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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.
−Removed: Equus is also a regulated investment company (“RIC”) under Subchapter M of the U.S.
+Added: Prior to the fourth quarter of 2024, Equus was also a regulated investment company (“RIC”) under Subchapter M of the U.S.
Internal Revenue Code of 1986.
−Removed: As such, we are not required to pay corporate-level income tax on the Fund’s investment income.
−Removed: 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.
−Removed: 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.
−Removed: Our principal office is located at 700 Louisiana St., 48 th Floor, Houston, Texas, 77002, and the telephone number is 1-800-856-0901.
+Added: A BDC that is also a RIC is not required to pay corporate-level income tax on its investment income.
+Added: During the fourth quarter of 2024, we elected to not qualify as a RIC.
+Added: Consequently, in the event that we incur operating income or net investment income, we will be taxed at regular corporate rates.
+Added: Notwithstanding our present election, we may seek to requalify as a RIC in the future.
+Added: For a discussion of 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.
+Added: Our principal office is located at 700 Louisiana St., 41st Floor, Houston, Texas, 77002, and the telephone number is 1-800-856-0901.
Our corporate website is located at www.equuscap.com .
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Our shares are traded on The New York Stock Exchange (“NYSE”) under the ticker symbol “EQS”.
−Removed: Significant Developments
Impact of Geopolitical Events on the Oil and Gas Sector .
−Removed: 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.
−Removed: producers and OPEC nations to generate additional supply, and the conflict in Ukraine.
−Removed: 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.
−Removed: 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.
−Removed: Gas prices were volatile in the first half of 2023 before stabilizing in the second half of the year.
−Removed: 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.
−Removed: 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.
+Added: The substantial volatility in world markets has been prominent in the oil and gas sector in the past several years, with geopolitical conflicts being a significant contributor to short-term price changes.
+Added: In the aftermath of the commencement of hostilities in Ukraine in 2022, oil prices began a rise and fall in successive quarters between the third quarter of 2023 and the fourth quarter of 2024 before experiencing a slow and steady decline from the end of 2024 and throughout 2025, and stood at $57.26 as of December 31, 2025.
+Added: The recent conflict with Iran, while not greatly affecting long-term prices, has had a dramatic effect on spot prices in the first quarter of 2026.
+Added: Since the beginning of 2024, natural gas prices steadily increased before declining in the first three quarters of 2025 and recovering at the end of the year, finishing the year ended December 31, 2025 at $4.00 per MMBTU.
+Added: Recent long-term oil price stability has been a significant factor in increased consolidation activity in the Williston Basin region in North Dakota where Morgan E&P, Inc.
+Added: holds its development rights.
Authorization to Withdraw BDC Election .
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Current Portfolio Companies
−Removed: For a description of our current portfolio company investments, see “ Management’s Discussion and Analysis of Financial Condition and Results of Operations–Portfolio Securities .”
+Added: For a description of our portfolio company investments as of December 31, 2025, see “ Management’s Discussion and Analysis of Financial Condition and Results of Operations–Portfolio Securities .”
On a quarterly basis, Management values our portfolio investments.
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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.
−Removed: Our principal executive offices are located at 700 Louisiana St., 48 th Floor, Houston, Texas 77002.
+Added: Our principal executive offices are located at 700 Louisiana St., 41st 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.
38 unchanged sentences
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.
−Removed: 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.
+Added: During the fourth quarter of 2024, we elected to not qualify as a RIC, although we may seek to requalify at a later date.
+Added: Because we do not presently qualify as a RIC, in the event that we generate operating income or net investment income, we will be subject to regular corporate rates of taxation.
+Added: If we requalify 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.
−Removed: 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.
−Removed: To maintain our RIC status, we must (i) continue to qualify as an investment company;
+Added: 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 obtain RIC status under the Code, among other requirements.
+Added: To obtain (or maintain, as the case may be) 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;
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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.
−Removed: 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.
−Removed: that was not fully offset by our capital loss carryforward.
−Removed: We chose not to distribute this small amount for the current year and pay the associated tax.
−Removed: 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.
−Removed: This tax was paid in March 2022.
−Removed: 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.
+Added: If we fail to satisfy the 90% distribution requirement or otherwise fail to requalify 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).
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Certifications
−Removed: 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.
+Added: In July 2025, 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.
5 unchanged sentences
Among the factors that could cause actual results to differ materially are the following:
−Removed: (i) changes in the economi# conditions in which we operate, including changes related to the evolving impact of the coronavirus, which might negatively impacting our financial resources;
+Added: (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;
14 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.