Equus Total Return, Inc. reported a net investment loss of $1.4 million for the third quarter of 2025, compared to a loss of $0.7 million in the same period last year. For the nine months ending September 30, 2025, the company recorded a net investment loss of $3.1 million, up from $2.7 million in 2024. Total investment income remained relatively stable at $0.4 million for the third quarter, compared to $0.3 million in 2024, and $1.0 million for the nine-month period, slightly up from $0.9 million in the previous year. The increase in losses was primarily attributed to higher compensation expenses related to additional shares issued under the equity incentive plan and increased interest expenses.
The company's total assets increased to $31.4 million as of September 30, 2025, from $29.9 million at the end of 2024. This growth was driven by a rise in investments in portfolio securities, which reached $28.0 million, up from $27.5 million. However, net assets decreased to $26.5 million from $29.5 million, reflecting a decline in net asset value per share from $2.17 to $1.90. The decrease in net assets was influenced by unrealized losses on investments, particularly in the energy sector, which accounted for a significant portion of the company's portfolio.
Equus Total Return has made strategic moves to enhance its operational efficiency, including the internalization of management and a shift in investment strategy to focus on shorter-term liquidation opportunities. The company also issued a $2 million convertible senior note in February 2025, which is convertible into shares of common stock at a price of $1.50 per share. This financing is part of the company's efforts to maintain liquidity and support its investment activities.
Operationally, Equus Total Return's portfolio is heavily weighted in the energy sector, with control investments representing 81.5% of total investments at fair value. The company has been actively managing its investments, including the sale of Equus Energy, which resulted in a realized loss of $2.7 million due to unmet redemption conditions on preferred stock received as part of the sale. The company is also evaluating opportunities to transform into an operating company, although no definitive timeline has been established for this transition.
Looking ahead, Equus Total Return faces challenges related to market conditions, particularly in the oil and gas sector, which have been volatile due to geopolitical events and fluctuating commodity prices. The company is focused on preserving liquidity and enhancing shareholder value through strategic investments and operational efficiencies. However, there is substantial doubt about its ability to continue as a going concern without securing additional financing or making significant changes to its operational strategy.
About EQUUS TOTAL RETURN, INC.
Equus Total Return, Inc. is a closed-end investment company focused on maximizing total returns through investments in debt and equity securities of small to middle-market companies. It targets growth, leveraged buyouts, and special situations, primarily in the energy sector. The company provides active management, seeks liquidity events, and operates under the Business Development Company (BDC) structure to balance income and capital appreciation.
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