FORM 10-K

 UNITED STATES

 SECURITIES AND EXCHANGE COMMISSION

 Washington, D.C. 20549

 FORM 10-K

 (Mark One)

 ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For the year ended December 31, 2023

 Or

 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For the transition period from to

 Commission File Number 814-00098

 (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)

 (713) 529-0900

 Registrant's telephone number, including area
code:

 Securities registered pursuant to Section
12(b) of the Act:

 Title of each class

 Trading Symbol

 Name of each exchange

 on which registered

 Common Stock

 EQS

 New York Stock Exchange

 Securities registered pursuant to Section
12(g) of the Act: None

by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes
No

by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes
No

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

by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in the definitive proxy or information statement incorporated by reference in Part III of
this 10-K.

 Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of "large
accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

 Large accelerated filer

 Accelerated filer

 Non-accelerated filer

 Smaller reporting company

 (Do not check if a smaller reporting company)

 Emerging growth company

by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes
No

 Approximate aggregate market value of common
stock held by non-affiliates of the registrant: $9,518,843 computed on the basis of $1.52 per share, the closing price of the registrant's
common stock on the New York Stock Exchange on June 30, 2023. For purposes of calculating this amount only, all directors and executive
officers of the registrant have been treated as affiliates. There were 13,586,173 shares of the registrant's common stock, $.001
par value, outstanding as of March 28, 2024. The net asset value of a share of the Registrant
as of December 31, 2023 was $3.55.

by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data
File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or such shorter period
that the registrant was required to submit and post such files).

by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of
its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public
accounting firm that prepared or issued its audit report.

 If
securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements.

by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation
received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b).

 Portions of the Proxy Statement (to be filed)
for the 2024 Annual Shareholder's meeting are incorporated by reference in Parts II and III.

 Page

 Item 1

 Business

 Item 1A

 Risk Factors

 Item 1B

 Unresolved Staff Comments

 Item 1C

 Cybersecurity

 Item 2

 Properties

 Item 3

 Legal Proceedings

 Item 4

 Mine Safety Disclosures

 Item 5

 Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

 Item 6

 [Reserved]

 Item 7

 Management's Discussion and Analysis of Financial Condition and Results of Operations

 Item 7A

 Quantitative and Qualitative Information About Market Risk

 Item 8

 Financial Statements and Supplementary Data

 Item 9

 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

 Item 9A

 Controls and Procedures

 Item 9B

 Other Information

 Item 9C

 Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

 Item 10

 Directors, Executive Officers and Corporate Governance

 Item 11

 Executive Compensation

 Item 12

 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 Item 13

 Certain Relationships and Related Transactions, and Director Independence

 Item 14

 Principal Accountant Fees and Services

 Item 15

 Exhibits and Financial Statement Schedules

 Item 16

 Form 10-K Summary

 Item 1. Business

 Equus Total Return,
Inc. ("we," "us," "our," "Equus" the "Company" or 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. 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 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 bonds, subordinated 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 a 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.

 Equus is a closed-end
management investment company that has elected to be treated as a business development company ("BDC") under the Investment
Company Act of 1940 ("1940 Act"). In order to remain a BDC, we must meet certain specified requirements under the 1940 Act,
including investing at least 70% of our assets in eligible portfolio companies and limiting the amount of leverage we incur. Equus is
also a regulated investment company ("RIC") under Subchapter M of the U.S. Internal Revenue Code of 1986. As such, we are
not required to pay corporate-level income tax on the Fund's investment income. So long as we remain a BDC, we intend, insofar as
reasonably possible, to maintain our RIC status, which requires that we qualify annually as a RIC by meeting certain specified requirements.
For a discussion of these requirements necessary to maintain our status as a BDC and as a RIC, please see " Business Development
Company Requirements " and " Regulated Investment Company Tax Status," respectively.

 Our
principal office is located at 700 Louisiana St., 48 th Floor, Houston, Texas, 77002, and
the telephone number is 1-800-856-0901. Our corporate website is located at www.equuscap.com. We make available free of charge
on our website our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to those
reports as soon as reasonably practicable after such material is electronically filed or furnished to the Securities and Exchange Commission
("SEC"). Our shares are traded on The New York Stock Exchange ("NYSE") under the ticker symbol "EQS".

 Significant Developments

 Impact of Geopolitical
Events on the Oil and Gas Sector. The substantial volatility in world markets has been prominent in the oil and gas sector, with WTI
oil prices reaching a multi-year high of $130.00 per barrel in March 2022, and gas prices also reaching a multi-year high in mid-year,
both due in part to increased demand, the reluctance of U.S. producers and OPEC nations to generate additional supply, and the conflict
in Ukraine. Beginning in the second and third quarters of 2022, oil prices retreated substantially before stabilizing in the second quarter
of 2023, increasing again in the third quarter of 2023, and largely returning to second quarter 2023 prices by year-end. During the third
quarter of 2023, oil prices increased from $70.64 to $90.79, and thereafter decreased to $71.65 by the end of the fourth quarter of 2023.
Gas prices were volatile in the first half of 2023 before stabilizing in the second half of the year. During the third quarter of 2023,
gas prices increased from $2.48 to $2.68 before decreasing to $2.58 by the end of the fourth quarter of 2023. Recent oil price stability
has been a significant factor in increased consolidation activity in the Permian Basin where Equus Energy holds most of its development
rights, as well as in the Williston Basin region in North Dakota where Morgan E&P, LLC holds its development rights.

 Authorization
to Withdraw BDC Election. Holders of a majority of our outstanding common stock have previously approved our cessation as a BDC under
the 1940 Act and have authorized our Board to cause the Fund's withdrawal of its election to be classified as a BDC, effective as
of a date designated by the Board and our Chief Executive Officer. Although this authorization has since expired, we expect to receive
an additional authorization from our stockholders in the future. This authorization is a consequence of our expressed intent to transform
Equus into an operating company or a permanent capital vehicle. Notwithstanding any such authorization to withdraw our BDC election, we
will not submit any such withdrawal unless and until Equus has entered into a definitive agreement to effect a transformative transaction.
Further, even if we are again authorized to withdraw our election as a BDC, we will require a subsequent affirmative vote from holders
of a majority of our outstanding voting shares to enter into any such definitive agreement or change the nature of our business. While
we are presently evaluating various opportunities that could enable us to accomplish this transformation, we cannot assure you that we
will be able to do so within any particular time period or at all. Moreover, we cannot assure you that the terms of any such transformative
transaction would be acceptable to us.

 Outlook. Our
Board and management of the Fund ("Management") continue to believe that current market conditions and recent portfolio performance
dictate the need to pursue a more active role in the management of our remaining investments and to seek liquidity events at the appropriate
time to protect and enhance shareholder value. These activities include continuous monitoring and intensive reviews of portfolio company
performance and expectations, providing follow-on capital when necessary, and the exploration of liquidity events for certain portfolio
companies to position the Fund to maximize investment returns and, to the extent we intend to remain a BDC, actively pursuing suitable
new investments for the Fund.

 Investment Objective

 To the extent we
remain a BDC and do not complete the transformation of Equus into an operating company as described above, our investment objective is
to maximize the total return to our stockholders in the form of current investment income and long-term capital gains by investing in
the debt and equity securities of small and middle market capitalization companies that are generally not publicly traded at the time
of our investment. As a result of our endeavors in the energy sector, we may also seek to purchase or develop working interests, mineral
interests, and revenue leasehold interests in oil and gas properties, although we remain open to exploring investment opportunities in
a variety of other sectors. Should we continue to grow and develop Equus as a closed-end fund or permanent capital vehicle instead of
an operating company, we intend to include investments in progressively larger enterprises.

 Investment Strategy

 Our investment strategy
attempts to strike a balance between the potential for gain and the risk of loss. With respect to capital appreciation, Equus is a "growth-at-reasonable-price"
investor that seeks to identify and acquire securities that meet our criteria for selling at reasonable prices. We give priority to cash
producing investments wherein we invest principally in debt or preferred equity financing with the objective of generating regular interest
and dividend income back to the Fund. 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 a financing. Given market conditions over the past several years and the
performance of our portfolio, our Management and Board believe it prudent to continue to review alternatives to refine and further clarify
the current strategies.

 Investment Criteria

 Consistent with our
investment objective and strategy, our Management evaluates prospective investments based upon the criteria set forth below. We may modify
some or all of these criteria from time to time.

 Management Competency
and Ownership. We seek to invest in companies with experienced management teams who have demonstrated a track record of successful
performance. Further, we desire to invest in companies with significant management ownership. We believe that significant management ownership
in small capitalization and middle market companies provides appropriate incentives and an alignment of interests for management to maximize
shareholder value. In addition, we will seek to design compensation and incentive arrangements that align the interests of the portfolio
company's management with those of the Fund to enhance potential returns.

 Substantial Target
Market. We desire to focus on companies whose products or services have favorable growth potential and strong competitive positions
in their respective markets. These positions may be as leadership positions within a given industry or market niche positions in which
the product or service has a demonstrated competitive advantage. The market in which a potential portfolio company operates should either
be sizeable or have significant growth potential.

 History of Profitability
and Favorable Growth Potential. We target companies that have demonstrated a history of profitability or a reasonable expectation
of a return to profitability in the near future.

 Ability to Provide
Regular Cash Interest and Distributions. We look for companies with strong cash flow models sufficient to provide regular and consistent
interest and/or preferred dividend payments.

 Management Assistance
and Substantial Equity. Given the requirements of a BDC under the 1940 Act, we seek to invest in companies that will permit substantial
managerial assistance, including representation on the board of directors of the company or its equivalent. With regard to equity investments,
we desire to obtain a substantial investment position in portfolio companies. This position may be as a minority shareholder with certain
contractual rights and powers, or as a majority shareholder, and should otherwise allow us to have substantive input on the direction
and strategies of the portfolio company.

 Plausible Exit
and Potential for Appreciation. Prior to investing in a portfolio company, we will seek to analyze potential exit strategies and pursue
those investments with such strategies as may be achievable.

 Investment Operations

 Our investment operations
consist principally of the following basic activities:

 Investment Selection.
 Historically, many of our investment opportunities have come from Management, members of our Board, other private equity investors,
direct approaches from prospective portfolio companies and referrals from investment banks, business brokers, commercial, regional and
local banks, attorneys, accountants and other members of the financial community. Subject to the approval of our Board, we may compensate
certain referrals with finder's fees to the extent permissible under applicable law and consistent with industry practice.

 Due Diligence.
 Once a potential investment is identified, we undertake a due diligence review using information provided by the prospective portfolio
company and publicly available information. Management may also seek input from consultants, investment bankers and other knowledgeable
sources. The due diligence review will typically include, but is not limited to:

 •

 Review of historical and prospective financial information, including audits and budgets;

 •

 On-site visits;

 •

 Interviews with management, employees, customers and vendors;

 •

 Review of existing loan documents and credit arrangements, if any;

 •

 Background checks on members of management; and

 •

 Research relating to the company, its management, industry, markets, products and services and competitors.

 Structuring Investments. We typically
negotiate investments in private transactions directly with the owner or issuer of the securities acquired. Management structures the
terms of a proposed investment, including the purchase price, the type of security to be purchased and our future involvement in the portfolio
company's business. We seek to structure the terms of the investment to provide for the capital needs of the portfolio company while
maximizing our opportunities for current income and capital appreciation. In addition, we may invest with other co-investors including
private equity firms, business development companies, small business investment companies, venture capital groups, institutional investors
and individual investors.

 Providing Management Assistance and
Monitoring of Investments. Successful private equity investments typically require active monitoring of, and significant participation
in, major business decisions of portfolio companies. In several cases, officers and directors of the Fund serve as members of the governing
boards of portfolio companies. Such management assistance is required of a BDC under the 1940 Act. We seek to provide guidance and management
assistance with respect to such matters as capital structure, acquisitions, budgets, profit goals, corporate strategy, portfolio management
and potential sale of the company or other exit strategies. In connection with their service as directors of portfolio companies, officers
and directors of the Fund may receive and retain directors' fees or reimbursement for expenses incurred, and may participate in
incentive stock option plans for non-employee directors, if any. When necessary and as requested by any portfolio company, Management,
on behalf of the Fund, may also assign staff professionals with financial or management expertise to assist portfolio company management.

 Follow-On Investments

 Following our initial
investment, a portfolio company may request that we make follow-on investments by providing additional equity or loans needed to fully
implement its business plans to develop a new line of business or to recover from unexpected business problems or other purposes. In addition,
follow-on investments may be made to exercise warrants or other preferential rights granted to the Fund or otherwise to increase our position
in a portfolio company. We may make follow-on investments in portfolio companies from cash on hand or borrow all or a portion of the funds
required. If we are unable to make follow-on investments due to lack of available capital, the portfolio company in need of the investment
may be negatively impacted, we may be required to subordinate our debt interest in the portfolio company to a new lender, and/or our equity
interest in the portfolio company may be diluted if outside equity capital is required.

 Disposition of Investments

 The method and timing
of the disposition of our investments in portfolio companies are critical to our ability to realize capital gains and minimize capital
losses. We may dispose of our portfolio securities through a variety of transactions, including recapitalizations, refinancings, management
buyouts, repayments from cash flow, acquisitions of portfolio companies by a third party and outright sales of the Fund's securities
in a portfolio company. In addition, under certain circumstances we may distribute our portfolio securities in-kind to our stockholders.
In structuring our investments, we endeavor to reach an understanding with the management of the prospective portfolio company as to the
appropriate method and timing of the disposition of the investment. In some cases, we seek registration rights for our portfolio securities
at the time of investment which typically provide that the portfolio company will bear the cost of registration. To the extent not paid
by the portfolio company, the Fund typically bears the costs of disposing of our portfolio investments.

 Current Portfolio Companies

 For a description
of our current portfolio company investments, see " Management's Discussion and Analysis of Financial Condition and Results
of Operations–Portfolio Securities."

 Valuation

 On a quarterly basis,
Management values our portfolio investments. These valuations are subject to the approval and adoption of the Board. Valuations of our
portfolio securities at "fair value" are performed in accordance with accounting principles generally accepted in the United
States ("GAAP").

 The fair value of
investments for which no market exists (which includes most of our investments) is determined through procedures established in good faith
by the Board. As a general principle, the current "fair value" of an investment is the amount the Fund might reasonably expect
to receive upon its sale in an orderly manner. There are a range of values that are reasonable for such investments at any particular
time.

 We base our adjustments
to fair value 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 inherently subjective, and our estimate of fair value may differ materially from amounts
actually received upon the disposition of our 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 the fair value will not exceed
the cost of the investment; however, we perform a yield analysis to determine if a debt security has been impaired.

 Our Management may
engage independent, third-party valuation firms to conduct independent appraisals and review Management's preliminary valuations
of each privately-held investment in order to make their own independent assessment. Any third- party valuation data would be considered
as one of many factors in a fair value determination. Management would then present its fair value recommendations to the Audit Committee
of the Board of Directors for review. Following review and any adjustments required thereby, the Audit Committee would, in turn, recommend
the fair values for all of the Fund's portfolio investments to the Board of Directors for final approval.

 To the extent that
market quotations are readily available for our investments and such investments are freely transferable, we value them at the closing
market price on the date of valuation. For securities which are of the same class as a class of public securities but are restricted from
free trading (such as Rule 144 stock), we establish our valuation by discounting the closing market price to reflect the estimated impact
of illiquidity caused by such restrictions. We generally hold investments in debt securities to maturity. Accordingly, we determine the
fair value of debt securities on the basis of the terms of the debt securities and the financial condition of the issuer. We value certificates
of deposit at their face value, plus interest accrued to the date of valuation.

 Our Board reviews
the valuation policies on a quarterly basis to determine their appropriateness and reserves the right to hire and, from time to time,
utilizes independent valuation firms to review Management's valuation methodology or to conduct an independent valuation.

 Competition

 We compete with a
large number of public and private equity and mezzanine funds and other financing sources, including traditional financial services companies
such as finance companies and commercial banks. Many of our competitors are substantially larger and have considerably greater financial,
technical and marketing resources. Our competitors may have a lower cost of funds and many have access to funding sources not available
to us. In addition, certain of our competitors may have higher risk tolerances or different risk assessments, which could allow them to
consider a wider variety of investments and establish more relationships and build their respective market shares. In addition, many of
our competitors are not subject to the regulatory restrictions imposed by the 1940 Act imposes on BDCs.

 We cannot assure
you that the competitive pressures we face will not have a material adverse effect on our business, financial condition and results of
operations. In addition, because of this competition, we may not be able to take advantage of attractive investment opportunities and
may not be able to identify and make investments that satisfy our investment objectives or meet our investment goals.

 Properties

 Our
principal executive offices are located at 700 Louisiana St., 48 th Floor, Houston, Texas
77002. Should we remain a BDC and not transform into an operating company or a permanent capital vehicle, we believe our office facilities
are suitable and adequate for our operations as currently conducted and contemplated.

 Business Development Company Requirements

 Qualifying Assets.
As a BDC, we may not acquire any asset other than qualifying assets, as defined by the 1940 Act, unless, at the time the acquisition is
made, the value of our qualifying assets represents at least 70% of the value of our total assets. The principal categories of qualifying
assets relevant to our business are the following:

 Securities purchased in transactions not involving any public offering from an issuer that is an eligible portfolio company. An eligible portfolio company is any issuer that (a) is organized and has its principal place of business in the United States, (b) is not an investment company other than a small business investment company wholly-owned by the BDC, and (c) either (i) (A) does not have any class of securities with respect to which a broker or dealer may extend margin credit, (B) is controlled by the BDC either singly or as part of a group and an affiliated person of the BDC is a member of the issuer's board of directors, or (C) has total assets of not more than $4 million and capital and surplus of at least $2 million, or (ii) does not have any class of securities listed on a national securities exchange, unless the total market capitalization of such issuer does not exceed $250 million. Qualifying assets may also include follow-on investments in a company that was a particular type of eligible portfolio company at the time of the BDC's initial investment, but subsequently did not meet the definition;

 Securities received in exchange for or distributed with respect to securities described above, or pursuant to the exercise of options, warrants or rights relating to such securities; and

 Cash, cash items, government securities, or high quality debt securities maturing in one year or less from the time of investment.

 To include certain
securities above as qualifying assets for the purpose of the 70% test, a BDC must make available to the issuer of those securities significant
managerial assistance, such as providing significant guidance and counsel concerning the management, operations, or business objectives
and policies of a portfolio company. We offer to provide significant managerial assistance to each of our portfolio companies.

 We may not change
the nature of our business so as to cease to be, or withdraw our election as, a BDC unless authorized by vote of the holders of the majority
of our outstanding voting securities, as defined in the 1940 Act. As noted above, we have previously received this authorization from
our shareholders to withdraw our BDC election and, although this authorization has expired, we expect to receive an additional authorization
by our stockholders in the future. This authorization was a consequence of our plan to effect a transformation of Equus by: (i) acquiring
or merging with an operating company based in the energy, natural resources, technology, or financial services sectors, and (ii) terminating
the Fund's election to be classified as a BDC under the 1940 Act. Notwithstanding any future authorization to withdraw our BDC election,
we will also require a separate affirmative vote of the holders of a majority of our outstanding voting securities to consummate a transformation
of Equus and change the nature of our business (see " Significant Developments-Authorization to Withdraw BDC Election"
 above).

 Temporary Investments.
 Pending investment in portfolio companies, we invest our available funds in interest-bearing bank accounts, money market mutual funds,
U.S. Treasury securities and/or certificates of deposit with maturities of less than one year (collectively, "Temporary Investments").
Temporary Investments may also include commercial paper (rated or unrated) and other short-term securities. Temporary Investments constituting
cash, cash items, securities issued or guaranteed by the U.S. Treasury or U.S. Government agencies and high quality debt securities (commercial
paper rated in the two highest rating categories by Moody's Investor Services, Inc. or Standard & Poor's Corporation,
or if not rated, issued by a company having an outstanding debt issue so rated, with maturities of less than one year at the time of investment)
will qualify for determining whether we have 70% of our total assets invested in qualifying assets or in qualified Temporary Investments
for purposes of the BDC provisions of the 1940 Act.

 Leverage. We
are permitted by the 1940 Act, under specified conditions, to issue multiple classes of senior debt and a single class of preferred stock
senior to the common stock if our asset coverage, as defined in the 1940 Act, is at least 150% after the issuance of the debt or the senior
stockholders' interests. In addition, provisions must be made to prohibit any distribution to common stockholders or the repurchase
of any shares unless the asset coverage ratio is at least 150% at the time of the distribution or repurchase.

 Fund Share Sales
Below Net Asset Value. To the extent we remain a BDC, we generally may sell our common stock at a price that is below the prevailing
net asset value per share only upon the approval of the policy by stockholders holding a majority of our issued shares, including a majority
of shares held by nonaffiliated stockholders. We may, in accordance with certain conditions established by the SEC, sell shares below
net asset value in connection with the distribution of rights to all of our stockholders. We may also issue shares at less than net asset
value in payment of dividends to existing stockholders.

 No Redemption
Rights. Since we are a closed-end BDC, our stockholders have no right to present their shares to the Fund for redemption. Recognizing
the possibility that our shares might trade at a discount, our Board has determined that it would be in the best interest of our stockholders
for the Fund to be authorized to attempt to reduce or eliminate a market value discount from net asset value. Accordingly, from time to
time we may, but are not required to, repurchase our shares (including by means of tender offers) to attempt to reduce or eliminate any
discount or to increase the net asset value of our shares.

 Affiliated Transactions.
Many of the transactions involving the Fund and its affiliates (as well as affiliates of such affiliates) require the prior approval of
a majority of the independent directors and a majority of the independent directors having no financial interest in the transactions.
However, certain transactions involving closely affiliated persons of the Fund require the prior approval of the SEC.

 Regulated Investment Company Tax Status

 As a BDC, we have
historically operated to qualify as a RIC under Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"),
although RIC qualification is not a prerequisite to qualifying as a BDC. If we qualify as a RIC and annually distribute to our stockholders
in a timely manner at least 90% of our investment company taxable income, we will not be subject to federal income tax on the portion
of our taxable income and capital gains we distribute to our stockholders. Taxable income generally differs from net income as defined
by accounting principles generally accepted in the United States due to temporary and permanent timing differences in the recognition
of income and expenses, returns of capital and net unrealized appreciation or depreciation.

 While we are not
required to qualify as a RIC to maintain our BDC status, we must continue to qualify as an investment company to maintain our RIC status,
among other requirements. To maintain our RIC status, we must (i) continue to qualify as an investment company; (ii) distribute to our
stockholders in a timely manner at least 90% of our investment company taxable income, as defined by the Code; (iii) derive in each taxable
year at least 90% of our gross investment company income from dividends, interest, payments with respect to securities loans, gains from
the sale of stock or other securities or other income derived with respect to our business of investing in such stock or securities as
defined by the Code; and (iv) meet investment diversification requirements. The diversification requirements generally require us, at
the end of each quarter of the taxable year, to have (a) at least 50% of the value of our assets consist of cash, cash items, government
securities, securities of other RICs and other securities if such other securities of any one issuer do not represent more than 5% of
our assets and 10% of the outstanding voting securities of the issuer and (b) no more than 25% of the value of our assets invested in
the securities of one issuer (other than U.S. government securities and securities of other RICs), or of two or more issuers that are
controlled by us and are engaged in the same or similar or related trades or businesses.

 In addition, should
we choose not to distribute at least 98.2% of our net income consisting of capital gains for each one-year period ending on October 31,
we will be subject to a 4.0% nondeductible Federal exercise tax. For the year ended December 31, 2021, we incurred a capital gain related
to the settlement of the escrow receivable in connection with the sale of our interest in PalletOne, Inc. that was not fully offset by
our capital loss carryforward. We chose not to distribute this small amount for the current year and pay the associated tax. For the year
ended December 31, 2021, we accrued a $38,000 in corporate level income and excise tax in lieu of effecting a distribution of the net
capital gain. This tax was paid in March 2022.

 If we fail to satisfy
the 90% distribution requirement or otherwise fail to qualify as a RIC in any taxable year, we will be subject to tax in such year on
all of our taxable income, regardless of whether we make any distribution to our stockholders. In addition, in that case, all of our distributions
to our stockholders will be characterized as ordinary income (to the extent of our current and accumulated earnings and profits). We have
distributed and currently intend to distribute sufficient dividends to eliminate our investment company taxable income; however, none
have been necessary in recent years.

 Custodian

 We act as the custodian
of our securities to the extent permitted under the 1940 Act and are subject to the restrictions imposed on self- custodians by the 1940
Act and the rules and regulations thereunder. We have also entered into an agreement with Amegy Bank with respect to the safekeeping of
our securities. The principal business office of Amegy Bank is 1717 West Loop South, Houston, Texas 77027.

 Transfer and Disbursing Agent

 We employ Equiniti
Group as our transfer agent to record transfers of our shares, maintain proxy records and to process distributions. The principal business
office of our transfer agent is 6201 15th Avenue, 2nd Floor, Brooklyn, NY 11219.

 Certifications

 In June 2023, pursuant
to Section 303A.12(a) of the NYSE Listed Company Manual, we submitted to the NYSE an unqualified certification of our Chief Executive
Officer. In addition, certifications by our Chief Executive Officer and Chief Financial Officer have been filed as exhibits to this annual
report on Form 10-K as required by the Securities Exchange Act of 1934, as amended, and the Sarbanes-Oxley Act of 2002.

 Forward-Looking
Statements

 All statements
contained herein that are not historical facts including, but not limited to, statements regarding anticipated activity are "forward-looking
statements" within the meaning of the federal securities laws, involve a number of risks and uncertainties, and are based on the
beliefs and assumptions of Management, based on information currently available to Management. Actual results may differ materially. In
some cases, readers can identify forward-looking statements by words such as "may," "will," "should,"
"expect," "objective," "plan," "intend," "anticipate," "believe,"
"Management believes," "estimate," "predict," "project," "potential," "forecast,"
"continue," "strategy," or "position" or the negative of such terms or other variations of them or
by comparable terminology. In particular, statements, express or implied, concerning future actions, conditions, or events, future operating
results, or the ability to generate sales, income, or cash flow are forward-looking statements.

 Among the factors
that could cause actual results to differ materially are the following: (i) changes in the economic conditions in which we operate, including
changes related to the evolving impact of the coronavirus, which might negatively impacting our financial resources; (ii) the substantially
greater resources of certain of our competitors than the Fund, potentially reducing the number of suitable investment opportunities offered
or reducing the yield necessary to consummate the investment; (iii) the uncertainty regarding the value of our privately held securities
that require a good faith estimate of fair value for which a change in estimate could affect the Fund's net asset value; (iv) the
illiquidity of our investments in securities of privately held companies which could affect our ability to realize a gain; (v) the default
of one or more of our portfolio companies on their loans or the failure of such companies to provide any returns on our investments which
could affect the Fund's operating results; (vi) our dependence on external financing to grow our business; (vii) our ability to
retain key management personnel; (viii) an economic downturn or recession that could impair our portfolio companies and therefore harm
our operating results; (iv) our borrowing arrangements, which could impose certain restrictions; (x) changes in interest rates that may
affect our cost of capital and net operating income; (xi) our inability to incur additional indebtedness unless the Fund maintains an
asset coverage of at least 150%, which may affect returns to our stockholders; (xii) the possible failure of the Fund to continue to qualify
for our pass-through treatment as a RIC which could have an effect on stockholder returns; (xiii) the volatility of the price of our common
stock; (xiv) general business and economic conditions and other risk factors described in its reports filed from time to time with the
SEC; and (xv) risks related to our plan to transform Equus into an operating company or a permanent capital vehicle. We caution readers
not to place undue reliance on any such forward-looking statements, which statements are made pursuant to the Private Securities Litigation
Reform Act of 1995 and, as such, speak only as of the date made.

 Item 1A. Risk
Factors

 An investment in
our securities involves certain risks relating to our structure and investment objectives. The risks and uncertainties described below
are not the only ones facing Equus. You should carefully consider these risks, together with all of the other information included in
our annual report on Form 10-K, including our financial statements and the related notes thereto.

 Additional risks
and uncertainties not presently known to us, or not presently deemed material by us, may also impair our operations and performance.

 If any of the following
risks actually occur, our business, financial condition or results of operations could be materially adversely affected. If that happens,
the trading price of our common stock could decline and you may lose all or part of your investment.

 Risks Related to Our Investments

in small capitalization companies present certain risks that may not exist to the same degree as investments in larger, more established
companies and will cause such investments to be volatile and speculative.

 We have invested
and may continue to invest, in private, small and/or new companies that may be in their early stages of development. Investments in these
types of companies involve a number of significant risks, including the following:

 They typically have shorter operating histories, narrower product lines and smaller market shares than public companies, which tend to render them more vulnerable to competitors' actions and market conditions as well as general economic downturns;

 They may have no earnings or experienced losses or may have limited financial resources and may be unable to meet their obligations under their securities, which may be accompanied by a deterioration in the value of their equity securities or any collateral or guarantees provided with respect to their debt;

 They are more likely to depend on the management talents and efforts of a small group of persons and, as a result, the death, disability, resignation or termination of one or more of those persons could have a material adverse effect on their business and prospects and, in turn, on our investment;

 They may have difficulty accessing the capital markets to meet future capital needs;

 They generally have less predictable operating results, may from time to time be parties to litigation, may be engaged in rapidly changing businesses with products subject to a substantial risk of obsolescence and may require substantial additional capital to support their operations, finance expansion or maintain their competitive position; and

 Generally little public information exists regarding these companies, and investors in these companies generally must rely on the ability of the equity sponsor to obtain adequate information for the purposes of evaluating potential returns and making a fully informed investment decision.

 There is uncertainty regarding the value of our
privately held securities.

 Our net asset value
is based on the value we assign to our portfolio investments. For investments that are not listed on a securities exchange or quotation
medium, we determine the value of our investments in securities for which market quotations are not available as of the end of each calendar
quarter, unless there is a significant event requiring a change in valuation in the interim. Because of the inherent uncertainty of the
valuation of portfolio securities that do not have readily ascertainable market values, our fair value determination may differ materially
from the value that would have been used had a ready market existed for the securities. We determine the fair value of investments for
which no market quotations are available based upon a methodology that we believe reaches a reasonable estimation of fair value. However,
we do not necessarily apply multiple valuation metrics in reaching this determination and, in some cases, we do not obtain any third-party
valuations before reaching this determination. Our determinations of the fair value of our investments have a material impact on our net
earnings through the recording of unrealized appreciation or depreciation of investments as well as our assessment of interest income
recognition. Our net asset value could be affected materially if our determinations of the fair value of our investments differ significantly
from values based on a ready market for these securities.

 We depend upon Management for
our future investment success.

 We depend upon the
diligence and skill of our Management to select, structure, close and monitor our investments. Management is responsible for identifying,
structuring, evaluating, monitoring, and disposing of our investments, and the services they collectively provide significantly impact
our results of operations. Our future success will depend to a significant extent on the continued service and coordination of Management.
Our success will depend on our ability to retain our existing Management and to recruit additional other highly qualified individuals.
If we are unable to integrate new investment and management personnel, we may be unable to achieve our desired investment results.

 Management may not be able to
implement our investment objective successfully.

 Our Board is taking
a more opportunistic approach to our portfolio investment strategy, shifting our investment emphasis to sectors such as energy. In order
to implement our investment strategy, Management must analyze, conduct due diligence, invest in, monitor and sell investment interests
in industries in which many of them have not previously been involved. Also, we expect that our investment strategy will continue to require
Management to investigate and monitor investments that are much more broadly dispersed geographically. In addition, Management is required
to provide valuations for investments in a broader range of securities, including debt securities, which may require expertise beyond
that previously required. We cannot assure investors that the overall risk of their investment in the Fund will be reduced as a result
of our investment strategy. If we cannot achieve our investment objective successfully, the value of your investment in our common stock
could decline substantially.

 We may not realize gains from our
equity investments.

 We frequently invest
in the equity securities of our portfolio companies. Also, when we make a loan, we sometimes receive warrants to acquire stock issued
by the borrower. Ultimately, our goal is to sell these equity interests and realize gains. These equity interests may not appreciate and,
in fact, may depreciate in value. For our present portfolio and other investments we may make in the future, the market value of our equity
investments may fall below our estimate of the fair value of such investments before we sell them. Given these factors, there is a risk
that we will not realize gains upon the sale of those or other investment interests that we hold.

 Our holdings
in Morgan E&P and Equus Energy are subject to commodity price declines endemic to oil and gas companies.

 The oil and gas business
is fundamentally a commodity-based enterprise. This means that the operations and earnings of Morgan E&P, LLC ("Morgan")
and Equus Energy, LLC ("Equus Energy"), our two remaining portfolio investments, may be significantly affected by changes
in prices of oil, gas and natural gas liquids. The prices of these products are also dependent upon local, regional and global events
or conditions that affect supply and demand for the relevant commodity. In addition, the pricing of these commodities is highly dependent
upon technological improvements in energy production and development, energy efficiency, and seasonal weather patterns. Moreover, as a
worldwide commodity, the price of oil and natural gas is also influenced by global demand, changes in currency exchange rates, interest
rates, and inflation. Neither Morgan nor Equus Energy employs any hedging strategies in respect of its oil and gas holdings and is therefore
subject to price fluctuations resulting from these and other factors. The operational results and financial condition of Morgan and Equus
Energy, as well as the economic attractiveness of future capital expenditures for new drilling and recompletions, may be materially adversely
affected as a result of lower oil and gas prices.

 We may
not be able to make additional investments in our portfolio companies from time to time, which may dilute our interests in such companies.

 After our initial
investment in a portfolio company, we may be called upon from time to time to provide additional funds to such company, or may have the
opportunity to increase our investment in that company through the exercise of a warrant to purchase common stock or through follow-on
investments in the debt or equity of that company. We cannot assure you that we will make, or have sufficient funds to make, any such
follow-on investments. Any decision by us not to make a follow-on investment or any inability on our part to make such an investment may
have a negative impact on a portfolio company in need of investment and may result in a missed opportunity for us to increase our participation
in a successful operation. A decision not to make a follow-on investment may also require us to subordinate our debt interest to a new
lender or dilute our equity interest in, or reduce the expected yield on, our investment.

 We have invested in a limited number
of portfolio companies.

 The Fund is 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 issuer. As a matter of policy, we generally have not initially invested more than 25%
of the value of our net assets in a single portfolio company. However, we would expect that any new investments may exceed this percentage
for the immediate future. Moreover, follow-on investments, disproportionate increases or decreases in the fair value of certain portfolio
companies or sales of investments may result in more than 25% of our net assets being invested in a single portfolio company at a particular
time.

 A consequence of
a limited number of investments is that 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 our 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 a greater number of investments.

 The lack of
liquidity of our privately held securities may adversely affect our business.

 Our portfolio investments
consist principally of securities that are subject to restrictions on sale because they are not listed or publicly traded securities.
If any of these securities were to become publicly traded, our ability to sell them may still be restricted because we acquired them from
the issuer in "private placement" transactions or because we may be deemed to be an affiliate of the issuer. We will not be
able to sell these securities publicly without the expense and time required to register the securities under the Securities Act and applicable
state securities laws, unless an exemption from such registration requirements is available. In addition, contractual or practical limitations
may restrict our ability to liquidate our securities in portfolio companies because those securities are privately held and we may own
a relatively large percentage of the issuer's outstanding securities. Sales also may be limited by market conditions, which may
be unfavorable for sales of securities of particular issuers or generally. The illiquidity of our investments may preclude or delay any
disposition of such securities, which may make it difficult for us to obtain cash equal to the value at which we record our investments
if the need arises.

 In situations
where we hold junior priority liens, our ability to control decisions with respect to our portfolio companies may be limited by lenders
holding superior liens. In a default scenario, the value of collateral may be insufficient to repay us after the senior priority lenders
are paid in full.

 We may make certain
loans to portfolio companies that are secured by a junior priority security interest in the same collateral pledged to secure debt owed
to lenders with liens senior to ours. Often, the senior lender has procured covenants from the portfolio company prohibiting the incurrence
of additional secured debt without the senior lender's consent. As a condition of permitting the portfolio company to incur junior secured
indebtedness, the senior lender will require that we, as junior lender, enter into an intercreditor agreement that, among other things,
will establish the senior lender's right to control the disposition of any collateral in the event of an insolvency proceeding or other
default situation. In addition, intercreditor agreements generally will expressly subordinate junior liens to senior liens as well as
the repayment of junior debt to senior debt.

 Because of the control
we may cede to senior lenders under intercreditor agreements, we may be unable to control the manner or timing of collateral disposition.
In addition, the value of collateral securing our debt investment will ultimately depend on market and economic conditions at the time
of disposal, the availability of buyers and other factors. Therefore, we cannot assure you that the proceeds, if any, from the sale or
sales of all of the collateral would be sufficient to satisfy the loan obligations secured by our liens. There is also a risk that such
collateral securing our investments will be difficult to sell in a timely manner or to appraise. If the proceeds of the collateral are
insufficient to repay our loans, then we will have an unsecured claim to the extent of the deficiency against any of the company's remaining
assets, which claim will likely be shared with many other unsecured creditors.

 As a debt
or minority equity investor in a portfolio company, we may have little direct influence over the entity. The stockholders and management
of the portfolio company may make decisions that could decrease the value of our portfolio holdings.

 We may make both
debt and minority equity investments. Should a portfolio company make business decisions with which we disagree, of the stockholders and
management of that company take risks or otherwise act in ways that do not serve our interests, the value of our portfolio holdings could
decrease and have an adverse effect on our financial position and results of operations.

 We may choose
to waive or defer enforcement of covenants in the debt securities held in our portfolio, which may cause us to lose all or part of our
investment in these companies.

 We may structure
the debt investments in our portfolio companies to include business and financial covenants placing affirmative and negative obligations
on the operation of the company's business and its financial condition. However, from time to time we may elect to waive breaches
of these covenants, including our right to payment, or waive or defer enforcement of remedies, such as acceleration of obligations or
foreclosure on collateral, depending upon the financial condition and prospects of the particular portfolio company. These actions may
reduce the likelihood of our receiving the full amount of future payments of interest or principal and be accompanied by a deterioration
in the value of the underlying collateral as many of these companies may have limited financial resources, may be unable to meet future
obligations and may go bankrupt. This could negatively impact our ability to pay dividends, could adversely affect our results of operation
and financial condition and cause the loss of all or part of your investment.

 We expect to have limited public information regarding
the companies in which we may invest.

 Our portfolio consists
entirely of securities issued by privately-held companies. There is generally little or no publicly available information about such companies,
and we must rely on the diligence of Management to obtain the information necessary for our decision to invest in them and in order to
monitor them effectively. We cannot assure you that such diligence efforts will uncover all material information about such privately
held businesses necessary to make fully informed investment decisions.

 Our prospective portfolio companies may be highly leveraged.

 Investments in leveraged
buyouts and in highly leveraged companies involve a high degree of business and financial risk and can result in substantial losses. A
leveraged company's income and net assets will tend to increase or decrease at a greater rate than if borrowed money were not used.
The use of leverage by portfolio companies also magnifies the increase or decrease in the value of our investment as compared to the overall
change in the enterprise value of a portfolio company.

 Some of our portfolio
companies have incurred substantial debt in relation to their equity capital. Such indebtedness generally has a term that will require
that the balance of the loan be refinanced when it matures. If a portfolio company cannot generate adequate cash flow to meet the principal
and interest payments on its debt or is not successful in refinancing the debt upon its maturity, our investment could be reduced or eliminated
through foreclosure on the portfolio company's assets or by the portfolio company's reorganization or bankruptcy.

 A substantial portion
of the debt incurred by portfolio companies may bear interest at rates that fluctuate in accordance with a stated interest rate index
or the prime lending rate. The cash flow of a portfolio company may not be sufficient to meet increases in interest payments on its debt.
Accordingly, the profitability of our portfolio companies, as well as the value of our investments in such companies, will depend significantly
upon prevailing interest rates. An increase in prevailing interest rates may have an adverse effect on the ability of our portfolio companies
to service their floating rate debt and on their profits.

 Leverage may impair
the ability of our portfolio companies to finance their future operations and capital needs. As a result, the ability of our portfolio
companies to respond to changing business and economic conditions and to business opportunities may be limited.

 Our business depends on external financing.

 Our business requires
a substantial amount of cash to operate. We may borrow funds to pay contingencies or expenses or to make investments, to maintain our
pass-through tax status as a RIC under Subchapter M of the Code. We are permitted under the 1940 Act to borrow if, immediately after the
borrowing, we have an asset coverage ratio of at least 150%. That is, we may borrow an amount equal to double the fair value of our total
net assets (including investments made with borrowed funds). The amount and nature of any such borrowings depend upon a number of factors
over which we have no control, including general economic conditions, conditions in the financial markets and the impact of the financing
on the tax treatment of our stockholders. The use of leverage, even on a short-term basis, could have the effect of magnifying increases
or decreases in our net asset value.

 While the "spread"
between the current yields on our investments and the cost of any loan would augment the return to our stockholders, if the spread narrows
(because of an increase in the cost of debt or insufficient income on our investments), our net investment income, and consequently our
ability to provide distributions to our stockholders, could be adversely affected. This may also render us unable to meet our obligations
to our lenders, which might then require us to liquidate some or all of our investments. We cannot assure you that we would realize full
value for our investments or recoup all of our capital if we needed to liquidate our portfolio investments.

 Many financial institutions
are unwilling to lend against a portfolio of illiquid, private securities. The make-up of our portfolio has made it more difficult for
us to borrow at the level and on the terms that we desire. Our borrowings have historically consisted of a revolving line of credit which
has since expired, and a margin account used quarterly to enable us to achieve adequate diversification to maintain our pass- through
tax status as a RIC. Although we believe the Fund's liquidity is sufficient for our operating expenses for the next twelve months,
we could be wrong. If we are wrong, we would have to obtain capital from other sources to pay Fund expenses, which could involve selling
our portfolio holdings at an inopportune time and at a price that may be less than would be received if such holding were sold in a more
competitive and orderly manner.

 The costs of borrowing
money may exceed the income from the portfolio securities we purchase with the borrowed money. We will suffer a decline in net asset value
if the investment performance of the additional securities purchased with borrowed money fails to cover their cost to the Fund (including
any interest paid on the money borrowed). A decline in net asset value could affect our ability to make distributions on our common stock.
Our failure to distribute a sufficient portion of our net investment income and net realized capital gains could result in a loss of pass-through
tax status or subject us to a 4% excise tax. If the asset coverage for debt securities issued by the Fund declines to less than 150% (as
a result of market fluctuations or otherwise), we may be required to sell a portion of our investments when it is disadvantageous to do
so. See Management's Discussion and Analysis of Financial Condition and Results of Operations.

 We have had
net investment losses in the past five years.

 We have had net investment
losses in the past five years, with a net investment loss of $4.0 million for the year ended December 31, 2023. We cannot assure you that
we will be able to increase our net assets or generate net investment income. If we fail to increase the Fund's net assets or generate
net investment income, such failure will likely have a material adverse effect upon the Fund, our results of operation, and our financial
condition. You could lose all or a substantial amount of your investment in the Fund as a result.

 We do not currently
intend to recommence our managed distribution policy and you might not receive dividends on your shares.

 On March 24, 2009,
we announced a suspension of our managed distribution policy and payment of quarterly dividends for an indefinite period. As originally
implemented, the policy provided for quarterly dividends at an annualized rate equal to 10% of the Fund's market value per share
as at the end of the preceding calendar year. We subsequently undertook certain changes in our Board and Management. These changes have
been pursued, in part, with the objective of increasing the number of attractive investment opportunities to us and revising our investment
strategy to include more recurrent cash income producing investments, all of which could ultimately result in the resumption of our managed
distribution policy at some time in the future. The implementation of these revisions to our investment strategy and the recurrent generation
of cash income from our investments, however, cannot be guaranteed and will not occur if we complete the transformation of Equus into
an operating company. If we were unable to resume our managed distribution policy and were further unable to profitably sell or otherwise
dispose of our portfolio company investments, you might not receive dividends on your shares.

 We operate in a highly competitive market for investment
opportunities.

 We compete with a
large number of private equity funds and mezzanine funds, investment banks and other equity and non-equity-based investment funds, investment
entities, foreign investors and individuals and other sources of financing, including traditional financial services companies such as
commercial banks. In recent years, the number of investment vehicles seeking small capitalization investments has increased dramatically.
Many of our competitors are substantially larger and have considerably greater financial resources than we do, and some may be subject
to different and frequently less stringent regulation. As our portfolio size increases, we expect that some of our investments will be
larger. We believe that we will face increased competition to participate in these larger transactions. These competitors may have a lower
cost of funds and many have access to funding sources that are not available to us. In addition, some of our competitors may have higher
risk tolerances or different risk assessments, which could allow them to consider a wider variety of investments and establish more relationships
and build their market shares. As a result of this competition, we may not be able to take advantage of attractive investment opportunities
from time to time. We cannot assure you that the competitive pressures we face will not have a material adverse effect on our business,
financial condition and results of operations.

 An economic downturn could affect our operating results.

 An economic downturn
may have a particularly adverse effect upon small and medium-sized companies, which are our primary market for investments. During periods
of volatile economic conditions, these companies often experience decreased revenues, financial losses, difficulty in obtaining access
to financing and increased funding costs. During such periods, these companies also may have difficulty expanding their businesses and
operations and may be unable to meet their debt service obligations or other expenses as they become due. Any of the foregoing developments
could cause the value of our investments in these companies to decline. In addition, during periods of adverse economic conditions, we
may have difficulty accessing financial markets, which could make it more difficult or impossible for us to obtain funding for additional
investments. Any of these events could have a material adverse effect on our business, financial condition and results of operations.

 We may experience
fluctuations in our quarterly results.

 We may experience
fluctuations in our quarterly operating results due to a number of factors, including variations in, and the timing of, the recognition
of realized and unrealized gains or losses, the degree to which we encounter competition in our markets, the ability to find and close
suitable investments and general economic conditions. The volatility of our results is exacerbated by our relatively small number of investments.
As a result of these factors, you should not rely on our results for any period as being indicative of performance in future periods.

 The due diligence process that
we undertake in connection with our investments may not reveal all facts that may be relevant in connection with an investment.

 Before making our
investments, we conduct due diligence that we deem reasonable and appropriate based on the facts and circumstances applicable to each
investment. The objective of the due diligence process is to identify attractive investment opportunities based on the facts and circumstances
surrounding an investment and to prepare a framework that may be used from the date of an acquisition to drive operational achievement
and value creation. When conducting due diligence, we evaluate a number of important business, financial, tax, accounting, environmental
and legal issues in determining whether or not to proceed with an investment. Our due diligence review with respect to a potential portfolio
company typically includes, but is not limited to, a review of historical and prospective financial information including audits and budgets,
on-site visits and interviews with management, employees, customers and vendors, a review of business plans and an analysis of the consistency
of operations with those plans, and other research relating to the company, management, industry, markets, products and services, and
competitors. Outside consultants, legal advisers, accountants and investment banks are expected to be involved in the due diligence process
in varying degrees depending on the type of investment. Nevertheless, when conducting due diligence and making an assessment regarding
an investment, we are required to rely on resources available to us, including information provided by the portfolio company and, in some
circumstances, third party investigations. The due diligence process may at times be subjective, including with respect to newly organized
companies for which only limited information is available. Accordingly, we cannot assure you that the due diligence investigation that
we will carry out with respect to any investment opportunity will reveal or highlight all relevant facts that may be necessary or helpful
in evaluating such investment opportunity. We also cannot assure you that such an investigation will result in an investment being successful.

 Risks Related to Our Potential Use of Leverage

 The use of leverage may adversely affect our performance.

 We may utilize leverage
for the Fund or its subsidiaries by borrowing or issuing preferred stock or short-term debt securities. Borrowings and other capital generated
from leverage will result in lenders and other creditors with fixed dollar claims on our assets that are superior to the claims of our
common shareholders. If the value of our assets increases, then leveraging would cause the net asset value attributable to our common
stock to increase more sharply than it would have had we not leveraged. Conversely, if the value of our assets decreases, leveraging would
cause net asset value to decline more sharply than it otherwise would have had we not leveraged. Similarly, any increase in our income
in excess of interest payable on the borrowed funds would cause our net income to increase more than it would without the leverage, while
any decrease in our income would cause net income to decline more sharply than it would have had we not borrowed. Leverage is generally
considered a speculative investment technique.

 The use of leverage may cause us to sell our portfolio
interests prematurely.

 If we remain a BDC
and borrow monies for our additional portfolio investments, we may secure loans or otherwise borrow funds from conventional banks, other
lending institutions, or private parties, which parties may include the sellers of the investment interests being acquired. In the event
Equus defaults under any of these borrowing arrangements, our business could be adversely affected as we may be forced to sell a portion
of our investments quickly and prematurely at what may be disadvantageous prices to us in order to meet our outstanding payment obligations,
the result of which would have a material adverse effect on our business, financial condition, results of operations and cash flows.

 The use of
leverage will increase our exposure to changes in market rates of interest.

 To date, we have
not incurred leverage to acquire portfolio investments. If we begin to take on leverage to make portfolio investments, we will be subject
to risks associated with the current interest rate environment and changes in interest rates will affect our cost of capital and net investment
income. The use of leverage will also affect our net investment income, which will depend, in part, upon the difference between the rate
at which we borrow funds and the rate at which we invest those funds. As a result, we cannot assure you that a significant change in market
interest rates would not have a material adverse effect on our net investment income.

 Risks Related to Our Business and Structure

 Our ability to invest in private companies may be limited
in certain circumstances.

 As noted elsewhere
herein, we have previously received an authorization from our stockholders to withdraw our election to be classified as a BDC. Although
this authorization has since expired, we expect to receive an additional authorization from our stockholders in the future. Accordingly,
our management is currently evaluating potential transactions that would result in the transformation of Equus into an operating company
instead of a BDC and the withdrawal of our BDC election within this time frame, but we may nevertheless not consummate any such transformation
and remain a BDC. If we maintain our status as a BDC and do not complete the transformation to become an operating company or a permanent
capital vehicle, we must not acquire any assets other than "qualifying assets" unless, at the time of and after giving effect
to such acquisition, at least 70% of our total assets are qualifying assets. A principal category of qualifying assets relevant to our
business is securities purchased in transactions not involving any public offering from issuers that qualify as eligible portfolio companies
under the 1940 Act. Investments in companies organized outside of the United States or having a principal place of business outside of
the United States are also not considered eligible portfolio companies.

 Any failure on our part to maintain the Fund's
status as a BDC could reduce our operating flexibility.

 If we do not maintain
the Fund's status as a BDC and we do not complete the transformation of Equus into an operating company, we might be regulated as
a closed-end investment company under the 1940 Act, which would subject us to substantially more regulatory restrictions under the 1940
Act. This could impose tighter limitations on Equus in terms of the use of leverage and transactions with affiliated entities. Such developments
could correspondingly decrease our operating flexibility.

 We may not
continue to qualify as a RIC under the Code.

 To remain entitled
to the tax benefits accorded to RICs under the Code while we maintain our status as a BDC, we must meet certain income source, asset diversification
and annual distribution requirements. To qualify as a RIC, we must derive each taxable year at least 90% of our gross income from dividends,
interest, payments with respect to certain securities loans, gains from the sale of stock or other securities or foreign currencies, or
other income derived with respect to our business of investing in such stock or securities or currencies and net income from interests
in certain "qualified" publicly traded partnerships. The annual distribution requirement for a RIC is satisfied if we distribute
at least 90% of our ordinary net taxable income and realized net short-term capital gains in excess of realized net long-term capital
losses, if any, to our stockholders on an annual basis.

 As discussed above
in "Our business depends on external financing," we historically have borrowed funds necessary to make qualifying investments
to satisfy the Subchapter M diversification requirements. If we fail to satisfy such diversification requirements and cease to qualify
for conduit tax treatment, we will be subject to income tax on our income and gains and will not be permitted to deduct distributions
paid to stockholders.

 In addition, our
distributions will be taxable as dividends to the extent paid from earnings and profits. We may also cease to qualify as a RIC or be subject
to income tax and/or a 4% excise tax, if we fail to distribute a sufficient portion of our net investment income and net realized capital
gains. The loss of our RIC qualification would have a material adverse effect on the total return, if any, obtainable from an investment
in our common stock.

 Because
we intend to distribute substantially all of our income and net realized capital gains to our stockholders, if we continue to operate
as a BDC and as a RIC, we will need additional capital to finance our growth.

 As noted above, inasmuch
as we expect to receive a future authorization from our stockholders to withdraw our election to be classified as a BDC, such withdrawal
also means that we will not operate as a RIC. Our management is currently evaluating potential transactions that would result in the transformation
of Equus into an operating company and the withdrawal of our BDC election and RIC status within this time frame, but we may nevertheless
not consummate any such transformative transaction and remain a BDC and continue to seek to qualify as a RIC. In order to qualify as a
RIC, to avoid payment of excise taxes and to minimize or avoid payment of income taxes, for so long as we maintain our status as a BDC,
we intend to distribute to our stockholders substantially all of our net ordinary income and realized net capital gains except for certain
net long- term capital gains (which we may retain, pay applicable income taxes with respect thereto, and elect to treat as deemed distributions
to our stockholders). As a BDC, we are generally required to meet a coverage ratio of total assets to total senior securities, which includes
all of our borrowings and any preferred stock we may issue in the future, of at least 150%. This requirement limits the amount that we
may borrow. Because we will continue to need capital to grow our investment portfolio, this limitation may prevent us from incurring debt
and require us to issue additional equity at a time when it may be disadvantageous to do so. We cannot assure you that debt and equity
financing will be available to us on favorable terms, or at all, and debt financings may be restricted by the terms of any of our outstanding
borrowings. In addition, as a BDC, we are generally not permitted to issue equity securities priced below net asset value without stockholder
approval. If additional funds are not available to us, we could be forced to curtail or cease new lending and investment activities, and
our net asset value could decline.

 Our Board of
Directors may change our investment objective, operating policies and strategies without prior notice or stockholder approval.

 Our Board of Directors
has the authority to modify or waive certain of our operating policies and strategies without prior notice (except as required by the
1940 Act) and without stockholder approval. However, absent stockholder approval, we may not change the nature of our business so as to
cease to be, or withdraw our election as, a BDC. As described above under " Significant Developments – Authorization to
Withdraw BDC Election ", our shareholders have previously provided this authorization and may do so again in the future, although
we will not withdraw our election as a BDC unless and until we have entered into a definitive agreement to effect the transformation of
Equus into an operating company. We cannot predict the effect any changes to our current operating policies and strategies would have
on our business, operating results and value of our stock. Nevertheless, any such effects may adversely affect our business and impact
our ability to make distributions.

 Risks Related to Our Operation
as a BDC

 Our ability to enter into transactions
with our affiliates is restricted.

 As noted above, our
stockholders have previously authorized our Board and Chief Executive Officer to withdraw our election to be classified as a BDC and,
although this authorization has expired, we expect to receive a further authorization from our stockholders in the future. Accordingly,
our management is currently evaluating potential transactions that would result in the transformation of Equus into an operating company
and the withdrawal of our BDC election within this time frame, but we may nevertheless not consummate any such transformative transaction
and remain a BDC. If we maintain our status as a BDC and do not complete a transformation into an operating company or a permanent capital
vehicle, we will continue to be subject to the 1940 Act. As an investment company, we are prohibited under the 1940 Act from participating
in certain transactions with certain of our affiliates without the prior approval of our independent directors and, in some cases, the
SEC. Any person that owns, directly or indirectly, 5% or more of our outstanding voting securities is our affiliate for purposes of the
1940 Act, and we generally are prohibited from buying or selling any security from or to such affiliate, absent the prior approval of
our independent directors. The 1940 Act also prohibits certain "joint" transactions with certain of our affiliates, which
could include investments in the same portfolio company (whether at the same or different times), without prior approval of our independent
directors and, in some cases, the SEC. If a person acquires more than 25% of our voting securities, we are prohibited from buying or selling
any security from or to such person or certain of that person's affiliates, or entering into prohibited joint transactions with
such persons, absent the prior approval of the SEC. Similar restrictions limit our ability to transact business with our officers or directors
or their affiliates.

 Regulations
governing our operation as a BDC affect our ability to, and the way in which we, raise additional capital.

 Our business requires
a substantial amount of additional capital. We may acquire additional capital from the issuance of senior securities or other indebtedness,
the issuance of additional shares of our common stock or from securitization transactions. However, we may not be able to raise additional
capital in the future on favorable terms or at all. We may issue debt securities or preferred securities, which we refer to collectively
as "senior securities," and we may borrow money from banks or other financial institutions, up to the maximum amount permitted
by the 1940 Act. The 1940 Act permits us to issue senior securities or incur indebtedness only in amounts such that our asset coverage,
as defined in the 1940 Act, equals at least 150% after such issuance or incurrence. Our ability to pay dividends or issue additional senior
securities would be restricted if our asset coverage ratio were not at least 150%. If the value of our assets declines, we may be unable
to satisfy this test. If that happens, we may be required to liquidate a portion of our investments and repay a portion of our indebtedness
at a time when such sales may be disadvantageous.

 Changes in the laws or regulations
governing our business, or changes in the interpretations thereof, and any failure by us to comply with these laws or regulations, could
negatively affect the profitability of our operations.

 To the extent we
remain a BDC, changes in the laws or regulations or the interpretations of the laws and regulations that govern BDCs, RICs or non-depository
commercial lenders, could significantly affect our operations and our cost of doing business. We are subject to federal, state and local
laws and regulations and are subject to judicial and administrative decisions that affect our operations, including our loan originations,
maximum interest rates, fees and other charges, disclosures to portfolio companies, the terms of secured transactions, collection and
foreclosure procedures and other trade practices. If these laws, regulations or decisions change, or if we expand our business into jurisdictions
that have adopted more stringent requirements than those in which we currently conduct business, we may have to incur significant expenses
in order to comply or we might have to restrict our operations. In addition, if we do not comply with applicable laws, regulations and
decisions, we may lose licenses needed for the conduct of our business and be subject to civil fines and criminal penalties, any of which
could have a material adverse effect upon our business, results of operations or financial condition.

 Risks Related
to Our Plan to Transform Equus Into an Operating Company

 In our efforts to pursue the
transformation of Equus into an operating company, we are exploring and evaluating strategic alternatives for the Fund and we cannot assure
you that we will be successful in identifying a strategic alternative, that such strategic alternative will yield additional value for
our stockholders or that the process will not have an adverse impact on our business.

 In prior years, we
announced our plan to effect the restructuring of the Fund as an operating company no longer subject to the 1940 Act, which transaction
could take the form of a sale of Equus, a restructuring, a recapitalization, merger, or other business combination, or the conversion
of Equus into a permanent capital vehicle. We cannot provide any assurance that the exploration of strategic alternatives will result
in the identification or consummation of a transformative transaction of Equus into an operating company or permanent capital vehicle.
Similarly, any strategic decision will involve risks and uncertainties, and we cannot provide any assurance that any strategic alternative,
if identified, evaluated and consummated, will provide the anticipated benefits or otherwise enhance stockholder value. The process is
ongoing and, although we believe we will consummate a transaction that would result in the transformation of Equus into an operating company
during 2024, we may be wrong. Our Board of Directors has not set a timetable for completion of the evaluation of a potential transaction.

 We expect to incur
substantial costs associated with identifying and evaluating potential strategic alternatives incident to a transformative transaction.
Any potential transaction would be dependent upon a number of factors that may be beyond our control, including, among other factors,
market conditions, industry trends, the interest of third parties in our business, stockholder approval and the availability of financing
to potential buyers or to Equus on reasonable terms. The process of exploring strategic alternatives may be time consuming and disruptive
to our business operations. We are also subject to other risks in connection with the uncertainty created by the strategic review process,
including stock price volatility and the ability to retain qualified employees. We do not currently intend to disclose further developments
with respect to this process, unless and until our Board of Directors approves a specific transaction or otherwise concludes the review
of strategic alternatives.

 If we are unable
to effectively manage the strategic review process, our business, financial condition, liquidity and results of operations could be adversely
affected.

 If we reorganize
as an operating company, we will likely not continue to qualify as a RIC under the Code.

 If we were to reorganize
as an operating company, we would lose our status as a RIC. If we fail to qualify as a RIC, we will be subject to corporate income tax,
which would substantially reduce the amount of income we might otherwise distribute to our shareholders.

 If we reorganize as an operating
company or a permanent capital vehicle, we will not continue to operate as a BDC.

 We have elected to
be classified as a BDC under the 1940 Act. However, if we effect a reorganization of the Fund into an operating company or a permanent
capital vehicle, we will seek to terminate our BDC classification. Holders of a majority of the outstanding common stock of the Fund have
previously approved our cessation as a BDC under the 1940 Act and authorized our Board to cause the Fund's withdrawal of its election
to be classified as a BDC. Although this authorization has expired, we expect to receive a further such authorization from our stockholders
in the future. Nevertheless, if we were to terminate our election to be classified as a BDC and were still determined by the SEC to constitute
an "investment company," we would be subject to significantly greater regulatory requirements and constraints than under those
which we presently operate, the result of which could have a material adverse effect on our results and financial condition.

 If we reorganize
as an operating company or a permanent capital vehicle, we may not be able to utilize our capital losses.

 As noted above, we
may reorganize Equus as an operating company or a permanent capital vehicle. If we reorganize as an operating company or a permanent capital
vehicle, we may lose our ability to offset future income against our cumulative capital losses. If we reorganized as an operating company
or a permanent capital vehicle and were unable to offset future income against these capital losses, the result could have a material
adverse effect on our future operating results and our financial condition.

 If we reorganize as an operating
company or a permanent capital vehicle, our stockholders will no longer have certain protections under the 1940 Act.

 If we withdraw the
Fund's election to be treated as a BDC, Equus will no longer be subject to regulation under the 1940 Act, which is designed to protect
the interests of investors in investment companies. Specifically, our stockholders would no longer have the following protections of the
1940 Act:

 Leverage Limits. We would no longer be subject to the requirement in Section 61 of the 1940 Act that we maintain a ratio of assets to senior securities (such as senior debt or preferred stock) of at least 150% and we would not be limited by statute or regulation to the amount of leverage we could incur.

 Range of Investments. We would no longer be prohibited from investing in certain types of companies, such as brokerage firms, insurance, companies, and investment companies.

 Changes in Financial Reporting. While the conversion of Equus into an operating company will enable us to consolidate the financial results of entities we control, a change in our method of accounting could also reduce the reported value of our investments in controlled privately-held companies by eliminating our ability to report an increase in the fair value of these holdings.

 Protection of Directors and Officers. We would no longer be prohibited from protecting any director or officer against any liability to the Fund or our stockholders arising from willful malfeasance, bad faith, gross negligence, or reckless disregard of the duties involved in the conduct of that person's office, although there are similar limitations under Delaware law, our Certificate of Incorporation, and our Bylaws that would still apply.

 Fidelity Bond. We would no longer be required to provide and maintain an investment company blanket bond issued by a reputable fidelity insurance company to protect us against larceny and embezzlement.

 Director Independence. We would no longer be required to ensure that a majority of our directors are persons who are not "interested persons," as that term is defined in the 1940 Act, and certain persons, such as investment bankers, that would be prevented from serving on our Board if we were a BDC. However, assuming we can comply with the NYSE's listing standards for operating companies, we will remain subject to NYSE listing standards that require the majority of directors of a listed company and all members of its compensation, audit and nominating committees to be "independent" as defined under NYSE rules.

 Affiliate Transactions. We would no longer be subject to provisions of the 1940 Act regulating transactions between BDCs and certain affiliates, although we would still be subject to conflict of interest rules and governance procedures that exist under Delaware law and NYSE rules.

 Share Issuances. We would no longer be subject to provisions of the 1940 Act restricting our ability to issue shares below NAV or in exchange for services, nor would we be restricted in issuing more than one class of equity securities or instruments that could be converted into other classes of equity securities.

 Share Repurchases. We would no longer be restricted under the 1940 Act in our ability to repurchase shares from our stockholders, and would instead be subject only to NYSE rules and Delaware corporate law requirements for such repurchases.

 Change of Business. We would be able to change the nature of our business and fundamental investment policies without having to obtain the approval of our stockholders.

 Director and Officer Incentives. We would no longer require exemptive relief from the SEC before implementing incentive compensation plans for our key executives and non-executive directors.

 Item 1B. Unresolved Staff Comments

 None.

 Item 1C. Cybersecurity

 Our operations and other aspects of our
business rely heavily on various information technology systems which are largely managed by third parties. We face significant cybersecurity
threats, which are continuously increasing in sophistication, including computer viruses, internal and external security breaches, and
other cyber-attacks. These threats could disrupt our operations, lead to the loss of confidential information, and hinder our ability
to accurately report our financial results in a timely manner. We have adopted a Cybersecurity Policy to create effective administrative,
technical, electronic, and physical protections to safeguard the personal information of Company personnel, confidential information concerning
our portfolio investments and the integrity of the Company's information systems.

 We have created an Information Security
Team, consisting of our Chief Financial Officer and our Chief Compliance Officer, to implement and administer our Cybersecurity Policy.
Among the duties and responsibility of our Information Security Team are the following:

 Ensuring that all Equus personnel are aware of the Cybersecurity
Policy and agree to adhere to its requirements;

 Establishing that information concerning the Fund is stored
on encrypted cloud-based servers accessible only by authorized Equus personnel;

 Providing that all of the Company's information systems
are backed up daily, with offline copies available in the event that a major security issue arises;

 Testing and evaluating cybersecurity safeguards via the
use of third-party information technology service providers;

 Reviewing the security measures in the Company's Cybersecurity
Policy annually or when there is a change in applicable laws or regulations or in business activities of Equus; and

 Conducting training as necessary for all Equus
 personnel; and

 Reporting cybersecurity matters to our Board of
 Directors who provide oversight of our Information Security Team.

 We utilize third-party services and tools
for identifying, protecting against, and detecting cyber incidents, and also partner with external vendors to augment our internal security
capabilities. Additionally, we engage third-parties to conduct independent assessments of our cybersecurity infrastructure to evaluate
the efficiency and effectiveness of our detection capabilities, along with our response mechanisms, and overall risk management.

 Our approach to managing cybersecurity
risks is part of a continuous improvement process, both in the context of cybersecurity and broader operational
risk management. This ongoing process, which includes personnel training, is aimed at routinely reviewing and, as necessary, improving,
our oversight processes and tools to ensure they remain effective and resilient in their management of cybersecurity risk.

 Material Impact of Cybersecurity Threats

 While we have yet to experience a material
cybersecurity event, we acknowledge the persistent and evolving nature of these threats, which have the potential to materially impact
our business strategy, operations, and financial results adversely. We maintain robust policies and procedures focused on cybersecurity
incident management, ensuring timely communication and escalation to all relevant stakeholders. This enables faster response and effective
communication, including public disclosure if a material cybersecurity event were to occur.

 Board of Directors Oversight

 Our Board of Directors oversees risks
related to cybersecurity, including the security of our corporate, financial, and portfolio investment information and the steps management
is taking to monitor and control these risks. Our Chief Compliance Officer conducts regular meetings with our independent directors to
discuss various compliance matters, including any cybersecurity issues, and also delivers a comprehensive Annual Compliance Report to
the Board, which report also addresses cybersecurity matters.

 Item 2. Properties

 We
do not own any real estate or other physical properties. Our principal executive offices are located at 700 Louisiana St. 48 th
 Floor, Houston, Texas 77002. Should we remain a BDC and not consummate the transformation of Equus
into an operating company, we believe that these leased office facilities are suitable and adequate for our business as it is contemplated
to be conducted.

 Item 3. Legal Proceedings

 From time to time,
the Fund is 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 any potential legal proceedings cannot at this time be predicted with certainty,
we do not expect that any such proceedings will have a material effect upon the Fund's financial condition or results of operations.

 Item 4. Mine Safety Disclosures

 Not applicable.

 Item 5. Market for Registrant's Common Equity,
Related Stockholder Matters and Issuer Purchases of Equity Securitie s

 Our common stock
is listed on the NYSE under the symbol "EQS". We had approximately 1,600 stockholders as of December 31, 2023, 607 of whom
were registered holders. Registered holders do not include those stockholders whose stock has been issued in
street name. As of December 31, 2023, our net asset value per share was $3.55.

reflects the high and low closing sales prices per share of our common stock on the NYSE, and net asset value ("NAV") per
share for each of the three years ended December 31, 2023, by quarter:

 2023

 2022

 2021

 Q1

 Q2

 Q3

 Q4

 Q1

 Q2

 Q3

 Q4

 Q1

 Q2

 Q3

 Q4

 High

 $
 1.75

 $
 1.65

 $
 1.55

 $
 1.51

 $
 2.71

 $
 2.70

 $
 2.63

 $
 1.83

 $
 2.23

 $
 1.96

 $
 2.75

 $
 2.48

 Low

 1.44

 1.46

 1.35

 1.38

 2.20

 2.35

 1.49

 1.39

 1.61

 1.82

 1.88

 2.12

 NAV

 2.52

 2.96

 3.49

 3.55

 2.77

 2.75

 2.68

 2.61

 2.52

 2.57

 2.68

 2.69

 Stock Performance Graph

 The following graph compares the cumulative total return
on our common stock with the cumulative total return of the NYSE Composite Index and the S&P 500 Index for the five years ended December
31, 2023. This comparison assumes $100.00 was invested in our common stock at the closing price of our common stock on December 31, 2018
and in the comparison groups and assumes the reinvestment of all cash dividends on the ex-dividend date prior to any tax effect. The stock
price performance shown on the graph below is not necessarily indicative of future price performance.

 As a RIC, we are
required to distribute to our stockholders, in a timely manner, at least 90% of our taxable net investment income each year. If we do
not distribute, in a timely manner, 98.2% of our taxable net capital gains and 90% of our taxable net investment income each year (as
well as any portion of the respective 2% balances not distributed in the previous year), we will be subject to a 4% non-deductible federal
excise tax on certain undistributed income of regulated investment companies. Under the 1940 Act, we are not permitted to pay dividends
to stockholders unless we meet certain asset coverage requirements. If taxable net investment income is retained, we will be subject to
federal income and excise taxes. We reserve 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 our stockholders will be able to claim their proportionate share of the federal income taxes paid by the Fund 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 invest in companies
that are believed to have a high potential for capital appreciation, and we intend to realize the majority of our profits upon the sale
of our investments in portfolio companies. Consequently, most of the companies in which we invest do not have established policies of
paying annual dividends. However, a portion of the investments in portfolio securities held by the Fund consists of interest-bearing subordinated
debt securities or dividend-paying preferred stock.

 Item 6. [Reserved]

 Item 7. Management's Discussion
and Analysis of Financial Condition and Results of Operations

 We are incorporating
by reference Management's Discussion and Analysis of Financial Condition and Results of Operations in our 2022 Annual Report on
Form 10-K for management's discussion and analysis of financial condition and results of operations for the fiscal year 2022 compared
to fiscal year 2021.

 Overview

 Equus is a BDC that
provides financing solutions for privately held middle market and small capitalization companies. We began operations in 1983 and have
been a publicly traded closed-end fund since 1991. Our investment objective is to seek the highest total return, consisting of capital
appreciation and current income. Consistent with our announced intention to transform Equus into an operating company or a permanent capital
vehicle, our shareholders have previously authorized our Board to withdraw our BDC election and, although this authorization has since
expired, we expect to receive a further authorization from our stockholders in the future. Nevertheless, we will not withdraw this election
unless and until we have entered into a definitive agreement to convert Equus into an operating company or a permanent capital vehicle.
Further, we will also require a subsequent affirmative vote from holders of a majority of our outstanding voting shares to enter into
any such definitive agreement or change the nature of our business. See Significant Developments – Authorization to Withdraw
BDC Election above.

 As a BDC, we are
required to comply with certain regulatory requirements. For instance, we generally have to invest at least 70% of the Fund's total
assets in "qualifying assets," including securities of private U.S. companies, certain public U.S. companies with a total
market capitalization not in excess of $250 million, cash, cash equivalents, U.S. government securities and short-term high-quality debt
investments. Equus is a RIC under Subchapter M of the Code. To qualify as a RIC, we must meet certain source of income and asset diversification
requirements. If we comply with the provisions of Subchapter M, the Fund generally does not have to pay corporate-level income taxes on
any income that is distributed to our stockholders.

 Investment Income.
We generate investment income from interest payable on the debt securities that the Fund holds, dividends received on equity interests
in our portfolio companies and capital gains, if any, realized upon sales of equity and, to a lesser extent, debt securities in the investment
portfolio. Our equity investments may include shares of common and preferred stock, membership interests in limited liability companies
and warrants to purchase additional equity interests. These equity securities may or may not pay dividends, and the exercise prices of
warrants that we acquire in connection with debt investments, if any, vary by investment. Our debt investments in portfolio companies
may be in the form of senior or subordinated loans and may be unsecured or have a first or second lien on some or all of the assets of
the borrower. Our loans typically have a term of three to seven years and bear interest at fixed or floating rates. Interest on these
debt securities is generally payable either quarterly or semiannually. Some promissory notes held by the Fund provide that a portfolio
company may elect to pay interest in cash or provide that discount interest may accrete in the form of original issue discount or payment-in-kind
(PIK) over the life of the notes by adding unpaid interest amounts to the principal balance. Amortization of principal on our debt investments
is generally deferred for several years from the date of initial investment. The principal amount of these debt securities and any accrued
but unpaid interest generally will become due at maturity. We also earn interest income at market rates on investments in short-term marketable
securities. From time to time, we generate income in the form of commitment, origination, structuring, and extension fees in connection
with our investments. We recognize all such fees when earned.

 Expenses. Currently,
our primary operating expenses include director fees and expenses, professional fees, compensation expense, and general and administrative
fees. During 2023, 2022 and 2021, we did not incur any non-recurring expenses.

 Non-Operating
Subsidiary. We have established Equus Total Return (Canada) Inc. as a wholly-owned subsidiary to facilitate payments to Canadian personnel
and contractors who provide services to the Fund. We consider Equus Total Return (Canada) Inc. a disregarded entity for accounting purposes,
inasmuch as it does not have active operations.

 Operating Activities.
 We use cash to make new investments and follow-on investments in our existing portfolio companies. We record these investments at
cost on the applicable trade date. Realized gains or losses are computed using the specific identification method. On an ongoing basis,
we carry our investments in our financial statements at fair value, as determined by our board of directors. See " Critical Accounting
Policies – Valuation of Investments " below. As of December 31, 2023, we had invested 43.7% of our assets in securities
of portfolio companies that constituted qualifying investments under the 1940 Act. At that time, we had invested 100% in membership interests
in limited liability companies.

 Commitments. Under
certain circumstances, we make follow-on investments in some of our portfolio companies. As of December 31, 2023, we had $1.7 million
in outstanding commitments in our portfolio companies.

 Financing Activities.
 From time to time, we use leverage to finance a portion of our investments. We then repay such debt from the sale of portfolio securities.
Under the 1940 Act, we have the ability to borrow funds and issue debt securities or preferred stock that are referred to as senior securities,
subject to certain restrictions, including an overall limitation on the amount of outstanding debt, or leverage, relative to equity of
1.5:1. Because of the nature and size of our portfolio investments, we periodically borrow funds to make qualifying investments in order
to maintain our qualification as a RIC. During 2023 and 2022, we borrowed such funds by accessing a margin account with a securities brokerage
firm. We invest the proceeds of these margin loans in high-quality securities such as U.S. Treasury securities until they are repaid.
We refer to these high-quality investments as "restricted assets" because they are not generally available for investment
in portfolio companies under the terms of borrowing. If, in the future, we cannot borrow funds to make such qualifying investments at
the end of any future quarter, we may not qualify as a RIC and would become subject to corporate-level income tax on our net investment
income and realized capital gains, if any. In addition, our distributions to stockholders would be taxable as ordinary dividends to the
extent paid from earnings and profits. See " Federal Income Tax Considerations."

 Distributions.
So long as we remain a BDC, save for minor exceptions we will continue to pay out net investment income and/or realized capital gains,
if any, on an annual basis as required under the 1940 Act.

 Possible Share
Repurchase. As a closed-end BDC, our shares of common stock are not redeemable at the option of stockholders, and our shares currently
trade at a discount to their net asset value. Our Board has determined that it would be in the best interests of our stockholders to reduce
or eliminate this market value discount. Accordingly, we have been authorized to, and may from time to time, repurchase shares of our
outstanding common stock (including by means of tender offers or privately negotiated transactions) in an effort to reduce or eliminate
this market discount or to increase the net asset value of our shares. We are not required to undertake, and we have not previously undertaken,
any such share repurchases, nor do we further anticipate taking any such action in 2024.

 2016 Equity Incentive Plan

 On June 13, 2016,
our shareholders approved the adoption of our 2016 Equity Incentive Plan ("Incentive Plan"). On January 10, 2017, the SEC
issued an order approving the Incentive Plan and certain awards intended to be made thereunder. The Incentive Plan is intended to promote
the interests of the Fund by encouraging officers, employees, and directors of the Fund and its affiliates to acquire or increase their
equity interest in the Fund and to provide a means whereby they may develop a proprietary interest in the development and financial success
of the Fund, to encourage them to remain with and devote their best efforts to the business of the Fund, thereby advancing the interests
of the Fund and its stockholders. The Incentive Plan is also intended to enhance the ability of the Fund and its affiliates to attract
and retain the services of individuals who are essential for the growth and profitability of the Fund.

 The Incentive Plan
permits the award of restricted stock as well as common stock purchase options. The maximum number of shares of common stock that are
subject to awards granted under the Incentive Plan is 2,434,728 shares. The term of the Incentive Plan will expire on June 13, 2026. On
March 17, 2017, we granted awards of restricted stock under the Plan to certain of our directors and executive officers in the aggregate
amount of 844,500 shares. The awards are each subject to a vesting requirement over a 3-year period unless the recipient thereof is terminated
or removed from their position as a director or executive officer without "cause", or as a result of constructive termination,
as such terms are defined in the respective award agreements entered into by each of the recipients and the Fund. We account for share-based
compensation using the fair value method, as prescribed by ASC 718, Compensation—Stock Compensation. Accordingly, for restricted
stock awards, we measure the grant date fair value based upon the market price of our common stock on the date of the grant and amortize
the fair value of the awards as share-based compensation expense over the requisite service period, which is generally the vesting term.
Inasmuch as all existing awards under the Incentive Plan became fully-vested prior to 2021, we recorded no compensation expense relating
to awards made under the Incentive Plan for the years ended December 31, 2023, 2022 and 2021.

 Critical Accounting Estimates

 We follow the accounting
and reporting guidance in FASB Accounting Standards Codification Topic 946 "Financial Services – Investment Companies."
Our financial statements are based on the selection and application of significant accounting policies, which require management to make
significant estimates and assumptions. We believe that the following are some of the more critical judgment areas in the application of
our accounting policies that currently affect our financial condition and results of operations.

 Valuation of Investments

 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;

 2.

 With respect to investments with a fair value exceeding $2.5 million that have been held for more than one year, we engage independent valuation firms to assist our investment professionals. These independent valuation firms conduct independent valuations and make their own independent assessments;

 3.

 Our Management produces a report that summarizes each of our portfolio investments and recommends a fair value of each such investment as of the date of the report;

 4.

 The Audit Committee of our Board reviews and discusses the preliminary valuation of our portfolio investments as recommended by Management in their report and any reports or recommendations of the independent valuation firms, and then approves and recommends the fair values of our investments so determined to our Board for final approval; and

 5.

 The Board discusses valuations and determines the fair value of each portfolio investment in good faith based on the input of our Management, the respective independent valuation firm, as applicable, and the Audit Committee.

 During the first
twelve months after an investment is made, we rely on the original investment amount to determine the fair value unless significant developments
have occurred during this twelve-month period which would indicate a material effect on the portfolio company (such as results of operations
or changes in general market conditions).

 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 enterprises 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. Also, any failure by a portfolio company to achieve its business plan
or obtain and maintain its financing arrangements could result in increased volatility and result in a significant and rapid change in
its value.

 Our general intent
is to hold our loans to maturity when appraising our privately held debt investments. As such, we believe that the fair value will not
exceed the cost of the investment. However, in addition to the previously described analysis involving allocation of value to the debt
instrument, we perform a yield analysis assuming a hypothetical current sale of the security to determine if a debt security has been
impaired. 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 if less than the cost of the investment.

 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.

 Because of the inherent
uncertainty of the valuation of portfolio securities which do not have readily ascertainable market values, amounting to $40.9 million
and $15.7 million as of December 31, 2023 and 2022, respectively, our fair value determinations may materially differ from the values
that would have been used had a ready market existed for the securities.

 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.

 Current Market Conditions

 U.S. GDP increased
at an annualized rate of 3.3% in the fourth quarter of 2023, substantially higher than consensus estimates for the quarter. GDP growth
in the fourth quarter of 2023 also compared favorably to an annualized increase of 2.7% for the fourth quarter of 2022, although down
from 4.9% for the third quarter of 2023. Overall, GDP growth was 2.5% for all of 2022, as compared to 2.1% for all of 2022. The slower
GDP growth in the fourth quarter of 2023 was largely due to decreases in private inventory investment, federal government spending, residential
fixed investment, and consumer spending. The Conference Board is projecting GDP growth of 1.2% for 2024 and 1.4% for 2025. The Congressional
Budget Office is predicting 1.5% GDP growth for 2024. (Sources: Bureau of Economic Analysis; The Conference Board; Congressional Budget
Office).

 As of February 2024,
the U.S. unemployment rate stood at 3.7%, and has remained largely stable for a considerable period, fluctuating between 3.4% and 3.8%
for the previous 24 months. Most economists, however, do not project this level to continue, as recessionary headwinds and lower growth
forecasts suggest an increase during the remainder of 2024. Moreover, the labor participation rate remains at approximately 62.5%, below
the pre-pandemic high of 63.3% of February 2020. Most of the recent employment gains in 2022 and 2023 were due to gains in the leisure
and hospitality industry, healthcare, construction, and social assistance. (Sources: Bureau of Labor Statistics; Trading Economics).

 Beginning in 2021
and continuing through 2022, consumer prices increased the most in four decades, reaching a high of 8.3%, before steadily declining throughout
2023, finishing the year at 3.4%. This trend has continued into January 2024, where the U.S. Bureau of Labor Statistics reported an annualized
rate of 3.1%. In view of lower growth projections and other economic headwinds, most analysts predict consumer price increases to taper
further to approximately 2.4% for all of 2024. (Sources: U.S. Bureau of Labor Statistics; Forbes).

 Global merger and
acquisition activity in 2023 was $3.1 trillion, a 14% drop from $3.6 trillion in 2022 which itself was 28% lower than 2021's all-time
high of $5.0 trillion. Biotechnology, energy, and healthcare were the sectors that experienced the most significant dealmaking activity
during the year. Higher costs of capital were the principal cause of the continued decline in dealmaking. Most analysts expect consolidation
activity in 2024 to increase slightly as a result of pent up demand and stable interest rates. (Source: Dealogic; Wall Street
Journal).

 Private equity firms
experienced a similar slowdown in activity during 2023 which continued a downward trend from 2022 and the highs experienced during the
Covid-19 pandemic. Nevertheless, there remains ample undeployed cash, and strong, acquisitive companies, as well as emerging companies
in the AI space, appear to be best positioned as some of the candidates for private equity activity in 2024. (Source: PWC; Bloomberg)

 During 2023, our
net asset value increased from $2.61 per share as of December 31, 2022 to $3.55 per share as of December 31, 2023. As of December 31,
202, our common stock was trading at a 45.2% discount to our net asset value as compared to 59.2% as of December 31, 2023.

 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, if we remain a BDC, we expect to achieve efficiencies
in our cost structure if we are able to grow the Fund.

 Liquidity and Capital Resources

 The Company defines
cash equivalents as securities that are readily convertible into known amounts of cash and near their maturity that they present insignificant
risk of changes in value because of changes in interest rates. Generally, only securities with a maturity of three months or less from
the date of purchase would qualify, with limited exceptions. The Company deems that certain money market funds, U.S. Treasury bills, repurchase
agreements and other high-quality, short-term debt securities would qualify as cash equivalents (See Note 2 to the financial statements.)

 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. If we effect a Consolidation of the Fund as described under " Significant
Developments – Authorization to Withdraw BDC Election " above, we may utilize some or a substantial portion of our current
liquidity in connection with a contemplated transaction as payment of the purchase price and to pay associated legal, due diligence, accounting,
and other fees. Further, we may borrow funds from financial institutions or other providers of debt capital to provide and pay for a part
of the consideration and expenses necessary to effect a conversion of Equus into an operating company.

 Year Ended December 31, 2023

2023, we had total assets of $93.5 million, of which $40.9 million were invested in portfolio investments and $6.5 million were invested
in cash and cash equivalents.

2023, we also had $45.4 million of U.S. Treasury bills 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, $45.0 million was invested in
U.S. Treasury bills and $0.4 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 matured on January 4, 2024 and
we subsequently repaid this margin loan. The margin interest was paid on February 4, 2024.

 Operating
Activities. We used $51.4 million in cash for operating activities in 2023 principally due to $8.3 million in investments, $4.3
million in fees to professional advisors, director and other, $17.0 million increase in unrealized appreciation, along with $38.9
million increase in net investments in U.S. Treasury bills.

 Financing Activities.
We provided $39.1 million in cash from financing activities for 2023, principally in connection with borrowings on margin..
We did not declare any dividends in 2023.

 Results of Operations Investment Income and Expense

 Year Ended December 31, 2023 as compared
to Year Ended December 31, 2022

 Total income from
portfolio securities was $0.3 million for 2023 and $0 for 2022.

 Compensation expense
increased to $1.9 million in 2023 from $1.6 million in 2022.

 As a result of the
factors described above, net investment loss after expenses was $4.0 million for 2023 as compared to a net investment loss of $3.6 million
in 2022.

 Summary of Portfolio Investment Activity

 Year Ended December 31, 2023

 During 2023, we made
an $8.3 million investment in Morgan E&P, LLC.

 The following table includes summarizes investment activity during the
year ended December 31, 2023 (in thousands):

 New

 Cash

 Cash

 PIK

 Total

 $
 8,253

 $
 —

 $

 $
 —

 $
 8,253

 $
 8,253

 $
 —

 $

 $
 —

 $
 8,253

 Year Ended December 31, 2022

 During 2022, we made
a $0.15 million follow-on investment in Equus Energy, LLC.

 The following table includes summarizes investment activity during the
year ended December 31, 2022 (in thousands):

 New

 Cash

 Cash

 PIK

 Total

 $
 —

 $
 —

 $

 $
 —

 $

 $
 —

 $
 —

 $

 $
 —

 $

 Year Ended December 31, 2021

 During 2021, we made
a $0.35 million non-cash follow-on investment in Equus Energy, LLC.

 The following table includes summarizes investment activity during the
year ended December 31, 2021 (in thousands):

 New

 Cash

 Cash

 PIK

 Total

 $
 —

 $
 —

 $

 $
 —

 $

 $
 —

 $
 —

 $

 $
 —

 $

 Realized Gains and Losses

 Year Ended December 31, 2023

 We realized capital gains of $34 thousand as a result
of disposition of U.S. Treasury bills.

 Year Ended December 31, 2022

 We realized capital gains of $1.0 thousand as a result
of disposition of U.S. Treasury bills.

 Year Ended December 31, 2021

 During 2021, we received a combination of escrowed
and contingent payments of $3.8 million from the sale of our interest in PalletOne, Inc. in December 2020, realizing a capital gain of
$0.4 million.

 Changes in Unrealized Appreciation of Portfolio
Securities

 Year Ended December 31, 2023

 During 2023, we recorded
an increase of $17.0 million in net unrealized appreciation, from an unrealized appreciation of $7.5 million at December 31, 2022 to a
net unrealized appreciation of $24.5 million at December 31, 2023. Such change in unrealized appreciation resulted primarily from the
increase in the fair value of our holdings in Morgan E&P, LLC of $22.6 million, principally due to substantial increases in Morgan's
reserves and the reclassification of certain of its proved reserves from undeveloped to producing. The increase in the fair value
of Morgan was offset by the decrease in fair value of our holding in Equus Energy, LLC of $5.7 million, principally due to decreases in
the forward curve for natural gas and its effect on the economic prospects of Equus Energy regarding future development of its gas properties.

 Year Ended December 31, 2022

 During 2022, we recorded
an increase of $2.5 million in net unrealized appreciation, from an unrealized appreciation of $5.0 million at December 31, 2021 to a
net unrealized appreciation of $7.5 million at December 31, 2022. Such change in unrealized appreciation resulted primarily from the increase
in the fair value of our holdings in Equus Energy, LLC of $2.65 million, principally due to an increase in the cost basis of this investment,
as well as increases in oil and gas prices, as well as increases in the short- and long-term forward pricing curves for these commodities
during 2022.

 Year Ended December 31, 2021

 During 2021, we recorded
an increase of $5.6 million in net unrealized appreciation, from an unrealized depreciation of $0.6 million at December 31, 2020 to a
net unrealized appreciation of $5.0 million at December 31, 2021. Such change in unrealized appreciation resulted primarily from the increase
in the fair value of our holdings in Equus Energy, LLC of $6.0 million, principally due to an increase in the cost basis of this investment,
as well as increases in oil and gas prices, as well as increases in the short- and long-term forward pricing curves for these commodities
during 2021.

 Portfolio Securities

2023, we had active investments in the following portfolio companies:

("Morgan") was organized by the Fund on April 3, 2023 as a Delaware limited liability company and a wholly-owned subsidiary
of the Fund. On May 22, 2023, Morgan completed the acquisition of 4,747.52 net acres, in the Bakken/Three Forks formation in the Williston
Basin of North Dakota, and acquired approximately 1,100 additional acres on September 26, 2023. The acreage and associated mineral rights
were acquired from Pro Energy I LLC ("Pro Energy"), a company whose principals have decades of oil and gas experience and
who have themselves drilled over 1,800 horizontal wells in the Williston Basin over a 10-year period. In May 2023, we entered into an
agreement with Morgan to provide it up to $10.0 million in senior debt financing, subject to a schedule of disbursements and draws that
we determine. As of December 31, 2023, we advanced Morgan $8.3 million under this facility (See Subsequent Events below where we
increased the total amount of the facility to $10.5 million and where we advanced, subsequent to year-end, an additional $2.0 million
under the facility). During 2023, Morgan substantially increased its reserves, completed the drilling of two new wells, and also reclassified
certain of its proved reserves from undeveloped to producing. As a result, the fair value of this holding was $22.6 million at December
31, 2023.

 We formed Equus Energy,
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 presently represented by 136 producing and non-producing oil and gas wells, including associated development rights of approximately
21,520 acres situated on 10 separate properties in Texas and Oklahoma. On September 30, 2020, the Fund provided an additional $0.6 million
in capital to Equus Energy for the purpose of additional working capital. On June 30, 2021, the Fund provided an additional $0.35 million
in capital to Equus Energy for the purpose of additional working capital. On December 31, 2022, the Fund provided an additional $0.15
million in capital to Equus Energy for the purpose of additional working capital. The working interests held by Equus Energy range from
a de minimus amount to 50% of the leasehold production of these wells. The wells are operated by a number of experienced operators
such as Burk Royalty, which has operating responsibility for leasehold interests in the Conger Field, representing approximately one-third
of the producing well interests. The assets were purchased from Warren American Oil Company, LLC, a Tulsa-based oil and gas firm. The
fair value of our holding in Equus Energy decreased from $15.65 million at December 31, 2022 to $10.0 million at December 31, 2023, principally
due to decreases in the forward curve for natural gas and its effect on the economic viability of Equus Energy's gas reserves for
future development.

 Off Balance Sheet Arrangements

 Our current office
space lease since December 31, 2020 is on a month-to-month basis. Rent expense, inclusive of common area maintenance costs, was $94,000
for the year ended December 31, 2023.

 Contractual Obligations

2023, we had $1.7 million in outstanding commitments to our portfolio company investments.

 Dividends

 So long as we remain
a BDC, we will continue to pay out net investment income and/or realized capital gains, if any, on an annual basis as required under the
1940 Act.

 Subsequent Events

 Our Management performed
an evaluation of the Fund's activity through the date the financial statements were issued, noting the following subsequent events:

 On January 4, 2024,
our holding in $45.0 million in U. S. Treasury Bills matured and we repaid our year-end margin loan.

 On February 26, 2024,
we amended our credit facility with Morgan and increased the total amount that may be drawn under the facility from $10.0 to $10.5 million.
Also, during February and March 2024, we advanced Morgan an additional $2.2 million under this facility.

 Item 7A. Quantitative and Qualitative
Disclosures 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 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 may also consist of common stocks in publicly traded companies.
These investments are directly exposed to equity price risk, in that a hypothetical ten percent change in these equity prices would result
in a similar percentage change in the fair value of these securities.

 We are classified
as a "non-diversified" investment company under the 1940 Act, which means we are not limited in the proportion of our assets
that may be invested in the securities of a single user. The value of one segment called "Energy" includes two portfolio companies
and was 84.6% of our net asset value, 43.7% of our total assets and 100% of our investments in portfolio company securities (at fair value)
as of December 31, 2023. 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 8. Financial Statements and Supplementary Data

 Index to Financial Statements

 Page

 Report of Independent Registered Public Accounting Firm - (BDO USA, P.C.; Houston, TX; PCAOB ID#243)

 Balance Sheets —As of December 31, 2023 and December 31, 202 2

 Statements of Operations —For the years ended December 31, 2023, 2022 and 202 1

 Statements of Changes in Net Assets —For the years ended December 31, 2023, 2022 and 202 1

 Statements of Cash Flows — For the years ended December 31, 2023, 2022 and 202 1

 Statements of Selected Per Share Data and Ratios - For the years ended December 31, 2023, 2022, 2021, 2020 and 201 9

 Schedule of Investments —December
 31, 202 3

 Schedule of Investments —December 31, 202 2

 Notes to Financial Statements

 Schedules of Investments in and Advances to Affiliates— For the year ended December 31, 202 3

 Report of Independent Registered Public Accounting
Firm

 Shareholders
and Board of Directors

 Equus
Total Return, Inc.

 Houston,
Texas

 Opinion on the Financial Statements

 We have audited
the accompanying balance sheets of Equus Total Return, Inc. (the "Fund"), including the schedules of investments, as of December
31, 2023 and 2022, the related statements of operations, changes in net assets, and cash flows for each of the three years in the period
ended December 31, 2023, and the related notes and financial statement schedule listed in the Table of Contents in Item 15(a)(1) (collectively
referred to as the " financial statements") and the selected per share data and ratios for each of the five years in the period
then ended. In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of
December 31, 2023 and 2022, and the results of its operations, changes in net assets and its cash flows for each of the three years in
the period ended December 31, 2023, and the selected per share data and ratios for each of the five years in the period then ended, in
conformity with accounting principles generally accepted in the United States of America.

 Basis for Opinion

 These financial
statements and the selected per share data and ratios are the responsibility of the Fund's management. Our responsibility is to
express an opinion on the Fund's financial statements and the selected per share data and ratios based on our audits. We are a
public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required
to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations
of the Securities and Exchange Commission and the PCAOB.

 We conducted our
audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements and the selected per share data and ratios are free of material misstatement, whether
due to error or fraud. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial
reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for
the purpose of expressing an opinion on the effectiveness of the Fund's internal control over financial reporting. Accordingly,
we express no such opinion.

 Our audits included
performing procedures to assess the risks of material misstatement of the financial statements and the selected per share data and ratios,
whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis,
evidence regarding the amounts and disclosures in the financial statements and the selected per share data and ratios. Our procedures
included confirmation of securities owned as of December 31, 2023, and 2022 by correspondence with the custodians. Our audits also included
evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation
of the financial statements and the selected per share data and ratios. We believe that our audits provide
a reasonable basis for our opinion.

 Critical Audit Matter

 The critical audit matter communicated below
is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to
the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our
especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our
opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate
opinions on the critical audit matter or on the accounts or disclosures to which it relates.

 Valuation of Control Investment

 As described
in Note 3 to the financial statements, the Fund's control investment portfolio has a total estimated fair value of $40.9 million
at December 31, 2023, which includes $32.6 million of limited liability company investments. These limited liability company investments
have been determined to be Level 3 investments and utilize inputs that are unobservable and significant to the fair value measurement.
Management engaged an independent third-party firm to assist in the determination of the fair value estimate of the Fund's limited
liability company Investments.

 We identified
the valuation of the Fund's limited liability company investments as a critical audit matter. The principal considerations for our
determination are significant judgments involved in the determination of (i) the valuation techniques utilized to value these investments
which include the guideline transaction method, guideline public company method and the discounted cash flow method, and (ii) the use
of unobservable inputs in these valuation techniques which include acreage value, proved reserve multiple, daily production multiple and
discount rate. Auditing these elements was complex because it involved especially subjective auditor judgment, including the extent of
specialized skills and knowledge needed.

 The
primary procedures we performed to address this critical audit matter included:

 Testing the completeness
 and accuracy of the underlying information used as inputs in both the guideline transaction method, guideline public company method
 and the discounted cash flow method.

 Testing mathematical accuracy of the discounted cash flow method.

 Utilizing personnel
 with specialized knowledge and skill in valuation to assist in: (i) evaluating the appropriateness of the valuation
 models applied to each limited liability company investment (ii) evaluating whether unobservable inputs, including the acreage value,
 proved reserve multiple, daily production multiple, and discount rate were reasonable, and (iii) testing mathematical accuracy of
 the guideline transaction method and guideline public company method.

 /s/ BDO USA, P.C.

 We have served as the Company's auditor since
2014.

 Houston, Texas

 April 1, 2024

 BALANCE SHEETS

 2023

 2022

 (in thousands, except shares and per share amounts)

 Assets

 Investments in portfolio securities at fair value:

 Control investments (cost at $16,364 and $8,111, respectively)

 $

 $

 Total investments in portfolio securities at fair value

 5,998

 Cash and cash equivalents

 6,533

 19,224

 Restricted cash

 Accounts receivable from affiliates

 Accrued interest

 —

 Other assets

 Total assets

 93,547

 41,664

 Liabilities and net assets

 Accounts payable

 Accrued compensation

 Accounts payable to related parties

 Borrowing under margin account

 5,998

 Total liabilities

 45,260

 6,427

 Commitments and contingencies (See Note 6)

 Net assets

 Common stock, $.001 par value per share; 100,000,000 shares authorized as of December 31, 2023 and December 31, 2022, respectively, and 13,586,173 and 13,518,146 shares outstanding as of December 31, 2023 and December 31, 2022, respectively

 Preferred stock, $.001 par value per share; 10,000,000 shares authorized as of December 31, 2023 and December 31, 2022 respectively

 Common stock, par value

 $

 $

 Capital in excess of par value

 74,785

 74,685

 Accumulated deficit

 (26,512
)

 (39,461
)

 Total net assets

 $
 48,287

 $
 35,237

 Shares of common stock issued and outstanding, $.001 par value, 100,000 and 50,000 shares authorized, respectively

 13,586

 Net asset value per share

 $
 3.55

 $
 2.61

 The accompanying notes are an
integral part of these financial statements

 STATEMENTS OF OPERATIONS

 Year Ended December 31,

 (in thousands, except per share amounts)

 2023

 2022

 2021

 Investment income:

 Interest and dividend income:

 $

 $
 —

 $
 —

 Total interest and dividend income

 —

 —

 Interest from U.S. Treasury bills

 —

 —

 Total investment income

 —

 —

 Expenses:

 Compensation expense

 1,937

 1,564

 1,632

 Professional fees

 1,110

 Professional liability expenses

 Director fees and expenses

 General and administrative expenses

 Mailing, printing and other expenses

 Taxes

 Interest expense

 Total expenses

 4,284

 3,629

 3,453

 Net investment loss

 (4,035
)

 (3,629
)

 (3,453
)

 Net realized gain:

 Escrow receivable

 —

 —

 —

 Net realized gain

 Net unrealized appreciation of portfolio securities:

 16,950

 2,500

 5,650

 Net change in net unrealized appreciation of portfolio securities

 16,950

 2,500

 5,650

 Income Taxes

 Federal and state income, excise and other taxes

 —

 —

 (38
)

 Net increase (decrease) in net assets resulting from operations

 $
 12,949

 $
 (1,128
)

 $
 2,588

 Net increase (decrease) in net assets resulting from operations per share:

 Basic and diluted

 $
 0.96

 $
 (0.08
)

 $
 0.19

 Weighted average shares outstanding:

 Basic and diluted

 13,526

 The accompanying notes are an
integral part of these financial statements

 STATEMENTS OF CHANGES IN NET ASSETS

 Common Stock

 Number of Shares

 Par Value

 Capital in Excess of Par Value

 Accumulated Deficit

 Total Net Assets

 Balances as of January 1, 2021

 $

 $
 56,142

 $
 (22,378
)

 $
 33,777

 Recharacterization of net capital gains

 —

 —

 18,543

 (18,543
)

 —

 Net increase in net assets resulting from operations

 —

 —

 —

 2,588

 2,588

 Balances as of December 31, 2021

 74,685

 (38,333
)

 36,365

 Net decrease in net assets resulting from operations

 —

 —

 —

 (1,128
)

 (1,128
)

 Balances as of December 31, 2022

 74,685

 (39,461
)

 35,237

 Issuance of shares

 —

 Net imcrease in net assets resulting from operations

 —

 —

 —

 12,949

 12,949

 Balances as of December 31, 2023

 13,586

 $

 $
 74,785

 $
 (26,512
)

 $
 48,287

 The accompanying notes are an integral part of these
financial statements.

 STATEMENTS OF CASH FLOWS

 Year Ended December 31,

 2023

 2022

 2021

 Reconciliation of 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

 $
 12,949

 $
 (1,128
)

 $
 2,588

 Adjustments to reconcile net (decrease) increase in net assets resulting from operations to net cash (used in) provided by operating activities:

 Net realized (gain):

 Escrow receivable

 —

 —

 (429
)

 (34
)

 (1
)

 —

 Net change in unrealized appreciation of portfolio securities:

 (16,950
)

 (2,500
)

 (5,650
)

 Purchase of portfolio securities

 (8,253
)

 (150
)

 (350
)

 Net proceeds from dispositions of portfolio securities

 —

 —

 (Purchases) sales of U.S. Treasury bills, net

 (38,923
)

 (3,497
)

 21,500

 Changes in operating assets and liabilities:

 Accounts receivable from affiliates

 —

 —

 Accrued interest and dividend receivable

 (225
)

 —

 —

 Accrued escrow receivable

 —

 —

 3,413

 Other assets

 (11
)

 (6
)

 (195
)

 Accounts payable and accrued liabilities

 (227
)

 (410
)

 (206
)

 Accounts payable to related parties

 (12
)

 Net cash (used in) provided by operating activities

 (51,359
)

 (7,704
)

 21,111

 Cash flows from financing activities:

 Borrowings under margin account

 85,923

 16,997

 2,500

 Repayments under margin account

 (46,966
)

 (13,499
)

 (24,000
)

 Issuance of common stock

 —

 —

 Net cash provided by (used in) financing activities

 39,058

 3,498

 (21,500
)

 Net (decrease) in cash and cash equivalents

 (12,301
)

 (4,206
)

 (390
)

 Cash and cash equivalents and restricted cash at beginning of period

 19,284

 23,490

 23,879

 Cash and cash equivalents and restricted cash at end of period

 $
 6,983

 $
 19,284

 $
 23,490

 Supplemental disclosure of cash flow information:

 Interest paid

 $

 $

 $

 Income taxes paid

 $

 $

 $

 The accompanying notes are an
integral part of these financial statements.

 SELECTED PER SHARE DATA AND RATIOS

 Year ended December 31,

 2023

 2022

 2021

 2020

 2019

 Investment income

 $
 0.02

 $
 —

 $
 —

 $
 0.02

 $
 0.03

 Expenses

 0.33

 0.27

 0.26

 0.38

 0.28

 Net investment loss

 (0.31
)

 (0.27
)

 (0.26
)

 (0.36
)

 (0.25
)

 Net realized gain (loss)

 0.00

 0.00

 0.03

 1.37

 (0.20
)

 Net change in unrealized appreciation of portfolio securities

 1.25

 0.19

 0.42

 (2.05
)

 0.58

 Net change in unrealized depreciation of portfolio securities - related party

 —

 —

 —

 0.13

 0.03

 Net increase (decrease) in net assets resulting from operations

 0.94

 (0.08
)

 0.19

 (0.91
)

 0.16

 Capital transactions:

 Shares issued for portfolio securities

 —

 —

 —

 0.01

 0.02

 Dilutive effect of shares issued

 —

 —

 —

 —

 —

 Decrease in net assets resulting from capital transactions

 —

 —

 —

 0.01

 0.02

 Net increase (decrease) in net assets

 0.94

 (0.08
)

 0.19

 (0.90
)

 0.18

 Net assets at beginning of period

 2.61

 2.69

 2.50

 3.40

 3.22

 Net assets at end of period, basic and diluted

 $
 3.55

 $
 2.61

 $
 2.69

 $
 2.50

 $
 3.40

 Weighted average number of shares outstanding during period,

 in thousands

 13,526

 Market price per share:

 Beginning of period

 $
 1.43

 $
 2.38

 $
 2.16

 $
 1.82

 $
 1.96

 End of period

 $
 1.45

 $
 1.43

 $
 2.38

 $
 2.16

 $
 1.82

 Selected information and ratios:

 Ratio of expenses to average net assets

 10.26
 %

 10.14
 %

 9.77
 %

 13.00
 %

 8.36
 %

 Ratio of net investment loss to average net assets

 (9.66
 %)

 (10.14
 %)

 (9.77
 %)

 (12.20
 %)

 (7.58
 %)

 Ratio of net increase (decrease) in net assets resulting from operations to average net assets

 31.01
 %

 (3.15
 %)

 7.38
 %

 (30.82
 %)

 4.86
 %

 Total return on market price (1)

 1.40
 %

 (39.92
 %)

 10.19
 %

 18.68
 %

 (7.14
 %)

 (1) Total
return = [(ending market price per share + year-to-date dividends paid - beginning market price per share) / beginning market price per
share].

 The accompanying notes are an integral
part of these financial statements.

 SCHEDULE OF INVESTMENTS

 DECEMBER 31, 2023

 (in thousands, except share data)

 Name and Location of

 Date of Initial

 Cost of

 Fair

 Portfolio Company (1)

 Industry

 Principal

 Value (2)

 Control Investments: Majority-owned
 (3):

 Equus Energy, LLC (4)

 Houston, TX

 December 2011

 Member interest (100%)

 $
 8,111

 $
 10,000

 Morgan
E&P, LLC (4)

 Houston, TX

 April 2023

 Member interest (100%)

 —

 22,600

 12% senior secured promissory note due 5/26 (5)

 $
 8,253

 8,253

 8,253

 8,253

 30,853

 Total Control Investments: Majority-owned (represents 47.6% of total investments at fair value)

 16,364

 U.S. Treasury Bills

 U.S. Treasury Bill

 Government

 December 2023

 UST 0% 1/24

 Total U.S. Treasury bills (represents 52.4% of total investments at
 fair value)

 Total Investments

 $
 61,319

 $
 85,808

 (1) Under Section 55 (a) of the 1940 Act,
qualifying assets must represent at least 70% of total assets at the time of acquisitions of any non-qualifying assets. As of none of
the Fund's total assets were considered non-qualifying assets. See Note 3 to the financial statements, Valuation of Investments.

 (2) See Note 3 to the financial statements,
Valuation of Investments.

 (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 secu

 (4) Level 3 Portfolio Investments

 (5) Income- producing

 SCHEDULE OF INVESTMENTS – (Continued)

 DECEMBER 31, 2023

 (in thousands, except share data)

 Our portfolio securities
are restricted from public sale without prior registration under the Securities Act of 1933 (hereafter, the "Securities Act").
We typically negotiate certain aspects of the method and timing of the disposition of our investment in each portfolio company, including
registration rights and related costs.

 As a business development
company ("BDC"), we may invest up to 30% of our assets in non-qualifying portfolio investments, as permitted by the Investment
Company Act of 1940 (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, 2023, we had invested 43.7% of our assets in securities of portfolio companies that constituted qualifying
investments under the 1940 Act. As of December 31, 2023, none of our investments are considered non-qualifying assets as all of our investments
are in enterprises that are considered eligible portfolio companies the 1940 Act. We provide significant managerial assistance to our
portfolio companies that comprise 100% of the total value of the investments in portfolio securities as of December 31, 2023.

 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 issuer. The value of one segment called "Energy" includes our two remaining
portfolio companies and was 70.1% of our net asset value, 50.4% of our total assets and 100% of our investments in portfolio company securities
(at fair value) as of December 31, 2023. 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.

 Our investments in
portfolio securities consist of the following types of securities as of December 31, 2023 (in thousands):

 Type of Securities

 Cost

 Fair Value as Percentage of Net Assets

 Limited liability company investments

 $
 8,111

 $
 32,600

 67.5
 %

 Secured and subordinated debt

 8,253

 8,253

 17.1
 %

 Total

 $
 16,364

 $

 84.6
 %

 The following
is a summary by industry of the Fund's investments in portfolio securities as of December 31, 2023 (in thousands):

 Industry

 Fair Value as Percentage of Net Assets

 $

 84.6
 %

 Total

 $

 84.6
 %

 SCHEDULE OF INVESTMENTS

 DECEMBER 31, 2022

 (in thousands, except share data)

 Name and Location of

 Date of Initial

 Cost of

 Fair

 Portfolio Company (1)

 Industry

 Principal

 Value (2)

 Control Investments: Majority-owned
 (3):

 Equus Energy, LLC (4)

 Houston, TX

 December 2011

 Member interest (100%)

 $
 8,111

 $

 Total Control Investments: Majority-owned (represents 72.3% of total investments at fair value)

 8,111

 Temporary Cash Investments

 U.S. Treasury Bill

 Government

 December 2022

 UST 0% 1/23

 5,998

 5,998

 5,998

 Total Temporary Cash Investments (represents 27.7% of total investments at fair value)

 5,998

 5,998

 Total Investments

 $
 14,109

 $
 21,648

 (1) Under Section 55 (a) of the 1940 Act,
qualifying assets must represent at least 70% of total assets at the time of acquisitions of any non-qualifying assets. As of none of
the Fund's total assets were considered non-qualifying assets. See Note 3 to the financial statements, Valuation of Investments.

 (2) See Note 3 to the financial statements,
Valuation of Investments.

 (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 secu

 (4) Level 3 Portfolio Investments

 (5) Income- producing

 The accompanying notes are an integral
part of these financial statements.

 SCHEDULE OF INVESTMENTS – (Continued)

 DECEMBER 31, 2022

 (in thousands, except share data)

 Our portfolio securities
are restricted from public sale without prior registration under the Securities Act of 1933 (hereafter, the "Securities Act")
or other relevant regulatory authority. We negotiate certain aspects of the method and timing of the disposition of our investment in
each portfolio company, including registration rights and related costs.

 As an investment
company classified as a business development company ("BDC") under the Investment Company Act of 1940 (hereafter, the "1940
Act"), we may invest up to 30% of our assets in non-qualifying portfolio investments, as permitted by the 1940 Act. Specifically,
we may invest up to 30% of our assets in entities that are not considered "eligible portfolio companies" (as defined in the
1940 Act), including companies located outside of the United States, entities that are operating pursuant to certain exceptions under
the 1940 Act, and publicly- traded entities with a market capitalization exceeding $250 million. As of December 31, 2022, we had invested
37.6% of our assets in securities of portfolio companies that constituted qualifying investments under the 1940 Act. As of December 31,
2022, all of our investments are in enterprises that are considered eligible portfolio companies under the 1940 Act. We provide significant
managerial assistance to a portfolio company that comprises 100% of the total value of the investments in portfolio securities as of December
31, 2022.

 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 issuer. The value of one segment called 'Energy' includes one portfolio
company and was 44.4% of our net asset value, 37.6% of our total assets and 100% of our investments in portfolio company securities (at
fair value) as of December 31, 2022. 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.

 Our investments in
portfolio securities consist of the following types of securities as of December 31, 2022 (in thousands):

 Type of Securities

 Cost

 Fair Value as Percentage of Net Assets

 Limited liability company investments

 $
 8,111

 $

 44.4
 %

 Total

 $
 8,111

 $

 44.4
 %

 The following
is a summary by industry of the Fund's investments in portfolio securities as of December 31, 2022 (in thousands):

 Industry

 Fair Value as Percentage of Net Assets

 $

 44.4
 %

 Total

 $

 44.4
 %

 The accompanying notes are an
integral part of these financial statements.

 NOTES TO FINANCIAL STATEMENTS

 DECEMBER 31, 2023, 2022 AND 2021

 (1)
ORGANIZATION AND BUSINESS PURPOSE

 About the Company— 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 ("NYSE") 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.
On January 20, 2021, holders of a majority of the outstanding common stock of the Fund approved the restatement of our Certificate of
Incorporation to increase the number of our authorized shares of common stock from 50,000,000 to 100,000,000, and the number of our authorized
shares of preferred stock from 5,000,000 to 10,000,000. As of December 31, 2023, we had 13,586,173 shares of common stock outstanding
and no shares of preferred stock outstanding.

 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 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 subordinated debt, debt convertible into common or preferred stock, or debt
combined with warrants and common and preferred stock. Debt and preferred equity financing may also be used to create long-term capital
appreciation through the exercise and sale of warrants received in connection with the financing. We seek to achieve capital appreciation
by making investments in equity and equity-oriented securities issued by privately-owned companies in transactions negotiated directly
with such companies. Given market conditions over the past several years and the performance of our portfolio, our Management and Board
of Directors believe it prudent to continue to review alternatives to refine and further clarify the current strategies.

 We elected to be
treated as a BDC under the Investment Company Act of 1940 Act ("1940 Act"), although our shareholders have previously authorized
us to withdraw this election and, although such authorization has expired, will likely do so again in the future. 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, with the exception
of Texas Margins Tax, which is an entity level tax. The 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.

 (2)
LIQUIDITY AND FINANCING ARRANGEMENTS

2023, we had cash and cash equivalents of $6.5 million. We had $40.9 million of our net assets of $48.3 million invested in portfolio
securities. We also had $45.4 million of U.S. Treasury bills 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, $45.0 million was invested
in U.S. Treasury bills and $0.4 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 matured January 4,
2024 and we subsequently repaid this margin loan. The margin interest was paid on February 4, 2024.

2022, we had cash and cash equivalents of $19.3 million. We had $15.7 million of our net assets of $35.2 million invested in portfolio
securities. We also had $6.0 million of U.S. Treasury bills 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, $6.0 million was invested
in U.S. Treasury bills and $0.06 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 matured January 3,
2023 and we subsequently repaid this margin loan. The margin interest was paid on February 3, 2023.

 During 2023 and 2022,
we borrowed 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. If we continue to be a BDC, failure
to continue to qualify as a RIC could be material to us and our stockholders.

 (3)
SIGNIFICANT ACCOUNTING POLICIES

 The following is
a summary of significant accounting policies followed by the Fund in the preparation of its financial statements:

 Earnings Per Share —Basic earnings per share is computed by dividing net
increase (decrease) in net assets resulting from operations by the weighted-average number of shares of common stock outstanding
for the period. Other potentially dilutive common stock, and the related impact to earnings, are considered when calculating earnings
per share on a diluted basis.

 Use of
Estimates —The preparation of financial statements in accordance with accounting principles generally accepted in the
United States ("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. We have identified
valuation of investments and revenue recognition as our most critical accounting estimates.

 Consolidation —In
accordance with Article 6 of Regulation S-X under the Securities Act of 1933, we do not consolidate portfolio company investments. Under
 Accounting Standards Committee ("ASC") 946, we are precluded
from consolidating any entity other than another investment company, except that ASC 946 provides for the consolidation of a controlled
operating company that provides substantially all of its services to the investment company or its consolidated subsidiaries.

 Valuation of Investments— 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;

 2.

 With respect to investments with a fair value exceeding $2.5 million that have been held for more than one year, we engage independent valuation firms to assist our investment professionals. These independent valuation firms conduct independent valuations and make their own independent assessments;

 3.

 Our Management produces a report that summarizes each of our portfolio investments and recommends a fair value of each such investment as of the date of the report;

 4.

 The Audit Committee of our Board reviews and discusses the preliminary valuation of our portfolio investments as recommended by Management in their report and any reports or recommendations of the independent valuation firms, and then approves and recommends the fair values of our investments so determined to our Board for final approval; and

 5.

 The Board discusses valuations and determines the fair value of each portfolio investment in good faith based on the input of our Management, the respective independent valuation firm, as applicable, and the Audit Committee.

 During the first
twelve months after an investment is made, we rely on the original investment amount to determine the fair value unless significant developments
have occurred during this twelve-month period which would indicate a material effect on the portfolio company (such as results of operations
or changes in general market conditions).

 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. 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.

 In addition to the previously described analysis involving allocation of value to the debt
instrument, we perform a yield analysis assuming a hypothetical current sale of the security to determine if a debt security has been
impaired. 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.

 We 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.

 Fair Value Measurement—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
as assumptions market participants would use in pricing an asset or liability. The three levels of the fair value hierarchy 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.

 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. One of the primary
valuation methods 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.

 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, our valuation
process as described above.

 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 to or from Level 3 for
the years ended December 31, 2023 and 2022.

2023, 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, 2023

 Total

 Quoted Prices in Active Markets for Identical Assets

 (Level 1)

 Significant Other Observable Inputs

 (Level 2)

 Significant Unobservable Inputs

 (Level 3)

 $

 $

 —
 $

 —
 $

 Total investments

 —

 —

 —

 —

 Total investments
 $

 85,808
 $

 $

 —

 $

2022, 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, 2022

 Total

 Quoted Prices in Active Markets for Identical Assets

 (Level 1)

 Significant Other Observable Inputs

 (Level 2)

 Significant Unobservable Inputs

 (Level 3)

 $

 $

 —
 $

 —
 $

 Total investments

 —

 —

 5,998

 5,998

 —

 —

 Total investments
 $

 21,648
 $

 5,998

 $

 —

 $

provides a reconciliation of fair value changes during 2023 for all investments for which we determine fair value using significant unobservable
(Level 3) inputs:

 Fair value measurements using significant unobservable inputs (Level 3)

 Control Investments

 Affiliate Investments

 Non-affiliate Investments

 Total

 Fair value as of January 1, 2023

 $

 $
 —

 $
 —

 $15,650

 Change in unrealized appreciation

 16,950

 —

 —

 16,950

 Purchases of portfolio securities

 8,253

 —

 —

 8,253

 Fair value as of December 31, 2023

 $

 $
 —

 $
 —

 $40,853

provides a reconciliation of fair value changes during 2022 for all investments for which we determine fair value using significant unobservable
(Level 3) inputs:

 Fair value measurements using significant unobservable inputs

 (Level 3)

 Control Investments

 Affiliate Investments

 Non-affiliate Investments

 Total

 Fair value as of January 1, 2022

 $

 $
 —

 $
 —

 $13,000

 Change in unrealized appreciation

 2,500

 —

 —

 2,500

 Purchases of portfolio securities

 —

 —

 Fair value as of December 31, 2022

 $

 $
 —

 $
 —

 $15,650

 The following table provides a reconciliation
of fair value changes during 2021 for all investments for which we determine fair value using significant unobservable (Level 3) inputs:

 Fair value measurements using significant unobservable inputs (Level 3)

 Control Investments

 Affiliate Investments

 Non-affiliate Investments

 Total

 Fair value as of January 1, 2021

 $
 7,000

 $
 —

 $
 —

 $7,000

 Change in unrealized appreciation

 5,650

 —

 —

 5,650

 Purchases of portfolio securities

 —

 —

 Fair value as of December 31, 2021

 $

 $
 —

 $
 —

 $13,000

 Fair value measurements
can be sensitive to changes in one or more of the valuation inputs. Changes in discount rates, EBITDA or EBITDA multiples (or revenue
or revenue multiples), each in isolation, may change the fair value of certain of our investments. Generally, an increase/(decrease) in
market yields, discount rates, or an increase/(decrease) in EBITDA or EBITDA multiples (or revenue or revenue multiples) may result in
a corresponding increase/(decrease), respectively, in the fair value of certain of our investments. In the case of our holdings in Morgan
and Equus Energy, we may also consider acreage value, proved reserve multiples, daily production multiples, and discount rates.

 Finally, industry
trends, market forecasts, and comparable transactions in sectors in which we hold a Level 3 investment are also taken into account when
assessing the value of these investments.

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, 2023:

 Range

 Valuation Techniques

 Unobservable Inputs

 Minimum

 Maximum

 Weighted Average

 Limited liability company investments

 Acreage Value (per acre)

 $1,500

 $11,000

 $4,062

 $ 10,000

 Guideline Transaction Method

 Proved Reserve Multiple

 4.2x

 10.9x

 9.0x

 Daily Production Multiple

 19,577.2x

 47,197.76x

 41,648.4x

 Discounted Cash Flow

 Discount Rate

 12.8%

 12.8%

 12.8%

 Guideline Public Company Method

 Proved Reserve Multiple

 10,180x

 13,953x

 12,067x

 Daily Production Multiple

 44,054x

 58,025x

 51,040x

 22,600

 Guideline Transaction Method

 Proved Reserve Multiple

 8,878x

 12,716x

 10,797x

 Daily Production Multiple

 32,565x

 59,790x

 46,178x

 Discounted Cash Flow

 Discount Rate

 10.9%

 12.9%

 11.90%

 Senior debt

 8,253

 Yield analysis

 Discount for lack of marketability

 11.13%

 12.0%

 11.57%

 $ 40,853

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, 2022:

 Range

 Valuation Techniques

 Unobservable Inputs

 Minimum

 Maximum

 Weighted Average

 Limited liability company investments

 Acreage Value (per acre)

 $1,500

 $11,000

 $4,062

 $15,650

 Guideline Transaction Method

 Proved Reserve Multiple

 4.0x

 9.5x

 8.2x

 Daily Production Multiple

 18,578.7x

 47,513.7x

 40,284.4x

 Discounted Cash Flow

 Discount Rate

 11.0%

 11.0%

 11.0%

 The various
weighted averages in the table above were determined based on acreage, reserves, production and, in the case of discount rates, an
arithmetic average of minimum and maximum rates. Because of the inherent uncertainty of the valuation of portfolio securities which
do not have readily ascertainable market values, our fair value determinations may materially differ from the values that would have
been used had a ready market existed for the securities.

 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.

 Investment Transactions —
 Investment transactions are recorded at fair value
on the trade date. Current-period changes in fair value of investments are reflected as a component of the net unrealized appreciation
of portfolio securities on the Statements of Operations. The net change in unrealized appreciation primarily reflects the change in investment
fair values as of the last business day of the reporting period, including the reversal of previously recorded unrealized gains or losses
for investments sold during the period. Realized gains or losses are recognized as the difference between the net proceeds received (excluding
prepayment fees, if any) and the amortized cost basis of the investment using the specific identification method without regard to unrealized
gains or losses previously recognized, and include investments written off during the period, net of recoveries. As of December
31, 2023, we have no assets going through foreclosure. Realized
gains and losses on investments sold are computed on a specific identification basis.

 We classify our investments
in accordance with the requirements of the 1940 Act. Under the 1940 Act, "Control Investments" are defined as investments
in companies in which 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.

 Interest and Dividend
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. Dividend income is recorded as dividends are declared by the portfolio company or at the point an obligation exists
for the portfolio company to make a distribution.

 Payment in Kind
Interest (PIK) —We may make 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 1940 Act.

 Cash and Cash
Equivalents and Restricted Cash — Cash includes unrestricted demand deposits at highly
rated financial institutions and highly liquid investments with original maturities of three months or less. The Company's cash
balances may exceed Federal Deposit Insurance Corporation ("FDIC") insured limits from time to time. Although the Company
bears risk to amounts in excess of those insured by the FDIC, it does not anticipate any losses as a result due to the financial position
and creditworthiness of the depository institutions in which those deposits are held. We include our investing activities within
cash flows from operations.

provides a reconciliation of cash and cash equivalents and restricted cash as reported within the consolidated balance sheet that sums
to the total of the same amounts shown in the consolidated statement of cash flows as of December 31, 2023, 2022 and 2021:

 2023

 2022

 2021

 Cash and cash equivalents at end of period

 $
 6,533

 $
 19,224

 $
 23,465

 Restricted cash at end of period

 Cash and cash equivalents and restricted cash at end of period

 $
 6,983

 $
 19,284

 $
 23,490

 Taxes —Although
we are not required to maintain our RIC status as a BDC, historically, we have nevertheless complied with the requirements of the Code
necessary to qualify as a RIC and, as such, are generally not subject to federal income taxes on otherwise taxable income (including net
realized capital gains) if distributed to stockholders. For the year ended December 31, 2023, no tax accrual for income or excise tax
was made. For the year ended December 31, 2021, we accrued a $0.04 million in corporate level income and excise tax in lieu of making
a distribution of the net capital gain for the sale of PalletOne, Inc. This tax was paid in March 2022. We borrow money from time to time
to maintain our tax status under the Code as a RIC. See Note 1 for discussion of Taxable Subsidiaries and see Note 2 for further discussion
of the Fund's RIC borrowings.

 All corporations
incorporated in the State of Delaware are required to file an Annual Report and to pay a franchise tax. As a result, we paid Delaware
Franchise tax in the amount of $0.03 million for the year ended December 31, 2023, $0.02 million for the year ended December 31, 2022,
$0.03 million for the year ended December 31, 2021, respectively.

 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. For
the year ended December 31, 2023, no state income tax is expected. No state income tax was due for the years ended December 31, 2022 and
2021.

 Distributable
Earnings —The components that make up distributable earnings (accumulated undistributed deficit) on the Balance Sheet as of December
31, 2023 and 2022 are as follows:

 December 31, 2023

 December 31, 2022

 Accumulated undistributed net investment losses

 $
 (51,465
)

 $
 (47,430
)

 Unrealized appreciation of portfolio securities, net

 24,489

 7,539

 Accumulated undistributed net capital gains

 Accumulated deficit

 $
 (26,512
)

 $
 (39,461
)

 Share-Based Incentive
Compensation —On June 13, 2016, our shareholders approved the adoption of our 2016 Equity Incentive Plan ("Incentive Plan").
On January 10, 2017, the SEC issued an order approving the Incentive Plan and certain awards intended to be made thereunder. The Incentive
Plan is intended to promote the interests of the Fund by encouraging officers, employees, and directors of the Fund and its affiliates
to acquire or increase their equity interest in the Fund and to provide a means whereby they may develop a proprietary interest in the
development and financial success of the Fund, to encourage them to remain with and devote their best efforts to the business of the
Fund, thereby advancing the interests of the Fund and its stockholders. The Incentive Plan is also intended to enhance the ability of
the Fund and its affiliates to attract and retain the services of individuals who are essential for the growth and profitability of the
Fund. The Incentive Plan permits the award of restricted stock as well as common stock purchase options. The maximum number of shares
of common stock that are subject to awards granted under the Incentive Plan is 2,434,728 shares. The term of the Incentive Plan will
expire on June 13, 2026. On March 17, 2017, we granted awards of restricted stock under the Plan to certain of our directors and executive
officers in the aggregate amount of 844,500 shares. The awards are each subject to a vesting requirement over a 3-year period unless
the recipient thereof is terminated or removed from their position as a director or executive officer without "cause", or
as a result of constructive termination, as such terms are defined in the respective award agreements entered into by each of the recipients
and the Fund. As of December 31, 2020, all shares were vested. We account for share-based compensation using the fair value method, as
prescribed by ASC 718, Compensation—Stock Compensation. Accordingly, for restricted stock awards, we measure the grant date
fair value based upon the market price of our common stock on the date of the grant and amortize the fair value of the awards as share-based
compensation expense over the requisite service period, which is generally the vesting term. Inasmuch as all existing awards under the
Incentive Plan became fully-vested prior to 2021, we recorded no compensation expense relating to awards made under the Incentive Plan
for the years ended December 31, 2023, 2022 and 2021.

 (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 $40,000 paid quarterly in arrears,
a fee of $2,000 for each meeting of the Board of Directors or committee thereof attended in person, a fee of $1,000 for participation
in each telephonic meeting of the Board or committee thereof, and reimbursement of all out-of-pocket expenses relating to attendance at
such meetings. The chair of each of our standing committees (audit, compensation, and nominating and governance) also receives an annual
fee of $50,000, payable quarterly in arrears. 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. 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 respect of services
provided to the Fund by members of the Board not in connection with their roles and duties as directors, the Fund pays a rate of $300
per hour for services rendered.

 (5)

 FEDERAL INCOME TAX MATTERS

 As a RIC, our tax
liability is dependent upon whether an election is made to distribute taxable investment income and capital gains above any statutory
requirement. For the year ended December 31, 2022, we have incurred net investment losses and no net capital gains or losses. As such,
no income or excise tax was accrued or paid. While we incurred net investment losses and had net realized capital gains for the year ended
December 31, 2021, we accrued $0.04 million in corporate level income and excise tax in lieu of making a distribution. This tax was paid
in March 2022.

 Our year-end for
determining capital gains for purposes of Section 4982 of the Internal Revenue Service Code (the "Code") is October 31.

 In general, we may
take certain adjustments to the classification of net assets as a result of permanent book-to-tax differences, which may include differences
in the book and tax basis of certain assets and liabilities, and undistributed net capital gains for which we have loss carryforwards,
among other items. During the year ended December 31, 2021, according and pursuant to ASC 946-20-50, we recharacterized $18.5 million
in accumulated undistributed net capital gains for which we had loss carryforwards, among other items. Accordingly, this recharacterization
has increased capital in excess of par and decreased accumulated deficit..

 There were no
material book-to-tax differences for net investment income/losses, realized gains or unrealized appreciation/depreciation. For the years
ended December 31, 2023 and December 31, 2022, there are no capital loss carryforwards.

 Reclassification
of returns of capital had no material book to tax differences for the three years ended December 31, 2023 and therefore has no material
book to tax differences impacting accumulated earnings during that three-year period.

 We believe that any
aggregate exposure for uncertain tax positions should not have a material impact on our financial statements as of December 31, 2023 or
December 31, 2022. An uncertain tax position is measured as the largest amount of tax return benefits that does not have a greater than
50% likelihood of being realized upon ultimate settlement. We have not recorded an adjustment to our financial statements related to any
uncertain tax positions. We will continue to evaluate our tax positions and recognize any future impact of uncertain tax positions as
a charge to income in the applicable period in accordance with promulgated standards.

 The Fund's
accounting policy related to income tax penalties and interest assessments is to accrue for these costs and record a charge to expenses
during the period that the Fund takes an uncertain tax position through resolution with the taxing authorities or expiration of the applicable
statute of limitations.

 All of the Fund's
federal and state tax returns for 2020 through 2023 remain open to examination. We believe that there are no tax positions taken or expected
to be taken that would significantly increase or decrease unrecognized tax benefits within twelve months of the reporting date.

 (6)

 COMMITMENTS AND CONTINGENCIES

 Lease Commitments.
We had an operating lease for office space that expired in September 2014. Our current office space lease is month-to-month. Rent expense
under the operating lease agreement, inclusive of common area maintenance costs, was $93,000 for the years ended December 31, 2023, December
31, 2022, and December 31, 2021, respectively. We have no other leases.

 Portfolio Companies.
 As of December 31, 2023 and December 31, 2022, we had $1.7 million and $0 in 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. Follow-on investments may include capital infusions which are expenditures
made directly to the portfolio company to ensure that operations are completed, thereby allowing the portfolio company to generate cash
flows to service the debt.

 Legal Proceedings.
 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.

 (7)

 PORTFOLIO SECURITIES

 2023 Portfolio Activity

summarizes significant investment activity during the year ended December 31, 2023 (in thousands):

 New

 Cash

 Cash

 PIK

 Total

 $
 8,253

 $
 —

 $

 —

 $
 —

 $
 8,253

 $
 8,253

 $
 —

 $

 —

 $
 —

 $
 8,253

 During 2023, we recorded
an increase of $17.0 million in net unrealized appreciation, from an unrealized appreciation of $7.5 million as of December 31, 2022 to
a net unrealized appreciation of $24.5 million as of December 31, 2023. Such change in unrealized appreciation resulted primarily from
the increase in the fair value of our holdings in Morgan E&P, LLC of $22.6 million, principally due to substantial increases in Morgan's
reserves and the reclassification of certain of its proved reserves from undeveloped to producing. The increase in the fair value
of Morgan was offset by the decrease in fair value of our holding in Equus Energy, LLC of $5.7 million, principally due to decreases in
the forward curve for natural gas and its effect on the economic prospects of Equus Energy regarding future development of its gas properties.

 2022 Portfolio Activity

summarizes significant investment activity during the year ended December 31, 2022 (in thousands):

 New

 Cash

 Cash

 PIK

 Total

 $
 —

 $
 —

 $

 $
 —

 $

 $
 —

 $
 —

 $

 $
 —

 $

 During 2022, we recorded
an increase of $2.5 million in net unrealized appreciation, from an unrealized appreciation of $5.0 million as of December 31, 2021 to
a net unrealized appreciation of $7.5 million as of December 31, 2022. Such change in unrealized appreciation resulted primarily from
the increase in the fair value of our holdings in Equus Energy, LLC of $2.65 million, principally due to increases in the cost basis of
this investment, as well as increases in oil and gas prices, as well as increases in the short- and long-term forward pricing curves for
these commodities during 2022.

 2021 Portfolio Activity

 During, 2021, we
received $3.8 million in cash from the escrow receivable related to the sale of PalletOne. We recognized a capital gain of $0.4 million
due to the settlement of the escrow receivable in connection with this sale.

summarizes significant investment activity during the year ended December 31, 2021 (in thousands):

 New

 Cash

 Cash

 PIK

 Total

 $
 —

 $
 —

 $

 $
 —

 $

 $
 —

 $
 —

 $

 $
 —

 $

 During 2021, we recorded
an increase of $5.6 million in net unrealized appreciation, from an unrealized depreciation of $0.6 million as of December 31, 2020 to
a net unrealized appreciation of $5.0 million as of December 31, 2021. Such change in unrealized appreciation resulted primarily from
the increase in the fair value of our holdings in Equus Energy, LLC of $6.0 million, principally due to an increase in the cost basis
of this investment, as well as increases in oil and gas prices, as well as increases in the short- and long-term forward pricing curves
for these commodities during 2021.

 (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 presently consisting of 136 producing and non- producing
oil and gas wells. On September 30, 2020, the Fund provided an additional $0.6 million in capital to Equus Energy for the purpose of additional
working capital. On June 30, 2021, the Fund provided an additional $0.35 million in capital to Equus Energy for the purpose of additional
working capital. On December 31, 2022, the Fund provided an additional $0.15 million in capital to Equus Energy for the purpose of additional
working capital. The working interests include associated development rights of approximately 21,320 acres situated on 9 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 operators, including Burk Royalty, which has operating responsibility for all of Equus Energy's 22 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 seeking to effect 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 (appx. 8,500 feet) on 2,400 acres in the Conger Field. Also included in the
interests acquired by Equus Energy are working interests of 7.5% and 2.5% in the Burnell and North Pettus Units, respectively, which collectively
comprise approximately 13,000 acres located in the area known as the "Eagle Ford Shale" play.

 Below is selected
financial information from the audited financial statements of Equus Energy as of December 31, 2023 and 2022, and for the years ended
December 31, 2023, 2022 and 2021 (in thousands):

 EQUUS ENERGY, LLC and SUBSIDIARY

 Condensed Consolidated Balance
Sheets

 2023

 2022

 Assets

 Current assets:

 Cash and cash equivalents

 $

 $

 Accounts receivable

 Other current assets

 —

 Total current assets

 Oil and gas properties

 8,173

 8,155

 Less: accumulated depletion, depreciation and amortization

 (8,097
)

 (8,095
)

 Net oil and gas properties

 Total assets
 $

 $

 Liabilities and member's deficit

 Current liabilities:

 Accounts payable and other

 $

 $

 Due to affiliate

 Total current liabilities

 Asset retirement obligations

 Total liabilities

 Total member's deficit

 $
 (149
)

 $
 (191
)

 Total liabilities and member's deficit
 $

 $

 EQUUS ENERGY, LLC and SUBSIDIARY

 Condensed Consolidated Statements
of Operations

 Year Ended December 31,

 2023

 2022

 2021

 Operating revenue

 $

 $
 1,063

 $855

 Operating expenses

 Direct operating expenses

 Gain on sale of oil and gas properties

 —

 —

 (22)

 Depletion, depreciation, amortization and accretion

 Impairment of oil and gas properties

 —

 —

 Salaries

 -

 Professional fees

 General and administrative

 Total operating expenses

 1,603

 1,596

 Loss from operations

 (958
)

 (533
)

 (69)

 Non-operating income

 Other income

 1,000

 —

 —

 Total other income

 1,000

 —

 —

 Net income (loss)

 $

 $
 (533
)

 $(69)

 EQUUS ENERGY, LLC and SUBSIDIARY

 Condensed Consolidated Statements
of Cash Flows

 Year ended December 31,

 2023

 2022

 2021

 Cash flows from operating activities:

 Net income (loss)

 $

 $
 (533
)

 $
 (69
)

 Adjustments to reconcile net income (loss) to

 net cash used in operating activities:

 Depletion, depreciation and amortization

 —

 Gain on sale of oil and gas properties

 —

 —

 (22
)

 Accretion expense

 Impairment

 —

 —

 Changes in operating assets and liabilities:

 Accounts receivable

 (138
)

 Prepaid expenses and other current assets

 (12
)

 —

 Accounts payable and accrued liabilities

 (5
)

 (127
)

 Due to parent

 (224
)

 —

 —

 Net cash provided by (used in) operating
 activities

 (130
)

 (527
)

 (317
)

 Cash flows from investing activities:

 Investment in oil & gas properties

 (18
)

 (58
)

 (36
)

 Sale of oil & gas properties

 —

 —

 Net cash used in investing activities

 (18
)

 (58
)

 (14
)

 Cash flows from financing activities:

 Capital contribution

 —

 Net cash (used in) provided by investing activities

 —

 Net (decrease) increase in cash

 (134
)

 (435
)

 Cash and cash equivalents at beginning of period

 Cash and cash equivalents at end of period

 $

 $

 $

 (9)

 MORGAN E&P, LLC

 Morgan E&P, LLC ("Morgan")
was organized by the Fund on April 3, 2023 as a Delaware limited liability company and a wholly-owned subsidiary of the Fund. On May 22,
2023, Morgan completed the acquisition of 4,747.52 net acres, in the Bakken/Three Forks formation in the Williston Basin of North Dakota,
and acquired approximately 1,100 additional acres on September 26, 2023. The acreage and associated mineral rights were acquired from
Pro Energy I LLC ("Pro Energy").

 Under the terms of the Purchase
and Sale Agreement entered into by Morgan and Pro Energy, Morgan is required to drill and complete a minimum of six wells within 18 months
of receiving the first drilling permits. The average cost of drilling a new horizontal well is approximately $8.2 million.

 In May 2023, we entered into an
agreement with Morgan to provide it up to $10.0 million in senior debt financing, subject to a schedule of disbursements and draws that
we determine. As of December 31, 2023, Morgan had drawn $8.3 million under this facility. (See Subsequent Events below where we
increased the total amount of the facility to $10.5 million and where we advanced, subsequent to year-end, an additional $2.0 million
under the facility).

 Below is summarized
audited condensed consolidated financial information for Morgan E&P, LLC as of December 31, 2023 and for the period from inception
(April 3, 2023) through December 31, 2023, respectively, (in thousands):

 MORGAN E&P, LLC

 Condensed Balance Sheets

 December 31, 2023

 Assets:

 Cash and cash equivalents

 $
 2,441

 Oil and gas receivables:

 Revenue receivables

 Joint interest billing receivables

 1,391

 Prepaids and other current assets

 Current assets

 4,428

 Property, plant and equipment

 Oil and gas properties, net-full cost method

 10,326

 Operating lease - right-of-use assets

 Other property, plant and equipment, net

 Total property, plant and equipment - net

 10,643

 Total assets

 $
 15,071

 Liabilities and member's deficit

 Current liabilities

 Accounts payable

 $
 2,372

 Revenue payable

 Prepayments from working interest owners

 Current portion of lease liabilities

 Due to parent

 Accrued liabilities

 5,383

 Total current liabilities

 8,129

 Long-term liabilities

 Asset retirement obligations

 Long-term operating lease liabilities

 Note payable - Due to parent

 8,253

 Long-term accrued liabilities

 Total long-term liabilities

 8,736

 Total liabilities

 16,875

 Retained deficit

 (1,804
)

 Total member's deficit

 $
 (1,804
)

 Total liabilities and member's deficit

 $
 15,071

 MORGAN E&P, LLC

 Condensed Statements of Operations

 From inception (April 3, 2023) to

 December 31, 2023

 Oil and gas revenues

 $

 Operating costs and expenses

 Lease operating expense

 Production and ad valorem taxes

 Depreciation, depletion, and amortization

 General and administrative

 1,510

 Total operating costs and expenses

 1,865

 Loss from operations

 (1,595
)

 Other income (expense)

 Interest income

 Interest expense

 (225
)

 Total other income and expenses, net

 (209
)

 Net loss

 $
 (1,804
)

 MORGAN E&P, LLC

 Condensed Statements of Cash Flows

 From inception

 (April 3, 2023) through

 December 31, 2023

 Cash flows from operating activities:

 Net loss

 $
 (1,804
)

 Adjustments to reconcile net income to cash flows

 used in operating activities:

 Depreciation, depletion, amortization

 Amortization of right-of-use assets

 Changes in operating assets and liabilities:

 Revenue receivables

 (464
)

 Joint interest billing receivables

 (291
)

 Prepaids and other current assets

 (133
)

 Accounts payable

 Revenue payable

 Prepayments from working interest owners

 1,701

 Accounts payable - Due to parent

 Accrued liabilities

 1,035

 Net cash provided used in operating activities

 Cash flows from investing activities:

 Additions to oil and gas properties

 (5,700
)

 Acquisition of oil and gas properties

 (500
)

 Additions to other property, plant and equipment

 (48
)

 Net cash used in investing activities

 (6,248
)

 Cash flows from financing activities:

 Proceeds from note payable - Due to parent

 8,253

 Net cash used by financing activities

 8,253

 Net change in cash

 2,441

 Cash and cash equivalents at beginning of period

 —

 Cash and cash equivalents at end of period

 $
 2,441

 (10)

 RECENT ACCOUNTING PRONOUNCEMENTS

 Recent Accounting
Standards —We consider the applicability and impact of all accounting standard updates ("ASU") issued by the Financial
Accounting Standards Board ("FASB"). ASUs not listed below were assessed and either determined to be not applicable or expected
to have minimal impact on our financial statements.

 Accounting Standards
Not Yet Adopted —In November 2023, FASB issued ASU 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable
Segment Disclosures". The amendments in this ASU require improved reportable segment information on an annual and interim basis,
primarily through enhanced disclosures about significant segment expenses. This update will be effective for financial statements issued
for fiscal years beginning after December 15, 2023, and interim periods for fiscal years beginning after December 15, 2024. The Company
is currently evaluating the impact of this standard on the consolidated financial statements

 In December 2023,
FASB issued ASU 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures". The amendments in this ASU require
improved annual income tax disclosures surrounding rate reconciliation, income taxes paid, and other disclosures. This update will be
effective for financial statements issued for fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company
is currently evaluating the impact of this standard on the consolidated financial statements.

 Accounting Standards
Recently Adopted — In June 2022, the FASB issued ASU 2022-03, "Fair Value Measurement (Topic 820) - Fair Value Measurement
of Equity Securities Subject to Contractual Sale Restrictions", which was issued to (1) clarify the guidance in Topic 820, Fair
Value Measurement, when measuring the fair value of an equity security subject to contractual restrictions that prohibit the sale of an
equity security, (2) to amend a related illustrative example, and (3) to introduce new disclosure requirements for equity securities subject
to contractual sale restrictions that are measured at fair value in accordance with Topic 820. The new guidance is effective for interim
and annual periods beginning after December 15, 2023. There was no impact on the financial statements or financial statement disclosures.

 (11)

 SUBSEQUENT EVENTS

 Our Management performed
an evaluation of the Fund's activity through the date the financial statements were issued, noting the following subsequent events:

 On January 4, 2024,
our holding in $45.0 million in U. S. Treasury Bills matured and we repaid our year-end margin loan.

 On February 26, 2024,
we amended our credit facility with Morgan and increased the total amount that may be drawn under the facility from $10.0 to $10.5 million.
Also, during February and March 2024, we advanced Morgan an additional $2.2 million under this facility.

 Item 9. Changes in and Disagreements
with Accountants on Accounting and Financial Disclosure

 None.

 Item 9A. Controls and Procedures

 Attached as exhibits
to this Form 10-K are certifications of our Chief Executive Officer and Chief Financial Officer (CFO), which are required in accordance
with Rule 13a-14 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). This section includes information
concerning the controls and controls evaluation referred to in those certifications and should be read in conjunction with the certifications
for a more complete understanding of the topics presented.

 Evaluation of Disclosure Controls and
Procedures

 We maintain disclosure
controls and procedures that are designed to ensure that information required to be disclosed in our reports filed pursuant to the Exchange
Act is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission's
rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and
Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure based on the definition of "disclosure
controls and procedures" as promulgated under the Exchange Act. In designing and evaluating the disclosure controls and procedures,
management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance
of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit
relationship of possible controls and procedures.

 The Fund, including
our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls
and procedures as of December 31, 2023. Based on the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that
our disclosure controls and procedures were effective.

 Report of Management on Internal Control Over Financial Reporting

 Management is responsible for establishing
and maintaining adequate internal control over financial reporting, and for performing an assessment of the effectiveness of internal
control over financial reporting as of December 31, 2023. Internal control over financial reporting is a process designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles. The Fund's internal control over financial reporting includes, among others, those
policies and procedures that pertain to assets of the Fund including, in particular, the fair value of portfolio investments held by the
Fund.

 A material weakness is a deficiency, or
a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material
misstatement of a company's annual or interim consolidated financial statements will not be prevented or detected on a timely basis.

 Management performed an assessment of the
effectiveness of the Fund's internal control over financial reporting as of December 31, 2023, based upon criteria in Internal Control—Integrated
Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO"). Based on this assessment,
management has concluded that the Fund did not maintain effective internal control over financial reporting as of December 31, 2023, due
to the material weaknesses described below.

 A material weakness was identified in our
internal control over financial reporting relating to the design and operation of management review over the valuation of the Fund's
portfolio investment, including management's review procedures over the completeness and accuracy of the underlying data and information
supplied to third parties assisting management by recommending a range of reasonable fair values.

 Although this material weakness did not
result in a material misstatement of our consolidated financial statements for the periods presented, there is a possibility that, had
the material weakness continued undetected, it could have led to a material misstatement of portfolio fair values and related disclosures.
Accordingly, management has concluded that this control deficiency constitutes a material weakness.

 Management believes that the financial statements
included in this Annual Report on Form 10-K present fairly in all material respects the Fund's financial condition, results of its
operations, changes in its net assets and its cash flows for the periods presented. We believe that the audited consolidated financial
statements included in this Annual Report on Form 10-K are accurate.

 We have begun the process of, and we are
focused on, enhancing effective internal control measures to improve our internal control over financial reporting and remediate the material
weaknesses. Our internal control remediation efforts include the following:

 Enhancing existing controls that address the completeness and accuracy of
underlying data and information supplied to third parties assisting management in its determination of fair value and in the performance
of management review controls over the valuation of the Fund's portfolio securities; and

 Enhancing policies and procedures to improve the precision of review and
evidence of review procedures performed to demonstrate effective design and operation of such controls.

 We believe our planned actions to enhance
our processes and controls will address the material weakness, but these actions are subject to ongoing management evaluation, and we
will need a period of execution to demonstrate remediation. We are committed to the continuous improvement of our internal control over
financial reporting and will continue to diligently review our internal control over financial reporting.

 There were no other changes in our internal
control over financial reporting during the quarter ended December 31, 2023 that have materially affected, or are reasonably likely to
affect, our internal control over financial reporting.

 Item 9B. Other Information

 None.

 Item 9C. Disclosure Regarding Foreign
Jurisdictions that Prevent Inspections.

 Not Applicable.

 Item 10. Directors, Executive Officers
and Corporate Governance

about our Directors and Executive Officers, our Audit Committee and the Nominating and Corporate Governance Committee, our code of ethics
applicable to the principal executive officer and principal financial officer, and Section 16(a) Beneficial Ownership Reporting Compliance
is incorporated by reference to our Definitive Proxy Statement for the 2024 Annual Meeting of Stockholders, to be filed pursuant to Regulation
14A under the Securities Exchange Act of 1934, as amended, on or prior to April 30, 2024 (the "2024 Proxy Statement").

 We
have adopted a code of business conduct and ethics applicable to our directors, officers (including our principal executive officer, principal
financial officer and controller) and employees, known as the Code of Business Conduct and Ethics. A copy of the Code of Business Conduct
and Ethics is available to any person, without charge, upon request addressed to Equus Total Return, Inc., Attention: Corporate Secretary,
700 Louisiana Street, 48 th Floor, Houston, TX 77002.
In the event that we amend or waive any of the provisions of the Code of Business Conduct and Ethics applicable to our principal executive
officer, principal financial officer, or controller, we intend to disclose the same on our website at www.equuscap.com.

 Item 11. Executive Compensation

regarding Executive Compensation is incorporated by reference to our 2024 Proxy Statement.

 Item 12.
 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

regarding Security Ownership of Certain Beneficial Owners and Management and Securities Authorized for Issuance under Equity Compensation
Plans is incorporated by reference to our 2024 Proxy Statement.

 Item 13. Certain Relationships and
Related Transactions and Director Independence

regarding Certain Relationships and Related Transactions is incorporated by reference to our 2024 Proxy Statement.

 Item 14. Principal Accountant Fees
and Services

regarding Principal Accountant Fees and Services is incorporated by reference to our 2024 Proxy Statement.

 Item 15. Exhibits and Financial
Statement Schedules

 (a)(1) The following financial statement
schedules are filed herewith:

 Schedule 12-14
Investments in and Advances to Affiliates

 Item 16. Form 10-K Summary

 Not Included.

 SCHEDULE 12-14

 SCHEDULE OF INVESTMENTS IN AND ADVANCES TO AFFILIATES

 Year Ended

 December 31, 2022

 Portfolio Company

 Investment (a)

 Amount of Interest
 or Dividend Credited to Income (d)

 As of December 31, 2021 Fair
 Value

 Gross Additions (b)

 Gross Reductions (c)

 Decrease in Unrealized Appreciation / Depreciation

 As of

 December 31, 2022 Fair Value

 Control Investments: Majority-owned

 Member interest (100%)

 $
 —

 $

 $

 $
 —

 $
 2,500

 $

 Total Control Investments: Majority-owned

 —

 —

 2,500

 Total Control Investments

 $
 —

 $

 $

 $
 —

 $
 2,500

 $

 This schedule should be read in conjunction
with our Financial Statements, including our Schedule of Investments and Notes 3 and 4 to the Financial Statements.

 (a) Common stock, warrants,
options and equity interests are generally non-income producing and restricted. In some cases, preferred stock may also be non-income
producing. The principal amount for debt and the number of shares of common stock and preferred stock is shown in the Schedule of Portfolio
Securities as of December 31, 2023.

 (b) Gross additions
include increases in investments resulting from new portfolio company investments, paid-in-kind interest or dividends, the amortization
of discounts and fees, and the exchange of one or more existing securities for one or more new securities. Gross additions also include
net increases in unrealized appreciation or net decreases in unrealized depreciation.

 (c) Gross reductions
include decreases in investments resulting from principal collections related to investment repayments or sales and the exchange of one
or more existing securities for one or more new securities. Gross reductions also include net increases in unrealized depreciation or
net decreases in unrealized appreciation.

 (d) Represents the total
amount of interest or dividends credited to income for the portion of the year an investment was a control investment (more than 25% owned)
or an affiliate investment (5% to 25% owned), respectively. All dividend income is non-cash unless otherwise noted.

 (a)(2) 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 Current Report on Form 8-K filed on January 21, 2021.]

 (b)

 Certificate of Merger dated June 30, 1993, between the Fund and Equus Investments Incorporated. [Incorporated by reference to Exhibit 3(b) to Registrant's Annual Report on Form 10-K for the year ended December 31, 2007.]

 (c)

 Amended and Restated Bylaws of the Fund. [Incorporated by reference to Exhibit 3(b) to Registrant's Current Report on Form 8-K filed on December 23, 2010.]

 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 certain of its directors and 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)

 2016 Equity Incentive Plan, adopted June 13, 2016 [Incorporated by reference to Exhibit 1 to Registrant's Definitive Proxy Statement filed on May 5, 2016.]

 23.

 Consent of Experts and Counsel *

 (1)

 Consent of Independent Accountants, BDO USA, P.C.

 31.

 R u le 13a-14(a)/15d-14(a) Certifications *

 (1)

 Certification by Chief Executive Officer

 (2)

 Certification by Chief Financial Officer

 32.

 Section 1350 Certification *

 (1)

 Certification by Chief Executive Officer

 (2)

 Certification by Chief Financial Officer

 97.

 Policy Relating to Recovery of Erroneously Awarded Compensation *

 (1)

 Equus Total Return, Inc. Compensation Recoupment Policy

 99.

 Equus Energy, LLC and Subsidiary and Morgan E&P, LLC *

 (1)

 Consolidated Financial Statements of Equus Energy, LLC and Subsidiary as of December 31, 2023 and 2022 and for the years ended December 31, 2023, 2022 and 2021

 (2)

 Financial Statements of Morgan E&P, LLC as of December 31, 2023 for the period from inception (April 3, 2023)
 through December 31, 2023

 * Filed herewith

 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:
 April 1, 2024

 /S/ JOHN A. HARDY

 John A. Hardy

 Chief Executive Officer

 (Principal Executive Officer)

 Pursuant to the requirements of the Securities
Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and
on the dates indicated.

 Signature

 Title

 Date

 /S/ FRASER ATKINSON

 Director

 April

 Fraser Atkinson

 /S/ KENNETH I. DENOS

 Director, Secretary and Chief Compliance Officer

 April

 Kenneth I. Denos

 /S/ HENRY W. HANKINSON

 Director

 April

 Henry W. Hankinson

 /S/ ROBERT L. KNAUSS

 Director

 April

 Robert L. Knauss

 /S/ JOHN A. HARDY

 Director, Chief Executive Officer (Principal Executive Officer)

 April

 John A. Hardy

 /S/ L'SHERYL D. HUDSON

 Senior Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)

 April

 L'Sheryl D. Hudson