10-K 1 f10k_equus12312024.htm 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, 2024

☐ 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

EQUUS TOTAL RETURN, INC.

(Exact name of registrant as specified in its charter)

Delaware		76-0345915
(State or other jurisdiction of		(I.R.S. Employer Identification No.)
incorporation or organization)

700 Louisiana St. 41^st Floor, Houston, Texas		77002
(Address of principal executive offices)		(Zip Code)

__________________________________________
(former address, if changed since last report)

Registrant’s telephone number, including area code: (713) 529-0900

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.

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

Indicate 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 ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate 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). ☐

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 ☐
	Emerging growth company ☐

Indicate 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. ☐

Indicate 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) ☐

	TABLE OF CONTENTS
PART I		Page
Item 1	Business	4
Item 1A	Risk Factors	12
Item 1B	Unresolved Staff Comments	24
Item 1C	Cybersecurity	24
Item 2	Properties	25
Item 3	Legal Proceedings	25
Item 4	Mine Safety Disclosures	25
PART II Item 5	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	26
Item 6	[Reserved]	27
Item 7	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
Item 7A	Quantitative and Qualitative Information About Market Risk	37
Item 8	Financial Statements and Supplementary Data	38
Item 9	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	72
Item 9A	Controls and Procedures	72
Item 9B	Other Information	73
Item 9C	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	74
PART III Item 10	Directors, Executive Officers and Corporate Governance	74
Item 11	Executive Compensation	74
Item 12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	74
Item 13	Certain Relationships and Related Transactions, and Director Independence	74
Item 14	Principal Accountant Fees and Services	74
PART IV Item 15	Exhibits and Financial Statement Schedules	74
Item 16	Form 10-K Summary	74

	2024								2023								2022
	Q1		Q2		Q3		Q4		Q1		Q2		Q3		Q4		Q1		Q2		Q3		Q4
High	$	1.68	$	1.53	$	1.48	$	1.40	$	1.75	$	1.65	$	1.55	$	1.51	$	2.71	$	2.70	$	2.63	$	1.83
Low		1.42		1.25		1.24		1.04		1.44		1.46		1.35		1.38		2.20		2.35		1.49		1.39
NAV		3.38		3.66		2.96		2.17		2.52		2.96		3.49		3.55		2.77		2.75		2.68		2.61

	Investment Activity
	New Investments				Existing Investments
Portfolio Company	Cash		Non-Cash		Follow-On Cash		PIK		Total
Morgan E&P, LLC	$	—	$	—	$	2,247	$	—	$	2,247

	$	—	$	—	$	2,247	$	—	$	2,247

		Page
	Report of Independent Registered Public Accounting Firm - (BDO USA, P.C.; Houston, TX; PCAOB ID#243)	39
	Balance Sheets—As of December 31, 2024 and 2023	41
	Statements of Operations—For the years ended December 31, 2024, 2023 and 2022	42
	Statements of Changes in Net Assets—For the years ended December 31, 2024, 2023 and 2022	43
	Statements of Cash Flows— For the years ended December 31, 2024, 2023 and 2022	44
	Statements of Selected Per Share Data and Ratios - For the years ended December 31, 2024, 2023, 2022, 2021 and 2020	45
	Schedule of Investments—December 31, 2024	46
	Schedule of Investments—December 31, 2023	48
	Notes to Financial Statements	50
	Schedules of Investments in and Advances to Affiliates— For the year ended December 31, 2024	75

	December 31, 2024			December 31, 2023

(in thousands, except shares and per share amounts)
Assets
Investments in portfolio securities at fair value:
Control investments (cost at $18,611 and $16,364, respectively)	$	27,500		$	40,853
Total investments in portfolio securities at fair value		27,500			40,853
U.S. Treasury Bills		—			44,955
Cash and cash equivalents		262			6,533
Restricted cash		—			450
Accounts receivable from affiliates		678			139
Accrued interest		1,470			225
Other assets		26			392
Total assets		29,936			93,547
Liabilities and net assets
Accounts payable		332			172
Accrued compensation		1			29
Accounts payable to related parties		93			104
Borrowing under margin account		—			44,955
Total liabilities		426			45,260

Commitments and contingencies (See Note 6)

Net assets
Common stock, $.001 par value per share; 100,000,000 shares authorized as of December 31, 2024 and December 31, 2023, and 13,586,173 shares outstanding as of December 31, 2024 and December 31, 2023

Preferred stock, $.001 par value per share; 10,000,000 shares authorized as of December 31, 2024 and December 31, 2023
Common stock, par value	$	14		$	14
Capital in excess of par value		74,785			74,785
Accumulated deficit		(45,289	)		(26,512	)
Total net assets	$	29,510		$	48,287
Shares of common stock issued and outstanding, $.001 par value, 100,000 and 50,000 shares authorized, respectively		13,586			13,586
Net asset value per share	$	2.17		$	3.55

	Year Ended December 31,
(in thousands, except per share amounts)	2024			2023			2022
Investment income:
Interest income:
Control investments	$	1,245		$	225		$	—
Total interest income		1,245			225			—
Interest from U.S. Treasury Bills		29			24			—
Total investment income		1,274			249			—

Expenses:
Compensation expense		1,761			1,937			1,564
Professional fees		1,439			1,110			815
Professional liability expenses		582			661			720
Director fees and expenses		317			334			325
General and administrative expenses		189			133			130
Mailing, printing and other expenses		127			71			56
Taxes		36			13			15
Interest expense		138			25			4
Total expenses		4,589			4,284			3,629

Net investment loss		(3,315	)		(4,035	)		(3,629	)

Net realized gain:
U.S. Treasury Bills		138			34			1
Net realized gain		138			34			1

Net unrealized appreciation (depreciation) of portfolio securities:
Control investments		(15,600	)		16,950			2,500
Net change in net unrealized appreciation (depreciation) of portfolio securities		(15,600	)		16,950			2,500

Income Taxes
Federal income taxes		—			—			—

Net increase (decrease) in net assets resulting from operations	$	(18,777	)	$	12,949		$	(1,128	)

Net increase (decrease) in net assets resulting from operations per share:
Basic and diluted	$	(1.38	)	$	0.96		$	(0.08	)
Weighted average shares outstanding:
Basic and diluted		13,586			13,526			13,518

	Common Stock
(in thousands)	Number of Shares		Par Value		Capital in Excess of Par Value		Accumulated Deficit			Total Net Assets

Balances as of December 31, 2024		13,586		14		74,785		(45,289	)	$	29,510

Net decrease in net assets resulting from operations		—		—		—		(18,777	)		(18,777	)

Balances as of December 31, 2023		13,586		14		74,785		(26,512	)		48,287

Issuance of shares		68		1		100		—			101

Net increase in net assets resulting from operations		—		—		—		12,949			12,949

Balances as of December 31, 2022		13,518		13		74,685		(39,461	)		35,237

Net decrease in net assets resulting from operations		—		—		—		(1,128	)		(1,128	)

Balances as of December 31, 2021		13,586	$	13	$	74,685	$	(38,333	)	$	36,365

Name and Location of			Date of Initial					Cost of		Fair
Portfolio Company ⁽¹⁾	Industry		Investment		Investment	Principal		Investment		Value⁽²⁾

Control Investments: Majority-owned ⁽³⁾:
Equus Energy, LLC ⁽⁴⁾ Houston, TX		Energy		December 2011	Member interest (100%)			$	8,111	$	4,000
Morgan E&P, LLC ⁽⁴⁾ Houston, TX		Energy		April 2023	Member interest (100%)				—		13,000
					12% senior secured promissory note due 5/26 ⁽⁵⁾	$	10,500		10,500		10,500
									10,500		23,500
Total Control Investments: Majority-owned (represents 100% of total investments at fair value)									18,611		27,500
Total Investments								$	18,611	$	27,500

Type of Securities	Cost		Fair Value		Fair Value as Percentage of Net Assets

Limited liability company investments	$	8,111	$	17,000		57.6	%
Secured and subordinated debt		10,500		10,500		35.6	%

Total	$	18,611	$	27,500		93.2	%

				Fair Value Measurements as of December 31, 2024
(in thousands)		Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets
Investments:
Control investments	$	27,500	$	—	$	—	$	27,500
Total investments	$	27,500	$	—		—	$	27,500

SEC Form 10-K filed by Equus Total Return Inc.