What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-04-20 compared with 2025-12-18 · 104 added, 95 removed, 181 unchanged (52% of the section changed)

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government securities and short-term high-quality debt investments.

Equus is a RIC under Subchapter M of the Code.

Prior to the fourth quarter of 2024, Equus qualified as a RIC under Subchapter M of the Code and may seek to requalify as a RIC in the future.

To qualify as a RIC, we must meet certain source of income and asset diversification requirements.

If we comply with the provisions of Subchapter M, the Fund generally does not have to pay corporate-level income taxes on any income that is distributed to our stockholders.

If we comply with the provisions of Subchapter M, the Fund generally would not have to pay corporate-level income taxes on any income that is distributed to our stockholders.

Investment Income .

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On an ongoing basis, we carry our investments in our financial statements at fair value, as determined by our board of directors.

See “ Critical Accounting Policies – Valuation of Investments ” below.

As of December 31, 2023, we had invested 43.7% of our assets in securities of portfolio companies that constituted qualifying investments under the 1940 Act.

At that time, we had invested 100% in membership interests in limited liability companies.

See “ Critical Accounting Estimates – Valuation of Investments ” below.

As of December 31, 2025, we had invested 104.3% of our net assets in securities of portfolio companies that constituted qualifying investments under the 1940 Act.

At that time, we had invested 0% of our net assets in membership interests in limited liability companies.

Under certain circumstances, we make follow-on investments in some of our portfolio companies.

As of December 31, 2023, we had $1.7 million in outstanding commitments in our portfolio companies.

As of December 31, 2025, we had no outstanding commitments in our portfolio companies.

Financing Activities.

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Under the 1940 Act, we have the ability to borrow funds and issue debt securities or preferred stock that are referred to as senior securities, subject to certain restrictions, including an overall limitation on the amount of outstanding debt, or leverage, relative to equity of 1.5:1.

Because of the nature and size of our portfolio investments, we periodically borrow funds to make qualifying investments in order to maintain our qualification as a RIC.

During 2023 and 2022, we borrowed such funds by accessing a margin account with a securities brokerage firm.

We invest the proceeds of these margin loans in high-quality securities such as U.S.

Treasury securities until they are repaid.

Because of the nature and size of our portfolio investments, we have periodically borrowed funds to make qualifying investments in order to maintain our qualification as a RIC.

During the first three quarters of 2024 and all of 2023, we borrowed such funds by accessing a margin account with a securities brokerage firm.

We invested the proceeds of these margin loans in high-quality securities such as U.S.

Treasury securities until they were repaid.

We refer to these high-quality investments as “restricted assets” because they are not generally available for investment in portfolio companies under the terms of borrowing.

If, in the future, we cannot borrow funds to make such qualifying investments at the end of any future quarter, we may not qualify as a RIC and would become subject to corporate-level income tax on our net investment income and realized capital gains, if any.

If, in the future, we seek to requalify as a RIC and cannot borrow funds to make such qualifying investments at the end of any future quarter, we would not so requalify and would, as a non-RIC, be subject to corporate-level income tax on our net investment income and realized capital gains, if any.

In addition, our distributions to stockholders would be taxable as ordinary dividends to the extent paid from earnings and profits.

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Inasmuch as all existing awards under the Incentive Plan became fully-vested prior to 2021, we recorded no compensation expense relating to awards made under the Incentive Plan for the years ended December 31, 2024, 2023 and 2022.

During the year ended December 31, 2025, we awarded an additional 380,523 shares of restricted stock under the Incentive Plan to officers of the Fund and to consultants of Morgan.

These awards were fully vested as of the date of grant.

Critical Accounting Estimates

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Because of the inherent uncertainty of the valuation of portfolio securities which do not have readily ascertainable market values, amounting to $12.5 million and $27.5 million as of December 31, 2025 and 2024, respectively, our fair value determinations may materially differ from the values that would have been used had a ready market existed for the securities.

See Note 3 to the financial statements included in Item 8.

We adjust our net asset value for the changes in the value of our publicly held securities, if applicable, and material changes in the value of private securities, generally determined on a quarterly basis or as announced in a press release, and report those amounts to Lipper Analytical Services, Inc.

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Current Market Conditions

GDP increased at an annualized rate of 3.3% in the fourth quarter of 2023, substantially higher than consensus estimates for the quarter.

GDP growth in the fourth quarter of 2023 also compared favorably to an annualized increase of 2.7% for the fourth quarter of 2022, although down from 4.9% for the third quarter of 2023.

Overall, GDP growth was 2.5% for all of 2022, as compared to 2.1% for all of 2022.

The slower GDP growth in the fourth quarter of 2023 was largely due to decreases in private inventory investment, federal government spending, residential fixed investment, and consumer spending.

The Conference Board is projecting GDP growth of 1.2% for 2024 and 1.4% for 2025.

The Congressional Budget Office is predicting 1.5% GDP growth for 2024.

GDP increased at an annualized rate of 0.7% in the fourth quarter of 2025, well below consensus estimates of 3.0% for the quarter and substantially lower than GDP growth for the third quarter of 2025 (4.4%), as well as the fourth quarter of 2024 (2.1%).

For the full year 2025, GDP growth was 2.1% as compared to 2.8% in 2024.

The sharp decrease in GDP during the fourth quarter of 2025 was driven principally by decreases in government and consumer spending, and exports, as well as a decrease in business investment during the quarter.

The Congressional Budget Office is projecting GDP growth of 2.5% for 2026 and 1.8% for 2027.

The CBO report was released prior to the start of hostilities with Iran and a sharp increase in short-term energy prices which has resulted in a downward adjustment to other, more recent, GDP forecasts.

Goldman Sachs, which initially predicted GDP growth of 2.9% for 2026, has now revised its estimate to 2.2%, citing oil price spikes and supply chain risks, and has also increased its estimate of the probability of a U.S.

recession to 25%.

Bureau of Economic Analysis;

The Conference Board;

Goldman Sachs;

Congressional Budget Office ).

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unemployment rate stood at 4.4%, and has remained largely stable for a considerable period, fluctuating between 3.54% and 4.4% for the previous 36 months.

Most economists, however, do not project this level to continue, as recessionary headwinds and lower growth forecasts suggest an increase during the remainder of 2024.

Moreover, the labor participation rate remains at approximately 62.5%, below the pre-pandemic high of 63.3% of February 2020.

Most of the recent employment gains in 2022 and 2023 were due to gains in the leisure and hospitality industry, healthcare, construction, and social assistance.

With the advent of tariffs, government layoffs, and a more aggressive deportation policy for undocumented immigrants, most economists are projecting the unemployment rate to increase slightly to 4.5% during the remainder of 2026.

Moreover, the labor participation rate remains at approximately 62.5%, the same rate as one year previously, and still below the pre-pandemic high of 63.3% of February 2020.

Most of the recent employment gains in 2024 and 2025 were due to gains in healthcare and healthcare services, government, and retail trade.

Bureau of Labor Statistics;

Trading Economics ).

Beginning in 2021 and continuing through 2022, consumer prices increased the most in four decades, reaching a high of 8.3%, before steadily declining throughout 2023, finishing the year at 3.4%.

Beginning in 2021 and continuing through 2022, consumer prices increased the most in four decades, reaching a high of 8.3%, before steadily declining, more or less, throughout 2023 and continuing through 2025, finishing the year at 2.7%.

This trend has continued into January 2026, where the U.S.

Bureau of Labor Statistics reported an annualized rate of 2.4%.

In view of lower growth projections and other economic headwinds, most analysts predict consumer price increases to taper further to approximately 2.4% for all of 2024.

Notwithstanding a projected slowing of the U.S.

economy for 2026, most economists are projecting similar rates of inflation for 2026 as compared to 2025, principally due to the continued effect of expected tariffs on imported goods and an increase in short-term energy prices.

Bureau of Labor Statistics;

Global merger and acquisition activity in 2023 was $3.1 trillion, a 14% drop from $3.6 trillion in 2022 which itself was 28% lower than 2021’s all-time high of $5.0 trillion.

Biotechnology, energy, and healthcare were the sectors that experienced the most significant dealmaking activity during the year.

Higher costs of capital were the principal cause of the continued decline in dealmaking.

Most analysts expect consolidation activity in 2024 to increase slightly as a result of pent up demand and stable interest rates.

Wall Street Journal ).

Private equity firms experienced a similar slowdown in activity during 2023 which continued a downward trend from 2022 and the highs experienced during the Covid-19 pandemic.

Nevertheless, there remains ample undeployed cash, and strong, acquisitive companies, as well as emerging companies in the AI space, appear to be best positioned as some of the candidates for private equity activity in 2024.

During 2023, our net asset value increased from $2.61 per share as of December 31, 2022 to $3.55 per share as of December 31, 2023.

As of December 31, 202, our common stock was trading at a 45.2% discount to our net asset value as compared to 59.2% as of December 31, 2023.

Morgan Stanley ).

Global merger and acquisition activity in 2025 surged to $4.8 trillion, an increase of 36% from 2024 and the second highest total on record.

Artificial intelligence and large, multibillion dollar transactions dominated the theme of M&A activity during the year and are expected to continue to do so in 2026.

Analysts are cautiously optimistic for 2026, as potential headwinds may materialize in private credit markets, ongoing regulatory scrutiny of larger transactions, and a recent spike in energy prices, any or all of which may disrupt consolidation activity in the short to medium term.

Ernst & Young ).

Private equity activity plateaued at $2.1 trillion in 2025, matching the same amount in 2024, which was only up slightly over 2023, all of which years are substantially below the post-pandemic highs of 2021 and 2022.

Private equity fundraising was lower again for the fourth straight year due to a weak exit environment that has constrained liquidity, with fund flows down 23% in 2025 as compared to 2024, which was itself down 30% from 2023.

During 2025, our net asset value decreased from $2.17 per share as of December 31, 2024 to $1.19 per share as of December 31, 2025.

As of December 31, 2025, our common stock was trading at a 18.5% premium to our net asset value as compared to a 49.3% discount as of December 31, 2024.

Over the past several years, we have executed certain initiatives to enhance liquidity, achieve a lower operational cost structure, provide more assistance to portfolio companies and realize certain of our portfolio investments.

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We use cash primarily to make additional investments, either in new companies or as follow-on investments in the existing portfolio companies and to pay the dividends to our stockholders.

Because of the nature and size of the portfolio investments, we may periodically borrow funds to make qualifying investments to maintain our tax status as a RIC.

We often borrow such funds by utilizing a margin account with a securities brokerage firm.

There is no assurance that such arrangement will be available in the future.

If the Fund is unable to borrow funds to make qualifying investments, it may no longer qualify as a RIC.

The Fund would then be subject to corporate income tax on its net investment income and realized capital gains, and distributions to stockholders would be subject to income tax as ordinary dividends.

Because of the nature and size of the portfolio investments, we have, until the fourth quarter of 2024, periodically borrowed funds to make qualifying investments to maintain our prior tax status as a RIC.

As a RIC, we often borrowed such funds by utilizing a margin account with a securities brokerage firm.

If we seek to requalify as a RIC, there is no assurance that such arrangement will be available in the future.

If the Fund is unable to borrow funds to make qualifying investments, it may no longer requalify as a RIC.

The Fund would then continue to be subject to corporate income tax on its net investment income and realized capital gains, and distributions to stockholders would be subject to income tax as ordinary dividends.

The Fund has the ability to borrow funds and issue forms of senior securities representing indebtedness or stock, such as preferred stock, subject to certain restrictions.

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however, we are cognizant of current market conditions that might affect future valuations of portfolio securities.

We believe that our operating cash flow and cash on hand will be sufficient to meet operating requirements and to finance routine capital expenditures through the next twelve months.

If we effect a Consolidation of the Fund as described under “ Significant Developments – Authorization to Withdraw BDC Election ” above, we may utilize some or a substantial portion of our current liquidity in connection with a contemplated transaction as payment of the purchase price and to pay associated legal, due diligence, accounting, and other fees.

Our operating cash flow and cash on hand is not sufficient to meet operating requirements or to finance routine capital expenditures through the next twelve months.

We are therefore seeking liquidity from the sale of our portfolio interests, as well as seeking external debt and equity financing from third parties.

Should either or both of the foregoing events not occur as contemplated, the Fund will not have the necessary funds to maintain normal operations and, therefore, substantial doubt would exist about the Fund’s ability to continue as a going concern.

Further, if we effect a transformation of the Fund into an operating company as described under “Significant Developments – Authorization to Withdraw BDC Election” above, we may utilize some or a substantial portion of our current liquidity in connection with a contemplated transaction as payment of the purchase price and to pay associated legal, due diligence, accounting, and other fees.

Further, we may borrow funds from financial institutions or other providers of debt capital to provide and pay for a part of the consideration and expenses necessary to effect a conversion of Equus into an operating company.

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As of December 31, 2025, we had total assets of $21.3 million, of which $17.3 million were invested in portfolio investments and $0.1 million were invested in cash and cash equivalents.

As of December 31, 2023, we also had $45.4 million of U.S.

Treasury bills and restricted cash, including primarily the proceeds of a quarter-end margin loan that we incurred to maintain the diversification requirements applicable to a RIC.

Of this amount, $45.0 million was invested in U.S.

Treasury bills and $0.4 million represented a required 1% brokerage margin deposit.

These securities were held by a securities brokerage firm and pledged along with other assets to secure repayment of the margin loan.

Treasury bills matured on January 4, 2024 and we subsequently repaid this margin loan.

The margin interest was paid on February 4, 2024.

Operating Activities.

We used $51.4 million in cash for operating activities in 2023 principally due to $8.3 million in investments, $4.3 million in fees to professional advisors, director and other, $17.0 million increase in unrealized appreciation, along with $38.9 million increase in net investments in U.S.

Treasury bills.

We used $2.1 million in cash for operating activities in 2025, principally due to $1.6 million used in connection with the purchase of investments, $2.2 million paid in fees to professional advisors, directors and other fees, which amount was offset by $1.7 million received from sales in investments.

Financing Activities .

We provided $39.1 million in cash from financing activities for 2023, principally in connection with borrowings on margin..

We generated $2.0 million in cash from financing activities for 2025, principally in connection with borrowings.

We did not declare any dividends in 2025.

Year Ended December 31, 2024

As of December 31, 2024, we had total assets of $29.9 million, of which $27.5 million were invested in portfolio investments and $0.3 million were invested in cash and cash equivalents.

Operating Activities.

We generated $38.2 million in cash for operating activities in 2024 principally due to $45.1 million sales in net investments in U.S.

Treasury bills, offset by $2.2 million in investments, along with $4.6 million in fees to professional advisors, directors and other fees.

Financing Activities .

We used $45.0 million in cash from financing activities for 2024, principally in connection with repayments net of borrowings on margin.

We did not declare any dividends in 2024.

Results of Operations Investment Income and Expense

Year Ended December 31, 2025 as compared to Year Ended December 31, 2024

Total income from portfolio securities was $0.3 million for 2023 and $0 for 2022.

Total income from portfolio securities was $1.4 million for 2025 and $1.3 million for 2024.

Compensation expense increased to $2.1 million in 2025 from $1.8 million in 2024.

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Summary of Portfolio Investment Activity

Year Ended December 31, 2023

During 2023, we made an $8.3 million investment in Morgan E&P, LLC.

The following table includes summarizes investment activity during the year ended December 31, 2023 (in thousands):

Investment Activity

New Investments

Existing Investments

Portfolio Company

Morgan E&P, LLC

New and Follow-On Investments

Year Ended December 31, 2025

During 2022, we made a $0.15 million follow-on investment in Equus Energy, LLC.

The following table includes summarizes investment activity during the year ended December 31, 2022 (in thousands):

During 2025, we made a $1.5 million investment in CitroTech, Inc.

(formerly, General Enterprise Ventures, Inc.) and a $2.8 million investment in North American Energy Opportunities Corp.

The following table includes summarizes new and follow-on investment activity during the year ended December 31, 2025 (in thousands):

Investment Activity

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Portfolio Company

Equus Energy, LLC

Follow-On Cash

CitroTech, Inc.

North American Energy Opportunities Corp

Year Ended December 31, 2024

During 2021, we made a $0.35 million non-cash follow-on investment in Equus Energy, LLC.

The following table includes summarizes investment activity during the year ended December 31, 2021 (in thousands):

During 2024, we made a $2.2 million investment in Morgan E&P, Inc.

The following table includes summarizes new and follow-on investment activity during the year ended December 31, 2024 (in thousands):

Investment Activity

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Portfolio Company

Equus Energy, LLC

Follow-On Cash

Morgan E&P, LLC

Realized Gains and Losses

Year Ended December 31, 2025

During 2025, we realized capital gains of $0.4 million as a result of disposition of shares with a cost of $0.2 million we held in CitroTech, Inc.

We realized a capital loss of $4.3 million in connection with our sale of Equus Energy, LLC in the first quarter of 2025.

Further, we also realized capital losses of $2.8 million as a result of the write-off of our investment in NAEOC.

Year Ended December 31, 2024

We realized capital gains of $138 thousand as a result of disposition of U.S.

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Treasury bills.

Year Ended December 31, 2021

During 2021, we received a combination of escrowed and contingent payments of $3.8 million from the sale of our interest in PalletOne, Inc.

in December 2020, realizing a capital gain of $0.4 million.

Changes in Unrealized Appreciation of Portfolio Securities

Year Ended December 31, 2025

During 2023, we recorded an increase of $17.0 million in net unrealized appreciation, from an unrealized appreciation of $7.5 million at December 31, 2022 to a net unrealized appreciation of $24.5 million at December 31, 2023.

Such change in unrealized appreciation resulted primarily from the increase in the fair value of our holdings in Morgan E&P, LLC of $22.6 million, principally due to substantial increases in Morgan’s reserves and the reclassification of certain of its proved reserves from undeveloped to producing.

The increase in the fair value of Morgan was offset by the decrease in fair value of our holding in Equus Energy, LLC of $5.7 million, principally due to decreases in the forward curve for natural gas and its effect on the economic prospects of Equus Energy regarding future development of its gas properties.

During 2025, we recorded a decrease of $3.5 million in net unrealized appreciation, from an unrealized appreciation of $8.9 million at December 31, 2024 to a net unrealized appreciation of $5.4 million at December 31, 2025.

Such change in unrealized appreciation resulted primarily from the increase in fair value of our holdings in CitroTech, Inc.

of $5.4 million and the reversal of an unrealized loss of $4.1 million when we sold our interest in Equus Energy, offset by the decrease in the fair value of our holdings in Morgan E&P, Inc.

of $13.0 million, principally due to a lower forward price curve for oil, as well as the elimination of certain reserves due to limited production.

Year Ended December 31, 2024

During 2022, we recorded an increase of $2.5 million in net unrealized appreciation, from an unrealized appreciation of $5.0 million at December 31, 2021 to a net unrealized appreciation of $7.5 million at December 31, 2022.

Such change in unrealized appreciation resulted primarily from the increase in the fair value of our holdings in Equus Energy, LLC of $2.65 million, principally due to an increase in the cost basis of this investment, as well as increases in oil and gas prices, as well as increases in the short- and long-term forward pricing curves for these commodities during 2022.

During 2024, we recorded a decrease of $15.6 million in net unrealized appreciation, from an unrealized appreciation of $24.5 million at December 31, 2023 to a net unrealized appreciation of $8.9 million at December 31, 2024.

Such change in unrealized appreciation resulted primarily from the decrease in the fair value of our holdings in Morgan E&P, Inc.

of $9.6 million, principally due to a lower forward price curve for oil, as well as the reclassification of certain of its proved reserves from producing to non-producing.

The change in unrealized appreciation also resulted from the decrease in fair value of our holding in Equus Energy, LLC of $6.0 million, principally due to decreases in the forward curve for oil and natural gas and its effect on the economic prospects of Equus Energy regarding future development of its oil and gas properties.

See Subsequent Events below where we sold our interest in Equus Energy in March 2025 for a combination of cash and preferred stock valued at $4.0 million.

Year Ended December 31, 2023

During 2021, we recorded an increase of $5.6 million in net unrealized appreciation, from an unrealized depreciation of $0.6 million at December 31, 2020 to a net unrealized appreciation of $5.0 million at December 31, 2021.

Such change in unrealized appreciation resulted primarily from the increase in the fair value of our holdings in Equus Energy, LLC of $6.0 million, principally due to an increase in the cost basis of this investment, as well as increases in oil and gas prices, as well as increases in the short- and long-term forward pricing curves for these commodities during 2021.

Such change in unrealized appreciation resulted primarily from the increase in the fair value of our holdings in Morgan E&P, Inc.

of $22.6 million, principally due to substantial increases in Morgan’s reserves and the reclassification of certain of its proved reserves from undeveloped to producing.

Portfolio Securities

As of December 31, 2025, we had active investments in the following portfolio companies:

Morgan E&P, LLC

CitroTech, Inc.

On February 10, 2025, we purchased from CitroTech, Inc., (formerly, General Enterprise Ventures, Inc.) a developer of fire suppression products (“CITR”), a 1- year senior convertible promissory note bearing interest at the rate of 10% per annum, in exchange for $1.5 million in cash (“CITR Note”).

Contemporaneously with the purchase of the CITR Note, the Fund also received a common stock purchase warrant to acquire an aggregate of 312,500 shares of CITR common stock at an exercise price of $3.00 per share (“CITR Warrant”).

The shares of CITR are traded on the NYSE American Stock Exchange under the symbol ‘CITR’.

In the third quarter of 2025, we converted the CITR Note and interest, as accrued, into 664,041 CITR shares, and in the fourth quarter of 2025, we sold 73,002 of our CITR shares.

As of December 31, 2025, the CITR share price stood at $8.08 per share.

Applying this price to the value of our remaining CITR shares and a Black-Scholes valuation analysis to the CITR Warrant, we valued our debt and equity interest in CITR at $6.8 million at December 31, 2025.

Morgan E&P, Inc.

Morgan E&P, LLC (“Morgan”) was organized by the Fund on April 3, 2023 as a Delaware limited liability company and a wholly-owned subsidiary of the Fund.

In 2025, we reorganized Morgan as a Delaware corporation taxed according to the requirements of Subchapter C of the Internal Revenue Code.

On May 22, 2023, Morgan completed the acquisition of 4,747.52 net acres, in the Bakken/Three Forks formation in the Williston Basin of North Dakota, and acquired approximately 1,100 additional acres on September 26, 2023.

The acreage and associated mineral rights were acquired from Pro Energy I LLC (“Pro Energy”), a company whose principals have decades of oil and gas experience and who have themselves drilled over 1,800 horizontal wells in the Williston Basin over a 10-year period.

In May 2023, we entered into an agreement with Morgan to provide it up to $10.0 million in senior debt financing, subject to a schedule of disbursements and draws that we determine.

As of December 31, 2023, we advanced Morgan $8.3 million under this facility (See Subsequent Events below where we increased the total amount of the facility to $10.5 million and where we advanced, subsequent to year-end, an additional $2.0 million under the facility).

During 2023, Morgan substantially increased its reserves, completed the drilling of two new wells, and also reclassified certain of its proved reserves from undeveloped to producing.

As a result, the fair value of this holding was $22.6 million at December 31, 2023.

Equus Energy, LLC

We formed Equus Energy, as a wholly-owned subsidiary of the Fund, to make investments in companies in the energy sector, with particular emphasis on income-producing oil & gas properties.

In December 2011, we contributed $250,000 to the capital of Equus Energy.

On December 27, 2012, we invested an additional $6.8 million in Equus Energy for the purpose of additional working capital and to fund the purchase of $6.6 million in working interests presently represented by 136 producing and non-producing oil and gas wells, including associated development rights of approximately 21,520 acres situated on 10 separate properties in Texas and Oklahoma.

On September 30, 2020, the Fund provided an additional $0.6 million in capital to Equus Energy for the purpose of additional working capital.

On June 30, 2021, the Fund provided an additional $0.35 million in capital to Equus Energy for the purpose of additional working capital.

On December 31, 2022, the Fund provided an additional $0.15 million in capital to Equus Energy for the purpose of additional working capital.

The working interests held by Equus Energy range from a de minimus amount to 50% of the leasehold production of these wells.

The wells are operated by a number of experienced operators such as Burk Royalty, which has operating responsibility for leasehold interests in the Conger Field, representing approximately one-third of the producing well interests.

The assets were purchased from Warren American Oil Company, LLC, a Tulsa-based oil and gas firm.

The fair value of our holding in Equus Energy decreased from $15.65 million at December 31, 2022 to $10.0 million at December 31, 2023, principally due to decreases in the forward curve for natural gas and its effect on the economic viability of Equus Energy’s gas reserves for future development.

In May 2023, we entered into an agreement with Morgan to provide it up to $10.0 million in senior debt financing, which amount was subsequently amended to $10.5 million, subject to a schedule of disbursements and draws that we determine.

As of December 31, 2024, we advanced Morgan $10.5 million under this facility.

During 2025, the forward price curve for oil decreased compared to 2024.

In addition, Morgan experienced substantial challenges with production and, as a consequence of these two factors, certain reserves were eliminated for consideration as being noneconomic.

As a result, the fair value of our debt and equity interest in Morgan decreased from $23.5 million at December 31, 2024 to $10.5 million at December 31, 2025.

Off Balance Sheet Arrangements

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Contractual Obligations

As of December 31, 2023, we had $1.7 million in outstanding commitments to our portfolio company investments.

As of December 31, 2025, we had no outstanding commitments to our portfolio company investments.

So long as we remain a BDC, we will continue to pay out net investment income and/or realized capital gains, if any, on an annual basis as required under the 1940 Act.

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Our Management performed an evaluation of the Fund’s activity through the date the financial statements were issued, noting the following subsequent events:

On January 4, 2024, our holding in $45.0 million in U.

Treasury Bills matured and we repaid our year-end margin loan.

On February 26, 2024, we amended our credit facility with Morgan and increased the total amount that may be drawn under the facility from $10.0 to $10.5 million.

Also, during February and March 2024, we advanced Morgan an additional $2.2 million under this facility.

On February 7, 2025, we issued a 1-year convertible promissory note in the original principal amount of $2.0 million bearing interest at the rate of 10% per annum (“Equus Note”).

On February 7, 2026, the Equus Note matured and remains unpaid.

The Equus Note requires the lender to provide written notice of default but, as of the date of filing of this Annual Report on Form 10-K, no such notice has been provided.

During the period commencing January 1, 2026 until the filing of this Annual Report on Form 10-K, we sold 122,581 of our shares of CitroTech, Inc.

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 7. Management’s Discussion and Analysis