30 unchanged sentences
Management may not be able to implement our investment objective successfully.
−Removed: Our Board is taking a more opportunistic approach to our portfolio investment strategy, shifting our investment emphasis from manufacturing and services to other sectors, such as energy.
+Added: 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.
8 unchanged sentences
These equity interests may not appreciate and, in fact, may depreciate in value.
−Removed: For Equus Energy 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.
+Added: 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.
−Removed: Our holdings in Equus Energy are subject to commodity price declines endemic to oil and gas companies.
+Added: 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.
−Removed: This means that the operations and earnings of Equus Energy may be significantly affected by changes in prices of oil, gas and natural gas liquids.
+Added: 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.
1 unchanged sentence
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.
−Removed: Equus Energy does not employ any hedging strategies in respect of its oil and gas holdings and is therefore subject to price fluctuations resulting from these and other factors.
−Removed: The operational results and financial condition of 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.
+Added: 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.
+Added: 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.
6 unchanged sentences
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.
−Removed: In view of the net asset value of the Fund as of December 31, 2022 and the fact that our sole portfolio investment consists of our equity holding in Equus Energy, however, we would expect that any new investments may exceed this percentage for the immediate future.
+Added: 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.
126 unchanged sentences
Our ability to invest in private companies may be limited in certain circumstances.
−Removed: As noted elsewhere herein, on November 1, 2022 we received authorization from our stockholders to withdraw our election to be classified as a BDC.
−Removed: Although this authorization expired on February 28, 2023, we expect to receive an additional authorization from our stockholders in the future.
+Added: As noted elsewhere herein, we have previously received an authorization from our stockholders to withdraw our election to be classified as a BDC.
+Added: 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.
28 unchanged sentences
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.
−Removed: As described above under “ Significant Developments – Authorization to Withdraw BDC Election ”, our shareholders have recently 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.
+Added: 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.
2 unchanged sentences
Our ability to enter into transactions with our affiliates is restricted.
−Removed: As noted above, on November 1, 2022, our stockholders authorized our Board and Chief Executive Officer to withdraw our election to be classified as a BDC and, although this authorization expired on February 28, 2023, we expect to receive a further authorization from our stockholders in the future.
+Added: 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.
14 unchanged sentences
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.
−Removed: Senior Securities .
−Removed: As a result of issuing senior securities, we would also be exposed to typical risks associated with leverage, including an increased risk of loss.
−Removed: If we issue preferred securities, they would rank “senior” to common stock in our capital structure.
−Removed: Preferred stockholders would have separate voting rights and may have rights, preferences or privileges more favorable than that of our common stockholders.
−Removed: Furthermore, the issuance of preferred securities could have the effect of delaying, deferring or preventing a transaction or a change of control that might involve a premium price for our common stockholders or otherwise be in your best interest.
−Removed: Additional Common Stock.
−Removed: Our Board of Directors may decide to issue common stock to finance our operations rather than issuing debt or other senior securities.
−Removed: As a BDC, we are generally not able to issue our common stock at a price below net asset value without first obtaining required approvals from our stockholders and our independent directors.
−Removed: In any such case, the price at which our securities are to be issued and sold may not be less than a price, that in the determination of our Board of Directors, closely approximates the market value of such securities (less any commission or discount).
−Removed: We may also make rights offerings to our stockholders at prices per share less than the net asset value per share, subject to the 1940 Act.
−Removed: If we raise additional funds by issuing more common stock or senior securities convertible into, or exchangeable for, our common stock, the percentage ownership of our stockholders at that time would decrease, and you may experience dilution.
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.
22 unchanged sentences
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.
−Removed: On November 1, 2022, holders of a majority of the outstanding common stock of the Fund 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.
−Removed: Although this authorization expired on February 28, 2023, we expect to receive a further such authorization from our stockholders in the future.
+Added: 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.
+Added: 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.
29 unchanged sentences
We would no longer require exemptive relief from the SEC before implementing incentive compensation plans for our key executives and non-executive directors.
−Removed: Unresolved Staff Comments
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.