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Item 9A. Controls and Procedures

2025-12-18 compared with 2025-12-17 · 31 added, 52 removed, 88 unchanged (49% of the section changed)

5 unchanged sentences

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.

Our management, with the participation of our Fund’s Chief Executive Officer and Chief Financial Officer, have evaluated the effectiveness of the design and operations of the Fund’s “disclosure controls and procedures” (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934) as of December 31, 2024.

Based on their evaluation, our Chief Executive Officer and Chief Financial Officer concluded that the Fund’s disclosure controls and procedures were not effective due to the material weaknesses in internal control over financial reporting described below.

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, 2024.

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, 2024, 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, 2024, 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;

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, 2024 that have materially affected, or are reasonably likely to affect, our internal control over financial reporting.

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, 2022.

Based on the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective.

Management Report on Internal Control Over Financial Reporting

Our Management is responsible for establishing and maintaining adequate internal control over financial reporting to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

Internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Fund are being made only in accordance with authorizations of Management and directors of the Fund;

and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Fund’s assets that could have a material effect on the financial statements.

We assessed our internal control over financial reporting as of December 31, 2022, the end of our most recent fiscal year.

We based our assessment on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in “Internal Control-Integrated Framework” published in 2013.

Our assessment included evaluation of such elements as the design and operating effectiveness of key financial reporting controls, process documentation, accounting policies, and our overall control environment.

This assessment is supported by testing and monitoring performed both by a third-party consultant and our accounting department.

Based on our assessment, we have concluded that our internal control over financial reporting was effective as of the end of the fiscal year to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance with generally accepted accounting principles.

The results of our assessment have been reviewed with the Audit Committee of our Board of Directors.

There have been no changes in our internal control over financial reporting that occurred during the fiscal quarter ended December 31, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Other Information

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections .

Disclosure Regarding Foreign Jursdictions that Prevent Inspections.

Not Applicable.

3 unchanged sentences

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, 41st Floor, Houston, TX 77002.

Corporate Secretary, 700 Louisiana Street, 48th 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.

We have adopted an insider trading policy and procedures governing the purchase, sale, and other dispositions of securities of the Fund by directors, officers, and employees that we believe are reasonably designed to promote compliance with insider trading laws, rules and regulations.

Our insider trading policy states, among other things, that our directors, officers, and employees are prohibited from trading in such securities while in possession of material, nonpublic information.

The foregoing summary of our insider trading policies and procedures does not purport to be complete and is qualified by reference to our Policy on Insider Trading filed as Exhibit 19 to this Annual Report on Form 10-K.

Executive Compensation

18 unchanged sentences

Investment (a)

Amount of Interest or Dividend Credited to Income (e)

As of December 31, 2023 Fair Value

Gross Additions (b)

Gross Reduction (c)

Dividend Credited

to Income (d)

Additions (b)

Reductions (c)

Decrease in Unrealized Appreciation / Depreciation

As of December 31, 2024 Fair Value

Control Investments:

2 unchanged sentences

Member interest (100%)

Morgan E&P, LLC

Member interest (100%)

12% senior secured

promissory note (d)

Total Control Investments:

2 unchanged sentences

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.

Common stock, warrants, options and equity interests are generally non-income producing and restricted.

(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, 2021.

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.

(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.

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.

(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.

Debt is on an accrual status as of December 31, 2024, and is therefore considered income producing.

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.

(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.

6 unchanged sentences

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.]

[Incorporated by reference to Exhibit 3(b) to Registrant’s Current Report on Form 8-K filed on June 24, 2014.]

Material Contracts.

8 unchanged sentences

Consent of Experts and Counsel *

Consent of Independent Accountants, BDO USA, P.C., regarding the Fund

Consent of Independent Accountants, BDO USA, P.C., regarding Equus Energy , LLC

Consent of Independent Accountants, BDO USA, P.C., regarding Morgan E&P, LLC

Rule 13a-14(a)/15d-14(a) Certifications *

Consent of Independent Accountants, BDO USA, LLP

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

Certification by Chief Executive Officer

3 unchanged sentences

Certification by Chief Financial Officer

Policy Relating to Recovery of Erroneously Awarded Compensation

Equus Total Return, Inc.

Compensation Recoupment Policy [Incorporated by reference to Exhibit 97.1 to Registrant’s Annual Report on Form 10-K for the year ended December 31, 2023.]

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

Consolidated Financial Statements of Equus Energy , LLC and Subsidiary as of December 31, 2024 and 2022 and for the years ended December 31, 2024, 2023 and 2022

Financial Statements of Morgan E&P, LLC as of December 31, 2024 for the year ended December 31, 2024 and the period from inception (April 3, 2023) through December 31, 2023

Equus Energy, LLC and Subsidiary *

Consolidated Financial Statements of Equus Energy, LLC and Subsidiary as of December 31, 2022 and 2021 and for the years ended December 31, 2022, 2021 and 2020 [Incorporated by reference to Exhibit 99.1 to Registrant’s Current Report on Form 10-K filed on March 28, 2023.]

* Filed herewith

1 unchanged sentence

EQUUS TOTAL RETURN, INC.

December 17, 2025 /S/ JOHN A.

December 18, 2025

Chief Executive Officer

8 unchanged sentences

December 18, 2025

/S/ ROBERT L.

December 18, 2025

5 unchanged sentences

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.

What changed 10-K/A

Item 9A. Controls and Procedures