirement Obligations </U></B>-
  The fair value of asset retirement obligations are recorded in the period in which they are incurred if a reasonable estimate of
  fair value can be made, and the corresponding cost is capitalized as part of the carrying amount of the related long-lived asset.&nbsp;
  The fair value of the asset retirement obligation is measured using expected future cash outflows discounted at the Company&rsquo;s
  credit-adjusted risk-free interest rate.&nbsp; Fair value, to the extent possible, should include a market risk premium for unforeseeable
  circumstances.&nbsp; No market risk premium was included in the Company&rsquo;s asset retirement obligation fair value estimate
  since a reasonable estimate could not be made. &nbsp;The liability is accreted to its then present value each period, and the capitalized
  cost is depleted or amortized over the estimated recoverable reserves using the units-of-production method.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <tr style="vertical-align: top">
      <td style="width: 24px; line-height: 115%">&nbsp;</td>
      <td style="width: 24px; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>(9)</b></font></td>
      <td style="text-decoration: underline; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><u>Recent Accounting Pronouncements </u></b></font></td></tr>
  </table>
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">In January 2016, the FASB issued ASU
  No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities.&nbsp; Among other things, this ASU requires
  that public business entities use the exit price notion when measuring the fair value of financial instruments for disclosure purposes.&nbsp;
  ASU No. 2016-01 is effective for public entities for fiscal years, and interim periods within those fiscal years, beginning after
  December 15, 2017.&nbsp; Our adoption of ASU No. 2016-01 is not anticipated to have a material effect on our financial statements.</P>
  
  
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  <P STYLE="font: 10pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <tr style="vertical-align: top">
      <td style="width: 24px; line-height: 115%">&nbsp;</td>
      <td style="width: 24px; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>(10) </b></font></td>
      <td style="text-decoration: underline; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><u>Subsequent Events </u></b></font></td></tr>
  </table>
  
  <P STYLE="margin-top: 0; margin-bottom: 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 the following subsequent events:</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">On April 1, 2016, we received $40,000
  in cash representing payment of accrued cash interest on our $2.0 million loan to Biogenic Reagents, LLC made on January 29, 2016.</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 April 1, 2016, we sold U.S. Treasury
  Bills for $15.0 million and repaid our margin loan.</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 April 28, 2016, we extended the maturity
  date of our $2.0 million loan to Biogenic Reagents, LLC from April 28, 2016 to May 31, 2016.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B>&nbsp;</B></P>
  
  <!-- Field: Page; Sequence: 26 -->
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      <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font-size: 10pt"><TR STYLE="vertical-align: top; text-align: left"><TD STYLE="width: 100%"><A HREF="#Index" TITLE="Index" STYLE="font-style: italic">Index</A>&nbsp;</TD></TR></TABLE></DIV>
      <!-- Field: /Page -->
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B><A NAME="a_010"></A></B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B><U>Item 2.</U> <U>Management&rsquo;s Discussion and Analysis
  of Financial Condition and Results of Operations</U></B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Equus Total Return, Inc. (<I>&ldquo;we,&rdquo;
  &ldquo;us,&rdquo; &ldquo;our,&rdquo; &ldquo;Equus,&rdquo; the &ldquo;Company,&rdquo; and the &ldquo;Fund</I>&rdquo;), a Delaware
  corporation, was formed on August 16, 1991. Our shares trade on the New York Stock Exchange under the symbol &lsquo;EQS&rsquo;.
  Our investment strategy seeks to provide the highest total return, consisting of capital appreciation and current income.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">The information contained in this
  section should be read in conjunction with our consolidated financial statements and notes thereto appearing elsewhere in this
  Quarterly Report and in conjunction with the financial statements and notes thereto in the Fund&rsquo;s Form 10-K for the year
  ended December 31, 2015, as filed with the SEC. In addition, some of the statements in this report constitute forward-looking statements.
  The matters discussed in this Quarterly Report, as well as in future oral and written statements by management of Equus, that are
  forward-looking statements are based on current management expectations that involve substantial risks and uncertainties which
  could cause actual results to differ materially from the results expressed in, or implied by, these forward-looking statements.
  Forward-looking statements relate to future events or our future financial performance. We generally identify forward-looking statements
  by terminology such as &ldquo;may,&rdquo; &ldquo;will,&rdquo; &ldquo;should,&rdquo; &ldquo;expects,&rdquo; &ldquo;plans,&rdquo;
  &ldquo;anticipates,&rdquo; &ldquo;could,&rdquo; &ldquo;intends,&rdquo; &ldquo;target,&rdquo; &ldquo;projects,&rdquo; &ldquo;believes,&rdquo;
  &ldquo;estimates,&rdquo; &ldquo;predicts,&rdquo; &ldquo;potential&rdquo; or &ldquo;continue&rdquo; or the negative of these terms
  or other similar words. Important assumptions include our ability to originate new investments, achieve certain margins and levels
  of profitability, and the availability of additional capital. In light of these and other uncertainties, the inclusion of a forward-looking
  statement in this Quarterly Report should not be regarded as a representation by us that our plans or objectives will be achieved.
  The forward-looking statements contained in this Quarterly Report include statements as to:</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/150% Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
  <TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: bold 10pt Symbol">&#183;</FONT></TD><TD STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">our future operating results;</FONT></TD></TR></TABLE>
  
  <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 11pt/150% Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
  <TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: bold 10pt Symbol">&#183;</FONT></TD><TD STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">our business prospects and the prospects of our existing
  and prospective portfolio companies; </FONT></TD></TR></TABLE>
  
  <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 11pt/150% Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
  <TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: bold 10pt Symbol">&#183;</FONT></TD><TD STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the return or impact of current and future investments;</FONT></TD></TR></TABLE>
  
  <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 11pt/150% Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
  <TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: bold 10pt Symbol">&#183;</FONT></TD><TD STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">our contractual arrangements and other relationships
  with third parties;</FONT></TD></TR></TABLE>
  
  <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 11pt/150% Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
  <TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: bold 10pt Symbol">&#183;</FONT></TD><TD STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the dependence of our future success on the general
  economy and its impact on the industries in which we invest;</FONT></TD></TR></TABLE>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 11pt/150% Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
  <TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: bold 10pt Symbol">&#183;</FONT></TD><TD STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the financial condition and ability of our existing
  and prospective portfolio companies to achieve their objectives;</FONT></TD></TR></TABLE>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 11pt/150% Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
  <TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: bold 10pt Symbol">&#183;</FONT></TD><TD STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">our expected financings and investments;</FONT></TD></TR></TABLE>
  
  <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 11pt/150% Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
  <TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: bold 10pt Symbol">&#183;</FONT></TD><TD STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">our regulatory structure and tax treatment;</FONT></TD></TR></TABLE>
  
  <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 11pt/150% Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
  <TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: bold 10pt Symbol">&#183;</FONT></TD><TD STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">our ability to qualify and operate as a BDC and a
  RIC, including the impact of changes in laws or regulations governing our operations, or the operations of our portfolio companies;</FONT></TD></TR></TABLE>
  
  <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 11pt/150% Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
  <TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: bold 10pt Symbol">&#183;</FONT></TD><TD STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the adequacy of our cash resources and working capital;</FONT></TD></TR></TABLE>
  
  <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 11pt/150% Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
  <TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: bold 10pt Symbol">&#183;</FONT></TD><TD STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the timing of cash flows, if any, from the operations
  of our portfolio companies;</FONT></TD></TR></TABLE>
  
  <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 11pt/150% Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
  <TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: bold 10pt Symbol">&#183;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the impact of fluctuations in interest rates on our
  business;</FONT></TD></TR></TABLE>
  
  <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 11pt/150% Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
  <TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: bold 10pt Symbol">&#183;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the valuation of our investments in portfolio companies,
  particularly those having no liquid trading market;</FONT></TD></TR></TABLE>
  
  <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 11pt/150% Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
  <TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: bold 10pt Symbol">&#183;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">our ability to recover unrealized losses; and</FONT></TD></TR></TABLE>
  
  <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 11pt/150% Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
  <TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: bold 10pt Symbol">&#183;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">market conditions and our ability to access additional
  capital, if deemed necessary.</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">There are a number of important risks and uncertainties
  that could cause our actual results to differ materially from those indicated by such forward-looking statements. For a discussion
  of factors that could cause our actual results to differ from forward-looking statements contained in this Quarterly Report, please
  see the discussion in Part II, &ldquo;Item 1A. Risk Factors&rdquo;, and in Part I, &ldquo;Item 1A. Risk Factors&rdquo; in our Annual
  Report on Form 10-K for the fiscal year ended December 31, 2015. You should not place undue reliance on these forward-looking statements.
  The forward-looking statements made in this Quarterly Report relate only to events as of the date on which the statements are made.
  We undertake no obligation to update any forward-looking statement to reflect events or circumstances occurring after the date
  this Quarterly Report is filed with the SEC.</P>
  
  
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">We attempt to maximize the return to
  stockholders in the form of current investment income and long-term capital gains by investing in the debt and equity securities
  of companies with a total enterprise value of between $5.0 million and $75.0 million, although we may engage in transactions with
  smaller or larger investee companies from time to time. We seek to invest primarily in companies pursuing growth either through
  acquisition or organically, leveraged buyouts, management buyouts and recapitalizations of existing businesses or special situations.
  Our income-producing investments consist principally of debt securities including subordinate debt, debt convertible into common
  or preferred stock, or debt combined with warrants and common and preferred stock. Debt and preferred equity financing may also
  be used to create long-term capital appreciation through the exercise and sale of warrants received in connection with the financing.
  We seek to achieve capital appreciation by making investments in equity and equity-oriented securities issued by privately-owned
  companies (and smaller public companies) in transactions negotiated directly with such companies. Given market conditions over
  the past several years and the performance of our portfolio, our management and Board of Directors believe it is prudent to continue
  to review alternatives to refine and further clarify the current strategies.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 22.5pt 0 0; text-indent: 24.5pt"></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B><I>&nbsp;</I></B></P>
  
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      <!-- Field: /Page -->
  
  <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><P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">We
                                           elected to be treated as a BDC under the 1940 Act. We currently qualify as a RIC for
                                           federal income tax purposes and, therefore, are not required to pay corporate income
                                           taxes on any income or gains that we distribute to our stockholders. We have certain
                                           wholly owned Taxable Subsidiaries each of which holds one or more portfolio investments
                                           listed on our Schedules of Investments. The purpose of these Taxable Subsidiaries is
                                           to permit us to hold certain income-producing investments or portfolio companies organized
                                           as limited liability companies, or LLCs, (or other forms of pass-through entities) and
                                           still satisfy the RIC tax requirement that at least 90% of our gross revenue for income
                                           tax purposes must consist of investment income. Absent the Taxable Subsidiaries, a portion
                                           of the gross income of these income-producing investments or of any LLC (or other pass-through
                                           entity) portfolio investment, as the case may be, would flow through directly to us for
                                           the 90% test. To the extent that such income did not consist of investment income, it
                                           could jeopardize our ability to qualify as a RIC and, therefore, cause us to incur significant
                                           federal income taxes. The income of the LLCs (or other pass-through entities) owned by
                                           Taxable Subsidiaries is taxed to the Taxable Subsidiaries and does not flow through to
                                           us, thereby helping us preserve our RIC status and resultant tax advantages. We do not
                                           consolidate the Taxable Subsidiaries for income tax purposes and they may generate income
                                           tax expense because of the Taxable Subsidiaries&rsquo; ownership of the portfolio investments.
                                           We reflect any such income tax expense on our Statements of Operations.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 22.5pt 0 0"><B>Plan of Reorganization </B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 22.5pt 0 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">On May 14, 2014, we announced
  that the Fund intended to effect a reorganization pursuant to Section 2(a)(33) of the 1940 Act. As a first step to consummating
  the reorganization, we sold to MVC 2,112,000 newly-issued shares of the Fund&rsquo;s common stock in exchange for 395,839 shares
  of MVC (such transaction is hereinafter referred to as the &ldquo;Share Exchange&rdquo;). MVC is a business development company
  traded on the New York Stock Exchange that provides long-term debt and equity investment capital to fund growth, acquisitions and
  recapitalizations of companies in a variety of industries. The Share Exchange was calculated based on the Fund&rsquo;s and MVC&rsquo;s
  respective net asset value per share. The number of MVC shares received by Equus represents approximately 1.73% of MVC&rsquo;s
  total outstanding shares of common stock. The number of Equus shares sold to MVC pursuant to the Share Exchange represents approximately
  16.7% of our issued and outstanding shares of common stock at March 31, 2015. We incurred dilution of $0.11 per share as a result
  of the Share Exchange. Since the announcement, we have received 49,905 shares of MVC (market value of $0.4 million calculated as
  of the date of receipt) in the form of dividend payments.</P>
  
  
  
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 22.5pt 0 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Pursuant to the terms of
  a Share Exchange Agreement, dated May 14, 2014, entered into by Equus and MVC which memorialized the Share Exchange, we intend
  to finalize the reorganization by pursuing a merger or consolidation with MVC, or a subsidiary of MVC, or one or more of MVC&rsquo;s
  portfolio companies (the &ldquo;Consolidation&rdquo;). Absent Equus merging or consolidating with/into MVC, our current intention
  is for Equus to (i) consummate the Consolidation, (ii) terminate its election to be classified as a business development company
  under the 1940 Act, and (iii) be restructured as a publicly-traded operating company focused on the energy and/or financial services
  sector.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 22.5pt 0 0; text-indent: 24.5pt"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 22.5pt 0 0"><B>Critical Accounting Policies </B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">See the Fund&rsquo;s Critical Accounting
  Policies from the disclosure set forth in the Annual Report on Form10-K for the year ended December 31, 2015.<B><I>&nbsp;</I></B></P>
  
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B><I>&nbsp;</I></B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B><I>Recent Accounting Pronouncements</I></B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B><I>&nbsp;</I></B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">In January 2016, the FASB issued ASU
  No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities.&nbsp; Among other things, this ASU requires
  that public business entities use the exit price notion when measuring the fair value of financial instruments for disclosure purposes.&nbsp;
  ASU No. 2016-01 is effective for public entities for fiscal years, and interim periods within those fiscal years, beginning after
  December 15, 2017.&nbsp; Our adoption of ASU No. 2016-01 is not anticipated to have a material effect on our financial statements.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.35pt"><B><I>&nbsp;</I></B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.35pt"><B><I>Current Market Conditions</I></B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.35pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Despite relatively low unemployment
  rates, the U.S. economy expanded at an annualized rate of 0.5% during the first quarter of 2016, following an annualized increase
  of 1.4% during the fourth quarter of 2015. The decreased growth during the first quarter, the slowest since the first quarter of
  2014, was principally attributed to a strong U.S. dollar, which hampered U.S. exports, lower consumer spending, and continued low
  crude and natural gas prices which negatively affected the energy sector. In a survey of 60 economists, the <I>Wall Street Journal</I>
  has predicted GDP growth of 2.4% for the second quarter of 2016. In respect of the energy industry, Schlumberger reported in October
  2015 that it did not expect a recovery in demand for energy before 2017 and predicted that exploration and production spending
  would decrease again in 2016. (Sources: <I>U.S. Dept. of Commerce Bureau of Economic Analysis, Wall Street Journal, CNBC</I>)</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B><I>&nbsp;</I></B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"></P>
  
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      <!-- 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">Market conditions for business transactions
  during 2015, including mergers and acquisitions and private equity investments, improved to their highest level ($3.8 trillion)
  since prior to the 2008 financial crisis, as corporations have been deleveraging and are holding significant amounts of cash and
  many have focused on acquisitions as part of future growth plans. Private equity funds increased their assets under management
  during 2015 to a projected $468 billion, a level not seen since 2008, as private equity firms as a group enjoyed more success during
  the year in attracting investment capital. First quarter 2016 results are not yet available but are expected to continue this trend.
  (Sources: <I>Bloomberg, Forbes</I> and <I>The New York Times</I>).</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">During the three months ended March
  31, 2016, our net asset value increased from $2.94 per share to $2.96 per share, an increase of 0.68%. As of March 31, 2016, our
  common stock is trading at a 45.9% discount to our net asset value as compared to 39.2% as of December 31, 2015.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Over the past several years, we have
  executed certain initiatives to enhance liquidity, achieve a lower operational cost structure, provide more assistance to portfolio
  companies and realize certain of our portfolio investments. Specifically, we changed the composition of our Board of Directors
  and Management, terminated certain of our follow-on investments, internalized the management of the Fund, suspended our managed
  distribution policy, modified our investment strategy to pursue shorter term liquidation opportunities, pursued non-cash investment
  opportunities, and sold certain of our legacy and underperforming investment holdings. We believe these actions continue to be
  necessary to protect capital and liquidity in order to preserve and enhance shareholder value. Because our Management is internalized,
  certain of our expenses should not increase commensurate with an increase in the size of the Fund and, therefore, we expect to
  achieve efficiencies in our cost structure if we are able to grow the Fund.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"></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"><B>Liquidity and Capital Resources </B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">We generate cash primarily from maturities,
  sales of securities and borrowings, as well as capital gains realized upon the sale of portfolio investments. We use cash primarily
  to make additional investments, either in new companies or as follow-on investments in the existing portfolio companies and to
  pay the dividends to our stockholders.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Because of the nature and size of the
  portfolio investments, we may periodically borrow funds to make qualifying investments to maintain our tax status as a RIC. We
  often borrow such funds by utilizing a margin account with a securities brokerage firm. There is no assurance that such arrangement
  will be available in the future. If the Fund is unable to borrow funds to make qualifying investments, it may no longer qualify
  as a RIC. The Fund would then be subject to corporate income tax on its net investment income and realized capital gains, and distributions
  to stockholders would be subject to income tax as ordinary dividends.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 0.4in; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">The Fund has the ability to borrow funds
  and issue forms of senior securities representing indebtedness or stock, such as preferred stock, subject to certain restrictions.
  Net taxable investment income and net taxable realized gains from the sales of portfolio investments are intended to be distributed
  at least annually, to the extent such amounts are not reserved for payment of expenses and contingencies or to make follow-on or
  new investments.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">The Fund reserves the right to retain
  net long-term capital gains in excess of net short-term capital losses for reinvestment or to pay contingencies and expenses. Such
  retained amounts, if any, will be taxable to the Fund as long-term capital gains and stockholders will be able to claim their proportionate
  share of the federal income taxes paid on such gains as a credit against their own federal income tax liabilities. Stockholders
  will also be entitled to increase the adjusted tax basis of their Fund shares by the difference between their undistributed capital
  gains and their tax credit.</P>
  
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">We are evaluating the impact of current
  market conditions on our portfolio company valuations and their ability to provide current income. We have followed valuation techniques
  in a consistent manner; however, we are cognizant of current market conditions that might affect future valuations of portfolio
  securities. We believe that our operating cash flow and cash on hand will be sufficient to meet operating requirements and to finance
  routine capital expenditures through the next twelve months.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B>Results of Operations </B>&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>Investment Income and Expense </B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Net investment loss decreased to $0.7
  million from $1.1 million for the three months ended March 31, 2016 and 2015, respectively. The decrease in net investment loss
  generated at March 31, 2016 compared to March 31, 2015 is due primarily to an increase in total investment income and a decrease
  in operating expense.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Investment income was $0.1 million for
  the three months ended March 31, 2016 and $0.04 million for the three months ended March 31, 2015. The increase in investment income
  was primarily due to the increase in income producing investments, including interest income from our loan to Biogenic Reagents,
  LLC and the MVC share dividend received during the three months ended March 31, 2016.</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>
  
  
  
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"></P>
  
  <!-- Field: Page; Sequence: 29 -->
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      <!-- Field: /Page -->
  
  <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">Total expenses decreased to $0.9 million
  for the three months ended March 31, 2016 from $1.1 million for the three months ended March 31, 2015. The decrease is principally
  officer and employee bonuses earned during the first quarter of 2015.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0; text-indent: 24.5pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>Realized
  Gains and Losses on Sales of Portfolio Securities</B></FONT>&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">During the three months ended March
  31, 2016, we realized a loss of $2.0 thousand from the sale of temporary cash investments.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">During the three months ended March
  31, 2015, we realized capital losses of $2.5 million, including the following significant transactions:</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"></P>
  
  <TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid; text-align: left; vertical-align: top">Portfolio Company</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid; text-align: left; vertical-align: top">Industry</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-weight: bold; border-bottom: Black 1pt solid; text-align: left; vertical-align: top">Type</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="font-weight: bold; text-align: left; border-bottom: Black 1pt solid; vertical-align: top">Transaction Type</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Realized Gain (Loss)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="width: 24%; text-align: left; vertical-align: top">Spectrum Management, LLC</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="line-height: 115%; width: 30%; text-align: left; vertical-align: top">Business products&nbsp;&nbsp;and services</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left; vertical-align: top">&nbsp;</TD><TD STYLE="width: 5%; text-align: left; vertical-align: top">Control</TD><TD STYLE="width: 1%; text-align: left; vertical-align: top">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 17%; text-align: left; vertical-align: top">Disposition</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 3%; text-align: left">$</TD><TD STYLE="width: 15%; text-align: right">(2,850</TD><TD STYLE="width: 1%; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; vertical-align: top">Orco Property Group S. A.</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left; vertical-align: top">Real Estate</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: top">Non-affiliate</TD><TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left; vertical-align: top">Disposition</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">372</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-bottom: 1pt; vertical-align: top">Various others</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="text-align: left; padding-bottom: 1pt; vertical-align: top">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left; vertical-align: top">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="padding-bottom: 1pt; text-align: left; vertical-align: top">Disposition</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(5</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font-family: Helv; text-align: left; padding-bottom: 2.5pt; vertical-align: top">&nbsp;</TD><TD STYLE="font-family: Helv; padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="font-family: Helv; text-align: left; padding-bottom: 2.5pt; vertical-align: top">&nbsp;</TD><TD STYLE="font-family: Helv; padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="font-family: Helv; text-align: left; vertical-align: top">&nbsp;</TD><TD STYLE="font-family: Helv; text-align: left; vertical-align: top">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; font-family: Helv; text-align: left; vertical-align: top">&nbsp;</TD><TD STYLE="font-family: Helv; padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="font-family: Helv; text-align: left; padding-bottom: 2.5pt; vertical-align: top">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(2,483</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD></TR>
  </TABLE>
  
  
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"></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 22.5pt 0 0; text-indent: 24.5pt"><B>Changes in Unrealized
  Appreciation/Depreciation of Portfolio Securities</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">During the three months ended March
  31, 2016, we recorded a net change in unrealized appreciation of $1.0 million, to a net unrealized appreciation of $3.3 million.
  Such change in unrealized appreciation resulted primarily from the following changes:</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;&nbsp;</P>
  
  <TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <TR STYLE="vertical-align: top">
      <TD STYLE="width: 33px; line-height: 115%">&nbsp;</TD>
      <TD STYLE="width: 48px; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">(i)</FONT></TD>
      <TD STYLE="line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Increase in the fair value of our shareholding in MVC of $0.1 million due to the receipt of a dividend payment in the form of additional shares of MVC;</FONT></TD></TR>
  </TABLE>
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <TR STYLE="vertical-align: top">
      <TD STYLE="width: 33px; line-height: 115%">&nbsp;</TD>
      <TD STYLE="width: 48px; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">(ii)</FONT></TD>
      <TD STYLE="line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Increase in fair value of our shareholding in PalletOne, Inc. of $2.0 million due to an overall improvement in comparable industry sectors, as well as continued revenue and earnings growth;</FONT></TD></TR>
  </TABLE>
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <TR STYLE="vertical-align: top">
      <TD STYLE="width: 33px; line-height: 115%">&nbsp;</TD>
      <TD STYLE="width: 48px; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">(iii)</FONT></TD>
      <TD STYLE="line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Decrease in the fair value of our holdings in Equus Energy, LLC of $1.0 million, principally due to a combination of lower production without a corresponding increase in proved reserves and continued lower short- and long-term prices for crude oil and natural gas.</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">During the three months ended March
  31, 2015, we recorded a net change in unrealized depreciation of $2.7 million, to a net unrealized depreciation of $0.8 million.
  Such change in unrealized depreciation resulted primarily from the following changes:</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <tr style="vertical-align: top">
      <td style="width: 33px; line-height: 115%">&nbsp;</td>
      <td style="width: 48px; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt; line-height: 91%">(i)</font></td>
      <td style="line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt; line-height: 91%">Decrease in the fair value of our holdings in Equus Energy, LLC of $0.8 million, principally due to a combination of decreased production and declining oil and prices;</font></td></tr>
  </table>
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <tr style="vertical-align: top">
      <td style="width: 33px; line-height: 115%">&nbsp;</td>
      <td style="width: 48px; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt; line-height: 91%">(ii)</font></td>
      <td style="line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt; line-height: 91%">Decrease in the fair value of our shareholding in MVC of $0.1 million due to a decrease in the MVC share price during the quarter;</font></td></tr>
  </table>
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <tr style="vertical-align: top">
      <td style="width: 33px; line-height: 115%">&nbsp;</td>
      <td style="width: 48px; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt; line-height: 91%">(iii)</font></td>
      <td style="line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt; line-height: 91%">Increase in fair value of our shareholding in PalletOne, Inc. of $1.2 million due to an overall improvement in the industry sector for packaging companies, as well as continued revenue and earnings growth; </font></td></tr>
  </table>
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <tr style="vertical-align: top">
      <td style="width: 33px; line-height: 115%">&nbsp;</td>
      <td style="width: 48px; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt; line-height: 91%">(iii)</font></td>
      <td style="line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt; line-height: 91%">Transfer of unrealized depreciation to realized gain on our holding of OPG Notes of $0.4 million in connection with the sale of our interest in the OPG Notes; and,</font></td></tr>
  </table>
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <tr style="vertical-align: top">
      <td style="width: 33px; line-height: 115%">&nbsp;</td>
      <td style="width: 48px; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt; line-height: 91%">(iv)</font></td>
      <td style="line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt; line-height: 91%">Transfer of unrealized depreciation to realized loss on our holdings in Spectrum of $2.9 million in connection with the sale of our interest in Spectrum.</font></td></tr>
  </table>
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>Dividends </B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">We will pay out net investment income
  and/or realized capital gains, if any, on an annual basis as required under the Investment Company Act of 1940.</P>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"></P>
  
  <!-- Field: Page; Sequence: 30 -->
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      <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font-size: 10pt"><TR STYLE="vertical-align: top; text-align: left"><TD STYLE="width: 100%"><A HREF="#Index" TITLE="Index" STYLE="font-style: italic">Index</A>&nbsp;</TD></TR></TABLE></DIV>
      <!-- Field: /Page -->
  
  <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">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>Portfolio Securities </B>&nbsp;</P>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">On March 2, 2016, we extended the maturity
  of the 5<SUP>th</SUP> Element Tracking, LLC promissory note to July 2016 and received fees in the form of a PIK and cash totaling
  $0.05 million.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">During the three months ended March
  31, 2016, we received dividends in the form of additional shares of $0.1 million relating to our shareholding in MVC.&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">During the three months ended March
  31, 2015, we received dividends in the form of additional shares of $0.05 million relating to our shareholding in MVC. As a result
  of the sale of our interests in Spectrum to 5th Element Tracking, LLC, we received $3.0 million in cash and a 1-year subordinated
  note in the original principal amount of $0.9 million, bearing interest at the rate of 14% per annum.</P>
  
  <P STYLE="font: 10pt/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>Subsequent Events </B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Management performed an evaluation of
  the Fund&rsquo;s activity through the date the financial statements were issued, noting the following subsequent events:</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">On April 1, 2016, we received $40,000
  in cash representing payment of accrued cash interest on our $2.0 million loan to Biogenic Reagents, LLC made on January 29, 2016.</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 April 1, 2016, we sold U.S. Treasury
  Bills for $15.0 million and repaid our margin loan.</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 April 28, 2016, we extended the maturity
  date of our $2.0 million loan to Biogenic Reagents, LLC from April 28, 2016 to May 31, 2016.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B><A NAME="a_011"></A><U>Item 3. Quantitative and Qualitative Disclosure about
  Market Risk </U></B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">We are subject to financial market risks,
  including changes in interest rates with respect to investments in debt securities and outstanding debt payable, as well as changes
  in marketable equity security prices. In the future, we may invest in companies outside the United States, including in Europe
  and Asia, which would give rise to exposure to foreign currency value fluctuations. We do not use derivative financial instruments
  to mitigate any of these risks. The return on investments is generally not affected by foreign currency fluctuations.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Our investments in portfolio securities
  consist of some fixed-rate debt securities. Since the debt securities are generally priced at a fixed rate, changes in interest
  rates do not directly affect interest income. In addition, changes in market interest rates are not typically a significant factor
  in the determination of fair value of these debt securities, since the securities are generally held to maturity. We determine
  their fair values based on the terms of the relevant debt security and the financial condition of the issuer.</P>
  
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">A major portion of our investment portfolio
  consists of debt and equity investments in private companies. Modest changes in public market equity prices generally do not significantly
  impact the estimated fair value of these investments. However, significant changes in market equity prices can have a longer-term
  effect on valuations of private companies, which could affect the carrying value and the amount and timing of gains or losses realized
  on these investments. A small portion of the investment portfolio could also consist of common stock in publicly traded companies.
  These investments are directly exposed to equity price risk, in that a hypothetical ten percent change in these equity prices would
  result in a similar percentage change in the fair value of these securities.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">We are classified as a &ldquo;non-diversified&rdquo;
  investment company under the 1940 Act, which means we are not limited in the proportion of our assets that may be invested in the
  securities of a single user. The value of one segment called &ldquo;Shipping products and services&rdquo; includes one portfolio
  company, PalletOne, Inc., and was 30.9% of the net asset value and 51.5% of our investments in portfolio company securities (at
  fair value) as of March 31, 2016. Changes in business or industry trends or in the financial condition, results of operations,
  or the market&rsquo;s assessment of any single portfolio company will affect the net asset value and the market price of our common
  stock to a greater extent than would be the case if we were a &ldquo;diversified&rdquo; company holding numerous investments.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 0.4in; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 55.05pt; text-indent: -55.1pt"><B><U><A NAME="a_012"></A>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"></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"></P>
  
  <!-- Field: Page; Sequence: 32 -->
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      <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font-size: 10pt"><TR STYLE="vertical-align: top; text-align: left"><TD STYLE="width: 100%"><A HREF="#Index" TITLE="Index" STYLE="font-style: italic">Index</A>&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">The Fund&rsquo;s management, with the
  participation of the Fund&rsquo;s Chief Executive Officer and Chief Financial Officer, have evaluated the effectiveness of the
  design and operations of the Fund&rsquo;s &ldquo;disclosure controls and procedures&rdquo; (as defined in Rule 13a-15(e) under
  the Securities Exchange Act of 1934) as of March 31, 2016. Based on their evaluation, the Fund&rsquo;s Chief Executive Officer
  and Chief Financial Officer concluded that the Fund&rsquo;s disclosure controls and procedures were effective at a reasonable assurance
  level. There has been no change in the Fund&rsquo;s internal control over financial reporting during the quarter ended March 31,
  2016, that has materially affected, or is reasonably likely to materially affect, the Fund&rsquo;s internal control over financial
  reporting.&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B><U><A NAME="a_013"></A>Part II. Other Information </U></B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 55.05pt; text-indent: -55.1pt"><FONT STYLE="background-color: white"><B>&nbsp;</B></FONT></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 55.05pt; text-indent: -55.1pt"><FONT STYLE="background-color: white"><B><U><A NAME="a_014"></A>Item
  1. Legal Proceedings&nbsp;</U></B></FONT></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 55.05pt; text-indent: -55.1pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"><B>Champion Window Arbitration Settlement</B>&mdash;In
  January 2006, we sold our 31.5% ownership interest in Champion Window, Inc. (&ldquo;Champion&rdquo;), a portfolio company of the
  Fund, to Atrium Companies Inc. (&ldquo;Atrium&rdquo;) pursuant to a Stock Purchase Agreement (&ldquo;SPA&rdquo;) dated December
  22, 2005. The SPA contained certain limited rights of indemnification for Atrium in connection with its purchase of such ownership
  interest.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">More than five years after the closing
  of the sale of our Champion interest, Atrium filed suit in Texas state court, which was subsequently consolidated into an Arbitration
  Action, against two former officers of Champion, Equus, and another former Champion shareholder. The suit alleged breaches of fiduciary
  duty against Champion&rsquo;s former officers for hiring undocumented workers that were discovered as a result of an investigation
  by the U.S. Immigration and Customs Enforcement agency (&ldquo;ICE&rdquo;) into Atrium&rsquo;s hiring practices. The suit also
  sought indemnification under the SPA from these officers, Equus, and another former Champion shareholder, for a payment of $2.0
  million made to ICE in settlement of the investigation and associated legal costs, as well as for claimed lost profits as a result
  of the investigation.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">On February 4, 2015, without admitting
  to any liability on the part of Equus, we entered into a settlement agreement with Atrium and its associated companies. Pursuant
  to the settlement agreement and in view of the estimated costs of protracted litigation and the associated disruption to the operations
  of the Fund, we agreed to pay $500,000, in complete settlement of the lawsuit, as being in the best interests of the Fund and its
  shareholders. This amount was accrued as of December 31, 2014. The settlement payment was made on February 6, 2015. Atrium filed
  a motion to dismiss the lawsuit with prejudice on February 4, 2015.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">From time to time, the Fund is also
  a party to certain proceedings incidental to the normal course of our business including the enforcement of our rights under contracts
  with our portfolio companies. While the outcome of these legal proceedings cannot at this time be predicted with certainty, we
  do not expect that these proceedings will have a material effect upon the Fund&rsquo;s financial condition or results of operations.</P>
  
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><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">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">There have been no material changes
  in the Fund&rsquo;s risk factors from the disclosure set forth in the Annual Report on Form 10-K for the year ended December 31,
  2015.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Readers should carefully consider these
  risks and all other information contained in the annual report on Form 10-K, including the Fund&rsquo;s financial statements and
  the related notes thereto. The risks and uncertainties described below are not the only ones facing the Fund.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Additional risks and uncertainties not
  presently known to the Fund, or not presently deemed material by the Fund, may also impair its operations and performance.&nbsp;&nbsp;</P>
  
  
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      <!-- 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"><B><U><A NAME="a_016"></A>Item 6. Exhibits </U></B></P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <tr style="vertical-align: top">
      <td style="width: 0px; line-height: 115%">&nbsp;</td>
      <td style="width: 33px; padding-top: 4.5pt; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">3.</font></td>
      <td style="padding-top: 4.5pt; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Articles of Incorporation and by-laws</font></td></tr>
  </table>
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <tr style="vertical-align: top">
      <td style="width: 41px; line-height: 115%">&nbsp;</td>
      <td style="width: 41px; padding-top: 4.5pt; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(a)</font></td>
      <td style="padding-top: 4.5pt; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Restated Certificate of Incorporation of the Fund, as amended. [Incorporated by reference to Exhibit 3(a) to Registrant&rsquo;s Annual Report on Form 10-K for the year ended December 31, 2007]</font></td></tr>
  </table>
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <tr style="vertical-align: top">
      <td style="width: 41px; line-height: 115%">&nbsp;</td>
      <td style="width: 41px; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(b)</font></td>
      <td style="line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Certificate of Merger dated June 30, 1993, between the Fund and Equus Investments Incorporated [Incorporated by reference to Exhibit 3(c) to Registrant&rsquo;s Annual Report on Form 10-K for the year ended December 31, 2007]</font></td></tr>
  </table>
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <tr style="vertical-align: top">
      <td style="width: 41px; line-height: 115%">&nbsp;</td>
      <td style="width: 41px; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(c)</font></td>
      <td style="line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Amended and Restated Bylaws of the Fund. [Incorporated by reference to Exhibit 3(b) to Registrant&rsquo;s Current Report on Form 8-K filed on June 30, 2014.]</font></td></tr>
  </table>
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <tr style="vertical-align: top">
      <td style="width: 0px; line-height: 115%">&nbsp;</td>
      <td style="width: 33px; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">10.</font></td>
      <td style="line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Material Contracts.</font></td></tr>
  </table>
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <tr style="vertical-align: top">
      <td style="width: 41px; line-height: 115%">&nbsp;</td>
      <td style="width: 41px; padding-top: 4.5pt; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(a)</font></td>
      <td style="padding-top: 4.5pt; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Safekeeping Agreement between the Fund and Amegy Bank dated August 16, 2008. [Incorporated by reference to Exhibit 10(c) to Registrant&rsquo;s Annual Report on Form 10-K for the year ended December 31, 2008.]</font></td></tr>
  </table>
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <tr style="vertical-align: top">
      <td style="width: 41px; line-height: 115%">&nbsp;</td>
      <td style="width: 41px; padding-top: 4.5pt; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(b)</font></td>
      <td style="padding-top: 4.5pt; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Form of Indemnification Agreement between the Fund and its directors and certain officers. [Incorporated by reference to Exhibit 10(d) to Registrant&rsquo;s Annual Report on Form 10-K for the year ended December 31, 2011.]</font></td></tr>
  </table>
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <tr style="vertical-align: top">
      <td style="width: 41px; line-height: 115%">&nbsp;</td>
      <td style="width: 41px; padding-top: 4.5pt; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(c)</font></td>
      <td style="padding-top: 4.5pt; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Form of Release Agreement between the Fund and certain of its officers and former officers. [Incorporated by reference to Exhibit 10(h) to Registrant&rsquo;s Annual Report on Form 10-K for the year ended December 31, 2004.]</font></td></tr>
  <tr style="vertical-align: top">
      <td style="line-height: 115%">&nbsp;</td>
      <td style="padding-top: 4.5pt; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(d)</font></td>
      <td style="padding-top: 4.5pt; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Code of Ethics of the Fund (Rule 17j-1) [Incorporated by reference to Exhibit 10(f) to Registrant&rsquo;s Annual Report on Form 10-K for the year ended December 31, 2009.]</font></td></tr>
  </table>
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <tr style="vertical-align: top">
      <td style="width: 41px; line-height: 115%">&nbsp;</td>
      <td style="width: 41px; padding-top: 4.5pt; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(e)</font></td>
      <td style="padding-top: 4.5pt; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Share Exchange Agreement between the Fund and MVC Capital, Inc., dated May 14, 2014. [Incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K, filed on May 15, 2014.]</font></td></tr>
  </table>
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <tr style="vertical-align: top">
      <td style="width: 0px; line-height: 115%">&nbsp;</td>
      <td style="width: 33px; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">31.</font></td>
      <td style="line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Rule 13a-14(a)/15d-14(a) Certifications</font></td></tr>
  </table>
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <tr style="vertical-align: top">
      <td style="width: 41px; line-height: 115%">&nbsp;</td>
      <td style="width: 41px; padding-top: 4.5pt; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">1.</font></td>
      <td style="padding-top: 4.5pt; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="ex31_1302certification.htm">Certification by Chief Executive Officer</A></font></td></tr>
  </table>
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <tr style="vertical-align: top">
      <td style="width: 41px; line-height: 115%">&nbsp;</td>
      <td style="width: 41px; padding-top: 4.5pt; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">2.</font></td>
      <td style="padding-top: 4.5pt; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="ex31_2302certification.htm">Certification by Chief Financial Officer</A></font></td></tr>
  </table>
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <tr style="vertical-align: top">
      <td style="width: 0px; line-height: 115%">&nbsp;</td>
      <td style="width: 33px; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">32.</font></td>
      <td style="line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Section 1350 Certifications</font></td></tr>
  </table>
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <tr style="vertical-align: top">
      <td style="width: 41px; line-height: 115%">&nbsp;</td>
      <td style="width: 41px; padding-top: 4.5pt; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">1.</font></td>
      <td style="padding-top: 4.5pt; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="ex32_1906certification.htm">Certification by Chief Executive Officer</A></font></td></tr>
  </table>
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%">
  <tr style="vertical-align: top">
      <td style="width: 41px; line-height: 115%">&nbsp;</td>
      <td style="width: 41px; padding-top: 4.5pt; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">2.</font></td>
      <td style="padding-top: 4.5pt; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="ex32_2906certification.htm">Certification by Chief Financial Officer</A></font></td></tr>
  </table>
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 6pt; text-indent: 0.5in">&nbsp;</P>
  
  
  <!-- Field: Page; Sequence: 34 -->
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      <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font-size: 10pt"><TR STYLE="vertical-align: top; text-align: left"><TD STYLE="width: 100%"><A HREF="#Index" TITLE="Index" STYLE="font-style: italic">Index</A>&nbsp;</TD></TR></TABLE></DIV>
      <!-- Field: /Page -->
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 0.4in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><A NAME="a_017"></A>SIGNATURE</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Pursuant to the requirements of Section
  13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has caused this report to be signed by the undersigned, thereunto
  duly authorized.</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 9pt 0 0">Date: May 11, 2016</P>
  
  <TABLE CELLSPACING="0" CELLPADDING="0" ALIGN="RIGHT" STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; width: 30%; border-collapse: collapse">
  <tr>
      <TD STYLE="width: 100%; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">EQUUS TOTAL RETURN, INC.</font></td></tr>
  <tr>
      <td style="line-height: 115%">&nbsp;</td></tr>
  <tr style="vertical-align: top">
      <td style="border-bottom: black 1pt solid; text-align: center; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">/s/ John A. Hardy</font></td></tr>
  <tr style="vertical-align: top">
      <td style="text-align: center; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>John A. Hardy</b></font></td></tr>
  <tr style="vertical-align: top">
      <td style="text-align: center; line-height: 115%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Chief Executive Officer</b></font></td></tr>
  </table><BR STYLE="clear: both">
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><BR CLEAR="ALL">
  </P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 6pt; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 10pt; text-indent: 0.5in"><B>&nbsp;</B></P>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 0 0.4in; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 0 0.4in; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 0 0.4in; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 0 0.4in; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 0 0.4in; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 0 0.4in; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 0 0.4in; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 0 0.4in; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 0 0.4in; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 0 0.4in; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 0 0.4in; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 0 0.4in; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 0 0.4in; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 0 0.4in; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 0 0.4in; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 0 0.4in; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 0 0.4in; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 0 0.4in; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 0 0.4in; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 0 0.4in; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 0 0.4in; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 0 0.4in; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 0 0.4in; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 0 0.4in; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 0 0.4in; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 0 0.4in; text-indent: 0.5in">&nbsp;</P>
  
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metadata_documents: [{"type": "10-Q", "sequence": "1", "filename": "f10q_equus33116.htm", "description": "FORM 10-Q", "secsgml_size_bytes": 498869}]
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": "161639941"}, "business-address": {"street1": "EIGHT GREENWAY PLAZA", "street2": "SUITE 930", "city": "HOUSTON", "state": "TX", "zip": "77046", "phone": "7135290900"}, "mail-address": {"street1": "EIGHT GREENWAY PLAZA", "street2": "SUITE 930", "city": "HOUSTON", "state": "TX", "zip": "77046"}, "former-company": {"former-conformed-name": "EQUUS II INC", "date-changed": "19970422"}}
text: UNITED STATES
  SECURITIES AND EXCHANGE COMMISSION
  Washington, D.C. 20549
  FORM 10-Q
  (Mark One)
  ☒
  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
  For the quarterly period ended
  March 31, 2016
  or
  ☐
  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
  For the transition period to
  Commission File Number 814-00098
  EQUUS TOTAL RETURN, INC.
  (Exact name of registrant as specified
  in its charter)
  Delaware
  76-0345915
  (State or other jurisdiction of
  incorporation or organization)
  (I.R.S. Employer
  Identification No.)
  700 Louisiana St., 48
  th
  Floor
  Houston, Texas
  77002
  (Address of principal executive offices)
  (Zip Code)
  (Former Name, Former Address and
  Former Fiscal Year, if Changed Since Last Report)
  Registrant's telephone
  number, including area code: (713) 529-0900
  Indicate
  by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
  Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and
  (2) has been subject to such filing requirements for the past 90 days. Yes
  ☒
  No
  ☐
  Indicate
  by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive
  Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the
  preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☐
  No ☐
  Indicate by check mark whether
  the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of "accelerated
  filer and large accelerated filer" in Rule 12b-2 of the Exchange Act.
  Large
      accelerated filer ☐
  Accelerated
      filer ☐
  Non-accelerated
      filer ☒
  Smaller
      Reporting Company ☐
  Indicate
  by check mark whether the registrant is a shell company. Yes ☐ No ☒
  There
  were 12,673,646 shares of the registrant's common stock, $.001 par value, outstanding, as of May 11, 2016.
  Index
  EQUUS TOTAL RETURN, INC.
  (A Delaware Corporation)
  INDEX
  PAGE
  PART I. FINANCIAL INFORMATION
  Item 1. Financial Statements
  3
  Balance Sheets
  3
  Statements of Operations
  4
  Statements of Changes in Net Assets
  5
  Statements of Cash Flows
  6
  Supplemental Information—Selected Per Share Data and Ratios
  7
  Schedules of Investments
  8
  Notes to Financial Statements
  12
  Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
  27
  Item 3. Quantitative and Qualitative Disclosure about Market Risk
  33
  Item 4. Controls and Procedures
  33
  PART II. OTHER INFORMATION
  Item 1. Legal Proceedings
  34
  Item 1A. Risk Factors
  34
  Item 6. Exhibits
  35
  SIGNATURE
  36
  2
  Index
  EQUUS TOTAL RETURN, INC.
  BALANCE SHEETS
  (Unaudited)
  Part I. Financial Information
  Item 1. Financial Statements
  March 31,
  2016
  December 31,
  2015
  (in thousands, except per share amounts)
  Assets
  Investments in portfolio securities at fair value:
  Control investments (cost at $10,050 and $10,050 respectively)
  $
  4,715
  $
  5,715
  Affiliate investments (cost at $350 and $350 respectively)
  11,600
  9,600
  Non-affiliate investments - related party (cost at $5,829 and $5,698 respectively)
  3,267
  3,159
  Non-affiliate investments (cost at $2,940 and $915 respectively)
  2,940
  915
  Total investments in portfolio securities at fair value
  22,522
  19,389
  Temporary cash investments
  15,000
  15,000
  Cash and cash equivalents
  14,430
  17,036
  Restricted cash
  149
  150
  Accounts receivable from investments
  611
  614
  Accrued interest receivable
  214
  128
  Accrued dividend receivable
  —
  130
  Accounts receivable and other
  40
  83
  Total assets
  52,966
  52,530
  Liabilities and net assets
  Accounts payable and accrued liabilities
  349
  36
  Accounts payable to related parties
  68
  186
  Borrowing under margin account
  14,999
  15,000
  Total liabilities
  15,416
  15,222
  Commitments and contingencies (See Note 2)
  Net assets
  $
  37,550
  $
  37,308
  Net assets consist of:
  Common stock, par value
  $
  13
  $
  13
  Capital in excess of par value
  54,224
  54,226
  Undistributed net investment losses
  (20,040
  )
  (19,307
  )
  Undistributed net capital gains
  —
  —
  Unrealized appreciation (depreciation) of portfolio securities, net
  5,915
  4,915
  Unrealized depreciation of portfolio securities - related party, net
  (2,562
  )
  (2,539
  )
  Total net assets
  $
  37,550
  $
  37,308
  Shares of common stock issued and outstanding, $.001 par value, 50,000 shares authorized
  12,674
  12,674
  Shares of preferred stock issued and outstanding, $.001 par value, 5,000 shares authorized
  —
  —
  Net asset value per share
  $
  2.96
  $
  2.94
  The accompanying notes are an
  integral part of these financial statements.
  3
  Index
  EQUUS TOTAL RETURN, INC.
  STATEMENTS OF OPERATIONS
  (Unaudited)
  Three Months Ended March 31,
  (in thousands, except per share amounts)
  2016
  2015
  Investment income:
  Interest and dividend income:
  Non-affiliate investments
  $
  136
  $
  44
  Total interest and dividend income
  136
  44
  Interest from temporary cash investments
  2
  —
  Total investment income
  138
  44
  Expenses:
  Compensation expense
  272
  624
  Professional fees
  368
  327
  Director fees and expenses
  120
  95
  General and administrative expense
  84
  41
  Mailing, printing and other expenses
  26
  23
  Taxes
  —
  7
  Interest expense
  1
  1
  Total expenses
  871
  1,118
  Net investment loss
  (733
  )
  (1,074
  )
  Net realized gain (loss):
  Control investments
  —
  (2,850
  )
  Non-affiliate investments
  —
  372
  Temporary cash investments
  (2
  )
  (5
  )
  Net realized loss
  (2
  )
  (2,483
  )
  Net unrealized appreciation (depreciation) of portfolio securities:
  End of period
  5,915
  1,023
  Beginning of period
  4,915
  (1,840
  )
  Net change in unrealized appreciation (depreciation) of portfolio securities
  1,000
  2,863
  Net unrealized depreciation of portfolio securities - related party:
  End of period
  (2,562
  )
  (1,870
  )
  Beginning of period
  (2,539
  )
  (1,725
  )
  Net change in unrealized depreciation of portfolio securities - related party
  (23
  )
  (145
  )
  Net increase (decrease) in net assets resulting from operations
  $
  242
  $
  (839
  )
  Net increase (decrease) in net assets resulting from operations per share:
  Basic and diluted
  $
  0.02
  $
  (0.07
  )
  Weighted average shares outstanding:
  Basic and diluted
  12,674
  12,674
  The accompanying notes are an
  integral part of these financial statements.
  4
  Index
  EQUUS TOTAL RETURN, INC.
  STATEMENTS OF CHANGES IN NET ASSETS
  (Unaudited)
  Three months ended March 31,
  (in thousands)
  2016
  2015
  Net increase (decrease) in net assets resulting from operations
  $
  242
  $
  (839
  )
  Net assets at beginning of period
  37,308
  36,201
  Net assets at end of period
  $
  37,550
  $
  35,362
  The accompanying notes are an integral
  part of these financial statements.
  5
  Index
  EQUUS TOTAL RETURN, INC.
  STATEMENTS OF CASH FLOWS
  (Unaudited)
  Three months ended March 31,
  (in thousands)
  2016
  2015
  Reconciliation of net increase (decrease) in net assets resulting from operations to net cash
  (used in) provided by   operating activities:
  Net increase (decrease)  in net assets resulting from operations
  $
  242
  $
  (839
  )
  Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net
      cash (used in) provided by operating activities:
  Net realized loss
  2
  2,483
  Net change in unrealized depreciation of portfolio securities
  (1,000
  )
  (2,863
  )
  Net change in unrealized depreciation of portfolio securities - related party
  23
  145
  Changes in operating assets and liabilities:
  Purchase of portfolio securities
  (2,000
  )
  —
  Net proceeds from dispositions of portfolio securities
  —
  372
  Principal payments received from portfolio securities
  —
  4,255
  Sales of temporary cash investments, net
  (2
  )
  15,144
  Decrease (increase) in accounts receivable from
      investments
  3
  (2
  )
  Increase in accrued interest receivable
  (111
  )
  (181
  )
  Decrease in accounts receivable and other
  43
  92
  Increase (decrease) in accounts payable and accrued liabilities
  313
  (442
  )
  (Decrease) increase  in accounts
      payable to related parties
  (118
  )
  109
  Net cash (used in) provided by operating activities
  (2,605
  )
  18,273
  Cash flows from financing activities:
  Borrowings under margin account
  14,999
  —
  Repayments under margin account
  (15,000
  )
  (14,999
  )
  Net cash used in financing activities
  (1
  )
  (14,999
  )
  Net (decrease) increase in cash and cash equivalents
  (2,606
  )
  3,274
  Cash and cash equivalents at beginning of period
  17,036
  15,697
  Cash and cash equivalents at end of period
  $
  14,430
  $
  18,971
  Non-cash operating and financing activities:
  Accrued interest or dividends exchanged for portfolio securities
  $
  25
  $
  915
  Accrued interest or dividends exchanged for portfolio securities - related party
  $
  130
  $
  54
  Supplemental disclosure of cash flow information:
  Interest paid
  $
  1
  $
  1
  Income taxes paid
  $
  4
  $
  7
  The accompanying notes are an integral
  part of these financial statements.
  6
  Index
  EQUUS TOTAL RETURN, INC.
  SUPPLEMENTAL INFORMATION—SELECTED
  PER SHARE DATA AND RATIOS
  (Unaudited)
  Three months ending March 31,
  2016
  2015
  Investment income
  $
  0.01
  $
  —
  Expenses
  0.07
  0.09
  Net investment loss
  (0.06
  )
  (0.09
  )
  Net realized loss
  —
  (0.20
  )
  Net change in unrealized appreciation
  0.08
  0.23
  Net change in unrealized depreciation - related party
  —
  (0.01
  )
  Net increase (decrease) in net assets
  0.02
  (0.07
  )
  Net assets at beginning of period
  2.94
  2.86
  Net assets at end of period, basic and diluted
  $
  2.96
  $
  2.79
  Weighted average number of shares outstanding during period,
  in thousands
  12,674
  12,674
  Market price per share:
  Beginning of period
  $
  1.79
  $
  2.10
  End of period
  $
  1.60
  $
  1.95
  Selected information and ratios:
  Ratio of expenses to average net assets
  2.33
  %
  3.12
  %
  Ratio of net investment loss to average net assets
  (1.96
  %)
  (3.00
  %)
  Ratio of net increase (decrease) in net assets resulting from operations to average net assets
  0.65
  %
  (2.34
  %)
  Total return on market price
  (1)
  (10.61
  %)
  (7.14
  %)
  (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.
  7
  Index
  EQUUS TOTAL RETURN, INC.
  SCHEDULE OF INVESTMENTS
  MARCH 31, 2016
  (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
  $
  4,500
  Equus Media Development Company, LLC
  Houston, TX
  Media
  January 2007
  Member interest (100%)
  3,000
  215
  Total Control Investments: Majority-owned (represents 12.6% of total investments at fair value)
  $
  10,050
  $
  4,715
  Affiliate Investments
  (4)
  :
  PalletOne, Inc.
  Bartow, FL
  Shipping products and services
  October 2001
  350,000 shares of common stock (18.7%)
  $
  350
  $
  11,600
  Total Affiliate Investments (represents 30.9% of total investments at fair value)
  $
  350
  $
  11,600
  Non-Affiliate Investments - Related Party (less than 5% owned):
  MVC Capital, Inc.
  Purchase, NY
  Financial services
  May 2014
  445,744 shares of common stock (1.7%)
  $
  5,829
  $
  3,267
  Total Non-Affiliate Investments - Related Party (represents 8.7% of total investments at fair value)
  $
  5,829
  $
  3,267
  Non-Affiliate Investments (less than 5% owned):
  5
  TH
  Element Tracking, LLC
  Boston, MA
  Business products and services
  January 2015
  14% promissory note due 7/16
  (2)
  $
  940
  940
  940
  Biogenic Reagents, LLC
  Energy
  January 2016
  16% promissory note due 5/16
  (2)
  2,000
  2,000
  2,000
  Minneapolis, MN
  Total Non-Affiliate Investments (represents 7.8% of total investments at fair value)
  $
  2,940
  $
  2,940
  Total Investment in Portfolio Securities
  $
  19,169
  $
  22,522
  Temporary Cash Investments
  U.S. Treasury Bill
  Government
  April 2016
  UST 0% 4/16
  $
  15,000
  15,000
  15,000
  Total Temporary Cash Investments (represents 40.0% of total investments at fair value)
  $
  15,000
  $
  15,000
  Total Investments
  $
  34,169
  $
  37,522
  (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.
  8
  Index
  EQUUS TOTAL RETURN, INC.
  SCHEDULE OF INVESTMENTS –
  (Continued)
  MARCH 31, 2016
  (Unaudited)
  Except for our holding of shares of
  MVC Capital, Inc. ("MVC"), substantially all of our portfolio securities are restricted from public sale without prior
  registration under the Securities Act of 1933 (hereafter, the "Securities Act"). We negotiate certain aspects of the
  method and timing of the disposition of our investment in each portfolio company, including registration rights and related costs.
  We may invest up to 30% of our assets
  in non-qualifying portfolio investments, as permitted by the Investment Company Act of 1940 (hereafter, the "1940 Act").
  Specifically, we may invest up to 30% of our assets in entities that are not considered "eligible portfolio companies"
  (as defined in the 1940 Act), including companies located outside of the United States, entities that are operating pursuant to
  certain exceptions under the 1940 Act, and publicly-traded entities with a market capitalization exceeding $250 million. As of
  March 31, 2016, except for our shares of MVC, all of our investments are in enterprises that are considered eligible portfolio
  companies under the 1940 Act. We provide significant managerial assistance to portfolio companies that comprise 29.8% of the total
  value of the investments in portfolio securities as of March 31, 2016.
  Our investments in portfolio securities
  consist of the following types of securities as of March 31, 2016 (in thousands):
  Type of Securities
  Cost
  Fair Value
  Fair Value as
  Percentage of
  Net Assets
  Limited liability company investments
  $
  10,050
  $
  4,715
  12.6
  %
  Secured and subordinated debt
  2,940
  2,940
  7.8
  %
  Common stock
  6,179
  14,867
  39.6
  %
  Total
  $
  19,169
  $
  22,522
  60.0
  %
  The following is a summary by industry
  of the Fund's investments in portfolio securities as of March 31, 2016 (in thousands):
  Industry
  Fair Value
  Fair Value as
  Percentage of
  Net Assets
  Shipping products and services
  $
  11,600
  30.9
  %
  Energy
  6,500
  17.3
  %
  Financial services
  3,267
  8.7
  %
  Business products and services
  940
  2.5
  %
  Media
  215
  0.6
  %
  Total
  $
  22,522
  60.0
  %
  The accompanying notes are an integral
  part of these financial statements.
  9
  Index
  EQUUS TOTAL RETURN, INC.
  SCHEDULE OF INVESTMENTS
  DECEMBER 31, 2015
  (Unaudited)
  (in thousands, except share data)
  Name and Location of
  Date of Initial
  Cost of
  Fair
  Portfolio Company
  Industry
  Investment
  Investment
  Principal
  Investment
  Value
  (1)
  Control Investments:  Majority-owned
  (3)
  :
  Equus Energy, LLC
  Houston, TX
  Energy
  December 2011
  Member interest (100%)
  $
  7,050
  $
  5,500
  Equus Media Development
                                   Company, LLC
  Houston, TX
  Media
  January 2007
  Member interest (100%)
  3,000
  215
  Total
      Control Investments: Majority-owned (represents 16.6% of total investments at fair value)
  $
  10,050
  $
  5,715
  Affiliate Investments
  (4)
  :
  PalletOne,
                                           Inc.
  Bartow, FL
  Shipping products and services
  October 2001
  350,000 shares of common stock
      (18.8%)
  $
  350
  $
  9,600
  Total
      Affiliate Investments (represents 27.9% of total investments at fair value)
  $
  350
  $
  9,600
  Non-Affiliate Investments
      - Related Party (less than 5% owned):
  MVC Capital, Inc.
  Purchase, NY
  Financial services
  September 2014
  428,662 shares of common stock (1.7%)
  $
  5,698
  $
  3,159
  Total
      Non-Affiliate Investments - Related Party (represents 9.2% of total investments at fair value)
  $
  5,698
  $
  3,159
  Non-Affiliate Investments
      (less than 5% owned):
  5
  TH
  Element Tracking, LLC
  Boston,
                                           MA
  Business products
      and services
  January 2015
  14% promissory
      note due 1/16
  (2)
  $
  915
  915
  915
  Total
      Non-Affiliate Investments (represents 2.7% of total investments at fair value)
  $
  915
  $
  915
  Total Investment in Portfolio
      Securities
  $
  17,013
  $
  19,389
  Temporary Cash Investments
  U.S. Treasury Bill
  Government
  December
      2015
  UST 0% 1/16
  $
  15,000
  15,000
  15,000
  Total
      Temporary Cash Investments (represents 43.6% of total investments at fair value)
  $
  15,000
  $
  15,000
  Total Investments
  $
  32,013
  $
  34,389
  (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.
  10
  Index
  EQUUS TOTAL RETURN, INC.
  SCHEDULE OF INVESTMENTS – (Continued)
  DECEMBER 31, 2015
  (Unaudited)
  Except for our holding of shares of
  MVC Capital, Inc. ("MVC"), substantially all of our portfolio securities are restricted from public sale without prior
  registration under the Securities Act of 1933 (hereafter, the "Securities Act"). 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
  December 31, 2015, except for our shares of MVC, all of our investments are in enterprises that are considered eligible portfolio
  companies under the 1940 Act. We provide significant managerial assistance to portfolio companies that comprise 29.5% of the total
  value of the investments in portfolio securities as of December 31, 2015.
  Our investments in portfolio securities
  consist of the following types of securities as of December 31, 2015 (in thousands):
  Type of Securities
  Cost
  Fair Value
  Fair Value as
  Percentage of
  Net
  Assets
  Limited liability company investments
  $
  10,050
  $
  5,715
  15.3
  %
  Secured and subordinated debt
  915
  915
  2.5
  %
  Common stock
  6,048
  12,759
  34.2
  %
  Total
  $
  17,013
  $
  19,389
  52.0
  %
  The following is a summary by industry
  of the Fund's investments in portfolio securities as of December 31, 2015 (in thousands):
  Industry
  Fair Value
  Fair Value as
  Percentage of
  Net Assets
  Shipping products and services
  $
  9,600
  25.7
  %
  Energy
  5,500
  14.7
  %
  Financial services
  3,159
  8.5
  %
  Business products and services
  915
  2.5
  %
  Media
  215
  0.6
  %
  Total
  $
  19,389
  52.0
  %
  The accompanying notes are an integral
  part of these financial statements.
  11
  Index
  EQUUS TOTAL RETURN, INC.
  NOTES TO FINANCIAL STATEMENTS
  MARCH 31, 2016
  (Unaudited)
  (1)
  Description of Business and Basis of Presentation
  Description of Business
  -
  Equus Total Return, Inc. (
  "we," "us," "our," "Equus" the
  "Company" and the "Fund
  "), a Delaware corporation, was formed by Equus Investments II, L.P. (the
  "Partnership") on August 16, 1991. On July 1, 1992, the Partnership was reorganized and all of the assets and
  liabilities of the Partnership were transferred to the Fund in exchange for shares of common stock of the Fund. Our shares
  trade on the New York Stock Exchange under the symbol EQS. On August 11, 2006, our shareholders approved the change of the
  Fund's investment strategy to a total return investment objective. This strategy seeks to provide the highest total
  return, consisting of capital appreciation and current income. In connection with this strategic investment change, the
  shareholders also approved the change of name from Equus II Incorporated to Equus Total Return, Inc.
  We attempt to maximize the return to
  stockholders in the form of current investment income and long-term capital gains by investing in the debt and equity securities
  of companies with a total enterprise value of between $5.0 million and $75.0 million, although we may engage in transactions with
  smaller or larger investee companies from time to time. We seek to invest primarily in companies pursuing growth either through
  acquisition or organically, leveraged buyouts, management buyouts and recapitalizations of existing businesses or special situations.
  Our income-producing investments consist principally of debt securities including subordinate debt, debt convertible into common
  or preferred stock, or debt combined with warrants and common and preferred stock. Debt and preferred equity financing may also
  be used to create long-term capital appreciation through the exercise and sale of warrants received in connection with the financing.
  We seek to achieve capital appreciation by making investments in equity and equity-oriented securities issued by privately-owned
  companies (or smaller public companies) in transactions negotiated directly with such companies. Given market conditions over the
  past several years and the performance of our portfolio, our Management and Board of Directors believe it prudent to continue to
  review alternatives to refine and further clarify the current strategies.
  We elected to be treated as a business
  development company ("BDC") under the 1940 Act. We currently qualify as a regulated investment company ("RIC")
  for federal income tax purposes and, therefore, are not required to pay corporate income taxes on any income or gains that we distribute
  to our stockholders. We have certain wholly owned taxable subsidiaries ("Taxable Subsidiaries") each of which holds
  one or more portfolio investments listed on our Schedules of Investments. The purpose of these Taxable Subsidiaries is to permit
  us to hold certain income-producing investments or portfolio companies organized as limited liability companies, or LLCs, (or other
  forms of pass-through entities) and still satisfy the RIC tax requirement that at least 90% of our gross revenue for income tax
  purposes must consist of investment income. Absent the Taxable Subsidiaries, a portion of the gross income of these income-producing
  investments or of any LLC (or other pass-through entity) portfolio investment, as the case may be, would flow through directly
  to us for the 90% test. To the extent that such income did not consist of investment income, it could jeopardize our ability to
  qualify as a RIC and, therefore, cause us to incur significant federal income taxes. The income of the LLCs (or other pass-through
  entities) owned by Taxable Subsidiaries is taxed to the Taxable Subsidiaries and does not flow through to us, thereby helping us
  preserve our RIC status and resultant tax advantages. We do not consolidate the Taxable Subsidiaries for income tax purposes and
  they may generate income tax expense because of the Taxable Subsidiaries' ownership of the portfolio companies. We reflect
  any such income tax expense on our Statements of Operations.
  Basis of Presentation
  —In
  accordance with Article 6 of Regulation S-X under the Securities Act of 1933 and the Securities Exchange Act of 1934, we do not
  consolidate portfolio company investments, including those in which we have a controlling interest. Our interim unaudited financial
  statements were prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP,
  for interim financial information and in accordance with the requirements of reporting on Form 10-Q and Article 10 of Regulation
  S-X, under the Securities Exchange Act of 1934, as amended. Accordingly, they are unaudited and exclude some disclosures required
  for annual financial statements. Management believes it has made all adjustments, consisting solely of normal recurring accruals,
  necessary for the fair presentation of these interim financial statements.
  The results of operations for the three
  months ended March 31, 2016 are not necessarily indicative of results that ultimately may be achieved for the remainder of the
  year. The interim unaudited financial statements and notes thereto should be read in conjunction with the financial statements
  and notes thereto included in the Fund's Annual Report on Form 10-K for the fiscal year ended December 31, 2015, as filed
  with the Securities and Exchange Commission ("SEC").
  12
  Index
  (2)
  Liquidity and Financing Arrangements
  Liquidity
  -There are
  several factors that may materially affect our liquidity during the reasonably foreseeable future. We view this period as the
  twelve month period from the date of the financial statements in this Form 10-Q,
  i.e
  ., the period through March 31,
  2016. We are evaluating the impact of current market conditions on our portfolio company valuations and their ability to
  provide current income. We have followed valuation techniques in a consistent manner; however, we are cognizant of current
  market conditions that might affect future valuations of portfolio securities. We believe that our operating cash flow and
  cash on hand will be sufficient to meet operating requirements and to finance routine follow-on investments, if any, through
  the next twelve months.
  Cash and Cash Equivalents
  -
  As of March 31, 2016, we had cash and cash equivalents of $14.4 million. We had $22.5
  million
  of our net assets of $37.6 million invested in portfolio securities. We also had $15.1 million of restricted cash
  and temporary cash investments, including primarily the proceeds of a quarter-end margin loan that we incurred to maintain
  the diversification requirements applicable to a RIC to maintain our pass-through tax treatment. Of this amount, $15.0
  million was invested in U.S. Treasury bills and $0.1 million represented a required 1% brokerage margin deposit. These
  securities were held by a securities brokerage firm and pledged along with other assets to secure repayment of the margin
  loan. The U.S. Treasury bills were sold on April 1, 2016 and we subsequently repaid this margin loan, plus interest, on April
  5, 2016.
  As of December 31, 2015, we had cash
  and cash equivalents of $17.0 million. We had $19.4 million of our net assets of $37.3 million invested in portfolio securities.
  We also had $15.1 million of temporary cash investments and restricted cash, including primarily the proceeds of a quarter-end
  margin loan that we incurred to maintain the diversification requirements applicable to a RIC. Of this amount, $15.0 million was
  invested in U.S. Treasury bills and $0.1 million represented a required 1% brokerage margin deposit. These securities were held
  by a securities brokerage firm and pledged along with other assets to secure repayment of the margin loan. The U.S. Treasury bills
  were sold on January 4, 2016 and we subsequently repaid this margin loan. The margin interest was paid on February 3, 2016.
  Dividends -
  We will pay out net
  investment income and/or realized capital gains, if any, on an annual basis as required under the 1940 Act.
  Investment Commitments -
  As of
  March 31, 2016, 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.
  As of March 31, 2016, we borrowed $15.0
  million to maintain our RIC status by utilizing a margin account with a securities brokerage firm. We collateralized such borrowings
  with restricted cash and temporary cash investments in U.S. Treasury bills of $15.1 million.
  As of December 31, 2015, we borrowed
  $15.0 million to maintain our RIC status by utilizing a margin account with a securities brokerage firm. We collateralized such
  borrowings with restricted cash and temporary cash investments in U.S. Treasury bills of $15.1 million.
  Certain Risks and Uncertainties -
  Market and economic volatility which has become endemic in the past few years has resulted in a relatively limited amount of available
  debt financing for small and medium-sized companies such as Equus and its portfolio companies. Such debt financing generally has
  shorter maturities, higher interest rates and fees, and more restrictive terms than debt facilities available in the past. In addition,
  during these years and continuing into the first three months of 2016, the price of our common stock remained well below our net
  asset value, thereby making it undesirable to issue additional shares of our common stock below net asset value. Because of these
  challenges, our near-term strategies shifted from originating debt and equity investments to preserving liquidity necessary to
  meet our operational needs. Key initiatives that we have previously undertaken to provide necessary liquidity include monetizations,
  the suspension of dividends and the internalization of management. Although we cannot assure you that such initiatives will be
  sufficient, we believe we have sufficient liquidity to meet our operating requirements for the remainder of 2016 and the first
  three months of 2017.
  13
  Index
  (3)
  Significant Accounting Policies
  The following is a summary of significant
  accounting policies followed by the Fund in the preparation of its financial statements:
  Use of Estimates -
  The
  preparation of financial statements in accordance with GAAP requires us to make estimates and assumptions that affect the
  reported amounts and disclosures in the financial statements. Although we believe the estimates and assumptions used in
  preparing these financial statements and related notes are reasonable in light of known facts and circumstances, actual
  results could differ from those estimates.
  Valuation of Investments -
  We follow ASC Topic 820 for measuring fair value. Prior to our election to become a BDC, we also followed the guidance in ASC
  Topic 820 in disclosing the fair value reported for all financial instruments that were either impaired or available for sale
  securities, using the definitions provided in Accounting Standards Codification Topic 320, "Investments – Debt
  and Equity Securities" ("ASC Topic 320"). Fair value is the price that would be received to sell an asset
  or paid to transfer a liability in an orderly transaction between market participants at the measurement date and sets out a
  fair value hierarchy. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical
  assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). Inputs are broadly defined under
  ASC Topic 820 as assumptions market participants would use in pricing an asset or liability. The three levels of the fair
  value hierarchy under ASC Topic 820 are described below:
  Level 1 - Unadjusted quoted prices in
  active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.
  Level 2 Inputs other than quoted prices
  within Level 1 that are observable for the asset or liability, either directly or indirectly; and fair value is determined through
  the use of models or other valuation methodologies.
  Level 3 - Inputs are unobservable for
  the asset or liability and include situations where there is little, if any, market activity for the asset or liability. The inputs
  into the determination of fair value are based upon the best information under the circumstances and may require significant management
  judgment or estimation.
  We consider a two-step process when
  appraising investments of privately held companies. The first step involves determining the enterprise value of the portfolio company.
  During this step, we consider three different valuation approaches: a market approach, an income approach, and a cost approach.
  The particular facts and circumstances of each portfolio company determine which approach, or combination of approaches, will be
  utilized. The second step when appraising equity investments of privately held companies involves allocating value to the various
  debt and equity securities of the company. We allocate value to these securities based on their relative priorities. For equity
  securities such as warrants, we may also incorporate alternative methodologies including the Black-Scholes Option Pricing Model.
  Yield analysis is also employed to determine if a debt security has been impaired.
  In certain cases, the inputs used to
  measure fair value may fall into different levels of the fair value hierarchy. In such cases, an investment's level within
  the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. Our assessment
  of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors
  specific to the investment.
  Investments for which prices are not
  observable are generally private investments in the debt and equity securities of operating companies. The primary valuation method
  used to estimate the fair value of these Level 3 investments is the discounted cash flow method (although a liquidation analysis,
  option theoretical, or other methodology may be used when more appropriate). The discounted cash flow approach to determine fair
  value (or a range of fair values) involves applying an appropriate discount rate(s) to the estimated future cash flows using various
  relevant factors depending on investment type, including comparing the latest arm's length or market transactions involving
  the subject security to the selected benchmark credit spread, assumed growth rate (in cash flows), and capitalization rates/multiples
  (for determining terminal values of underlying portfolio companies). The valuation based on the inputs determined to be the most
  reasonable and probable is used as the fair value of the investment. The determination of fair value using these methodologies
  may take into consideration a range of factors including, but not limited to, the price at which the investment was acquired, the
  nature of the investment, local market conditions, trading values on public exchanges for comparable securities, current and projected
  operating performance, financing transactions subsequent to the acquisition of the investment and anticipated financing transactions
  after the valuation date. Application of these valuation methodologies involves a significant degree of judgment by management.
  Fair values of new investments are generally assumed to be equal to their cost to the Company for up to three months after their
  initial purchase.
  14
  Index
  To assess the reasonableness of the
  discounted cash flow approach, the fair value of equity securities, including warrants, in portfolio companies may also consider
  the market approach—that is, through analyzing and applying to the underlying portfolio companies, market valuation multiples
  of publicly-traded firms engaged in businesses similar to those of the portfolio companies. The market approach to determining
  the fair value of a portfolio company's equity security (or securities) will typically involve: (1) applying to the portfolio
  company's trailing twelve months (or current year projected) EBITDA a low to high range of enterprise value to EBITDA multiples
  that are derived from an analysis of publicly-traded comparable companies, in order to arrive at a range of enterprise values for
  the portfolio company; (2) subtracting from the range of calculated enterprise values the outstanding balances of any debt or equity
  securities that would be senior in right of payment to the equity securities we hold; and (3) multiplying the range of equity values
  derived therefrom by our ownership share of such equity tranche in order to arrive at a range of fair values for our equity security
  (or securities). Application of these valuation methodologies involves a significant degree of judgment by Management.
  Due to the inherent uncertainty of determining
  the fair value of Level 3 investments that do not have a readily available market value, the fair value of the investments may
  differ significantly from the values that would have been used had a ready market existed for such investments and may differ materially
  from the values that may ultimately be received or settled. Further, such investments are generally subject to legal and other
  restrictions or otherwise are less liquid than publicly traded instruments. If we were required to liquidate a portfolio investment
  in a forced or liquidation sale, we might realize significantly less than the value at which such investment had previously been
  recorded. With respect to Level 3 investments, where sufficient market quotations are not readily available or for which no or
  an insufficient number of indicative prices from pricing services or brokers or dealers have been received, we undertake, on a
  quarterly basis, a valuation process as described below:
  •
  For each debt investment, a basic credit review process is completed. The risk profile on every credit facility is reviewed and either reaffirmed or revised by our Investment Committee.
  •
  Each portfolio company or investment is valued by an investment professional
  •
  Third party valuation firm(s) are engaged to provide valuation services as requested, by reviewing Management's preliminary valuations and/or analysis of the portfolio investment in question. For investments with a fair value exceeding $2.5 million held for more than 1 year, our Management's preliminary fair value conclusions on each of the Fund's assets for which sufficient market quotations are not readily available is reviewed and assessed by a third-party valuation firm at least once in every 12-month period, and more often as determined by the Audit Committee or required by our valuation policy. Such valuation assessment may be in the form of positive assurance, range of values or another valuation method based on the discretion of our Board.
  •
  The Audit Committee reviews the preliminary valuations of our Management and independent valuation firms and, if appropriate, recommends the approval of the valuations by the Board.
  •
  Our Board discusses valuations and determines the fair value of each investment in the portfolio in good faith based on the input of Management, the Audit Committee and, where appropriate, the respective independent valuation firms.
  The following sections describe the
  valuation techniques we use to measure different financial instruments at fair value and include the levels within the fair value
  hierarchy in which the financial instruments are categorized.
  Market approach -
  The market approach typically employed by Management calculates the enterprise value of a company as a multiple of earnings before
  interest, taxes, depreciation and amortization ("EBITDA") generated by the company for the trailing twelve month period.
  Adjustments to the company's EBITDA, including those for non-recurring items, may be considered. Multiples are estimated
  based on current market conditions and past experience in the private company marketplace and are subjective in nature. We will
  apply liquidity and other discounts as deemed appropriate to equity valuations where applicable. We may also use, when available,
  third-party transactions in a portfolio company's securities as the basis of valuation (the "private market method").
  The private market method will be used only with respect to completed transactions or firm offers made by sophisticated, independent
  investors.
  Income approach
  - The
  income approach typically utilized by our Management calculates the enterprise value of a company utilizing a discounted cash
  flow model incorporating projected future cash flows of the company. Projected future cash flows consider the historical
  performance of the company as well as current and projected market participant performance. Discount rates are estimated
  based on current market conditions and past experience in the private company marketplace and are subjective in nature. We
  will apply liquidity and other discounts as deemed appropriate to equity valuations where applicable.
  15
  Index
  Asset approach
  - We
  consider the asset approach to determine the fair value of significantly deteriorated investments demonstrating circumstances
  indicative of a liquidation analysis. This situation may arise when a portfolio company: 1) cannot generate adequate cash
  flow to meet the principal and interest payments on its indebtedness; 2) is not successful in refinancing its debt upon
  maturity; 3) we believe the credit quality of a loan has deteriorated due to changes in the business and underlying asset or
  market conditions may result in the company's inability to meet future obligations; or 4) the portfolio company's
  reorganization or bankruptcy. Consideration is also given as to whether a liquidation event would be orderly or forced.
  We base adjustments upon such factors
  as the portfolio company's earnings, cash flow and net worth, the market prices for similar securities of comparable companies,
  an assessment of the company's current and future financial prospects and various other factors and assumptions. In the case
  of unsuccessful or substantially declining operations, we may base a portfolio company's fair value upon the company's
  estimated liquidation value. Fair valuations are necessarily subjective, and our estimate of fair value may differ materially from
  amounts actually received upon the disposition of its portfolio securities. Also, any failure by a portfolio company to achieve
  its business plan or obtain and maintain its financing arrangements could result in increased volatility and result in a significant
  and rapid change in its value.
  Our general intent is to hold our loans
  to maturity when appraising our privately held debt investments. As such, we believe that the fair value will not exceed the cost
  of the investment. However, in addition to the previously described analysis involving allocation of value to the debt instrument,
  we will often perform a yield analysis to determine if a debt security has been impaired. Certificates of deposit purchased by
  the Fund generally will be valued at their face value, plus interest accrued to the date of valuation.
  For most of our investments, market
  quotations are not available. With respect to investments for which market quotations are not readily available or when such market
  quotations are deemed not to represent fair value, our Board has approved a multi-step valuation process each quarter, as described
  below:
  1.
  Each portfolio company or investment is reviewed by our investment professionals and, where necessary, with independent valuation firms engaged by the Fund;
  2.
  The independent valuation firms conduct independent valuations and make their own independent assessments;
  3.
  The Audit Committee of our Board reviews and discusses the preliminary valuation of the Fund and that of the independent valuation firms; and
  4.
  The Board discusses valuations and determines the fair value of each investment in our portfolio in good faith based on the input of our Management, the respective independent valuation firm and the Audit Committee.
  Investments are valued utilizing a yield
  analysis, enterprise value ("EV") analysis, net asset value analysis, liquidation analysis, discounted cash flow analysis,
  or a combination of methods, as appropriate. The yield analysis uses loan spreads and other relevant information implied by market
  data involving identical or comparable assets or liabilities. Under the EV analysis, the EV of a portfolio company is first determined
  and allocated over the portfolio company's securities in order of their preference relative to one another (i.e., "waterfall"
  allocation). To determine the EV, we typically use a market multiples approach that considers relevant and applicable market trading
  data of guideline public companies, transaction metrics from precedent M&A transactions and/or a discounted cash flow analysis.
  The net asset value analysis is used to derive a value of an underlying investment (such as real estate property) by dividing a
  relevant earnings stream by an appropriate capitalization rate. For this purpose, we consider capitalization rates for similar
  properties as may be obtained from guideline public companies and/or relevant transactions. The liquidation analysis is intended
  to approximate the net recovery value of an investment based on, among other things, assumptions regarding liquidation proceeds
  based on a hypothetical liquidation of a portfolio company's assets. The discounted cash flow analysis uses valuation techniques
  to convert future cash flows or earnings to a range of fair values from which a single estimate may be derived utilizing an appropriate
  discount rate. The measurement is based on the net present value indicated by current market expectations about those future amounts.
  In applying these methodologies, additional
  factors that we consider in fair value pricing our investments may include, as we deem relevant: security covenants, call protection
  provisions, and information rights; the nature and realizable value of any collateral; the portfolio company's ability to
  make payments; the principal markets in which the portfolio company does business; publicly available financial ratios of peer
  companies; the principal market; and enterprise values, among other factors.
  Because of the inherent uncertainty
  of the valuation of portfolio securities which do not have readily ascertainable market values, amounting to $19.3 million and
  $16.2 million as of March 31, 2016 and December 31, 2015, respectively, our fair value determinations may materially differ from
  the values that would have been used had a ready market existed for these securities. As of March 31, 2016, one of our portfolio
  investments, 445,744 common shares of MVC, was publicly listed on the NYSE. As of December 31, 2015, one of our portfolio investments,
  428,662 common shares of MVC, was publicly listed on the NYSE.
  16
  Index
  We adjust our net asset value for the
  changes in the value of our publicly held securities, if applicable, and material changes in the value of private securities, generally
  determined on a quarterly basis or as announced in a press release, and report those amounts to Lipper Analytical Services, Inc.
  Our net asset value appears in various publications, including
  Barron's
  and
  The Wall Street Journal
  .
  For loan and debt securities held for
  longer than one year, the Fund will often perform a yield analysis assuming a hypothetical current sale of the security. The yield
  analysis considers changes in interest rates and changes in leverage levels of the portfolio company as compared to the market
  interest rates and leverage levels. Assuming the credit quality of the portfolio company remains stable, the Fund will use the
  value determined by the yield analysis as the fair value for that security.
  We will record unrealized depreciation
  on investments when we determine that the fair value of a security is less than its cost basis, and will record unrealized appreciation
  when we determine that the fair value is greater than its cost basis.
  We assess the levels of the investments
  at each measurement date, and transfers between levels are recognized on the subsequent measurement date closest in time to the
  actual date of the event or change in circumstances that caused the transfer. There were no transfers among Level 1, 2 and 3 for
  the quarter ended March 31, 2016 and the year ended December 31, 2015.
  As of March 31, 2016, investments measured
  at fair value on a recurring basis are categorized in the tables below based on the lowest level of significant input to the valuations:
  Fair
      Value Measurements as of March 31, 2016
  (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
  $
  4,715
  $
  —
  $
  —
  $
  4,715
  Affiliate investments
  11,600
  —
  —
  11,600
  Non-affiliate investments - related party
  3,267
  3,267
  —
  —
  Non-affiliate investments
  2,940
  —
  —
  2,940
  Total investments
  22,522
  3,267
  —
  19,255
  Temporary cash investments
  15,000
  15,000
  —
  —
  Total investments and temporary cash investments
  $
  37,522
  $
  18,267
  $
  —
  $
  19,255
  17
  Index
  As of December 31, 2015, investments
  measured at fair value on a recurring basis are categorized in the tables below based on the lowest level of significant input
  to the valuations:
  Fair
      Value Measurements as of December 31, 2015
  (in thousands)
  Total
  Quoted
  Prices in Active
  Markets
  for
  Identical
  Assets
  (Level 1)
  Significant
  Other
  Observable
  Inputs
  (Level 2)
  Significant
  Unobservable
  Inputs
  (Level 3)
  Assets
  Investments:
  Control investments
  $
  5,715
  $
  —
  $
  —
  $
  5,715
  Affiliate investments
  9,600
  —
  —
  9,600
  Non-affiliate investments - related party
  3,159
  3,159
  —
  —
  Non-affiliate investments
  915
  —
  —
  915
  Total investments
  19,389
  3,159
  —
  16,230
  Temporary cash investments
  15,000
  15,000
  —
  —
  Total investments and temporary cash investments
  $
  34,389
  $
  18,159
  $
  —
  $
  16,230
  The following table provides a reconciliation
  of fair value changes during the three months ended March 31, 2016 for all investments for which we determine fair value using
  unobservable (Level 3) factors:
  Fair value measurements using significant unobservable inputs (Level 3)
  (in thousands)
  Control Investments
  Affiliate Investments
  Non-affiliate Investments
  Total
  Fair value as of December 31, 2015
  $
  5,715
  $
  9,600
  $
  915
  $16,230
  Change in unrealized appreciation (depreciation)
  (1,000
  )
  —
  2,000
  1,000
  Purchases of portfolio securities
  —
  —
  2,025
  2,025
  Fair value as of March 31, 2016
  $
  4,715
  $
  9,600
  $
  4,940
  $19,255
  The following table provides a reconciliation
  of fair value changes during the three months ended March 31, 2015 for all investments for which we determine fair value using
  unobservable (Level 3) factors:
  Fair value measurements using significant unobservable inputs (Level 3)
  (in thousands)
  Control Investments
  Affiliate Investments
  Non-affiliate Investments
  Total
  Fair value as of December 31, 2014
  $
  13,173
  $
  960
  $
  1,532
  $15,665
  Realized gains (losses)
  (2,850
  )
  —
  372
  (2,478)
  Change in unrealized appreciation (depreciation)
  2,050
  1,248
  (580
  )
  2,718
  Purchases of portfolio securities
  —
  —
  54
  54
  Proceeds from sales/dispositions
  (3,158
  )
  —
  (463
  )
  (3,621)
  Fair value as of March 31, 2015
  $
  9,215
  $
  2,208
  $
  915
  $12,338
  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.
  18
  Index
  We classify our investments in accordance
  with the requirements of the 1940 Act. Under the 1940 Act, "Control Investments" are defined as investments in companies
  in which the Fund owns more than 25% of the voting securities or maintains greater than 50% of the board representation. Under
  the 1940 Act, "Affiliate Investments" are defined as those non-control investments in companies in which we own between
  5% and 25% of the voting securities. Under the 1940 Act, "Non-affiliate Investments" are defined as investments that
  are neither Control Investments nor Affiliate Investments.
  As of March 31, 2016 and December 31,
  2015, we had no outstanding commitments to our portfolio company investments; however, under certain circumstances, we may be called
  on to make follow-on investments in certain portfolio companies. If we do not have sufficient funds to make follow-on investments,
  the portfolio company in need of the investment may be negatively impacted. Also, our equity interest in the estimated fair value
  of the portfolio company could be reduced. Follow-on investments may include capital infusions which are expenditures made directly
  to the portfolio company to ensure that operations are completed, thereby allowing the portfolio company to generate cash flows
  to service their debt.
  Interest Income
  Recognition
  - We record interest income, adjusted for amortization of premium and accretion of discount, on an accrual
  basis to the extent that we expect to collect such amounts. We accrete or amortize discounts and premiums on securities
  purchased over the life of the respective security using the effective yield method. The amortized cost of investments
  represents the original cost adjusted for the accretion of discount and/or amortization of premium on debt securities. We
  stop accruing interest on investments when we determine that interest is no longer collectible. We may also impair the
  accrued interest when we determine that all or a portion of the current accrual is uncollectible. If we receive any cash
  after determining that interest is no longer collectible, we treat such cash as payment on the principal balance until the
  entire principal balance has been repaid, before we recognize any additional interest income. We will write off uncollectible
  interest upon the occurrence of a definitive event such as a sale, bankruptcy, or reorganization of the relevant portfolio
  interest.
  Payment in Kind
  Interest (PIK)
  - We have loans in our portfolio that may pay PIK interest. We add PIK interest, if any, computed at the
  contractual rate specified in each loan agreement, to the principal balance of the loan and recorded as interest income. To
  maintain our status as a RIC, we must pay out to stockholders this non-cash source of income in the form of dividends even if
  we have not yet collected any cash in respect of such investments. We will continue to pay out net investment income and/or
  realized capital gains, if any, on an annual basis as required under the Investment Company Act of 1940.
  Cash Flows
  - For purposes
  of the Statements of Cash Flows, we consider all highly liquid temporary cash investments purchased with an original maturity of
  three months or less to be cash equivalents. We include our investing activities within cash flows from operations. We exclude
  "Restricted Cash and Temporary Cash Investments" used for purposes of complying with RIC requirements from cash equivalents.
  Taxes
  - We intend to
  comply with the requirements of the Internal Revenue Code necessary to qualify as a regulated investment company and, as
  such, will not be subject to federal income taxes on otherwise taxable income (including net realized capital gains) which is
  distributed to stockholders. Therefore, no provision for federal income taxes is recorded in the financial statements. We
  borrow money from time to time to maintain our tax status under the Internal Revenue Code as a RIC. See Note 1 for discussion
  of Taxable Subsidiaries and see Note 2 for further discussion of the Fund's RIC borrowings.
  All corporations organized in the State
  of Delaware are required to file an Annual Report and to pay a franchise tax. As a result, we paid Delaware Franchise tax in the
  amount of $0.02 million for the year ended December 31, 2015.
  Texas margin tax applies to legal entities
  conducting business in Texas. The margin tax is based on our Texas sourced taxable margin. The tax is calculated by applying a
  tax rate to a base that considers both revenue and expenses and therefore has the characteristics of an income tax. As a result,
  we did not owe state income tax for the year ended December 31, 2015.
  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.
  19
  Index
  The following table summarizes the significant
  non-observable inputs in the fair value measurements of our Level 3 investments by category of investment and valuation technique
  as of March 31, 2016:
  Range
  (in thousands)
  Fair Value
  Valuation Techniques
  Unobservable Inputs
  Minimum
  Maximum
  Secured and subordinated debt
  $
  2,940
  Yield-to-maturity
  Discount for lack of marketability
  0
  %
  0
  %
  Common stock
  11,600
  Income/Market approach
  EBITDA Multiple/Discount for lack of marketability/Control premium
  2.3
  %
  24
  %
  Asset approach
  Recovery rate
  0
  %
  100
  %
  Limited liability company investments
  4,715
  Discounted cash flow; Guideline transaction method
  Reserve adjustment factors
  75
  %
  100
  %
  $
  19,255
  The following table summarizes the significant
  non-observable inputs in the fair value measurements of our level 3 investments by category of investment and valuation technique
  as of December 31, 2015:
  Range
  (in thousands)
  Fair
      Value
  Valuation
      Techniques
  Unobservable
      Inputs
  Minimum
  Maximum
  Secured and subordinated debt
  $
  915
  Yield-to-maturity
  Discount for lack of marketability
  0
  %
  0
  %
  Common stock
  9,600
  Income/Market approach
  EBITDA Multiple/Discount for lack of marketability/Control premium
  10
  %
  32.5
  %
  Asset approach
  Recovery rate
  0
  %
  100
  %
  Limited liability company investments
  5,715
  Discounted cash flow; Guideline transaction
      method
  Reserve adjustment factors
  75
  %
  100
  %
  $
  16,230
  (4)
  Related Party Transactions and Agreements
  Except as noted below, as compensation
  for services to the Fund, each Independent Director receives an annual fee of $20,000 paid quarterly in arrears, a fee of $2,000
  for each meeting of the Board of Directors attended in person, a fee of $1,000 for participation in each telephonic meeting of
  the Board and a fee of $1,000 for each committee meeting attended, and reimbursement of all out-of-pocket expenses relating to
  attendance at such meetings. A quarterly fee of $15,000 is paid to the Chairman of the Audit Committee and a quarterly fee of $3,750
  is paid to the Chairman of the Independent Directors. We may also pay other one-time or recurring fees to members of our Board
  of Directors in special circumstances. None of our interested directors receive annual fees for their service on the Board of Directors.
  In 2011, Equus Energy, LLC, a wholly-owned
  subsidiary of the Fund, entered into a consulting agreement with Global Energy Associates, LLC ("Global Energy") to
  provide consulting services for energy related investments. Henry W. Hankinson, Director, is a managing partner and co-founder
  of Global Energy. Payments to Global Energy totaled $18,750 for each of the three months ended March 31, 2016 and 2015.
  In respect of services provided to the
  Fund by members of the Board not in connection with their roles and duties as directors, the Fund pays a fixed amount at a rate
  of $250 per hour for services rendered. During the three months ended March 31, 2016 and 2015, we paid Kenneth I. Denos, P.C.,
  a professional corporation owned by Kenneth I. Denos, a director of the Fund, $104,813 and $91,813 respectively, for services provided
  to the Fund.
  .
  20
  Index
  (5)
  Dividends
  We will pay out net investment income
  and/or realized capital gains, if any, on an annual basis as required under the 1940 Act.
  (6)
  Portfolio Securities
  On January 29, 2016, we invested $2.0
  million in Biogenic Reagents, LLC ("Biogenic") in the form of a senior secured promissory note maturing May 31, 2016
  and bearing cash and PIK interest at the combined rate of 16% per annum. Biogenic is a developer and producer of high value carbon
  products from renewable biomass, headquartered in Minneapolis. The company has developed and commercialized a low-cost platform
  technology to make carbon products such as activated carbon for use in purification of air, water, food and pharmaceuticals and
  agricultural carbon to improve crop production.
  On March 2, 2016, we extended the maturity
  of the 5
  th
  Element Tracking, LLC promissory note to July, 2016 and received fees in the form of a PIK and cash totaling
  $0.05 million.
  During the three months ended March
  31, 2016, we received dividends in the form of additional shares of $0.1 million relating to our shareholding in MVC
  During the three months ended March
  31, 2016, we recorded a net change in unrealized appreciation of $1.0 million, to a net unrealized appreciation of $3.3 million.
  Such change in unrealized appreciation resulted primarily from the following changes:
  (i)
  Increase in the fair value of our shareholding in MVC of $0.1 million due to the receipt of a dividend payment in the form of additional shares of MVC;
  (ii)
  Increase in fair value of our shareholding in PalletOne, Inc. of $2.0 million due to an overall improvement in comparable industry sectors, as well as continued revenue and earnings growth;
  (iii)
  Decrease in the fair value of our holdings in Equus Energy, LLC of $1.0 million, principally due to a combination of lower production without a corresponding increase in proved reserves and continued lower short- and long-term prices for crude oil and natural gas.
  On January 6, 2015, we sold our interests
  in Spectrum to 5
  th
  Element Tracking, LLC ("5
  th
  Element"). The purchase price of $3.9 million paid by 5
  th
  Element
  consisted of $3.0 million in cash and a 1-year subordinated note in the original principal amount of $0.9 million, bearing interest
  at the rate of 14% per annum. We realized a net capital loss of $2.8 million in connection with the sale of our interest in Spectrum.
  Also on January 6, 2015, in connection
  with the sale of our interest in Spectrum, our $0.5 million loan to Security Monitor Holdings, LLC, together with all accrued interest
  amounting to approximately $0.1 million, was repaid.
  On January 30, 2015, we received a partial
  redemption payment in respect of our holding of Notes of Orco Property Group S.A. ("OPG Notes") in the amount of €36,587
  [$41,478].
  On February 20, 2015, we sold our OPG
  Notes at a discount of 23% to their par value, receiving $1.0 million in cash and a realized gain of $0.4 million.
  During the three months ended March
  31, 2015, we recorded a net change in unrealized depreciation of $2.7 million, to a net unrealized depreciation of $0.8 million.
  Such change in unrealized depreciation resulted primarily from the following changes:
  (i)
  Decrease in the fair value of our holdings in Equus Energy, LLC of $0.8 million, principally due to a combination of decreased production and declining oil and prices;
  (ii)
  Decrease in the fair value of our shareholding in MVC of $0.1 million due to a decrease in the MVC share price during the quarter;
  (iii)
  Increase in fair value of our shareholding in PalletOne, Inc. of $1.2 million due to an overall improvement in the industry sector for packaging companies, as well as continued revenue and earnings growth;
  (iii)
  Transfer of unrealized depreciation to realized gain on our holding of OPG Notes of $0.4 million in connection with the sale of our interest in the OPG Notes; and,
  21
  Index
  (iv)
  Transfer of unrealized depreciation to realized loss on our holdings in Spectrum Management, LLC ("Spectrum") of $2.9 million in connection with the sale of our interest in Spectrum.
  (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 Capital, Inc. ("MVC") 2,112,000 newly-issued shares of the Fund's common stock in exchange for
  395,839 shares of MVC (such transaction is hereinafter referred to as the "Share Exchange"). MVC is a business development
  company traded on the New York Stock Exchange that provides long-term debt and equity investment capital to fund growth, acquisitions
  and recapitalizations of companies in a variety of industries. The Share Exchange was calculated based on the Fund's and
  MVC's respective net asset value per share. At the time of the Share Exchange, the number of MVC shares received by Equus
  represented approximately 1.73% of MVC's total outstanding shares of common stock.
  Pursuant to the terms of a Share Exchange
  Agreement, dated May 12, 2014, entered into by Equus and MVC which memorialized the Share Exchange, we intend to finalize the reorganization
  by pursuing a merger or consolidation with MVC, a subsidiary of MVC, or one or more of MVC's portfolio companies (the "Consolidation").
  Absent Equus merging or consolidating with/into MVC or a subsidiary thereof, our current intention is for Equus to (i) consummate
  the Consolidation with a portfolio company of MVC, (ii) terminate its election to be classified as a BDC under the 1940 Act, and
  (iii) be restructured as a publicly-traded operating company focused on the energy and/or financial services sector. Our management
  is currently evaluating these alternatives.
  (8)
  Equus Energy, LLC
  Equus Energy was formed in November
  2011 as a wholly-owned subsidiary of the Fund to make investments in companies in the energy sector, with particular emphasis on
  income-producing oil & gas properties. In December 2011, we contributed $250,000 to the capital of Equus Energy. On December
  27, 2012, we invested an additional $6.8 million in Equus Energy for the purpose of additional working capital and to fund the
  purchase of $6.6 million in working interests, which presently comprise 130 producing and non-producing oil and gas wells. The
  working interests include associated development rights of approximately 21,220 acres situated on 13 separate properties in Texas
  and Oklahoma. The working interests range from a
  de minimus
  amount to 50% of the leasehold that includes these wells.
  The wells are operated by a number of
  experienced operators, including Chevron USA, Inc., which has operating responsibility for all of Equus Energy's 40 producing
  well interests located in the Conger Field, a productive oil and gas field on the edge of the Permian Basin that has experienced
  successful gas and hydrocarbon extraction in multiple formations. Equus Energy, which holds a 50% working interest in each of these
  Conger Field wells, is working with Chevron in a recompletion program of existing Conger Field wells to the Wolfcamp formation,
  a zone containing oil as well as gas and natural gas liquids. Part of Equus Energy's acreage rights described above also
  includes a 50% working interest in possible new drilling to the base of the Canyon formation (approximately 8,500 feet) on 2,400
  acres in the Conger Field. Also included in the interests acquired by Equus Energy are working interests of 7.5% and 2.5% in the
  Burnell and North Pettus Units, respectively, which collectively comprise approximately 13,000 acres located in the area known
  as the "Eagle Ford Shale" play.
  Revenue and Income
  . During the
  three months ended March 31, 2016, Equus Energy's revenue, operating revenue less direct operating expenses, and net loss
  were $0.01 million, ($0.2) million, and ($0.4) million, respectively, as compared to revenue, operating revenue less direct operating
  expenses, and net income of $0.3 million, $0.02 million, and ( $0.3) million, respectively, for the three months ended March 31,
  2015.
  Capital Expenditures
  . During
  the three months ended March 31, 2016, Equus Energy invested $0.003 million in capital expenditures for small repairs and improvements.
  The operators of the various working interest have communicated their intent to wait until later in 2016, commensurate with an
  anticipated gradual rise in the price of crude oil, to commence new drilling and recompletion projects.
  We do not consolidate Equus Energy or
  its wholly-owned subsidiaries and accordingly only the value of our investment in Equus Energy is included on our statement of
  assets and liabilities. Our investment in Equus Energy is valued in accordance with our normal valuation procedures and is based
  in part on using a discounted cash flow analysis based on a reserve report prepared for Equus Energy by Lee Keeling & Associates,
  Inc., an independent petroleum engineering firm, the transactions and values of comparable companies in this sector, and the estimated
  value of leasehold mineral interests associated with the acreage held by Equus Energy. A valuation of Equus Energy was performed
  by a third-party valuation firm, who recommended a value range of Equus Energy consistent with the fair value determined by our
  Management (See
  Schedule of Investments
  )
  .
  22
  Index
  Below is summarized consolidated financial
  information for Equus Energy as of March 31, 2016 and December 31, 2015 and for the three months ended March 31, 2016 and 2015,
  respectively, (in thousands):
  EQUUS ENERGY, LLC
  Condensed Consolidated Balance Sheets
  March
      31,
  December
      31,
  2016
  2015
  Assets
  Current
      assets:
  Cash
      and cash equivalents
  $
  178
  $
  517
  Accounts
      receivable
  42
  122
  Other
      current assets
  32
  32
  Total
      current assets
  252
  671
  Oil
      and gas properties
  8,273
  8,269
  Less:
      accumulated depletion, depreciation and amortization
  (6,579
  )
  (6,516
  )
  Net
      oil and gas properties
  1,694
  1,753
  Total
      assets
  $
  1,946
  $
  2,424
  Liabilities
      and member's capital
  Current
      liabilities:
  Accounts
      payable and other
  $
  163
  $
  206
  Due
      to affiliate
  611
  611
  Total
      current liabilities
  774
  817
  Asset
      retirement obligations
  179
  178
  Total
      liabilities
  953
  995
  Total
      member's equity
  993
  1,429
  Total
      liabilities and member's equity
  $
  1,946
  $
  2,424
  Revenue and direct operating expenses
  for the various oil and gas assets included in the accompanying statements represent the net collective working and revenue interests
  acquired by Equus Energy. The revenue and direct operating expenses presented herein relate only to the interests in the producing
  oil and natural gas properties and do not represent all of the oil and natural gas operations of all of these properties. Direct
  operating expenses include lease operating expenses and production and other related taxes. General and administrative expenses,
  depletion, depreciation and amortization ("DD&A") of oil and gas properties and federal and state taxes have been
  excluded from direct operating expenses in the accompanying statements of revenues and direct operating expenses because the allocation
  of certain expenses would be arbitrary and would not be indicative of what such costs would have been had Equus Energy been operated
  as a stand-alone entity. The statements of revenue and direct operating expenses presented are not indicative of the financial
  condition or results of operations of Equus Energy on a go forward basis due to changes in the business and the omission of various
  operating expenses.
  23
  Index
  EQUUS ENERGY, LLC
  Condensed Consolidated Statements
  of Operations
  Three Months Ended March 31,
  2016
  2015
  Operating revenue
  $
  58
  $
  284
  Operating expenses
  Direct operating expenses
  262
  259
  Impairment
  —
  Depletion, depreciation, amortization and accretion
  63
  186
  General and administrative
  169
  131
  Total operating expenses
  494
  576
  Operating loss before income tax expense
  (436
  )
  (292
  )
  Net loss
  $
  (436
  )
  $
  (292
  )
  EQUUS ENERGY, LLC
  Condensed Consolidated Statements
  of Cash Flows
  Three Months Ending March 31,
  2016
  2015
  Cash flows from operating activities:
  Net loss
  $
  (436
  )
  $
  (292
  )
  Adjustments to reconcile net loss to
  net cash (used in) provided by operating activities:
  Depletion, depreciation, amortization and accretion
  63
  186
  Changes in operating assets and liabilities:
  Accounts receivable and other current assets
  80
  162
  Accounts payable and other
  (43
  )
  11
  Net cash (used in) provided by operating activities
  (336
  )
  67
  Cash flows from investing activities:
  Investment in oil & gas properties
  (3
  )
  (45
  )
  Net cash used in investing activities
  (3
  )
  (45
  )
  Net (decrease) increase in cash
  (339
  )
  22
  Cash and cash equivalents at beginning of period
  517
  613
  Cash and cash equivalents at end of period
  $
  178
  $
  635
  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.
  24
  Index
  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, amortization and
  accretion expense for the Company's oil and gas properties totaled $0.06 million and $0.2 million for the three months ended
  March 31, 2016 and March 31, 2015, respectively.
  Capitalized oil and gas property costs
  are limited to an amount (the ceiling limitation) equal to the sum of the following:
  (a)
  As of March 31, 2016, the present value of estimated future net revenue from the projected production of proved oil and gas reserves, calculated at the simple arithmetic average, first-day-of-the-month prices during the twelve-month period before the balance sheet date (with consideration of price changes only to the extent provided by contractual arrangements) and a discount factor of 10%;
  (b)
  The cost of investments in unproved and unevaluated properties excluded from the costs being amortized; and
  (c)
  The lower of cost or estimated fair value of unproved properties included in the costs being amortized.
  When it is determined that oil and gas
  property costs exceed the ceiling limitation, an impairment charge is recorded to reduce its carrying value to the ceiling limitation. 
  The Company did not recognize an impairment loss on its oil and gas properties during the three months ended March 31, 2016. However,
  during 2015, the Company recognized an impairment loss of $4.0 million.
  The costs of certain unevaluated leasehold
  acreage and certain wells being drilled are not amortized. The Company excludes all costs until proved reserves are found or until
  it is determined that the costs are impaired. Costs not amortized are periodically assessed for possible impairment or reduction
  in value. If a reduction in value has occurred, costs being amortized are increased accordingly.
  Revenue Recognition
  -
  Revenue
  recognized for oil and natural gas sales under the sales method of accounting. Under this method, revenue recognized on production
  as it is taken and delivered to its purchasers. The volumes sold may be more or less than the volumes entitled to, based on the
  owner's net leasehold interest. These differences result from production imbalances, which are not significant, and are reflected
  as adjustments to proven reserves and future cash flows in the unaudited consolidated financial information included herein.
  Accounting Policy on DD&A
  - The Company employs the "Units of Production" method in calculating depletion of its proved oil and gas properties,
  wherein capitalized costs, as adjusted for future development costs and asset retirement obligations, are amortized over the total
  estimated proved reserves.
  Income Taxes
  - A
  limited liability company is not subject to the payment of federal income taxes as components of its income and expenses flow
  through directly to the members. However, the Company is subject to certain state income taxes. Texas margin tax applies to
  legal entities conducting business in Texas. The margin tax is based on our Texas sourced taxable margin. The tax is
  calculated by applying a tax rate to a base that considers both revenue and expenses and therefore has the characteristics of
  an income tax. Taxable Subsidiaries may generate income tax expense because of the Taxable Subsidiaries' ownership of
  the portfolio companies. We reflect any such income tax expense on our Statements of Operations.  As of March 31, 2016
  and March 31, 2015, the Company recorded $0 in federal income taxes.
  Asset Retirement Obligations
  -
  The fair value of asset retirement obligations are recorded in the period in which they are incurred if a reasonable estimate of
  fair value can be made, and the corresponding cost is capitalized as part of the carrying amount of the related long-lived asset. 
  The fair value of the asset retirement obligation is measured using expected future cash outflows discounted at the Company's
  credit-adjusted risk-free interest rate.  Fair value, to the extent possible, should include a market risk premium for unforeseeable
  circumstances.  No market risk premium was included in the Company's asset retirement obligation fair value estimate
  since a reasonable estimate could not be made.  The liability is accreted to its then present value each period, and the capitalized
  cost is depleted or amortized over the estimated recoverable reserves using the units-of-production method.
  (9)
  Recent Accounting Pronouncements
  In January 2016, the FASB issued ASU
  No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities.  Among other things, this ASU requires
  that public business entities use the exit price notion when measuring the fair value of financial instruments for disclosure purposes. 
  ASU No. 2016-01 is effective for public entities for fiscal years, and interim periods within those fiscal years, beginning after
  December 15, 2017.  Our adoption of ASU No. 2016-01 is not anticipated to have a material effect on our financial statements.
  25
  Index
  (10)
  Subsequent Events
  Management performed an evaluation of
  the Fund's activity through the date the financial statements were issued, noting the following subsequent events:
  On April 1, 2016, we received $40,000
  in cash representing payment of accrued cash interest on our $2.0 million loan to Biogenic Reagents, LLC made on January 29, 2016.
  On April 1, 2016, we sold U.S. Treasury
  Bills for $15.0 million and repaid our margin loan.
  On April 28, 2016, we extended the maturity
  date of our $2.0 million loan to Biogenic Reagents, LLC from April 28, 2016 to May 31, 2016.
  26
  Index
  Item 2.
  Management's Discussion and Analysis
  of Financial Condition and Results of Operations
  Equus Total Return, Inc. (
  "we,"
  "us," "our," "Equus," the "Company," and the "Fund
  "), a Delaware
  corporation, was formed on August 16, 1991. Our shares trade on the New York Stock Exchange under the symbol 'EQS'.
  Our investment strategy seeks to provide the highest total return, consisting of capital appreciation and current income.
  The information contained in this
  section should be read in conjunction with our consolidated financial statements and notes thereto appearing elsewhere in this
  Quarterly Report and in conjunction with the financial statements and notes thereto in the Fund's Form 10-K for the year
  ended December 31, 2015, as filed with the SEC. In addition, some of the statements in this report constitute forward-looking statements.
  The matters discussed in this Quarterly Report, as well as in future oral and written statements by management of Equus, that are
  forward-looking statements are based on current management expectations that involve substantial risks and uncertainties which
  could cause actual results to differ materially from the results expressed in, or implied by, these forward-looking statements.
  Forward-looking statements relate to future events or our future financial performance. We generally identify forward-looking statements
  by terminology such as "may," "will," "should," "expects," "plans,"
  "anticipates," "could," "intends," "target," "projects," "believes,"
  "estimates," "predicts," "potential" or "continue" or the negative of these terms
  or other similar words. Important assumptions include our ability to originate new investments, achieve certain margins and levels
  of profitability, and the availability of additional capital. In light of these and other uncertainties, the inclusion of a forward-looking
  statement in this Quarterly Report should not be regarded as a representation by us that our plans or objectives will be achieved.
  The forward-looking statements contained in this Quarterly Report include statements as to:
  ·
  our future operating results;
  ·
  our business prospects and the prospects of our existing
  and prospective portfolio companies;
  ·
  the return or impact of current and future investments;
  ·
  our contractual arrangements and other relationships
  with third parties;
  ·
  the dependence of our future success on the general
  economy and its impact on the industries in which we invest;
  ·
  the financial condition and ability of our existing
  and prospective portfolio companies to achieve their objectives;
  ·
  our expected financings and investments;
  ·
  our regulatory structure and tax treatment;
  ·
  our ability to qualify and operate as a BDC and a
  RIC, including the impact of changes in laws or regulations governing our operations, or the operations of our portfolio companies;
  ·
  the adequacy of our cash resources and working capital;
  ·
  the timing of cash flows, if any, from the operations
  of our portfolio companies;
  ·
  the impact of fluctuations in interest rates on our
  business;
  ·
  the valuation of our investments in portfolio companies,
  particularly those having no liquid trading market;
  ·
  our ability to recover unrealized losses; and
  ·
  market conditions and our ability to access additional
  capital, if deemed necessary.
  There are a number of important risks and uncertainties
  that could cause our actual results to differ materially from those indicated by such forward-looking statements. For a discussion
  of factors that could cause our actual results to differ from forward-looking statements contained in this Quarterly Report, please
  see the discussion in Part II, "Item 1A. Risk Factors", and in Part I, "Item 1A. Risk Factors" in our Annual
  Report on Form 10-K for the fiscal year ended December 31, 2015. You should not place undue reliance on these forward-looking statements.
  The forward-looking statements made in this Quarterly Report relate only to events as of the date on which the statements are made.
  We undertake no obligation to update any forward-looking statement to reflect events or circumstances occurring after the date
  this Quarterly Report is filed with the SEC.
  We attempt to maximize the return to
  stockholders in the form of current investment income and long-term capital gains by investing in the debt and equity securities
  of companies with a total enterprise value of between $5.0 million and $75.0 million, although we may engage in transactions with
  smaller or larger investee companies from time to time. We seek to invest primarily in companies pursuing growth either through
  acquisition or organically, leveraged buyouts, management buyouts and recapitalizations of existing businesses or special situations.
  Our income-producing investments consist principally of debt securities including subordinate debt, debt convertible into common
  or preferred stock, or debt combined with warrants and common and preferred stock. Debt and preferred equity financing may also
  be used to create long-term capital appreciation through the exercise and sale of warrants received in connection with the financing.
  We seek to achieve capital appreciation by making investments in equity and equity-oriented securities issued by privately-owned
  companies (and smaller public companies) in transactions negotiated directly with such companies. Given market conditions over
  the past several years and the performance of our portfolio, our management and Board of Directors believe it is prudent to continue
  to review alternatives to refine and further clarify the current strategies.
  27
  Index
  We
                                           elected to be treated as a BDC under the 1940 Act. We currently qualify as a RIC for
                                           federal income tax purposes and, therefore, are not required to pay corporate income
                                           taxes on any income or gains that we distribute to our stockholders. We have certain
                                           wholly owned Taxable Subsidiaries each of which holds one or more portfolio investments
                                           listed on our Schedules of Investments. The purpose of these Taxable Subsidiaries is
                                           to permit us to hold certain income-producing investments or portfolio companies organized
                                           as limited liability companies, or LLCs, (or other forms of pass-through entities) and
                                           still satisfy the RIC tax requirement that at least 90% of our gross revenue for income
                                           tax purposes must consist of investment income. Absent the Taxable Subsidiaries, a portion
                                           of the gross income of these income-producing investments or of any LLC (or other pass-through
                                           entity) portfolio investment, as the case may be, would flow through directly to us for
                                           the 90% test. To the extent that such income did not consist of investment income, it
                                           could jeopardize our ability to qualify as a RIC and, therefore, cause us to incur significant
                                           federal income taxes. The income of the LLCs (or other pass-through entities) owned by
                                           Taxable Subsidiaries is taxed to the Taxable Subsidiaries and does not flow through to
                                           us, thereby helping us preserve our RIC status and resultant tax advantages. We do not
                                           consolidate the Taxable Subsidiaries for income tax purposes and they may generate income
                                           tax expense because of the Taxable Subsidiaries' ownership of the portfolio investments.
                                           We reflect any such income tax expense on our Statements of Operations.
  Plan of Reorganization
  On May 14, 2014, we announced
  that the Fund intended to effect a reorganization pursuant to Section 2(a)(33) of the 1940 Act. As a first step to consummating
  the reorganization, we sold to MVC 2,112,000 newly-issued shares of the Fund's common stock in exchange for 395,839 shares
  of MVC (such transaction is hereinafter referred to as the "Share Exchange"). MVC is a business development company
  traded on the New York Stock Exchange that provides long-term debt and equity investment capital to fund growth, acquisitions and
  recapitalizations of companies in a variety of industries. The Share Exchange was calculated based on the Fund's and MVC's
  respective net asset value per share. The number of MVC shares received by Equus represents approximately 1.73% of MVC's
  total outstanding shares of common stock. The number of Equus shares sold to MVC pursuant to the Share Exchange represents approximately
  16.7% of our issued and outstanding shares of common stock at March 31, 2015. We incurred dilution of $0.11 per share as a result
  of the Share Exchange. Since the announcement, we have received 49,905 shares of MVC (market value of $0.4 million calculated as
  of the date of receipt) in the form of dividend payments.
  Pursuant to the terms of
  a Share Exchange Agreement, dated May 14, 2014, entered into by Equus and MVC which memorialized the Share Exchange, we intend
  to finalize the reorganization by pursuing a merger or consolidation with MVC, or a subsidiary of MVC, or one or more of MVC's
  portfolio companies (the "Consolidation"). Absent Equus merging or consolidating with/into MVC, our current intention
  is for Equus to (i) consummate the Consolidation, (ii) terminate its election to be classified as a business development company
  under the 1940 Act, and (iii) be restructured as a publicly-traded operating company focused on the energy and/or financial services
  sector.
  Critical Accounting Policies
  See the Fund's Critical Accounting
  Policies from the disclosure set forth in the Annual Report on Form10-K for the year ended December 31, 2015.
  Recent Accounting Pronouncements
  In January 2016, the FASB issued ASU
  No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities.  Among other things, this ASU requires
  that public business entities use the exit price notion when measuring the fair value of financial instruments for disclosure purposes. 
  ASU No. 2016-01 is effective for public entities for fiscal years, and interim periods within those fiscal years, beginning after
  December 15, 2017.  Our adoption of ASU No. 2016-01 is not anticipated to have a material effect on our financial statements.
  Current Market Conditions
  Despite relatively low unemployment
  rates, the U.S. economy expanded at an annualized rate of 0.5% during the first quarter of 2016, following an annualized increase
  of 1.4% during the fourth quarter of 2015. The decreased growth during the first quarter, the slowest since the first quarter of
  2014, was principally attributed to a strong U.S. dollar, which hampered U.S. exports, lower consumer spending, and continued low
  crude and natural gas prices which negatively affected the energy sector. In a survey of 60 economists, the
  Wall Street Journal
  has predicted GDP growth of 2.4% for the second quarter of 2016. In respect of the energy industry, Schlumberger reported in October
  2015 that it did not expect a recovery in demand for energy before 2017 and predicted that exploration and production spending
  would decrease again in 2016. (Sources:
  U.S. Dept. of Commerce Bureau of Economic Analysis, Wall Street Journal, CNBC
  )
  28
  Index
  Market conditions for business transactions
  during 2015, including mergers and acquisitions and private equity investments, improved to their highest level ($3.8 trillion)
  since prior to the 2008 financial crisis, as corporations have been deleveraging and are holding significant amounts of cash and
  many have focused on acquisitions as part of future growth plans. Private equity funds increased their assets under management
  during 2015 to a projected $468 billion, a level not seen since 2008, as private equity firms as a group enjoyed more success during
  the year in attracting investment capital. First quarter 2016 results are not yet available but are expected to continue this trend.
  (Sources:
  Bloomberg, Forbes
  and
  The New York Times
  ).
  During the three months ended March
  31, 2016, our net asset value increased from $2.94 per share to $2.96 per share, an increase of 0.68%. As of March 31, 2016, our
  common stock is trading at a 45.9% discount to our net asset value as compared to 39.2% as of December 31, 2015.
  Over the past several years, we have
  executed certain initiatives to enhance liquidity, achieve a lower operational cost structure, provide more assistance to portfolio
  companies and realize certain of our portfolio investments. Specifically, we changed the composition of our Board of Directors
  and Management, terminated certain of our follow-on investments, internalized the management of the Fund, suspended our managed
  distribution policy, modified our investment strategy to pursue shorter term liquidation opportunities, pursued non-cash investment
  opportunities, and sold certain of our legacy and underperforming investment holdings. We believe these actions continue to be
  necessary to protect capital and liquidity in order to preserve and enhance shareholder value. Because our Management is internalized,
  certain of our expenses should not increase commensurate with an increase in the size of the Fund and, therefore, we expect to
  achieve efficiencies in our cost structure if we are able to grow the Fund.
  Liquidity and Capital Resources
  We generate cash primarily from maturities,
  sales of securities and borrowings, as well as capital gains realized upon the sale of portfolio investments. We use cash primarily
  to make additional investments, either in new companies or as follow-on investments in the existing portfolio companies and to
  pay the dividends to our stockholders.
  Because of the nature and size of the
  portfolio investments, we may periodically borrow funds to make qualifying investments to maintain our tax status as a RIC. We
  often borrow such funds by utilizing a margin account with a securities brokerage firm. There is no assurance that such arrangement
  will be available in the future. If the Fund is unable to borrow funds to make qualifying investments, it may no longer qualify
  as a RIC. The Fund would then be subject to corporate income tax on its net investment income and realized capital gains, and distributions
  to stockholders would be subject to income tax as ordinary dividends.
  The Fund has the ability to borrow funds
  and issue forms of senior securities representing indebtedness or stock, such as preferred stock, subject to certain restrictions.
  Net taxable investment income and net taxable realized gains from the sales of portfolio investments are intended to be distributed
  at least annually, to the extent such amounts are not reserved for payment of expenses and contingencies or to make follow-on or
  new investments.
  The Fund reserves the right to retain
  net long-term capital gains in excess of net short-term capital losses for reinvestment or to pay contingencies and expenses. Such
  retained amounts, if any, will be taxable to the Fund as long-term capital gains and stockholders will be able to claim their proportionate
  share of the federal income taxes paid on such gains as a credit against their own federal income tax liabilities. Stockholders
  will also be entitled to increase the adjusted tax basis of their Fund shares by the difference between their undistributed capital
  gains and their tax credit.
  We are evaluating the impact of current
  market conditions on our portfolio company valuations and their ability to provide current income. We have followed valuation techniques
  in a consistent manner; however, we are cognizant of current market conditions that might affect future valuations of portfolio
  securities. We believe that our operating cash flow and cash on hand will be sufficient to meet operating requirements and to finance
  routine capital expenditures through the next twelve months.
  Results of Operations
  Investment Income and Expense
  Net investment loss decreased to $0.7
  million from $1.1 million for the three months ended March 31, 2016 and 2015, respectively. The decrease in net investment loss
  generated at March 31, 2016 compared to March 31, 2015 is due primarily to an increase in total investment income and a decrease
  in operating expense.
  Investment income was $0.1 million for
  the three months ended March 31, 2016 and $0.04 million for the three months ended March 31, 2015. The increase in investment income
  was primarily due to the increase in income producing investments, including interest income from our loan to Biogenic Reagents,
  LLC and the MVC share dividend received during the three months ended March 31, 2016.
  29
  Index
  Total expenses decreased to $0.9 million
  for the three months ended March 31, 2016 from $1.1 million for the three months ended March 31, 2015. The decrease is principally
  officer and employee bonuses earned during the first quarter of 2015.
  Realized
  Gains and Losses on Sales of Portfolio Securities
  During the three months ended March
  31, 2016, we realized a loss of $2.0 thousand from the sale of temporary cash investments.
  During the three months ended March
  31, 2015, we realized capital losses of $2.5 million, including the following significant transactions:
  Portfolio Company
  Industry
  Type
  Transaction Type
  Realized Gain (Loss)
  Spectrum Management, LLC
  Business products  and services
  Control
  Disposition
  $
  (2,850
  )
  Orco Property Group S. A.
  Real Estate
  Non-affiliate
  Disposition
  372
  Various others
  Disposition
  (5
  )
  $
  (2,483
  )
  Changes in Unrealized
  Appreciation/Depreciation of Portfolio Securities
  During the three months ended March
  31, 2016, we recorded a net change in unrealized appreciation of $1.0 million, to a net unrealized appreciation of $3.3 million.
  Such change in unrealized appreciation resulted primarily from the following changes:
  (i)
  Increase in the fair value of our shareholding in MVC of $0.1 million due to the receipt of a dividend payment in the form of additional shares of MVC;
  (ii)
  Increase in fair value of our shareholding in PalletOne, Inc. of $2.0 million due to an overall improvement in comparable industry sectors, as well as continued revenue and earnings growth;
  (iii)
  Decrease in the fair value of our holdings in Equus Energy, LLC of $1.0 million, principally due to a combination of lower production without a corresponding increase in proved reserves and continued lower short- and long-term prices for crude oil and natural gas.
  During the three months ended March
  31, 2015, we recorded a net change in unrealized depreciation of $2.7 million, to a net unrealized depreciation of $0.8 million.
  Such change in unrealized depreciation resulted primarily from the following changes:
  (i)
  Decrease in the fair value of our holdings in Equus Energy, LLC of $0.8 million, principally due to a combination of decreased production and declining oil and prices;
  (ii)
  Decrease in the fair value of our shareholding in MVC of $0.1 million due to a decrease in the MVC share price during the quarter;
  (iii)
  Increase in fair value of our shareholding in PalletOne, Inc. of $1.2 million due to an overall improvement in the industry sector for packaging companies, as well as continued revenue and earnings growth;
  (iii)
  Transfer of unrealized depreciation to realized gain on our holding of OPG Notes of $0.4 million in connection with the sale of our interest in the OPG Notes; and,
  (iv)
  Transfer of unrealized depreciation to realized loss on our holdings in Spectrum of $2.9 million in connection with the sale of our interest in Spectrum.
  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.
  30
  Index
  Portfolio Securities
  On March 2, 2016, we extended the maturity
  of the 5
  th
  Element Tracking, LLC promissory note to July 2016 and received fees in the form of a PIK and cash totaling
  $0.05 million.
  During the three months ended March
  31, 2016, we received dividends in the form of additional shares of $0.1 million relating to our shareholding in MVC.
  During the three months ended March
  31, 2015, we received dividends in the form of additional shares of $0.05 million relating to our shareholding in MVC. As a result
  of the sale of our interests in Spectrum to 5th Element Tracking, LLC, we received $3.0 million in cash and a 1-year subordinated
  note in the original principal amount of $0.9 million, bearing interest at the rate of 14% per annum.
  Subsequent Events
  Management performed an evaluation of
  the Fund's activity through the date the financial statements were issued, noting the following subsequent events:
  On April 1, 2016, we received $40,000
  in cash representing payment of accrued cash interest on our $2.0 million loan to Biogenic Reagents, LLC made on January 29, 2016.
  On April 1, 2016, we sold U.S. Treasury
  Bills for $15.0 million and repaid our margin loan.
  On April 28, 2016, we extended the maturity
  date of our $2.0 million loan to Biogenic Reagents, LLC from April 28, 2016 to May 31, 2016.
  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, we may invest in companies outside the United States, including in Europe
  and Asia, which would give rise to exposure to foreign currency value fluctuations. We do not use derivative financial instruments
  to mitigate any of these risks. The return on investments is generally not affected by foreign currency fluctuations.
  Our investments in portfolio securities
  consist of some fixed-rate debt securities. Since the debt securities are generally priced at a fixed rate, changes in interest
  rates do not directly affect interest income. In addition, changes in market interest rates are not typically a significant factor
  in the determination of fair value of these debt securities, since the securities are generally held to maturity. We determine
  their fair values based on the terms of the relevant debt security and the financial condition of the issuer.
  A major portion of our investment portfolio
  consists of debt and equity investments in private companies. Modest changes in public market equity prices generally do not significantly
  impact the estimated fair value of these investments. However, significant changes in market equity prices can have a longer-term
  effect on valuations of private companies, which could affect the carrying value and the amount and timing of gains or losses realized
  on these investments. A small portion of the investment portfolio could also consist of common stock in publicly traded companies.
  These investments are directly exposed to equity price risk, in that a hypothetical ten percent change in these equity prices would
  result in a similar percentage change in the fair value of these securities.
  We are classified as a "non-diversified"
  investment company under the 1940 Act, which means we are not limited in the proportion of our assets that may be invested in the
  securities of a single user. The value of one segment called "Shipping products and services" includes one portfolio
  company, PalletOne, Inc., and was 30.9% of the net asset value and 51.5% of our investments in portfolio company securities (at
  fair value) as of March 31, 2016. 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.
  33
  Index
  The Fund's management, with the
  participation of the Fund's Chief Executive Officer and Chief Financial Officer, have evaluated the effectiveness of the
  design and operations of the Fund's "disclosure controls and procedures" (as defined in Rule 13a-15(e) under
  the Securities Exchange Act of 1934) as of March 31, 2016. Based on their evaluation, the Fund's Chief Executive Officer
  and Chief Financial Officer concluded that the Fund's disclosure controls and procedures were effective at a reasonable assurance
  level. There has been no change in the Fund's internal control over financial reporting during the quarter ended March 31,
  2016, that has materially affected, or is reasonably likely to materially affect, the Fund's internal control over financial
  reporting.
  Part II. Other Information
  Item
  1. Legal Proceedings
  Champion Window Arbitration Settlement
  —In
  January 2006, we sold our 31.5% ownership interest in Champion Window, Inc. ("Champion"), a portfolio company of the
  Fund, to Atrium Companies Inc. ("Atrium") pursuant to a Stock Purchase Agreement ("SPA") dated December
  22, 2005. The SPA contained certain limited rights of indemnification for Atrium in connection with its purchase of such ownership
  interest.
  More than five years after the closing
  of the sale of our Champion interest, Atrium filed suit in Texas state court, which was subsequently consolidated into an Arbitration
  Action, against two former officers of Champion, Equus, and another former Champion shareholder. The suit alleged breaches of fiduciary
  duty against Champion's former officers for hiring undocumented workers that were discovered as a result of an investigation
  by the U.S. Immigration and Customs Enforcement agency ("ICE") into Atrium's hiring practices. The suit also
  sought indemnification under the SPA from these officers, Equus, and another former Champion shareholder, for a payment of $2.0
  million made to ICE in settlement of the investigation and associated legal costs, as well as for claimed lost profits as a result
  of the investigation.
  On February 4, 2015, without admitting
  to any liability on the part of Equus, we entered into a settlement agreement with Atrium and its associated companies. Pursuant
  to the settlement agreement and in view of the estimated costs of protracted litigation and the associated disruption to the operations
  of the Fund, we agreed to pay $500,000, in complete settlement of the lawsuit, as being in the best interests of the Fund and its
  shareholders. This amount was accrued as of December 31, 2014. The settlement payment was made on February 6, 2015. Atrium filed
  a motion to dismiss the lawsuit with prejudice on February 4, 2015.
  From time to time, the Fund is also
  a party to certain proceedings incidental to the normal course of our business including the enforcement of our rights under contracts
  with our portfolio companies. While the outcome of these legal proceedings cannot at this time be predicted with certainty, we
  do not expect that these proceedings will have a material effect upon the Fund's financial condition or results of operations.
  Item 1A. Risk Factors
  There have been no material changes
  in the Fund's risk factors from the disclosure set forth in the Annual Report on Form 10-K for the year ended December 31,
  2015.
  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.
  34
  Index
  Item 6. Exhibits
  3.
  Articles of Incorporation and by-laws
  (a)
  Restated Certificate of Incorporation of the Fund, as amended. [Incorporated by reference to Exhibit 3(a) to Registrant's Annual Report on Form 10-K for the year ended December 31, 2007]
  (b)
  Certificate of Merger dated June 30, 1993, between the Fund and Equus Investments Incorporated [Incorporated by reference to Exhibit 3(c) to Registrant's Annual Report on Form 10-K for the year ended December 31, 2007]
  (c)
  Amended and Restated Bylaws of the Fund. [Incorporated by reference to Exhibit 3(b) to Registrant's Current Report on Form 8-K filed on June 30, 2014.]
  10.
  Material Contracts.
  (a)
  Safekeeping Agreement between the Fund and Amegy Bank dated August 16, 2008. [Incorporated by reference to Exhibit 10(c) to Registrant's Annual Report on Form 10-K for the year ended December 31, 2008.]
  (b)
  Form of Indemnification Agreement between the Fund and its directors and certain officers. [Incorporated by reference to Exhibit 10(d) to Registrant's Annual Report on Form 10-K for the year ended December 31, 2011.]
  (c)
  Form of Release Agreement between the Fund and certain of its officers and former officers. [Incorporated by reference to Exhibit 10(h) to Registrant's Annual Report on Form 10-K for the year ended December 31, 2004.]
  (d)
  Code of Ethics of the Fund (Rule 17j-1) [Incorporated by reference to Exhibit 10(f) to Registrant's Annual Report on Form 10-K for the year ended December 31, 2009.]
  (e)
  Share Exchange Agreement between the Fund and MVC Capital, Inc., dated May 14, 2014. [Incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K, filed on May 15, 2014.]
  31.
  Rule 13a-14(a)/15d-14(a) Certifications
  1.
  Certification by Chief Executive Officer
  2.
  Certification by Chief Financial Officer
  32.
  Section 1350 Certifications
  1.
  Certification by Chief Executive Officer
  2.
  Certification by Chief Financial Officer
  35
  Index
  SIGNATURE
  Pursuant to the requirements of Section
  13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has caused this report to be signed by the undersigned, thereunto
  duly authorized.
  Date: May 11, 2016
  EQUUS TOTAL RETURN, INC.
  /s/ John A. Hardy
  John A. Hardy
  Chief Executive Officer
  36