Equus Total Return Inc SEC Filings

Equus Total Return, Inc. filed an amended quarterly report for the period ended June 30, 2022 solely to add required Inline XBRL tags; the underlying financial information is unchanged from the original filing.

As of June 30, 2022, Equus reported total assets of $41.5 million and net assets of $37.2 million, resulting in a net asset value of $2.75 per share, up from $2.69 at December 31, 2021. Cash and cash equivalents were $21.6 million, and the fair value of its sole control investment, Equus Energy, LLC, increased to $15.5 million from $13.0 million, driving $2.5 million of unrealized appreciation in the first half of 2022.

For the six months ended June 30, 2022, Equus recorded total expenses of $1.7 million, a net investment loss of $1.7 million, and a net increase in net assets from operations of $0.8 million, reflecting the strong valuation gains on its energy investment offsetting operating losses.

Equus Total Return, Inc. filed an amended quarterly report for the period ended September 30, 2022 solely to add required Inline XBRL tagging, with no changes to the previously reported financial results.

At September 30, 2022, total assets were $40.6 million and net assets were $36.2 million, or $2.68 net asset value per share, little changed from year-end 2021. The portfolio is highly concentrated: the sole control investment, Equus Energy, LLC, was valued at $15.5 million, up from $13.0 million, while cash and cash equivalents totaled $20.1 million. For the nine months, a net investment loss of $2.6 million was largely offset by $2.5 million of unrealized appreciation on Equus Energy, resulting in a small net decrease in net assets from operations of $0.1 million. Management highlights concentration and energy sector risks, and Equus Energy’s financials include a going-concern warning.

Equus Total Return, Inc. filed an amended annual report for the year ended December 31, 2022 to add required Inline XBRL data, with no other changes to the original filing. Equus is a closed-end management investment company that has elected business development company and regulated investment company status, investing primarily in debt and equity of small and middle market companies. At a June 30, 2022 share price of $2.61, the market value of common stock held by non‑affiliates was $16,167,306, and there were 13,518,146 common shares outstanding as of March 28, 2023; net asset value per share was $2.61 as of December 31, 2022.

The company highlights significant volatility in oil and gas prices affecting its Equus Energy holding, and a shareholder authorization (now expired) that allowed the board to withdraw its BDC election in connection with a potential transformation into an operating company or permanent capital vehicle. Equus details its total return investment strategy, concentration in a limited number of largely illiquid private investments, use-of-leverage constraints under the 1940 Act, prior net investment losses including a $3.6 million loss in 2022, and extensive risks tied to valuation uncertainty, competition, external financing needs, and the uncertain timing and outcome of any transformative transaction.

Equus Total Return, Inc. filed an amended quarterly report for the period ended March 31, 2023 solely to add required Inline XBRL tags; the underlying financial results are unchanged. The fund reported a net decrease in net assets from operations of $1.1 million, or $(0.08) per share, driven by operating expenses of $1.1 million against minimal investment income and no new unrealized gains.

Total assets were $44.5 million and net assets $34.1 million, with net asset value per share slipping from $2.61 to $2.52. About $15.7 million of net assets were invested in a single control investment, Equus Energy, LLC, while cash and cash equivalents were $17.7 million$10.0 million margin loan at quarter-end, collateralized by U.S. Treasury bills, which were repaid after maturity in April 2023. The portfolio remains highly concentrated in the energy sector through Equus Energy, where continued price volatility and limited capital spending contribute to operating losses.

Equus Total Return, Inc. filed an amended quarterly report solely to add the required Inline XBRL tagging, with no changes to the previously reported June 30, 2023 results.

For the three months ended June 30, 2023, the company reported a net increase in net assets resulting from operations of $5,945 (in thousands), or $0.44 per share, mainly from $6,800 (in thousands) of unrealized appreciation on control investments in its energy portfolio. Net asset value rose to $40,051 (in thousands), or $2.96 per share, from $35,237 (in thousands), or $2.61 per share, at December 31, 2022.

Despite these valuation gains, Equus posted a net investment loss of $864 (in thousands) for the quarter and used $9,738 (in thousands) of cash in operating activities over the first six months of 2023. As of June 30, 2023, it held cash and restricted cash of $16,537 (in thousands), control investments at fair value of $23,200 (in thousands) entirely in the energy sector, and $12,989 (in thousands) of U.S. Treasury bills securing a $12,989 (in thousands) margin loan used to help maintain its regulated investment company status.

Equus Total Return, Inc. reports much stronger results for the nine months ended September 30, 2023, in an amended quarterly report that only adds Inline XBRL tagging. Net assets rose to $47.1 million, lifting net asset value to $3.49 per share from $2.61 at December 31, 2022, with 13,518,146 common shares outstanding.

The Fund generated a net increase in net assets from operations of $7.1 million in Q3 and $11.9 million year‑to‑date, driven mainly by $8.2 million in Q3 and $15.0 million year‑to‑date unrealized appreciation on control investments, including its new energy subsidiary Morgan E&P, LLC. Control investments at fair value reached $33.1 million, complemented by $18.0 million in U.S. Treasury bills used as temporary cash investments. The Fund remains focused on energy, with those holdings representing about 70% of net asset value, and it used margin borrowings collateralized by Treasuries to maintain its regulated investment company status.

Equus Total Return, Inc. filed an Amendment No. 1 to its annual report for the year ended December 31, 2023 solely to add required Inline XBRL tagging that was omitted previously; all other disclosures from the original filing remain unchanged and continue to speak as of their original date.

Equus is a closed-end management investment company that has elected business development company (BDC) status and operates as a regulated investment company (RIC), investing mainly in debt and equity of small and middle-market companies, with an increasing focus on energy assets through holdings such as Equus Energy and Morgan E&P. As of June 30, 2023, common stock held by non-affiliates had an aggregate market value of $9,518,843 at $1.52 per share, and there were 13,586,173 common shares outstanding as of March 28, 2024. Net asset value per share was $3.55 as of December 31, 2023, and the company reported a $4.0 million net investment loss for 2023, highlighting ongoing challenges even as management evaluates a possible future transformation from a BDC into an operating company or permanent capital vehicle.

Equus Total Return, Inc. filed an amended Q1 2024 report solely to add the required Inline XBRL tagging; the underlying quarterly results remain unchanged. Net assets decreased to $45,892 (in thousands) from $48,287 (in thousands), and net asset value per share declined to $3.38 from $3.55, driven by a net investment loss of $1,090 (in thousands) and a total decrease in net assets from operations of $2,395 (in thousands), or $0.17 per share.

At March 31, 2024, the portfolio held $41,750 (in thousands) in control investments and $52,970 (in thousands) in U.S. Treasury bills, with energy investments representing 91.0% of net assets. The fund used a margin account, borrowing $53.0 million secured by $53.5 million of restricted cash and temporary cash investments in U.S. Treasury bills to help maintain its regulated investment company status. The fair value of Morgan E&P, LLC equity fell by $1.35 million to $21.25 million, while Equus Energy, LLC remained at $10.0 million; Equus Energy faces going‑concern risks, but the fund has committed financial support for at least one year and one day beyond the report date.

Equus Total Return, Inc. reports Q2 2024 results showing higher net asset value but continued operating losses and tight liquidity. Net assets were $49.8 million as of June 30, 2024, and net asset value per share rose to $3.66 from $3.55 at year-end, helped by unrealized gains on energy investments, including a $4.75 million increase in the fair value of Morgan E&P, LLC during the quarter. For Q2, total investment income was $331 thousand, expenses were $1,211 thousand, and net unrealized appreciation of portfolio securities was $4,750 thousand, resulting in a $3,900 thousand increase in net assets from operations.

The portfolio is highly concentrated in two energy holdings that represented 93.4% of net asset value at fair value as of June 30, 2024. Equus had cash and cash equivalents of $1.9 million and restricted cash and U.S. Treasury bills of $54.5 million, funded by margin borrowings of $54.0 million to maintain regulated investment company status. Management states that current cash on hand and projected cash flows are not sufficient to fund operating activities and discloses that substantial doubt exists about the company’s ability to continue as a going concern.