<SEC-DOCUMENT>0001391609-11-000391.txt : 20110815
<SEC-HEADER>0001391609-11-000391.hdr.sgml : 20110815
<ACCEPTANCE-DATETIME>20110815134007
ACCESSION NUMBER:		0001391609-11-000391
CONFORMED SUBMISSION TYPE:	10-Q
PUBLIC DOCUMENT COUNT:		5
CONFORMED PERIOD OF REPORT:	20110630
FILED AS OF DATE:		20110815
DATE AS OF CHANGE:		20110815

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			EQUUS TOTAL RETURN, INC.
		CENTRAL INDEX KEY:			0000878932
		IRS NUMBER:				760345915
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			0604

	FILING VALUES:
		FORM TYPE:		10-Q
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	814-00098
		FILM NUMBER:		111034909

	BUSINESS ADDRESS:	
		STREET 1:		EIGHT GREENWAY PLAZA
		STREET 2:		SUITE 930
		CITY:			HOUSTON
		STATE:			TX
		ZIP:			77046
		BUSINESS PHONE:		7135290900

	MAIL ADDRESS:	
		STREET 1:		EIGHT GREENWAY PLAZA
		STREET 2:		SUITE 930
		CITY:			HOUSTON
		STATE:			TX
		ZIP:			77046

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	EQUUS II INC
		DATE OF NAME CHANGE:	19970422
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>f10qequus.htm
<DESCRIPTION>SARBANES OXLEY 906 L'SHERYL HUDSON
<TEXT>
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<!-- Field: Rule-Page --><DIV ALIGN="LEFT" STYLE="margin-top: 1pt; margin-bottom: 1pt"><DIV STYLE="font-size: 1pt; border-top: black 0.5pt solid; width: 100%">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

<!-- Field: Rule-Page --><DIV ALIGN="LEFT" STYLE="margin-top: 1pt; margin-bottom: 1pt"><DIV STYLE="font-size: 1pt; border-top: black 1pt solid; width: 100%">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

<P STYLE="font: 13.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>UNITED STATES </B></P>

<P STYLE="font: 13.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>SECURITIES AND EXCHANGE COMMISSION </B></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>Washington, D.C. 20549 </B></P>

<P STYLE="font: 6pt Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center"><FONT STYLE="font-size: 18pt"><B>FORM
10-Q </B></FONT><FONT STYLE="font-size: 6pt">&nbsp;</FONT></P>

<P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 9pt 0 0">(Mark One)</P>

<P STYLE="font: 10pt Calibri, Halvetica, Sans-Serif; margin: 0 0 0 24.45pt; text-indent: -24.5pt"><FONT STYLE="font-family: Wingdings; color: black"><B>x
</B></FONT><B><FONT STYLE="font-family: Times New Roman, Times, Serif">QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 </FONT></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center">For the quarterly period ended June 30,
2011</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center">or</P>

<P STYLE="font: 10pt Calibri, Halvetica, Sans-Serif; margin: 9pt 0 0 24.45pt; text-indent: -24.5pt"><FONT STYLE="font-family: Wingdings; color: black"><B>&uml;
</B></FONT><B><FONT STYLE="font-family: Times New Roman, Times, Serif">TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 </FONT></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center">For the transition period <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</U>to <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</U></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center"><FONT STYLE="font-size: 10pt">Commission
File Number 814-00098</FONT><FONT STYLE="font-size: 6pt">&nbsp;</FONT></P>

<P STYLE="font: 24pt Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center"><B>EQUUS TOTAL RETURN, INC. </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>(Exact name of registrant as specified in
its charter) </B></P>

<P STYLE="font: 6pt Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center">&nbsp;</P>

<P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE ALIGN="CENTER" CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="font: bold 10pt/115% Times New Roman, Times, Serif; text-align: center">Delaware</TD>
    <TD STYLE="font: bold 10pt/115% Times New Roman, Times, Serif; text-align: center">76-0345915</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>
        <P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>(State or other jurisdiction of</B></P>
        <P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0 0 0.75pt; text-align: center"><B>incorporation or organization)</B></P></TD>
    <TD>
        <P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>(I.R.S. Employer</B></P>
        <P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0 0 0.75pt; text-align: center"><B>Identification No.)</B></P></TD></TR>
<TR>
    <TD STYLE="font: 12pt/115% Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 12pt/115% Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font: bold 10pt/115% Times New Roman, Times, Serif; text-align: center">Eight Greenway Plaza, Suite 930 Houston, Texas</TD>
    <TD STYLE="font: bold 10pt/115% Times New Roman, Times, Serif; text-align: center">77046</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font: bold 7.5pt/115% Times New Roman, Times, Serif; text-align: center">(Address of principal executive offices)</TD>
    <TD STYLE="font: bold 7.5pt/115% Times New Roman, Times, Serif; text-align: center">(Zip Code)</TD></TR>
</TABLE>
<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center"><FONT STYLE="font-size: 10pt"><B>Registrant&rsquo;s
telephone number, including area code:&nbsp;(713)&nbsp;529-0900 </B></FONT><FONT STYLE="font-size: 6pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Calibri, Halvetica, Sans-Serif; margin: 9pt 0 0; text-indent: 24.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Indicate
by check mark whether the registrant (1)&nbsp;has filed all reports required to be filed by Section&nbsp;13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports)
and (2)&nbsp;has been subject to such filing requirements for the past 90 days.&nbsp;&nbsp;&nbsp;&nbsp;Yes&nbsp;&nbsp;</FONT><FONT STYLE="font-family: Wingdings">x</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;No&nbsp;&nbsp;
</FONT><FONT STYLE="font-family: Wingdings">&uml;</FONT></P>

<P STYLE="font: 10pt Calibri, Halvetica, Sans-Serif; margin: 9pt 0 0; text-indent: 24.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Indicate
by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (&sect;232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).&nbsp;&nbsp;&nbsp;&nbsp;Yes&nbsp;&nbsp;</FONT><FONT STYLE="font-family: Wingdings">&uml;</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;No&nbsp;&nbsp;
</FONT><FONT STYLE="font-family: Wingdings">&uml;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 9pt 0 0; text-indent: 24.5pt">Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of &ldquo;accelerated filer and
large accelerated filer&rdquo; in Rule 12b-2 of the Exchange Act.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>

<TABLE ALIGN="CENTER" CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 23%; font: 10pt/115% Calibri, Halvetica, Sans-Serif"> <FONT STYLE="font: 10pt Times New Roman, Times, Serif">Large accelerated filer </FONT><FONT STYLE="font-family: Wingdings">&uml;</FONT></TD>
    <TD STYLE="width: 23%; font: 10pt/115% Calibri, Halvetica, Sans-Serif; text-align: center"> <FONT STYLE="font: 10pt Times New Roman, Times, Serif">Accelerated filer </FONT><FONT STYLE="font-family: Wingdings">&uml;</FONT></TD>
    <TD STYLE="width: 25%; font: 10pt/115% Calibri, Halvetica, Sans-Serif; text-align: center"> <FONT STYLE="font: 10pt Times New Roman, Times, Serif">Non-accelerated filer </FONT><FONT STYLE="font-family: Wingdings">x</FONT></TD>
    <TD STYLE="width: 29%; font: 10pt/115% Calibri, Halvetica, Sans-Serif; text-align: right"> <FONT STYLE="font: 10pt Times New Roman, Times, Serif">Smaller Reporting Company </FONT><FONT STYLE="font-family: Wingdings">&uml;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Calibri, Halvetica, Sans-Serif; margin: 9pt 0 0; text-indent: 24.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Indicate
by check mark whether the registrant is a shell company.&nbsp;&nbsp;&nbsp;&nbsp;Yes&nbsp;&nbsp;</FONT><FONT STYLE="font-family: Wingdings">&uml;</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;No&nbsp;&nbsp;
</FONT><FONT STYLE="font-family: Wingdings">x</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 9pt 0 0; text-indent: 24.5pt"><FONT STYLE="color: black">There were
10,561,646 shares of the registrant&rsquo;s common stock, $.001 par value, outstanding, as of August&nbsp;15, 2011.</FONT>&nbsp;&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">EQUUS TOTAL RETURN, INC.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">(A Delaware Corporation)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center"><A NAME="TableOfContents" TITLE="Table of Contents"></A>INDEX</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center"></P>

<TABLE ALIGN="CENTER" CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 0.1in; line-height: 115%; font-size: 4pt">&nbsp;</TD>
    <TD STYLE="padding-left: 0.1in; line-height: 115%; font-size: 7.5pt; font-weight: bold; text-align: center">PAGE</TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top; padding-left: 12pt; line-height: 115%; text-indent: -12pt"> <FONT STYLE="font: 10pt Times New Roman, Times, Serif">PART I.&nbsp;<FONT STYLE="color: windowtext"><A HREF="#a_001">FINANCIAL INFORMATION</A></FONT></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-left: 0.1in">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top; padding-left: 0.5in; line-height: 115%"> <FONT STYLE="font: 10pt Times New Roman, Times, Serif">Item &nbsp;1.<A HREF="#a_002"></A></FONT><FONT STYLE="color: windowtext"> <A HREF="#a_002">Financial Statements</A></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-left: 0.1in">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top; padding-left: 60pt; line-height: 115%; text-decoration: none; text-indent: -12pt"><A HREF="#a_003">Balance Sheets</A></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; line-height: 115%; text-align: center">3</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top; padding-left: 60pt; line-height: 115%; text-decoration: none; text-indent: -12pt"><A HREF="#a_004">Statements of Operations</A></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; line-height: 115%; text-align: center">4</TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top; padding-left: 60pt; line-height: 115%; text-decoration: none; text-indent: -12pt"><A HREF="#a_005">Statements of Changes in Net Assets</A></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; line-height: 115%; text-align: center">5</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top; padding-left: 60pt; line-height: 115%; text-decoration: none; text-indent: -12pt"><A HREF="#a_006">Statements of Cash Flows</A></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; line-height: 115%; text-align: center">6</TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top; padding-left: 60pt; line-height: 115%; text-decoration: none; text-indent: -12pt"><A HREF="#a_007">Supplemental Information&mdash;Selected Per Share Data and Ratios</A></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; line-height: 115%; text-align: center">7</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top; padding-left: 60pt; line-height: 115%; text-decoration: none; text-indent: -12pt"><A HREF="#a_008">Schedule of Investments</A></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; line-height: 115%; text-align: center">8</TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top; padding-left: 60pt; line-height: 115%; text-decoration: none; text-indent: -12pt"><A HREF="#a_009">Notes to Financial Statements</A></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; line-height: 115%; text-align: center">14</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top; padding-left: 0.5in; line-height: 115%"> <FONT STYLE="font: 10pt Times New Roman, Times, Serif">Item &nbsp;2. <FONT STYLE="color: windowtext"><A HREF="#a_010">Management&rsquo;s Discussion and Analysis of Financial Condition and Results of Operations</A></FONT></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; line-height: 115%; text-align: center">24</TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top; padding-left: 0.5in; line-height: 115%"> <FONT STYLE="font: 10pt Times New Roman, Times, Serif">Item &nbsp;3. <FONT STYLE="color: windowtext"><A HREF="#a_011">Quantitative and Qualitative Disclosure about Market Risk</A></FONT></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; line-height: 115%; text-align: center">32</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top; padding-left: 0.5in; line-height: 115%"> <FONT STYLE="font: 10pt Times New Roman, Times, Serif">Item &nbsp;4.<FONT STYLE="color: windowtext"> <A HREF="#a_012">Controls and Procedures</A></FONT></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; line-height: 115%; text-align: center">32</TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top; padding-left: 12pt; line-height: 115%; text-indent: -12pt"> <FONT STYLE="font: 10pt Times New Roman, Times, Serif">PART II.&nbsp;<FONT STYLE="color: windowtext"><A HREF="#a_013">OTHER INFORMATION</A></FONT></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-left: 0.1in">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top; padding-left: 0.5in; line-height: 115%"> <FONT STYLE="font: 10pt Times New Roman, Times, Serif">Item 1. <FONT STYLE="color: windowtext"><A HREF="#a_014">Legal Proceedings</A></FONT></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; line-height: 115%; text-align: center">33</TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top; padding-left: 0.5in; line-height: 115%"> <FONT STYLE="font: 10pt Times New Roman, Times, Serif">Item 1A.<FONT STYLE="color: windowtext"> <A HREF="#a_015">Risk Factors</A></FONT></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; line-height: 115%; text-align: center">33</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top; padding-left: 0.5in; line-height: 115%"> <FONT STYLE="font: 10pt Times New Roman, Times, Serif">Item &nbsp;6. <A HREF="#a_016"></A></FONT><FONT STYLE="color: windowtext"><A HREF="#a_016">Exhibits</A></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; line-height: 115%; text-align: center">34</TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top; padding-left: 12pt; line-height: 115%; text-decoration: none; text-indent: -12pt"><A HREF="#a_017">SIGNATURE</A></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; line-height: 115%; text-align: center">35</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center"></P>

<P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11pt Calibri, Halvetica, Sans-Serif; margin: 0 0 6pt">&nbsp;</P>

<P STYLE="font: 11pt Calibri, Halvetica, Sans-Serif; margin: 0">&nbsp;</P>

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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 10pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 9pt 0 0"><A NAME="a_001"></A><B>Part I. Financial Information </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 9pt 0 0"><B><A NAME="a_002"></A>Item 1. Financial Statements </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><U>EQUUS TOTAL RETURN, INC. </U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><U><A NAME="a_003"></A>BALANCE SHEETS </U></P>

<P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 9pt Arial, Helvetica, Sans-Serif; margin: 9pt 0 0">&nbsp;</P>

<P STYLE="font: 9pt Calibri, Halvetica, Sans-Serif; margin: 9pt 0 0; text-align: center"><FONT STYLE="font-family: Arial; color: Red"><B></B></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="1" STYLE="font: 10pt Arial, Helvetica, Sans-serif; text-align: center; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">June 30,<BR>
 2011</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">December 31, 2010</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="1" STYLE="font: 10pt Arial, Helvetica, Sans-serif; text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center">(Unaudited)</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="1" STYLE="font-weight: bold; text-align: left; vertical-align: bottom">&nbsp;(in thousands, except per share amounts)</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>Assets</TD><TD STYLE="font-family: Arial, Helvetica, Sans-serif">&nbsp;</TD>
    <TD STYLE="font-family: Arial, Helvetica, Sans-serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-serif; text-align: right">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-serif">&nbsp;</TD>
    <TD STYLE="font-family: Arial, Helvetica, Sans-serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-serif; text-align: right">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Investments in portfolio securities at fair value:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 56%">&nbsp;&nbsp;&nbsp;&nbsp;Control investments (cost at $24,186 and $34,231 respectively)</TD><TD STYLE="width: 8%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">15,832</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">17,576</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;Affiliate investments (cost at $350 and $923 respectively)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">50</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">762</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1pt">&nbsp;&nbsp;&nbsp;&nbsp;Non-affiliate investments (cost at $12,878 and $19,808 respectively)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">5,805</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">9,324</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total investments in portfolio securities at fair value</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">21,687</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">27,662</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>Cash and cash equivalents</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">17,333</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7,382</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Restricted cash and temporary cash investments</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">15,150</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">15,150</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>Accounts receivable and other</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">42</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">273</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Accrued interest receivable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,701</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,724</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1pt">Deferred offering costs</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">128</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">263</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">57,041</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">53,454</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>Liabilities and net assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable and accrued liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">575</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">345</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable to related parties</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">34</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">58</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt">&nbsp;&nbsp;&nbsp;&nbsp;Borrowing under margin account</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">15,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">15,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">15,609</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">15,403</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Commitments and contingencies</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1pt">Net assets</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">41,432</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">38,051</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Net assets consist of:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;Common stock, par value</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">10</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">9</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;Capital in excess of par value</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">64,292</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">70,597</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;Undistributed net investment losses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(7,143</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(5,255</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt">&nbsp;&nbsp;&nbsp;&nbsp;Unrealized depreciation of portfolio securities, net</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(15,727</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(27,300</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total net assets</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">41,432</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">38,051</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt">Shares of common stock issued and outstanding, $.001 par value, 50,000 shares authorized</TD><TD STYLE="font-size: 11.5pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 11.5pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">10,562</TD><TD STYLE="padding-bottom: 1pt; font-size: 11.5pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 11.5pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 11.5pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">8,862</TD><TD STYLE="padding-bottom: 1pt; font-size: 11.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1pt">Shares of preferred stock issued and outstanding,&nbsp; $.001 par value,&nbsp; 5,000 shares authorized</TD><TD STYLE="font-size: 11.5pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 11.5pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 11.5pt; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-size: 11.5pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 11.5pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 11.5pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 11.5pt; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-size: 11.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt">Net asset value per share</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">3.92</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">4.29</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
</TABLE>


<P STYLE="font: 9pt Calibri, Halvetica, Sans-Serif; margin: 9pt 0 0; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">The accompanying notes are an integral part
of these financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><U>EQUUS TOTAL RETURN, INC.</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><A NAME="a_004"></A><U>STATEMENTS OF OPERATIONS </U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">(Unaudited)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"></P>

<P STYLE="font: 9pt Arial; margin: 0; text-align: center; color: Red"><B></B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: 10pt Arial, Helvetica, Sans-serif; text-align: center">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="7" STYLE="font-size: 10pt; font-weight: bold; text-align: center">Three months ended</TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="7" STYLE="font-size: 10pt; font-weight: bold; text-align: center">Six&nbsp; months ended</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: 10pt Arial, Helvetica, Sans-serif; text-align: center; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="7" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">June 30,</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="7" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">June 30,</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 11.5pt; font-weight: bold; text-align: left; padding-bottom: 1pt; vertical-align: bottom">&nbsp;(in thousands, except per share amounts)</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2011</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2010</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2011</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2010</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>Investment income:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-serif">&nbsp;</TD>
    <TD STYLE="font-family: Arial, Helvetica, Sans-serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-serif; text-align: right">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Arial, Helvetica, Sans-serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Arial, Helvetica, Sans-serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Arial, Helvetica, Sans-serif; text-align: right">&nbsp;</TD><TD STYLE="font: 10pt Arial, Helvetica, Sans-serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Arial, Helvetica, Sans-serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Arial, Helvetica, Sans-serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Arial, Helvetica, Sans-serif; text-align: right">&nbsp;</TD><TD STYLE="font: 10pt Arial, Helvetica, Sans-serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;Interest and dividend income:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Arial, Helvetica, Sans-serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Arial, Helvetica, Sans-serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Arial, Helvetica, Sans-serif; text-align: right">&nbsp;</TD><TD STYLE="font: 10pt Arial, Helvetica, Sans-serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Arial, Helvetica, Sans-serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Arial, Helvetica, Sans-serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Arial, Helvetica, Sans-serif; text-align: right">&nbsp;</TD><TD STYLE="font: 10pt Arial, Helvetica, Sans-serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 42%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Control investments</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">354</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">273</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">670</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">577</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Affiliate investments</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">13</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">26</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-affiliate investments</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">29</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">538</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">141</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,068</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total interest and dividend income</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">383</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">824</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">815</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,671</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1pt">&nbsp;&nbsp;&nbsp;&nbsp;Interest from temporary cash investments</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">9</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">3</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">16</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">7</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total investment income</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">392</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">827</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">831</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,678</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>Expenses:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;Compensation expense</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">335</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">201</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">827</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">549</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;Professional fees</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">424</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">833</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">763</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,177</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;Offering costs</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">300</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">300</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;Settlement expense</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">200</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">320</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;Director fees and expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">126</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">113</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">208</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">213</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;Mailing, printing and other expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">45</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">251</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">86</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">280</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;General and administrative expense</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">42</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">46</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">93</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">90</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;Interest expense</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">15</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">24</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt">&nbsp;&nbsp;&nbsp;&nbsp;Taxes</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">121</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">121</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">24</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total expenses</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,594</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,459</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">2,719</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">2,357</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Net investment loss</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,202</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(632</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,888</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(679</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>Net realized gain (loss):</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;Control investments</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(10,074</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(10,074</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;Affiliate investments</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">138</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;Non-affiliate investments</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(992</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1pt">&nbsp;&nbsp;&nbsp;&nbsp;Temporary cash investments</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(1</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(1</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(5</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net realized loss</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(10,074</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(10,929</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(5</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>Net unrealized depreciation of portfolio securities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;End of period</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(15,727</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(27,556</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(15,727</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(27,556</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1pt">&nbsp;&nbsp;&nbsp;&nbsp;Beginning of period</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(27,477</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(15,926</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(27,300</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(15,227</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt">Net change in unrealized depreciation of portfolio securities</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">11,750</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(11,630</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">11,573</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(12,329</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1pt">Net increase (decrease) in net assets resulting from operations</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">474</TD><TD STYLE="padding-bottom: 1pt; text-align: left"></TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(12,263</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(1,244</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(13,013</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">Net increase (decrease) in net assets resulting from operations per share:</TD><TD STYLE="font-size: 11pt">&nbsp;</TD>
    <TD STYLE="font-size: 11pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 11pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 11pt; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Arial, Helvetica, Sans-serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Arial, Helvetica, Sans-serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Arial, Helvetica, Sans-serif; text-align: right">&nbsp;</TD><TD STYLE="font: 10pt Arial, Helvetica, Sans-serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Arial, Helvetica, Sans-serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Arial, Helvetica, Sans-serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Arial, Helvetica, Sans-serif; text-align: right">&nbsp;</TD><TD STYLE="font: 10pt Arial, Helvetica, Sans-serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Arial, Helvetica, Sans-serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Arial, Helvetica, Sans-serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Arial, Helvetica, Sans-serif; text-align: right">&nbsp;</TD><TD STYLE="font: 10pt Arial, Helvetica, Sans-serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Basic and diluted</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">0.05</TD><TD STYLE="padding-bottom: 1pt; text-align: left"></TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(1.38</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(0.13)</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(1.46</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">Weighted average shares outstanding</TD><TD STYLE="font-size: 11pt">&nbsp;</TD>
    <TD STYLE="font-size: 11pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 11pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 11pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 11pt">&nbsp;</TD>
    <TD STYLE="font-size: 11pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 11pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 11pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 11pt">&nbsp;</TD>
    <TD STYLE="font-size: 11pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 11pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 11pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 11pt">&nbsp;</TD>
    <TD STYLE="font-size: 11pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 11pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 11pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 2.5pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Basic and diluted</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">10,188</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">8,862</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">9,528</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">8,862</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>


<P STYLE="font: 9pt Arial; margin: 0; text-align: center; color: Red"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 11pt Calibri, Halvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center">The accompanying notes are an integral
part of these financial statements.</P>

<P STYLE="font: 11pt Calibri, Halvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><U>EQUUS TOTAL RETURN, INC.</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><U><A NAME="a_005"></A>STATEMENTS OF CHANGES IN NET ASSETS </U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">(Unaudited)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 11.5pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="1" STYLE="font: 10pt Arial, Helvetica, Sans-serif; text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="7" STYLE="font-size: 10pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt">Six months ended</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="1" STYLE="font: 10pt Arial, Helvetica, Sans-serif; text-align: center; padding-bottom: 1pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="7" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 10pt">June
    30,</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="1" STYLE="font-weight: bold; text-align: left; padding-bottom: 1pt; vertical-align: bottom"><FONT STYLE="font-size: 10pt">&nbsp;(in
    thousands)</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 10pt">2011</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 10pt">2010</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 56%"><FONT STYLE="font-size: 10pt">&nbsp;Net decrease in net assets resulting from operations</FONT></TD><TD STYLE="width: 8%"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 10pt">$</FONT></TD><TD STYLE="width: 12%; text-align: right"><FONT STYLE="font-size: 10pt">(1,244</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 10pt">)</FONT></TD><TD STYLE="width: 8%"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 10pt">$</FONT></TD><TD STYLE="width: 12%; text-align: right"><FONT STYLE="font-size: 10pt">(13,013</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 10pt">)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD><FONT STYLE="font-size: 10pt">&nbsp;Capital share transactions:</FONT></TD><TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shares issued
    for portfolio securities</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 10pt">4,626</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 10pt">&mdash;&nbsp;&nbsp;</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 10pt">&nbsp;Net increase in net assets resulting from capital share
    transactions</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">4,626</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">&mdash;&nbsp;&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD><FONT STYLE="font-size: 10pt">&nbsp;Increase (decrease) in net assets</FONT></TD><TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">3,382</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">(13,013</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 10pt">&nbsp;Net assets at beginning of period</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">38,051</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">50,901</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 10pt">&nbsp;Net assets at end of period</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-size: 10pt">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 10pt">41,432</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-size: 10pt">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 10pt">37,888</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"></P>



<P STYLE="font: 9pt Arial; margin: 0; text-align: center; color: Red"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"><SUP>&nbsp;</SUP></P>

<P STYLE="font: 9pt Arial, Helvetica, Sans-Serif; margin: 9pt 0 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center">The accompanying notes are an integral
part of these financial statements.</P>

<P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11pt Calibri, Halvetica, Sans-Serif; margin: 0 0 6pt">&nbsp;</P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: left; width: 100%"><A HREF="#TableOfContents" TITLE="Table of Contents" STYLE="font-style: italic">Table of Contents</A></TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><U>EQUUS TOTAL RETURN, INC.</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><U><A NAME="a_006"></A>STATEMENTS OF CASH FLOWS </U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">(Unaudited)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="1" STYLE="font: 10pt Arial, Helvetica, Sans-serif; text-align: center; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="7" STYLE="font-size: 10pt; font-weight: bold; text-align: center">Six months ended</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="1" STYLE="font: 10pt Arial, Helvetica, Sans-serif; text-align: center; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="7" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">June 30,</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="1" STYLE="font-size: 10pt; font-weight: bold; text-align: left; padding-bottom: 1pt; vertical-align: bottom">(in thousands)</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2011</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2010</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD COLSPAN="1" STYLE="text-align: left; vertical-align: bottom">Reconciliation of decrease in net assets resulting from
    operations to net cash provided by operating activities:</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-serif">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-family: Arial, Helvetica, Sans-serif; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 56%">Net decrease in net assets resulting from operations</TD><TD STYLE="width: 8%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">(1,244</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 8%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">(13,013</TD><TD STYLE="width: 1%; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>Adjustments to reconcile net decrease in net assets resulting from operations to net cash provided by operating activities:</TD><TD STYLE="font-family: Arial, Helvetica, Sans-serif">&nbsp;</TD>
    <TD STYLE="font-family: Arial, Helvetica, Sans-serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-serif; text-align: right">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-serif">&nbsp;</TD>
    <TD STYLE="font-family: Arial, Helvetica, Sans-serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-serif; text-align: right">&nbsp;</TD><TD STYLE="font-family: Arial, Helvetica, Sans-serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;Net realized loss</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10,929</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;Net change in unrealized depreciation of portfolio securities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(11,573</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">12,329</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;Offering costs expense</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">300</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>Changes in operating assets and liabilities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;Purchase of portfolio securities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(254</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(200</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;Net proceeds from dispositions of portfolio securities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9,731</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;Principal payments received from portfolio securities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">157</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,500</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;Cash settlement of collateral</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,610</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;Sales of temporary cash investments</TD><TD STYLE="font-size: 12pt">&nbsp;</TD>
    <TD STYLE="font-size: 12pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 12pt; text-align: right">&mdash;&nbsp;</TD><TD STYLE="font-size: 12pt; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11,104</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;Decrease in accounts receivable and other</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">231</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;(Increase) decrease&nbsp; in accrued interest receivable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">23</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(699</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;Deferred offering costs</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(165</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;Increase in accounts payable and accrued liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">230</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1pt">&nbsp;&nbsp;&nbsp;&nbsp;Increase (decrease) in accounts payable-related parties</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(24</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">70</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Net cash provided by operating activities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9,951</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">13,107</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>Cash flows from financing activities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;Borrowings under margin account</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">21,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">39,999</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1pt">&nbsp;&nbsp;&nbsp;&nbsp;Repayments under margin account</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">(21,000</TD><TD STYLE="text-align: left; padding-bottom: 1pt">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">(50,998</TD><TD STYLE="text-align: left; padding-bottom: 1pt">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by financing activities</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(10,999</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>Net increase (used in) in cash and cash equivalents</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9,951</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,108</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt">Cash and cash equivalents at beginning of period</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">7,382</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">6,045</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 2.5pt">Cash and cash equivalents at end of period</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">17,333</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">8,153</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Non-cash operating and financing activities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 2.5pt">&nbsp;&nbsp;&nbsp;&nbsp;Shares issued for portfolio securities</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">4,626</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 2.5pt">&nbsp;&nbsp;&nbsp;&nbsp;Accrued interest or dividends exchanged for portfolio securities</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">333</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>Supplemental disclosure of cash flow information:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;&nbsp;&nbsp;&nbsp;Interest paid</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">5</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">7</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;&nbsp;&nbsp;&nbsp;Income taxes paid</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">24</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>


<P STYLE="font: 9pt Calibri, Halvetica, Sans-Serif; margin: 9pt 0 0; text-align: center"><FONT STYLE="font-family: Arial; color: Red"><B></B></FONT><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center">The accompanying notes are an integral
part of these financial statements.</P>

<P STYLE="font: 11pt Calibri, Halvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><U>EQUUS TOTAL RETURN, INC.</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><U><A NAME="a_007"></A>SUPPLEMENTAL INFORMATION&mdash;SELECTED PER
SHARE DATA AND RATIOS </U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">(Unaudited)</P>

<P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 9pt Calibri, Halvetica, Sans-Serif; margin: 0; text-indent: 22pt"><FONT STYLE="font-family: Arial; color: Red"><B></B></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: 10pt Arial, Helvetica, Sans-serif; text-align: center">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="7" STYLE="font-size: 10pt; font-weight: bold; text-align: center">Six months ended</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: 10pt Arial, Helvetica, Sans-serif; text-align: center; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="7" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">June 30,</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2011</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2010</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 63%">Investment income</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">0.09</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">0.19</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt">Expenses</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">0.29</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(0.26</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>Net investment loss</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(0.20</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(0.07</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Net realized loss</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1.14</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1pt">Net change in unrealized depreciation</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1.21</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(1.39</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Net decrease in net assets resulting from operations</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(0.13</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1.46</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>Capital transactions:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shares issued for portfolio securities</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(0.17</TD><TD STYLE="text-align: left; padding-bottom: 1pt">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dilutive effect of shares issued</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">(0.07</TD><TD STYLE="text-align: left; padding-bottom: 1pt">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">&mdash;&nbsp;</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1pt">Net decrease in assets from capital transactions</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">(0.24</TD><TD STYLE="text-align: left; padding-bottom: 1pt">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">&mdash;&nbsp;</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Net decrease in net assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(0.37</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1.46</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1pt">Net assets at beginning of period</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">4.29</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">5.74</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt">Net assets at end of period, basic and diluted</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">3.92</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">4.28</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>Weighted average number of shares outstanding during period, in thousands</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9,528</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8,862</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Market price per share:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left"></TD><TD STYLE="text-align: right"></TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left"></TD><TD STYLE="text-align: right"></TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Beginning of the period</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">2.50</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">3.20</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;End of period </TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">2.40</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">2.68</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>Selected ratios:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Ratio of expenses to average net assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6.84</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5.31</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Ratio of net investment loss to average net assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(4.75</TD><TD STYLE="text-align: left">)%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1.53</TD><TD STYLE="text-align: left">)%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 24px">Ratio of net decrease in net assets resulting from operations to average net assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(3.13</TD><TD STYLE="text-align: left">)%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(29.31</TD><TD STYLE="text-align: left">)%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total return on market price <SUP>(1)</SUP></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(4.00</TD><TD STYLE="text-align: left">)%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(16.25</TD><TD STYLE="text-align: left">)%</TD></TR>
</TABLE>


<P STYLE="font: 9pt Calibri, Halvetica, Sans-Serif; margin: 0; text-indent: 22pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-size: 8pt; color: black"><SUP>(1)</SUP>&nbsp;&nbsp;Total
return = [(ending market price per share - beginning price per share) / beginning market price per share</FONT><FONT STYLE="font-size: 9pt">].&nbsp;</FONT></P>

<P STYLE="font: 8pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;The accompanying notes are an integral
part of these financial statements.</P>

<P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11pt Calibri, Halvetica, Sans-Serif; margin: 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>EQUUS TOTAL RETURN, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B><A NAME="a_008"></A>SCHEDULE OF INVESTMENTS </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>June 30, 2011 </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>(Unaudited) </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B><I>(in thousands, except share data)</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 9pt Arial, Helvetica, Sans-Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 9pt Calibri, Halvetica, Sans-Serif; margin: 0; text-align: center"><FONT STYLE="font-family: Arial; color: Red"><B></B></FONT></P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; border-collapse: collapse; font: 7.5pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; width: 32%">&nbsp;Name&nbsp;and&nbsp;Location&nbsp;of&nbsp;</TD>
    <TD STYLE="font: 10pt Arial, Helvetica, Sans-Serif; width: 11%">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center; width: 11%">&nbsp;Date&nbsp;of&nbsp;Initial&nbsp;</TD>
    <TD STYLE="font: 10pt Arial, Helvetica, Sans-Serif; width: 29%">&nbsp;</TD>
    <TD STYLE="font: 10pt Arial, Helvetica, Sans-Serif; width: 1%">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center; width: 8%">&nbsp;Cost of&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center; width: 8%">&nbsp;Fair&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-decoration: underline">&nbsp;Portfolio&nbsp;Company&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-decoration: underline; text-align: center">&nbsp;Industry&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-decoration: underline; text-align: center">&nbsp;Investment&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-decoration: underline; text-align: center">&nbsp;Investment&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-decoration: underline; text-align: center">&nbsp;Principal&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-decoration: underline; text-align: center">&nbsp;Investment&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-decoration: underline; text-align: center">&nbsp;Value(1)&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 4pt">&nbsp;</TD>
    <TD STYLE="font-size: 4pt">&nbsp;</TD>
    <TD STYLE="font-size: 4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="font-size: 4pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; font-style: italic; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="border-bottom: black 0.5pt solid; font-weight: bold; text-align: left">&nbsp;Control investments:&nbsp; Majority-Owned (4):&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 0.5pt solid; font: bold 9pt Arial, Helvetica, Sans-Serif; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 0.5pt solid; font-size: 9pt; font-weight: bold; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 0.5pt solid; font-size: 9pt; font-weight: bold; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 0.5pt solid; font: bold 9pt Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 0.5pt solid; font: bold 9pt Arial, Helvetica, Sans-Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD>&nbsp;Equus Media Development Company, LLC<BR>
&nbsp;Houston, TX&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;Media&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;January 2007&nbsp;</TD>
    <TD>&nbsp;Member interest (100%)&nbsp;</TD>
    <TD STYLE="font-size: 4pt">&nbsp;</TD>
    <TD STYLE="text-align: right">$4,000</TD>
    <TD STYLE="text-align: right">$1,109</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="border-top: Black 1pt solid">&nbsp;Sovereign Business Forms, Inc.<BR>
&nbsp;Houston, TX&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid">&nbsp;Business products and services&nbsp;</TD>
    <TD STYLE="text-align: center; border-top: Black 1pt solid">&nbsp;August 1996&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid">&nbsp;1,214,630 shares of common stock (64.66% / 55.00% fully diluted)&nbsp;</TD>
    <TD STYLE="font-size: 4pt; border-top: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="text-align: right; border-top: Black 1pt solid">5,080</TD>
    <TD STYLE="text-align: right; border-top: Black 1pt solid">4,501</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 4pt">&nbsp;</TD>
    <TD STYLE="font-size: 4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="font-size: 4pt; text-align: center">&nbsp;</TD>
    <TD>&nbsp;12% subordinated promissory notes 5/13(2)&nbsp;</TD>
    <TD STYLE="text-align: right">$2,585</TD>
    <TD STYLE="border-bottom: windowtext 0.5pt solid; text-align: right">2,585</TD>
    <TD STYLE="border-bottom: windowtext 0.5pt solid; text-align: right">2,585</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="font-size: 4pt">&nbsp;</TD>
    <TD STYLE="font-size: 4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="font-size: 4pt; text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">7,665</TD>
    <TD STYLE="text-align: right">7,086</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="border-top: Black 1pt solid">&nbsp;Spectrum Management, LLC<BR>
&nbsp;Carrollton, TX&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid">&nbsp;Business products and services&nbsp;</TD>
    <TD STYLE="text-align: center; border-top: Black 1pt solid">&nbsp;December&nbsp;1999&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid">&nbsp;285,000 units of class&nbsp;A member interest (81% fully diluted)&nbsp;</TD>
    <TD STYLE="font-size: 4pt; border-top: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="text-align: right; border-top: Black 1pt solid">2,850</TD>
    <TD STYLE="text-align: right; border-top: Black 1pt solid">-</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 4pt">&nbsp;</TD>
    <TD STYLE="font-size: 4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="font-size: 4pt; text-align: center">&nbsp;</TD>
    <TD>&nbsp;16% subordinated promissory notes 11/11(2)(3)&nbsp;</TD>
    <TD STYLE="text-align: right">2,301</TD>
    <TD STYLE="border-bottom: windowtext 0.5pt solid; text-align: right">2,301</TD>
    <TD STYLE="border-bottom: windowtext 0.5pt solid; text-align: right">1,774</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 4pt">&nbsp;</TD>
    <TD STYLE="font-size: 4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="font-size: 4pt; text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">5,151</TD>
    <TD STYLE="text-align: right">1,774</TD></TR>
<TR>
    <TD COLSPAN="4" STYLE="border-top: windowtext 0.5pt solid; border-bottom: black 0.5pt solid; font-weight: bold; vertical-align: bottom; text-align: left">&nbsp;Total Control investments: Majority-Owned (represents 27.2% of total investments at fair value)&nbsp;</TD>
    <TD STYLE="border-top: black 0.5pt solid; border-bottom: black 0.5pt solid; font-weight: bold; vertical-align: top">&nbsp;</TD>
    <TD STYLE="border-top: black 0.5pt solid; border-bottom: black 0.5pt solid; font-weight: bold; vertical-align: bottom; text-align: right">$16,816</TD>
    <TD STYLE="border-top: black 0.5pt solid; border-bottom: black 0.5pt solid; font-weight: bold; vertical-align: bottom; text-align: right">$9,969</TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD COLSPAN="4" STYLE="border-bottom: Black 0.5pt solid; font-weight: bold; vertical-align: bottom; text-align: left">&nbsp;Control Investments: Non-Majority Owned(5):&nbsp;</TD>
    <TD STYLE="border-bottom: black 0.5pt solid; font-weight: bold; vertical-align: top; border-top-color: black; border-top-width: 0.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 0.5pt solid; font-weight: bold; vertical-align: bottom; border-top-color: black; border-top-width: 0.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 0.5pt solid; font-weight: bold; vertical-align: bottom; border-top-color: black; border-top-width: 0.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;ConGlobal Industries Holding, Inc.<BR>
&nbsp;San Ramon, CA&nbsp;</TD>
    <TD>&nbsp;Shipping products and services&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;February 1997&nbsp;</TD>
    <TD>&nbsp;24,397,303 shares of common stock (34.2%)&nbsp;</TD>
    <TD STYLE="font-size: 4pt">&nbsp;</TD>
    <TD STYLE="text-align: right">$1,370</TD>
    <TD STYLE="text-align: right">$-</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>&nbsp;&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="font-size: 4pt; text-align: center">&nbsp;</TD>
    <TD>&nbsp;7% subordinated promissory note 12/12(3)&nbsp;</TD>
    <TD STYLE="text-align: right">$6,000</TD>
    <TD STYLE="border-bottom: windowtext 0.5pt solid; text-align: right">6,000</TD>
    <TD STYLE="border-bottom: windowtext 0.5pt solid; text-align: right">5,863</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 2.5pt">&nbsp;</TD>
    <TD STYLE="font-size: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 1pt; text-align: center">&nbsp;</TD>
    <TD STYLE="font-size: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: right">7,370</TD>
    <TD STYLE="text-align: right">5,863</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD COLSPAN="4" STYLE="border-top: Black 1pt solid; font-weight: bold; text-align: left">&nbsp;Total Control Investments: Non-Majority Owned (represents 16.0% of total investments at fair value)&nbsp;</TD>
    <TD STYLE="font-size: 4pt; border-top: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: right; border-top: Black 1pt solid">$7,370</TD>
    <TD STYLE="font-weight: bold; text-align: right; border-top: Black 1pt solid">$5,863</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="4" STYLE="border-bottom: Black 0.5pt solid; font-weight: bold; text-align: left; border-top: Black 1pt solid">&nbsp;Total Control Investments: (represents 43.2% of total investments at fair value)&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 0.5pt solid; font-size: 4pt">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 0.5pt solid; font-weight: bold; text-align: right">$24,186</TD>
    <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 0.5pt solid; font-weight: bold; text-align: right">$15,832</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid">&nbsp;Affiliate Investments(6):&nbsp;</TD>
    <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;PalletOne, Inc.&nbsp;<BR>
&nbsp;Bartow, FL</TD>
    <TD>&nbsp;Shipping products and services&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;October 2001&nbsp;</TD>
    <TD>&nbsp;350,000&nbsp;shares&nbsp;of&nbsp;common stock (20% / 18.70% fully diluted)&nbsp;</TD>
    <TD STYLE="font-size: 4pt">&nbsp;</TD>
    <TD STYLE="text-align: right">$350</TD>
    <TD STYLE="text-align: right">$50</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD COLSPAN="4" STYLE="border-bottom: Black 0.5pt solid; font-weight: bold; text-align: left; border-top: Black 1pt solid">&nbsp;Total Affiliate Investments (represents 0.1% of total investments at fair value)&nbsp;</TD>
    <TD STYLE="border-bottom: Black 0.5pt solid; font-size: 4pt; border-top: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 0.5pt solid; font-weight: bold; text-align: right; border-top: Black 1pt solid">$350</TD>
    <TD STYLE="border-bottom: Black 0.5pt solid; font-weight: bold; text-align: right; border-top: Black 1pt solid">$50</TD></TR>
</TABLE>

<P STYLE="font: 9pt Calibri, Halvetica, Sans-Serif; margin: 0; text-align: center"><FONT STYLE="font-family: Arial; color: Red"><B></B></FONT><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center">The accompanying notes are an integral
part of these financial statements.</P>

<P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11pt Calibri, Halvetica, Sans-Serif; margin: 0 0 6pt">&nbsp;</P>

<P STYLE="font: 11pt Calibri, Halvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>EQUUS TOTAL RETURN, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>SCHEDULE OF INVESTMENTS &ndash; (Continued)
</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>June 30, 2011 </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>(Unaudited) </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B><I>(in thousands, except share data)</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 9pt Calibri, Halvetica, Sans-Serif; margin: 0; text-align: center"><FONT STYLE="font-family: Arial; color: Red"><B></B></FONT></P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; border-collapse: collapse; font: 7.5pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; width: 32%">Name&nbsp;and&nbsp;Location&nbsp;of</TD>
    <TD STYLE="font: 10pt Arial, Helvetica, Sans-Serif; width: 11%">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center; width: 11%">Date&nbsp;of&nbsp;Initial</TD>
    <TD STYLE="font: 10pt Arial, Helvetica, Sans-Serif; width: 21%">&nbsp;</TD>
    <TD STYLE="font: 10pt Arial, Helvetica, Sans-Serif; width: 9%">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center; width: 8%">Cost of</TD>
    <TD STYLE="font-weight: bold; text-align: center; width: 8%">Fair</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-decoration: underline">Portfolio&nbsp;Company</TD>
    <TD STYLE="font-weight: bold; text-decoration: underline; text-align: center">Industry</TD>
    <TD STYLE="font-weight: bold; text-decoration: underline; text-align: center">Investment</TD>
    <TD STYLE="font-weight: bold; text-decoration: underline; text-align: center">Investment</TD>
    <TD STYLE="font-weight: bold; text-decoration: underline; text-align: center">Principal</TD>
    <TD STYLE="font-weight: bold; text-decoration: underline; text-align: center">Investment</TD>
    <TD STYLE="font-weight: bold; text-decoration: underline; text-align: center">Value(1)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 4pt">&nbsp;</TD>
    <TD STYLE="font-size: 4pt">&nbsp;</TD>
    <TD STYLE="font-size: 4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="font-size: 4pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; font-style: italic; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="4" STYLE="border-bottom: black 0.5pt solid; font-weight: bold">Non-Affiliate Investments (less than 5% owned):</TD>
    <TD STYLE="border-bottom: windowtext 0.5pt solid; font-weight: bold">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 0.5pt solid; font-weight: bold">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 0.5pt solid; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD>The Bradshaw Group<BR>
Richardson, TX</TD>
    <TD>Business products and services</TD>
    <TD STYLE="text-align: center">May 2000</TD>
    <TD>576,828&nbsp;Class&nbsp;B&nbsp;Shares&nbsp;12.25%<BR>
preferred&nbsp;stock</TD>
    <TD STYLE="font-size: 4pt">&nbsp;</TD>
    <TD STYLE="text-align: right">$1,795</TD>
    <TD STYLE="text-align: right">$-</TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 4pt; vertical-align: top">&nbsp;</TD>
    <TD STYLE="font-size: 4pt; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="font-size: 4pt; vertical-align: bottom; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">38,750 Class C shares preferred stock</TD>
    <TD STYLE="font-size: 4pt; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: right">-</TD>
    <TD STYLE="vertical-align: top; text-align: right">-</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 4pt">&nbsp;</TD>
    <TD STYLE="font-size: 4pt">&nbsp;</TD>
    <TD STYLE="font-size: 4pt; text-align: center">&nbsp;</TD>
    <TD>788,649 Class D shares 15% preferred stock</TD>
    <TD STYLE="font-size: 4pt">&nbsp;</TD>
    <TD STYLE="text-align: right">-</TD>
    <TD STYLE="text-align: right">-</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 4pt">&nbsp;</TD>
    <TD STYLE="font-size: 4pt">&nbsp;</TD>
    <TD STYLE="font-size: 4pt; text-align: center">&nbsp;</TD>
    <TD>2,218,109 Class E shares 8% preferred stock</TD>
    <TD STYLE="font-size: 4pt">&nbsp;</TD>
    <TD STYLE="text-align: right">-</TD>
    <TD STYLE="text-align: right">-</TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 12pt; vertical-align: top">&nbsp;</TD>
    <TD STYLE="font-size: 12pt; vertical-align: top">&nbsp;</TD>
    <TD STYLE="font-size: 12pt; vertical-align: top; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: top">Warrant to buy 2,229,450 shares of common stock through 5/16</TD>
    <TD STYLE="font-size: 12pt; vertical-align: top">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 0.5pt solid; vertical-align: middle; text-align: right">-</TD>
    <TD STYLE="border-bottom: windowtext 0.5pt solid; vertical-align: middle; text-align: right">-</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 12pt">&nbsp;</TD>
    <TD STYLE="font-size: 12pt">&nbsp;</TD>
    <TD STYLE="font-size: 12pt; text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="font-size: 12pt">&nbsp;</TD>
    <TD STYLE="text-align: right">1,795</TD>
    <TD STYLE="text-align: right">-</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-top: windowtext 0.5pt solid">Infinia Corporation<BR>
Kennewick, WA</TD>
    <TD STYLE="border-top: windowtext 0.5pt solid">Alternative energy</TD>
    <TD STYLE="border-top: windowtext 0.5pt solid; text-align: center">June 2007</TD>
    <TD STYLE="border-top: windowtext 0.5pt solid">115,180 shares common stock (0.63%)</TD>
    <TD STYLE="border-top: windowtext 0.5pt solid; font-size: 4pt">&nbsp;</TD>
    <TD STYLE="border-top: windowtext 0.5pt solid; text-align: right">&nbsp;&nbsp;8,000</TD>
    <TD STYLE="border-top: windowtext 0.5pt solid; text-align: right">-</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="font-size: 4pt; vertical-align: top">&nbsp;</TD>
    <TD STYLE="font-size: 4pt; vertical-align: top">&nbsp;</TD>
    <TD STYLE="font-size: 4pt; vertical-align: top; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: top">Option to purchase 16,000 shares of common stock at $6.50 per share through 12/12</TD>
    <TD STYLE="font-size: 4pt; vertical-align: top">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 0.5pt solid; vertical-align: middle; text-align: right">-</TD>
    <TD STYLE="border-bottom: windowtext 0.5pt solid; vertical-align: middle; text-align: right">-</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: windowtext 0.5pt solid; font-size: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 0.5pt solid; font-size: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 0.5pt solid; font-size: 4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 0.5pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 0.5pt solid; font-size: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 0.5pt solid; border-top-color: windowtext; border-top-width: 0.5pt; text-align: right">8,000</TD>
    <TD STYLE="border-bottom: windowtext 0.5pt solid; text-align: right">-</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="border-bottom: Black 1pt solid">Orco Germany S.A<BR>
Berlin, Germany</TD>
    <TD STYLE="border-bottom: Black 1pt solid">Real estate</TD>
    <TD STYLE="text-align: center; border-bottom: Black 1pt solid">April 2011</TD>
    <TD STYLE="border-bottom: Black 1pt solid">8,890 4% Corporate Bonds 5/12</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: right">$&nbsp;&nbsp;8,612</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;&nbsp;3,083</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;&nbsp;5,751</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-top-color: black; border-top-width: 0.5pt">Trulite, Inc.<BR>
Columbia, SC</TD>
    <TD STYLE="border-top-color: black; border-top-width: 0.5pt">Alternative energy</TD>
    <TD STYLE="text-align: center; border-top-color: black; border-top-width: 0.5pt">August 2008</TD>
    <TD STYLE="border-top-color: windowtext; border-top-width: 0.5pt">Warrants to buy 8,934,211 shares of common stock through at $0.01 - $0.38 per share through 11/15</TD>
    <TD STYLE="text-align: center; border-top-color: windowtext; border-top-width: 0.5pt">&nbsp;</TD>
    <TD STYLE="text-align: right; border-top-color: windowtext; border-top-width: 0.5pt">-</TD>
    <TD STYLE="text-align: right">54</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD COLSPAN="4" STYLE="border-top: windowtext 0.5pt solid; border-bottom: windowtext 0.5pt solid; font-weight: bold">Total Non-Affiliate Investments (represents 15.8% of total investments at fair value)</TD>
    <TD STYLE="border-top: black 0.5pt solid; border-bottom: windowtext 0.5pt solid; font-weight: bold; text-align: left">&nbsp;</TD>
    <TD STYLE="border-top: black 0.5pt solid; border-bottom: windowtext 0.5pt solid; font-weight: bold; text-align: right">$12,878</TD>
    <TD STYLE="border-top: black 0.5pt solid; border-bottom: windowtext 0.5pt solid; font-weight: bold; text-align: right">$5,805</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: black 0.5pt solid; font-weight: bold; border-top-color: black; border-top-width: 0.5pt">Total Portfolio Securities</TD>
    <TD STYLE="border-bottom: black 0.5pt solid; font-weight: bold; border-top-color: black; border-top-width: 0.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 0.5pt solid; font-weight: bold; border-top-color: black; border-top-width: 0.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 0.5pt solid; font-weight: bold; border-top-color: black; border-top-width: 0.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 0.5pt solid; font-weight: bold; text-align: left; border-top-color: black; border-top-width: 0.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 0.5pt solid; font-weight: bold; border-top-color: black; border-top-width: 0.5pt; text-align: right">$37,414</TD>
    <TD STYLE="border-bottom: black 0.5pt solid; font-weight: bold; border-top-color: black; border-top-width: 0.5pt; text-align: right">$21,687</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold">Temporary Cash Investments</TD>
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD>
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">U.S. Treasury Bill (7)</TD>
    <TD>Government</TD>
    <TD>August 2011</TD>
    <TD>UST 0% 8/11</TD>
    <TD STYLE="text-align: right">$15,000</TD>
    <TD STYLE="text-align: right">$15,000</TD>
    <TD STYLE="text-align: right">$15,000</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD COLSPAN="4" STYLE="border-top: windowtext 0.5pt solid; border-bottom: windowtext 0.5pt solid; font-weight: bold">Total Temporary Cash Investments (represents 40.9% of total investments at fair value)</TD>
    <TD STYLE="border-top: black 0.5pt solid; border-bottom: windowtext 0.5pt solid; font-weight: bold; text-align: left">&nbsp;</TD>
    <TD STYLE="border-top: black 0.5pt solid; border-bottom: windowtext 0.5pt solid; font-weight: bold; text-align: right">$15,000</TD>
    <TD STYLE="border-top: black 0.5pt solid; border-bottom: windowtext 0.5pt solid; font-weight: bold; text-align: right">$15,000</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: black 0.5pt solid; font-weight: bold; border-top-color: black; border-top-width: 0.5pt">Total Investments</TD>
    <TD STYLE="border-bottom: black 0.5pt solid; font-weight: bold; border-top-color: black; border-top-width: 0.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 0.5pt solid; font-weight: bold; border-top-color: black; border-top-width: 0.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 0.5pt solid; font-weight: bold; border-top-color: black; border-top-width: 0.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 0.5pt solid; font-weight: bold; text-align: left; border-top-color: black; border-top-width: 0.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 0.5pt solid; font-weight: bold; border-top-color: black; border-top-width: 0.5pt; text-align: right">$52,414</TD>
    <TD STYLE="border-bottom: black 0.5pt solid; font-weight: bold; border-top-color: black; border-top-width: 0.5pt; text-align: right">$36,687</TD></TR>
</TABLE>

<P STYLE="font: 9pt Calibri, Halvetica, Sans-Serif; margin: 0; text-align: center"><FONT STYLE="font-family: Arial; color: Red"><B> </B></FONT><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 9pt Calibri, Halvetica, Sans-Serif; margin: 0"><FONT STYLE="font-family: Arial; color: Red"><B></B></FONT></P>

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<P STYLE="font: 9pt Calibri, Halvetica, Sans-Serif; margin: 0"><FONT STYLE="font-family: Arial; color: Red"><B></B></FONT><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 1pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse; font-family: Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 4%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 7.5pt; text-align: right">(1)</TD>
    <TD STYLE="width: 2%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 7.5pt">&nbsp;</TD>
    <TD STYLE="width: 94%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 7.5pt">See Note 3 to the financial statements, Valuation of Investments.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 7.5pt; text-align: right">(2)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 7.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 7.5pt">Income-producing.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 7.5pt; text-align: right">(3)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 7.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 7.5pt">Income on these securities is accrued to maturity.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 7.5pt; text-align: right">(4)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 7.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 7.5pt">Majority owned investments are generally defined under the Investment Company Act of 1940 as companies in which we own more than 50% of the voting securities of the company.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 7.5pt; text-align: right">(5)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 7.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 7.5pt">Non-majority owned control investments are generally defined under the Investment Company Act of 1940 as companies in which we own more than 25% but not more than 50% of the voting securities of the company.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 7.5pt; text-align: right">(6)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 7.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 7.5pt">Affiliate investments are generally defined under the Investment Company Act of 1940 as companies in which we own at least 5% but not more than 25% voting securities of the company.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 7.5pt; text-align: right">(7)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 7.5pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 7.5pt">The Fund has included U.S. Treasury Bills in &ldquo;Restricted Cash and Temporary Cash Investments&rdquo; on the balance sheet.</TD></TR>
</TABLE>
<P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11pt Calibri, Halvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11pt Calibri, Halvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center">&nbsp;The accompanying notes are an integral
part of these financial statements.</P>

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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>EQUUS TOTAL RETURN, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>SCHEDULE OF INVESTMENTS &ndash; (Continued)
</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>June 30, 2011 </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>(Unaudited) </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Substantially all of our portfolio securities
are restricted from public sale without prior registration under the Securities Act of 1933. We negotiate certain aspects of the
method and timing of the disposition of our investment in each portfolio company, including registration rights and related costs.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">As defined in the Investment Company Act of
1940, as of June 30, 2011 all of our investments, with the exception of the Fund&rsquo;s holdings of the Orco Germany S.A. 4% bonds
due May 2012, were in eligible portfolio companies. We provide significant managerial assistance to portfolio companies that comprise
73.2% of the total value of the investments in portfolio securities as of June 30, 2011.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Our investments in portfolio securities consist
of the following types of securities as of June 30, 2011 (in thousands):</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">Type of Securities</TD>
    <TD STYLE="line-height: 115%; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: black 1pt solid; line-height: 115%; font-weight: bold; text-align: center">&nbsp; Cost</TD>
    <TD STYLE="line-height: 115%; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: black 1pt solid; line-height: 115%; font-weight: bold; text-align: center">&nbsp; Fair Value</TD>
    <TD STYLE="line-height: 115%; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: black 1pt solid; line-height: 115%; font-weight: bold; text-align: center">Fair Value as Percentage of Net Assets</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 46%; line-height: 115%">Secured and subordinated debt</TD>
    <TD STYLE="width: 5%; line-height: 115%">&nbsp;</TD>
    <TD STYLE="width: 1%; line-height: 115%">$</TD>
    <TD STYLE="width: 11%; line-height: 115%; text-align: right">13,969</TD>
    <TD STYLE="width: 1%; line-height: 115%">&nbsp;</TD>
    <TD STYLE="width: 5%; line-height: 115%">&nbsp;</TD>
    <TD STYLE="width: 1%; line-height: 115%">$</TD>
    <TD STYLE="width: 11%; line-height: 115%; text-align: right">15,973</TD>
    <TD STYLE="width: 1%; line-height: 115%">&nbsp;</TD>
    <TD STYLE="width: 5%; line-height: 115%">&nbsp;</TD>
    <TD STYLE="width: 1%; line-height: 115%">&nbsp;</TD>
    <TD STYLE="width: 11%; line-height: 115%; text-align: right">38.5</TD>
    <TD STYLE="width: 1%; line-height: 115%">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="line-height: 115%">Common stock</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%; text-align: right">14,800</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%; text-align: right">4,551</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%; text-align: right">11.0</TD>
    <TD STYLE="line-height: 115%">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="line-height: 115%">Limited liability company investments</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%; text-align: right">6,850</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%; text-align: right">1,109</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%; text-align: right">2.7</TD>
    <TD STYLE="line-height: 115%">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="line-height: 115%">Options and warrants</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%; text-align: right">&mdash; &nbsp;&nbsp;</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%; text-align: right">54</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%; text-align: right">0.1</TD>
    <TD STYLE="line-height: 115%">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="line-height: 115%">Preferred stock</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; line-height: 115%">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; line-height: 115%; text-align: right">1,795</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; line-height: 115%">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; line-height: 115%; text-align: right">&mdash; &nbsp;&nbsp;</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; line-height: 115%">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; line-height: 115%; text-align: right">0.0</TD>
    <TD STYLE="line-height: 115%">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="line-height: 115%; text-align: left; vertical-align: bottom">Total</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="border-bottom: black 2.25pt double; line-height: 115%">$</TD>
    <TD STYLE="border-bottom: black 2.25pt double; line-height: 115%; text-align: right">37,414</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="border-bottom: black 2.25pt double; line-height: 115%">$</TD>
    <TD STYLE="border-bottom: black 2.25pt double; line-height: 115%; text-align: right">21,687</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="border-bottom: black 2.25pt double; line-height: 115%">&nbsp;</TD>
    <TD STYLE="border-bottom: black 2.25pt double; line-height: 115%; text-align: right">52.3</TD>
    <TD STYLE="line-height: 115%">%</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0 0 0 0.25in"></P>

<P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0 0 0 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Cash payments of interest are currently being
received and/or accrued on secured and subordinated debt, aggregating $16.0 million in fair value.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">The following is a summary by industry of the
Fund&rsquo;s investments in portfolio securities as of June 30, 2011 (in thousands):</P>

<P STYLE="font: 9pt Arial, Helvetica, Sans-Serif; margin: 9pt 0 0 45pt; text-align: center"></P>

<TABLE ALIGN="CENTER" CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%"><TR STYLE="vertical-align: bottom"><TD STYLE="font: bold 10pt/115% Arial, Helvetica, Sans-Serif; text-align: center">&nbsp;</TD>
    <TD STYLE="font: bold 10pt/115% Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font: bold 10pt/115% Arial, Helvetica, Sans-Serif; text-align: center">&nbsp;</TD>
    <TD STYLE="line-height: 115%; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="line-height: 115%; font-weight: bold; text-align: center">Fair Value as</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: bold 10pt/115% Arial, Helvetica, Sans-Serif; text-align: center">&nbsp;</TD>
    <TD STYLE="font: bold 10pt/115% Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font: bold 10pt/115% Arial, Helvetica, Sans-Serif; text-align: center">&nbsp;</TD>
    <TD STYLE="line-height: 115%; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="line-height: 115%; font-weight: bold; text-align: center">Percentage of</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">Industry</TD>
    <TD STYLE="line-height: 115%; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: black 1pt solid; line-height: 115%; font-weight: bold; text-align: center">Fair Value</TD>
    <TD STYLE="line-height: 115%; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: black 1pt solid; line-height: 115%; font-weight: bold; text-align: center">Net Assets</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 56%; line-height: 115%">Business products and services</TD>
    <TD STYLE="width: 8%; line-height: 115%">&nbsp;</TD>
    <TD STYLE="width: 1%; line-height: 115%">$</TD>
    <TD STYLE="width: 12%; line-height: 115%; text-align: right">8,860</TD>
    <TD STYLE="width: 1%; line-height: 115%">&nbsp;</TD>
    <TD STYLE="width: 2%; line-height: 115%">&nbsp;</TD>
    <TD STYLE="width: 3%; line-height: 115%">&nbsp;</TD>
    <TD STYLE="width: 16%; line-height: 115%; text-align: right">21.4</TD>
    <TD STYLE="width: 1%; line-height: 115%">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="line-height: 115%">Shipping products and services</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%; text-align: right">5,913</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%; text-align: right">14.2</TD>
    <TD STYLE="line-height: 115%">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="line-height: 115%">Real estate</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%; text-align: right">5,751</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%; text-align: right">13.9</TD>
    <TD STYLE="line-height: 115%">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="line-height: 115%">Media</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%; text-align: right">1,109</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%; text-align: right">2.7</TD>
    <TD STYLE="line-height: 115%">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="line-height: 115%">Alternative energy</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; line-height: 115%">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; line-height: 115%; text-align: right">54</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; line-height: 115%">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; line-height: 115%; text-align: right">0.1</TD>
    <TD STYLE="line-height: 115%">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="line-height: 115%">Total</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="border-bottom: black 2.25pt double; line-height: 115%">$</TD>
    <TD STYLE="border-bottom: black 2.25pt double; line-height: 115%; text-align: right">21,687</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="border-bottom: black 2.25pt double; line-height: 115%">&nbsp;</TD>
    <TD STYLE="border-bottom: black 2.25pt double; line-height: 115%; text-align: right">52.3</TD>
    <TD STYLE="line-height: 115%">%</TD></TR></TABLE>

<P STYLE="font: 9pt Arial, Helvetica, Sans-Serif; margin: 9pt 0 0 45pt; text-align: center"><FONT STYLE="font-family: Arial; color: Red"><B>
</B></FONT><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 9pt 0 0 81pt; text-align: center">The accompanying notes are an integral
part of these financial statements.</P>

<P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 10pt"><B>&nbsp;</B></P>

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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>EQUUS TOTAL RETURN, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>SCHEDULE OF INVESTMENTS </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>DECEMBER&nbsp;31, 2010</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B><I>(in thousands, except share data)</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 9pt Arial, Helvetica, Sans-Serif; margin: 0; text-align: center">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 7.5pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 32%; line-height: 115%; font-weight: bold">Name &nbsp;and&nbsp;Location&nbsp;of</TD>
    <TD STYLE="width: 11%; font: 10pt/115% Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="width: 11%; line-height: 115%; font-weight: bold; text-align: center">Date &nbsp;of&nbsp;Initial</TD>
    <TD STYLE="width: 21%; font: 10pt/115% Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="width: 9%; font: 10pt/115% Arial, Helvetica, Sans-Serif; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 8%; line-height: 115%; font-weight: bold; text-align: center">Cost of</TD>
    <TD STYLE="width: 8%; line-height: 115%; font-weight: bold; text-align: center">Fair</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="line-height: 115%; font-weight: bold; text-decoration: underline">Portfolio &nbsp;Company</TD>
    <TD STYLE="line-height: 115%; font-weight: bold; text-decoration: underline; text-align: center">Industry</TD>
    <TD STYLE="line-height: 115%; font-weight: bold; text-decoration: underline; text-align: center">Investment</TD>
    <TD STYLE="line-height: 115%; font-weight: bold; text-decoration: underline; text-align: center">Investment</TD>
    <TD STYLE="line-height: 115%; font-weight: bold; text-decoration: underline; text-align: center">Principal</TD>
    <TD STYLE="line-height: 115%; font-weight: bold; text-decoration: underline; text-align: center">Investment</TD>
    <TD STYLE="line-height: 115%; font-weight: bold; text-decoration: underline; text-align: center">Value(1)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="line-height: 115%; font-size: 4pt">&nbsp;</TD>
    <TD STYLE="line-height: 115%; font-size: 4pt">&nbsp;</TD>
    <TD STYLE="line-height: 115%; font-size: 4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="line-height: 115%; font-size: 4pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="line-height: 115%; font-style: italic; font-weight: bold; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="border-bottom: black 1pt solid; line-height: 115%; font-weight: bold">Control investments:&nbsp; Majority-Owned (6):</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; font: bold 9pt/115% Arial, Helvetica, Sans-Serif; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; line-height: 115%; font-size: 9pt; font-weight: bold; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; line-height: 115%; font-size: 9pt; font-weight: bold; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; font: bold 9pt/115% Arial, Helvetica, Sans-Serif; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; font: bold 9pt/115% Arial, Helvetica, Sans-Serif; text-align: right">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top; line-height: 115%">Equus Media Development Company, LLC</TD>
    <TD STYLE="vertical-align: top; line-height: 115%">Media</TD>
    <TD STYLE="vertical-align: top; line-height: 115%; text-align: center">January 2007</TD>
    <TD STYLE="vertical-align: top; line-height: 115%">Member interest (100%)</TD>
    <TD STYLE="vertical-align: top; line-height: 115%; font-size: 4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; line-height: 115%; text-align: right">$&nbsp;&nbsp;4,000</TD>
    <TD STYLE="vertical-align: bottom; line-height: 115%; text-align: right">$&nbsp;&nbsp;1,163</TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top; border-bottom: windowtext 1pt solid; line-height: 115%">Houston, TX</TD>
    <TD STYLE="vertical-align: top; border-bottom: windowtext 1pt solid; line-height: 115%; font-size: 4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: top; border-bottom: windowtext 1pt solid; line-height: 115%; font-size: 4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: top; border-bottom: windowtext 1pt solid; line-height: 115%; font-size: 4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; border-bottom: windowtext 1pt solid; line-height: 115%; font-size: 4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; line-height: 115%; font-size: 4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; line-height: 115%; font-size: 4pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="line-height: 115%">Riptide Entertainment, LLC<BR> Miami, FL</TD>
    <TD STYLE="line-height: 115%">Entertainment and leisure</TD>
    <TD STYLE="line-height: 115%; text-align: center">December &nbsp;2005</TD>
    <TD STYLE="line-height: 115%">Member &nbsp;interest&nbsp;(64.67%)</TD>
    <TD STYLE="line-height: 115%; font-size: 4pt">&nbsp;</TD>
    <TD STYLE="line-height: 115%; text-align: right">65</TD>
    <TD STYLE="line-height: 115%; text-align: right">-</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: black 1pt solid; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; line-height: 115%; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; line-height: 115%; font-size: 4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; line-height: 115%">8% promissory notes due 9/14(5)</TD>
    <TD STYLE="border-bottom: black 1pt solid; line-height: 115%; text-align: right">10,009</TD>
    <TD STYLE="border-bottom: black 1pt solid; line-height: 115%; text-align: right">10,009</TD>
    <TD STYLE="border-bottom: black 1pt solid; line-height: 115%; text-align: right">-</TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top; line-height: 115%">Sovereign Business Forms, Inc.<BR> Houston, TX</TD>
    <TD STYLE="vertical-align: top; line-height: 115%">Business products and services</TD>
    <TD STYLE="vertical-align: top; line-height: 115%; text-align: center">August 1996</TD>
    <TD STYLE="vertical-align: top; line-height: 115%">1,214,630 shares of common stock (64.66% / 55.00% fully diluted)</TD>
    <TD STYLE="vertical-align: top; line-height: 115%; font-size: 4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; line-height: 115%; text-align: right">5,080</TD>
    <TD STYLE="vertical-align: bottom; line-height: 115%; text-align: right">3,894</TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top; line-height: 115%; font-size: 4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; line-height: 115%; font-size: 4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: top; line-height: 115%; font-size: 4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: top; line-height: 115%">12% subordinated promissory notes due 5/13(2)</TD>
    <TD STYLE="vertical-align: bottom; line-height: 115%; text-align: right">2,742</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: black 1pt solid; line-height: 115%; text-align: right">2,742</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: black 1pt solid; line-height: 115%; text-align: right">2,742</TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top; border-bottom: black 1pt solid; line-height: 115%; font-size: 4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; border-bottom: black 1pt solid; line-height: 115%; font-size: 4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: top; border-bottom: black 1pt solid; line-height: 115%; font-size: 4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: top; border-bottom: black 1pt solid; line-height: 115%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: black 1pt solid; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: black 1pt solid; line-height: 115%; text-align: right">7,822</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: black 1pt solid; line-height: 115%; text-align: right">6,636</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; line-height: 115%">Spectrum Management, LLC<BR> Carrollton, TX</TD>
    <TD STYLE="vertical-align: top; line-height: 115%">Business products and services</TD>
    <TD STYLE="vertical-align: top; line-height: 115%; text-align: center">December &nbsp;1999</TD>
    <TD STYLE="vertical-align: top; line-height: 115%">285,000 units of Class&nbsp;A member interest (81% fully diluted)</TD>
    <TD STYLE="vertical-align: top; line-height: 115%; font-size: 4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; line-height: 115%; text-align: right">2,850</TD>
    <TD STYLE="vertical-align: bottom; line-height: 115%; text-align: right">-</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; line-height: 115%; font-size: 4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; line-height: 115%; font-size: 4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: top; line-height: 115%; font-size: 4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: top; line-height: 115%">16% subordinated promissory notes due 5/11(2)(3)</TD>
    <TD STYLE="vertical-align: bottom; line-height: 115%; text-align: right">2,115</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; line-height: 115%; text-align: right">2,115</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; line-height: 115%; text-align: right">1,422</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; line-height: 115%; font-size: 4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; line-height: 115%; font-size: 4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: top; line-height: 115%; font-size: 4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: top; line-height: 115%">&nbsp;</TD>
    <TD STYLE="vertical-align: top; line-height: 115%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; line-height: 115%; text-align: right">4,965</TD>
    <TD STYLE="vertical-align: bottom; line-height: 115%; text-align: right">1,422</TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD COLSPAN="4" STYLE="vertical-align: bottom; border-top: black 1pt solid; border-bottom: black 1pt solid; line-height: 115%; font-weight: bold">Total Control investments: Majority-Owned (represents 21.6% of total investments at fair value)</TD>
    <TD STYLE="vertical-align: top; border-top: black 1pt solid; border-bottom: black 1pt solid; line-height: 115%; font-weight: bold">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: black 1pt solid; border-bottom: black 1pt solid; line-height: 115%; font-weight: bold; text-align: right">$26,861</TD>
    <TD STYLE="vertical-align: bottom; border-top: black 1pt solid; border-bottom: black 1pt solid; line-height: 115%; font-weight: bold; text-align: right">$&nbsp;&nbsp;9,221</TD></TR>
<TR>
    <TD COLSPAN="4" STYLE="vertical-align: bottom; border-bottom: black 1pt solid; line-height: 115%; font-weight: bold">Control Investments: Non-Majority Owned(7):</TD>
    <TD STYLE="vertical-align: top; border-bottom: black 1pt solid; line-height: 115%; font-weight: bold">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: black 1pt solid; line-height: 115%; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: black 1pt solid; line-height: 115%; font-weight: bold; text-align: right">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: bottom; line-height: 115%">ConGlobal Industries Holding, Inc. <BR> San Romon, CA<BR>
</TD>
    <TD STYLE="vertical-align: top; line-height: 115%">Shipping products and services</TD>
    <TD STYLE="vertical-align: top; line-height: 115%; text-align: center">February 1997</TD>
    <TD STYLE="vertical-align: top; line-height: 115%">24,397,303 shares of common stock (34.2%)</TD>
    <TD STYLE="vertical-align: top; line-height: 115%; font-size: 4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; line-height: 115%; text-align: right">$&nbsp;&nbsp;1,370</TD>
    <TD STYLE="vertical-align: bottom; line-height: 115%; text-align: right">$&nbsp;&nbsp;2,355</TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top; line-height: 115%">&nbsp;</TD>
    <TD STYLE="vertical-align: top; line-height: 115%">&nbsp;</TD>
    <TD STYLE="vertical-align: top; line-height: 115%; font-size: 4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: top; line-height: 115%">7% subordinated promissory note due 12/12(3)</TD>
    <TD STYLE="vertical-align: bottom; line-height: 115%; text-align: right">6,000</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; line-height: 115%; text-align: right">6,000</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; line-height: 115%; text-align: right">6,000</TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top; border-bottom: black 1pt solid; line-height: 115%; font-size: 2.5pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; border-bottom: black 1pt solid; line-height: 115%; font-size: 1pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; border-bottom: black 1pt solid; line-height: 115%; font-size: 1pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: top; border-bottom: black 1pt solid; line-height: 115%; font-size: 1pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; border-bottom: black 1pt solid; line-height: 115%; font-size: 1pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: black 1pt solid; line-height: 115%; text-align: right">7,370</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: black 1pt solid; line-height: 115%; text-align: right">8,355</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="4" STYLE="border-bottom: black 1pt solid; line-height: 115%; font-weight: bold">Total Control Investments: Non-Majority Owned (represents 19.6% of total investments at fair value)</TD>
    <TD STYLE="line-height: 115%; font-size: 4pt">&nbsp;</TD>
    <TD STYLE="line-height: 115%; font-weight: bold; text-align: right">$&nbsp;&nbsp;7,370</TD>
    <TD STYLE="line-height: 115%; font-weight: bold; text-align: right">$&nbsp;&nbsp;8,355</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD COLSPAN="4" STYLE="border-bottom: black 1pt solid; line-height: 115%; font-weight: bold">Total Control Investments: (represents 41.2% of total investments at fair value)</TD>
    <TD STYLE="border-top: black 1pt solid; border-bottom: black 1pt solid; line-height: 115%; font-size: 4pt">&nbsp;</TD>
    <TD STYLE="border-top: black 1pt solid; border-bottom: black 1pt solid; line-height: 115%; font-weight: bold; text-align: right">$34,231</TD>
    <TD STYLE="border-top: black 1pt solid; border-bottom: black 1pt solid; line-height: 115%; font-weight: bold; text-align: right">$17,576</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: black 1pt solid; line-height: 115%; font-weight: bold">Affiliate Investments(8):</TD>
    <TD STYLE="border-bottom: black 1pt solid; line-height: 115%; font-weight: bold">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; line-height: 115%; font-weight: bold; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; line-height: 115%; font-weight: bold">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; line-height: 115%; font-weight: bold">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; line-height: 115%; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; line-height: 115%; font-weight: bold; text-align: right">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top; border-bottom: black 1pt solid; line-height: 115%">PalletOne, Inc.<BR> Bartow, FL</TD>
    <TD STYLE="vertical-align: top; border-bottom: black 1pt solid; line-height: 115%">Shipping products and services</TD>
    <TD STYLE="vertical-align: top; border-bottom: black 1pt solid; line-height: 115%; text-align: center">October 2001</TD>
    <TD STYLE="vertical-align: top; border-bottom: black 1pt solid; line-height: 115%">350,000 &nbsp;shares&nbsp;of&nbsp;common
    stock (20% / 18.70% fully diluted)</TD>
    <TD STYLE="vertical-align: top; border-bottom: black 1pt solid; line-height: 115%; font-size: 4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: black 1pt solid; line-height: 115%; text-align: right">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;350</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: black 1pt solid; line-height: 115%; text-align: right">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;50</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; line-height: 115%">RP &amp;C International Investments LLC</TD>
    <TD STYLE="vertical-align: top; line-height: 115%">Healthcare</TD>
    <TD STYLE="vertical-align: top; line-height: 115%; text-align: center">September &nbsp;2006</TD>
    <TD STYLE="vertical-align: top; line-height: 115%">Member interest (17.24%)</TD>
    <TD STYLE="vertical-align: top; line-height: 115%; font-size: 4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; line-height: 115%; text-align: right">573</TD>
    <TD STYLE="vertical-align: bottom; line-height: 115%; text-align: right">712</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; line-height: 115%">New York, NY&nbsp;</TD>
    <TD STYLE="vertical-align: top; line-height: 115%">&nbsp;</TD>
    <TD STYLE="vertical-align: top; line-height: 115%; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: top; line-height: 115%">&nbsp;</TD>
    <TD STYLE="vertical-align: top; line-height: 115%; font-size: 4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; line-height: 115%; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; line-height: 115%; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD COLSPAN="4" STYLE="border-top: windowtext 1pt solid; border-bottom: black 1pt solid; line-height: 115%; font-weight: bold">Total Affiliate Investments (represents 1.8% of total investments at fair value)</TD>
    <TD STYLE="border-top: black 1pt solid; border-bottom: black 1pt solid; line-height: 115%; font-size: 4pt">&nbsp;</TD>
    <TD STYLE="border-top: black 1pt solid; border-bottom: black 1pt solid; line-height: 115%; font-weight: bold; text-align: right">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;923</TD>
    <TD STYLE="border-top: black 1pt solid; border-bottom: black 1pt solid; line-height: 115%; font-weight: bold; text-align: right">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;762</TD></TR>
</TABLE>
<P STYLE="font: 9pt Arial, Helvetica, Sans-Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 18.35pt; text-align: center; text-indent: -18.35pt">The accompanying
notes are an integral part of these financial statements.</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 0 0 18.35pt; text-align: center; text-indent: -18.35pt">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 0 0 18.35pt; text-align: center; text-indent: -18.35pt">&nbsp;</P>

<P STYLE="font: 11pt Calibri, Halvetica, Sans-Serif; margin: 0 0 6pt">&nbsp;</P>

<P STYLE="font: 11pt Calibri, Halvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 18.35pt; text-align: center; text-indent: -18.35pt"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>EQUUS TOTAL RETURN, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>SCHEDULE OF INVESTMENTS&mdash;(Continued)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>DECEMBER&nbsp;31, 2010</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B><I>(in thousands, except share data)</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 7.5pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 32%; line-height: 115%; font-weight: bold">Name &nbsp;and&nbsp;Location&nbsp;of</TD>
    <TD STYLE="width: 11%; font: 10pt/115% Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="width: 11%; line-height: 115%; font-weight: bold; text-align: center">Date &nbsp;of&nbsp;Initial</TD>
    <TD STYLE="width: 21%; font: 10pt/115% Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="width: 9%; font: 10pt/115% Arial, Helvetica, Sans-Serif; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 8%; line-height: 115%; font-weight: bold; text-align: center">Cost of</TD>
    <TD STYLE="width: 8%; line-height: 115%; font-weight: bold; text-align: center">Fair</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="line-height: 115%; font-weight: bold; text-decoration: underline">Portfolio &nbsp;Company</TD>
    <TD STYLE="line-height: 115%; font-weight: bold; text-decoration: underline; text-align: center">Industry</TD>
    <TD STYLE="line-height: 115%; font-weight: bold; text-decoration: underline; text-align: center">Investment</TD>
    <TD STYLE="line-height: 115%; font-weight: bold; text-decoration: underline; text-align: center">Investment</TD>
    <TD STYLE="line-height: 115%; font-weight: bold; text-decoration: underline; text-align: center">Principal</TD>
    <TD STYLE="line-height: 115%; font-weight: bold; text-decoration: underline; text-align: center">Investment</TD>
    <TD STYLE="line-height: 115%; font-weight: bold; text-decoration: underline; text-align: center">Value(1)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="line-height: 115%; font-size: 4pt">&nbsp;</TD>
    <TD STYLE="line-height: 115%; font-size: 4pt">&nbsp;</TD>
    <TD STYLE="line-height: 115%; font-size: 4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="line-height: 115%; font-size: 4pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="line-height: 115%; font-style: italic; font-weight: bold; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="4" STYLE="border-bottom: black 1pt solid; line-height: 115%; font-weight: bold">Non-Affiliate Investments (less than 5% owned):</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; line-height: 115%; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; line-height: 115%; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; line-height: 115%; font-weight: bold; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="border-bottom: black 1pt solid; line-height: 115%">1848 Capital Partners LLC<BR> Miami, FL</TD>
    <TD STYLE="border-bottom: black 1pt solid; line-height: 115%">Entertainment and leisure</TD>
    <TD STYLE="border-bottom: black 1pt solid; line-height: 115%; text-align: center">January 2008</TD>
    <TD STYLE="border-bottom: black 1pt solid; line-height: 115%">18% promissory note due1/11(4)</TD>
    <TD STYLE="border-bottom: black 1pt solid; line-height: 115%; text-align: right">$&nbsp;&nbsp;3,883</TD>
    <TD STYLE="border-bottom: black 1pt solid; line-height: 115%; text-align: right">$&nbsp;&nbsp;3,883</TD>
    <TD STYLE="border-bottom: black 1pt solid; line-height: 115%; text-align: right">$&nbsp;&nbsp;3,883</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: black 1pt solid; line-height: 115%">Big Apple Entertainment Partners LLC<BR> New York</TD>
    <TD STYLE="border-bottom: black 1pt solid; line-height: 115%">Entertainment and leisure</TD>
    <TD STYLE="border-bottom: black 1pt solid; line-height: 115%; text-align: center">October 2007</TD>
    <TD STYLE="border-bottom: black 1pt solid; line-height: 115%">18% promissory note due 10/10(4)</TD>
    <TD STYLE="border-bottom: black 1pt solid; line-height: 115%; text-align: right">3,275</TD>
    <TD STYLE="border-bottom: black 1pt solid; line-height: 115%; text-align: right">3,275</TD>
    <TD STYLE="border-bottom: black 1pt solid; line-height: 115%; text-align: right">3,275</TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top; line-height: 115%">Infinia Corporation<BR> Kennewick, WA</TD>
    <TD STYLE="vertical-align: top; line-height: 115%">Alternative energy</TD>
    <TD STYLE="vertical-align: top; line-height: 115%; text-align: center">June 2007</TD>
    <TD STYLE="vertical-align: top; line-height: 115%">115,180 shares common stock (0.63%)</TD>
    <TD STYLE="vertical-align: bottom; line-height: 115%; font-size: 4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; line-height: 115%; text-align: right">8,000</TD>
    <TD STYLE="vertical-align: bottom; line-height: 115%; text-align: right">-</TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top; line-height: 115%; font-size: 4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; line-height: 115%; font-size: 4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; line-height: 115%; font-size: 4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: top; line-height: 115%">Option to purchase 16,000 shares of common stock at $6.50 per share through 12/12</TD>
    <TD STYLE="vertical-align: bottom; line-height: 115%; font-size: 4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; line-height: 115%; text-align: right">-</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; line-height: 115%; text-align: right">-</TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top; border-bottom: windowtext 1pt solid; line-height: 115%; font-size: 4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; border-bottom: windowtext 1pt solid; line-height: 115%; font-size: 4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; border-bottom: windowtext 1pt solid; line-height: 115%; font-size: 4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: top; border-bottom: windowtext 1pt solid; line-height: 115%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; line-height: 115%; font-size: 4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; line-height: 115%; text-align: right">8,000</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; line-height: 115%; text-align: right">-</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; border-bottom: black 1pt solid; line-height: 115%">London Bridge Entertainment Partners Ltd<BR> London UK</TD>
    <TD STYLE="vertical-align: top; border-bottom: black 1pt solid; line-height: 115%">Entertainment and leisure</TD>
    <TD STYLE="vertical-align: top; border-bottom: black 1pt solid; line-height: 115%; text-align: center">August 2008</TD>
    <TD STYLE="vertical-align: top; border-bottom: black 1pt solid; line-height: 115%">18% promissory notes due 8/11(4)</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: black 1pt solid; line-height: 115%; text-align: right">2,855</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: black 1pt solid; line-height: 115%; text-align: right">2,855</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: black 1pt solid; line-height: 115%; text-align: right">2,026</TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top; line-height: 115%">The Bradshaw Group<BR> Richardson, TX</TD>
    <TD STYLE="vertical-align: top; line-height: 115%">Business products and services</TD>
    <TD STYLE="vertical-align: top; line-height: 115%; text-align: center">May 2000</TD>
    <TD STYLE="vertical-align: top; line-height: 115%">576,828 &nbsp;Class&nbsp;B&nbsp;Shares&nbsp;12.25% preferred stock</TD>
    <TD STYLE="vertical-align: bottom; line-height: 115%; font-size: 4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="line-height: 115%; text-align: right">1,795</TD>
    <TD STYLE="line-height: 115%; text-align: right">-</TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top; line-height: 115%; font-size: 4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; line-height: 115%; font-size: 4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; line-height: 115%; font-size: 4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; line-height: 115%">38,750 Class C shares preferred stock</TD>
    <TD STYLE="vertical-align: bottom; line-height: 115%; font-size: 4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; line-height: 115%; text-align: right">-</TD>
    <TD STYLE="vertical-align: bottom; line-height: 115%; text-align: right">-</TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: bottom; line-height: 115%; font-size: 4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: top; line-height: 115%; font-size: 4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; line-height: 115%; font-size: 4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: top; line-height: 115%">788,649 Class D shares 15% preferred stock</TD>
    <TD STYLE="vertical-align: bottom; line-height: 115%; font-size: 4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; line-height: 115%; text-align: right">-</TD>
    <TD STYLE="vertical-align: bottom; line-height: 115%; text-align: right">-</TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top; line-height: 115%; font-size: 4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; line-height: 115%; font-size: 4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; line-height: 115%; font-size: 4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: top; line-height: 115%">2,218,109 Class E shares 8% preferred stock</TD>
    <TD STYLE="vertical-align: bottom; line-height: 115%; font-size: 4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; line-height: 115%; text-align: right">-</TD>
    <TD STYLE="vertical-align: bottom; line-height: 115%; text-align: right">-</TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top; line-height: 115%; font-size: 12pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; line-height: 115%; font-size: 12pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; line-height: 115%; font-size: 12pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: top; line-height: 115%">Warrant to buy 2,229,450 shares of common stock through 5/16</TD>
    <TD STYLE="vertical-align: bottom; line-height: 115%; font-size: 12pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; line-height: 115%; text-align: right">-</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; line-height: 115%; text-align: right">-</TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top; line-height: 115%; font-size: 12pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; line-height: 115%; font-size: 12pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; line-height: 115%; font-size: 12pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: top; line-height: 115%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; line-height: 115%; font-size: 12pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; line-height: 115%; text-align: right">1,795</TD>
    <TD STYLE="vertical-align: bottom; line-height: 115%; text-align: right">-</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; border-top: black 1pt solid; line-height: 115%">Trulite, Inc.<BR> Columbia, SC</TD>
    <TD STYLE="vertical-align: top; border-top: black 1pt solid; line-height: 115%">Alternative energy</TD>
    <TD STYLE="vertical-align: top; border-top: black 1pt solid; line-height: 115%; text-align: center">August 2008</TD>
    <TD STYLE="vertical-align: top; border-top: windowtext 1pt solid; line-height: 115%">Warrants to buy 8,934,211 shares of common stock through at $0.01 - $0.38 per share through 11/15</TD>
    <TD STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; line-height: 115%; text-align: right">-</TD>
    <TD STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; line-height: 115%; text-align: right">-</TD>
    <TD STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; line-height: 115%; text-align: right">140</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD COLSPAN="4" STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; line-height: 115%; font-weight: bold">Total Non-Affiliate Investments (represents 21.9% of total investments at fair value)</TD>
    <TD STYLE="border-top: black 1pt solid; border-bottom: windowtext 1pt solid; line-height: 115%; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD STYLE="border-top: black 1pt solid; border-bottom: windowtext 1pt solid; line-height: 115%; font-weight: bold; text-align: right">$19,808</TD>
    <TD STYLE="border-top: black 1pt solid; border-bottom: windowtext 1pt solid; line-height: 115%; font-weight: bold; text-align: right">$&nbsp;&nbsp;9,324</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: black 1pt solid; line-height: 115%; font-weight: bold">Total Portfolio Securities</TD>
    <TD STYLE="border-bottom: black 1pt solid; line-height: 115%; font-weight: bold">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; line-height: 115%; font-weight: bold">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; line-height: 115%; font-weight: bold">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; line-height: 115%; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; line-height: 115%; font-weight: bold; text-align: right">$54,962</TD>
    <TD STYLE="border-bottom: black 1pt solid; line-height: 115%; font-weight: bold; text-align: right">$27,662</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="line-height: 115%; font-weight: bold">Temporary Cash Investments</TD>
    <TD STYLE="line-height: 115%; font-weight: bold">&nbsp;</TD>
    <TD STYLE="line-height: 115%; font-weight: bold">&nbsp;</TD>
    <TD STYLE="line-height: 115%; font-weight: bold">&nbsp;</TD>
    <TD STYLE="line-height: 115%; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD STYLE="line-height: 115%; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD STYLE="line-height: 115%; font-weight: bold; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="line-height: 115%">U.S. Treasury Bill</TD>
    <TD STYLE="line-height: 115%">Government</TD>
    <TD STYLE="line-height: 115%">December 2010</TD>
    <TD STYLE="line-height: 115%">UST 0% due 1/11</TD>
    <TD STYLE="line-height: 115%; text-align: right">$15,000</TD>
    <TD STYLE="line-height: 115%; text-align: right">$15,000</TD>
    <TD STYLE="line-height: 115%; text-align: right">$15,000</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="4" STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; line-height: 115%; font-weight: bold">Total Temporary Cash Investments (represents 35.1% of total investments at fair value)</TD>
    <TD STYLE="border-top: black 1pt solid; border-bottom: windowtext 1pt solid; line-height: 115%; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD STYLE="border-top: black 1pt solid; border-bottom: windowtext 1pt solid; line-height: 115%; font-weight: bold; text-align: right">$15,000</TD>
    <TD STYLE="border-top: black 1pt solid; border-bottom: windowtext 1pt solid; line-height: 115%; font-weight: bold; text-align: right">$15,000</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="border-bottom: black 1pt solid; line-height: 115%; font-weight: bold">Total Investments</TD>
    <TD STYLE="border-bottom: black 1pt solid; line-height: 115%; font-weight: bold">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; line-height: 115%; font-weight: bold">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; line-height: 115%; font-weight: bold">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; line-height: 115%; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; line-height: 115%; font-weight: bold; text-align: right">$69,962</TD>
    <TD STYLE="border-bottom: black 1pt solid; line-height: 115%; font-weight: bold; text-align: right">$42,662</TD></TR>
</TABLE>
<P STYLE="font: 9pt Arial, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 9pt Arial; margin: 0; color: Red"></P>

<!-- Field: Rule-Page --><DIV ALIGN="LEFT" STYLE="margin-top: 3pt; margin-bottom: 3pt"><DIV STYLE="font-size: 1pt; border-top: Black 1pt solid; width: 25%">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

<P STYLE="font: 9pt Arial; margin: 0; color: Red"></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"></P>

<P STYLE="font: 9pt Arial, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 7.5pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 4%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">(1)</TD>
    <TD STYLE="width: 2%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="width: 94%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">See Note 3 to the financial statements, Valuation of Investments.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">(2)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">Income-producing.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">(3)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">Income on these securities is accrued to maturity.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">(4)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">Income on these securities is paid-in-kind by the issuance of additional securities, or through accretion of original issue discount.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">(5)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">Non-income producing.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">(6)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">Majority owned investments are generally defined under the Investment Company Act of 1940 as companies in which we own more than 50% of the voting securities of the company.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">(7)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">Non-majority owned control investments are generally defined under the Investment Company Act of 1940 as companies in which we own more than 25% but not more than 50% of the voting securities of the company.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">(8)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">Affiliate investments are generally defined under the Investment Company Act of 1940 as companies in which we own at least 5% but not more than 25% voting securities of the company.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; text-align: right">(9)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">The Fund has included U.S. Treasury Bills in &ldquo;Restricted Cash and Temporary Cash Investments&rdquo; on the balance sheet.</TD></TR>
</TABLE>
<P STYLE="font: 9pt Arial, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11pt Calibri, Halvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11pt Calibri, Halvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11pt Calibri, Halvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11pt Calibri, Halvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11pt Calibri, Halvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 18.35pt; text-align: center; text-indent: -18.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 18.35pt; text-align: center; text-indent: -18.35pt">The accompanying
notes are an integral part of these financial statements.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>EQUUS TOTAL RETURN, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 24.5pt"><B>SCHEDULE OF INVESTMENTS
&ndash; (Continued)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 24.5pt"><B>DECEMBER 31, 2010</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 24.5pt"><B><I>(in thousands, except
share data)</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Substantially all of our portfolio securities
are restricted from public sale without prior registration under the Securities Act of 1933. We negotiate certain aspects of the
method and timing of the disposition of our investment in each portfolio company, including registration rights and related costs.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">As defined in the Investment Company Act of
1940, as of December 31, 2010 all of our investments were in eligible portfolio companies. We provide significant managerial assistance
to portfolio companies that comprise 66.3% of the total value of the investments in portfolio securities as of December&nbsp;31,
2010.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Our investments in portfolio securities consist
of the following types of securities as of December&nbsp;31, 2010 (in thousands):</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">Type of Securities</TD>
    <TD STYLE="line-height: 115%; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: black 1pt solid; line-height: 115%; font-weight: bold; text-align: center">&nbsp; Cost</TD>
    <TD STYLE="line-height: 115%; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: black 1pt solid; line-height: 115%; font-weight: bold; text-align: center">&nbsp; Fair Value</TD>
    <TD STYLE="line-height: 115%; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: black 1pt solid; line-height: 115%; font-weight: bold; text-align: center">Fair Value as Percentage of Net Assets</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 46%; line-height: 115%">Secured and subordinated debt</TD>
    <TD STYLE="width: 5%; line-height: 115%">&nbsp;</TD>
    <TD STYLE="width: 1%; line-height: 115%">$</TD>
    <TD STYLE="width: 11%; line-height: 115%; text-align: right">30,879</TD>
    <TD STYLE="width: 1%; line-height: 115%">&nbsp;</TD>
    <TD STYLE="width: 5%; line-height: 115%">&nbsp;</TD>
    <TD STYLE="width: 1%; line-height: 115%">$</TD>
    <TD STYLE="width: 11%; line-height: 115%; text-align: right">19,348</TD>
    <TD STYLE="width: 1%; line-height: 115%">&nbsp;</TD>
    <TD STYLE="width: 5%; line-height: 115%">&nbsp;</TD>
    <TD STYLE="width: 1%; line-height: 115%">&nbsp;</TD>
    <TD STYLE="width: 11%; line-height: 115%; text-align: right">50.8</TD>
    <TD STYLE="width: 1%; line-height: 115%">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="line-height: 115%">Common stock</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%; text-align: right">14,800</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%; text-align: right">6,299</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%; text-align: right">16.6</TD>
    <TD STYLE="line-height: 115%">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="line-height: 115%">Limited liability company investments</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%; text-align: right">7,488</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%; text-align: right">1,875</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%; text-align: right">4.9</TD>
    <TD STYLE="line-height: 115%">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="line-height: 115%">Options and warrants</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%; text-align: right">&mdash; &nbsp;&nbsp;</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%; text-align: right">140</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%; text-align: right">0.4</TD>
    <TD STYLE="line-height: 115%">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="line-height: 115%">Preferred stock</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; line-height: 115%">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; line-height: 115%; text-align: right">1,795</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; line-height: 115%">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; line-height: 115%; text-align: right">&mdash; &nbsp;&nbsp;</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; line-height: 115%">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; line-height: 115%; text-align: right">0.0</TD>
    <TD STYLE="line-height: 115%">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="line-height: 115%; text-align: left; vertical-align: bottom">Total</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="border-bottom: black 2.25pt double; line-height: 115%">$</TD>
    <TD STYLE="border-bottom: black 2.25pt double; line-height: 115%; text-align: right">54,962</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="border-bottom: black 2.25pt double; line-height: 115%">$</TD>
    <TD STYLE="border-bottom: black 2.25pt double; line-height: 115%; text-align: right">27,662</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="border-bottom: black 2.25pt double; line-height: 115%">&nbsp;</TD>
    <TD STYLE="border-bottom: black 2.25pt double; line-height: 115%; text-align: right">72.7</TD>
    <TD STYLE="line-height: 115%">%</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">Three notes receivable included in secured
and subordinated debt with an estimated fair value of $9.2 million provide that all or a portion of interest is paid-in-kind, by
adding such amount to the principal of the notes. For the remainder of secured and subordinated debt, cash payments of interest
are currently being received and/or accrued on notes aggregating $10.1 million in fair value, while notes with a cost basis of
$10 million and a fair value of $0 are non-income producing.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">The following is a summary by industry of our
investments in portfolio securities as of December&nbsp;31, 2010 (in thousands):</P>

<TABLE ALIGN="CENTER" CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: bold 10pt/115% Arial, Helvetica, Sans-Serif; text-align: center">&nbsp;</TD>
    <TD STYLE="font: bold 10pt/115% Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font: bold 10pt/115% Arial, Helvetica, Sans-Serif; text-align: center">&nbsp;</TD>
    <TD STYLE="line-height: 115%; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="line-height: 115%; font-weight: bold; text-align: center">Fair Value as</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: bold 10pt/115% Arial, Helvetica, Sans-Serif; text-align: center">&nbsp;</TD>
    <TD STYLE="font: bold 10pt/115% Arial, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font: bold 10pt/115% Arial, Helvetica, Sans-Serif; text-align: center">&nbsp;</TD>
    <TD STYLE="line-height: 115%; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="line-height: 115%; font-weight: bold; text-align: center">Percentage of</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">Industry</TD>
    <TD STYLE="line-height: 115%; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: black 1pt solid; line-height: 115%; font-weight: bold; text-align: center">Fair Value</TD>
    <TD STYLE="line-height: 115%; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: black 1pt solid; line-height: 115%; font-weight: bold; text-align: center">Net Assets</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 56%; line-height: 115%">Entertainment and leisure</TD>
    <TD STYLE="width: 8%; line-height: 115%">&nbsp;</TD>
    <TD STYLE="width: 1%; line-height: 115%">$</TD>
    <TD STYLE="width: 12%; line-height: 115%; text-align: right">9,184</TD>
    <TD STYLE="width: 1%; line-height: 115%">&nbsp;</TD>
    <TD STYLE="width: 2%; line-height: 115%">&nbsp;</TD>
    <TD STYLE="width: 3%; line-height: 115%">&nbsp;</TD>
    <TD STYLE="width: 16%; line-height: 115%; text-align: right">24.1</TD>
    <TD STYLE="width: 1%; line-height: 115%">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="line-height: 115%">Shipping products and services</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%; text-align: right">8,405</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%; text-align: right">22.1</TD>
    <TD STYLE="line-height: 115%">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="line-height: 115%">Business products and services</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%; text-align: right">8,058</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%; text-align: right">21.2</TD>
    <TD STYLE="line-height: 115%">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="line-height: 115%">Media</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%; text-align: right">1,163</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%; text-align: right">3.1</TD>
    <TD STYLE="line-height: 115%">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="line-height: 115%">Healthcare</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%; text-align: right">712</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%; text-align: right">1.8</TD>
    <TD STYLE="line-height: 115%">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="line-height: 115%">Alternative energy</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; line-height: 115%">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; line-height: 115%; text-align: right">140</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; line-height: 115%">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; line-height: 115%; text-align: right">0.4</TD>
    <TD STYLE="line-height: 115%">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="line-height: 115%">Total</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="border-bottom: black 2.25pt double; line-height: 115%">$</TD>
    <TD STYLE="border-bottom: black 2.25pt double; line-height: 115%; text-align: right">27,662</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="border-bottom: black 2.25pt double; line-height: 115%">&nbsp;</TD>
    <TD STYLE="border-bottom: black 2.25pt double; line-height: 115%; text-align: right">72.7</TD>
    <TD STYLE="line-height: 115%">%</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 9pt Arial, Helvetica, Sans-Serif; margin: 0; text-align: center">&nbsp;</P>


<P STYLE="font: 9pt Arial, Helvetica, Sans-Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 18.35pt; text-align: center; text-indent: -18.35pt">The accompanying
notes are an integral part of these financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 18.35pt; text-align: center; text-indent: -18.35pt">&nbsp;</P>

<P STYLE="font: 11pt Calibri, Halvetica, Sans-Serif; margin: 0 0 6pt">&nbsp;</P>

<P STYLE="font: 11pt Calibri, Halvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 18.35pt; text-align: center; text-indent: -18.35pt">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">EQUUS TOTAL RETURN, INC.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><A NAME="a_009"></A>NOTES TO FINANCIAL STATEMENTS </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">June 30, 2011 AND 2010 </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">(Unaudited)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>(1) <U>Description of Business and Basis of Presentation </U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><B>Description of Business</B>&mdash;Equus Total
Return, Inc. (<I>&ldquo;we,&rdquo; &ldquo;us,&rdquo; &ldquo;our,&rdquo; &ldquo;Equus&rdquo; the &ldquo;Company&rdquo; and the &ldquo;Fund</I>&rdquo;),
a Delaware corporation, was formed by Equus Investments II, L.P. (the &ldquo;Partnership&rdquo;) on August&nbsp;16, 1991. On July&nbsp;1,
1992, the Partnership was reorganized and all of the assets and liabilities of the Partnership were transferred to the Fund in
exchange for shares of common stock of the Fund. Our shares trade on the New York Stock Exchange under the symbol EQS. On August
11, 2006, our shareholders approved the change of the Fund&rsquo;s investment strategy to a total return investment objective.
This new strategy seeks to provide the highest total return, consisting of capital appreciation and current income. In connection
with this strategic investment change, the shareholders also approved the change of name from Equus II Incorporated to Equus Total
Return, Inc.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">We seek to achieve capital appreciation by making
investments in equity and equity-oriented securities issued by privately-owned companies in transactions negotiated directly with
such companies. We seek to invest primarily in companies which intend to grow either by acquiring other businesses, including leveraged
buyouts, or organically. We may also invest in recapitalizations of existing businesses or special situations from time to time.
Our investments in portfolio companies consist of equity securities such as common and preferred stock, but also include other
equity-oriented securities such as debt convertible into common or preferred stock or debt combined with warrants, options or other
rights to acquire common or preferred stock. We elected to be treated as a business development company under the Investment Company
Act of 1940 (&ldquo;1940 Act&rdquo;). For tax purposes, we have elected to be treated as a regulated investment company (&ldquo;RIC&rdquo;).
We are an internally managed fund, meaning that the Fund directly employs its management team and incurs the costs and expenses
associated with Fund operations.&nbsp;There is no outside investment advisory organization providing services to the Fund under
a fee-based advisory agreement, or an administrative organization charging the Fund for services rendered.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Our total return investment strategy combines
both growth and income investments and is intended to strike a balance between the potential for gain and the risk of loss.&nbsp;In
the growth category, we are a &ldquo;growth-at- reasonable-price&rdquo; investor.&nbsp;We invest primarily in privately owned companies
and are open to virtually any potential growth investment in the privately owned arena.&nbsp;However, our primary aim is to identify
and acquire only those equity securities that meet our criteria for selling at reasonable prices.&nbsp;The income investments made
consist principally of purchasing debt&nbsp;financing with the objective of generating regular interest income as well as long-term
capital appreciation through the exercise and sale of warrants received in connection with the financing.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><B>Basis of Presentation</B>&mdash;In accordance
with Article 6 of Regulation S-X under the Securities Act of 1933 and Securities Exchange Act of 1934, we do not consolidate portfolio
company investments, including those in which we have a controlling interest. Our interim consolidated financial statements were
prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP, for interim financial
information and in accordance with the requirements of reporting on Form 10-Q and Article 10 of Regulation S-X, under the Securities
Exchange Act of 1934, as amended. Accordingly, they are unaudited and exclude some disclosures required for annual financial statements.
Management believes it has made all adjustments, consisting solely of normal recurring accruals, necessary for the fair presentation
of these interim financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">The results of operations for the
three and six months ended June 30, 2011 are not necessarily indicative of results that ultimately may be achieved for the
year. The interim unaudited  financial statements and notes thereto should be read in conjunction with the
financial statements and notes thereto included in the Fund&rsquo;s Form 10-K for the fiscal year ended December&nbsp;31,
2010, as filed with the Security and Exchange Commission (&ldquo;SEC&rdquo;). Certain prior period information has been
reclassified to conform to current year presentation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>(2) <U>Liquidity and Financing Arrangements </U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><B>Liquidity</B>&mdash;There are several factors
that may materially affect the Fund&rsquo;s liquidity during the reasonably foreseeable future. The Fund views this period as the
twelve month period from the date of the financial statements in this Form 10-Q, <I>i.e</I>., the period through June 30, 2012.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">We are evaluating the impact of current market
conditions on our portfolio company valuations and their ability to provide current income. We have followed valuation techniques
in a consistent manner; 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.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><B>Cash and Temporary Investments</B>&mdash;As
of June 30, 2011, we had cash and cash equivalents of $17.3 million. We had $21.7 million of our net assets of $41.4 million invested
in portfolio securities. Temporary cash investments of $15.0 million were invested in U.S. Treasury Bills for the purpose of satisfying
the diversification requirement to maintain our pass-through tax treatment. Restricted cash amounted to $0.2 million for the required
1% brokerage deposit. These securities are held by a securities brokerage firm and are pledged along with cash to secure the payment
of the margin account balance. The U.S. Treasury bills were sold and the margin loan was repaid to the brokerage firm on July&nbsp;1,
2011.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">As of December 31, 2010, we had cash and cash
equivalents of $7.4 million. We had $27.7 million of our net assets of $38.1 million invested in portfolio securities. Temporary
cash investments of $15.0 million were invested in U.S. Treasury Bills for the purpose of satisfying the diversification requirement
to maintain our pass-through tax treatment. Restricted cash amounted to $0.2 million for the required 1% brokerage deposit. These
securities are held by a securities brokerage firm and are pledged along with cash to secure the payment of the margin account
balance. The U.S. Treasury bills were sold and the margin loan was repaid to the brokerage firm on January 3, 2011.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><B>Dividends</B>&mdash; On March&nbsp;24, 2009,
we announced that we suspended our managed distribution policy and payment of quarterly distributions for an indefinite period,
following the distribution of the first quarter dividend, paid on March&nbsp;30, 2009. We will continue to pay out net investment
income and/or realized capital gains, if any, on an annual basis as required under the Investment Company Act of 1940.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><B>Revolving Line of Credit Agreement</B>&mdash;Effective
September 8, 2010, the Fund terminated its revolving line of credit agreement (the &ldquo;Credit Facility&rdquo;) with Amegy Bank
of Texas. The Credit Facility was secured by substantially all of the Fund&rsquo;s portfolio assets and securities. The Fund did
not borrow any amounts under the Credit Facility.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><B>Investment Commitments</B>&mdash;As of June
30, 2011, we had total commitments of $0.1 million committed to Spectrum Management, LLC, which is in the business products and
services industry.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Under certain circumstances, we may be called
on to make follow-on investments in certain portfolio companies. If we do not have sufficient funds to make follow-on investments,
the portfolio company in need of the investment may be negatively impacted. Also, our equity interest in the estimated fair value
of the portfolio company could be reduced.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><B>RIC Borrowings, Restricted Cash and Temporary
Investments</B>&mdash;As of June 30, 2011 and December&nbsp;31, 2010, we borrowed sufficient funds to maintain the Fund&rsquo;s
RIC status by utilizing a margin account with a securities brokerage firm. There is no assurance that such arrangement will be
available in the future. If we are unable to borrow funds to make qualifying investments, we may no longer qualify as a RIC. We
would then be subject to corporate income tax on the Fund&rsquo;s net investment income and realized capital gains, and distributions
to stockholders would be subject to income tax as ordinary dividends. Failure to continue to qualify as a RIC could be material
to us and our stockholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">As of June 30, 2011, we borrowed $15.0 million
to make qualifying investments to maintain our RIC status by utilizing a margin account with a securities brokerage firm. We collateralized
such borrowings with restricted cash and temporary investments in U.S. Treasury bills of $15.2 million. The U.S. Treasury bills
were sold and the total amount borrowed was repaid on July 1, 2011.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">As of December 31, 2010, we borrowed $15.0 million
to make qualifying investments to maintain our RIC status by utilizing a margin account with a securities brokerage firm. We collateralized
such borrowings with restricted cash and temporary cash investments in U.S. Treasury bills of $15.2 million. The U.S. Treasury bills
were sold on January&nbsp;3, 2011 and the total amount borrowed was repaid at that time.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><B>Certain Risks and Uncertainties</B>&mdash;
The modest recovery of the economy since the recession ended in late 2009 continues to impact the financing markets. Activity in
these markets has increased, but the continued uncertainties related to taxes, government spending and debt levels and remaining
high unemployment continue to influence market</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">participants and companies seeking outside capital sources. In addition,
the price of our common stock continues to trade below our net asset value, limiting our ability to raise equity capital. Because
of these challenges, our near-term strategies shifted from originating debt and equity investments to preserving liquidity and
seeking liquidity events to meet our operational needs. We have achieved numerous liquidity events and improved the cash position
of the company, which should allow the Fund to begin to seek new investment opportunities going forward. Key initiatives we are
continuing to pursue to improve liquidity include investment monetizations for mature investments, an equity rights offering and
the suspension of dividends. Although there can be no assurances that such initiatives will be sufficient, we believe we have sufficient
liquidity to meet our 2011 operating requirements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0pt; text-indent: 0"><B><U>(3) Significant Accounting Policies </U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">The following is a summary of significant accounting
policies followed by the Fund in the preparation of its financial statements:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><B>Use of Estimates</B>&mdash;The preparation
of financial statements in accordance with accounting principles generally accepted in the United States of America requires us
to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Although we believe
the estimates and assumptions used in preparing these financial statements and related notes are reasonable in light of known facts
and circumstances, actual results could differ from those estimates.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><B>Valuation of Investments</B>&mdash;Portfolio
investments are carried at fair value with the net change in unrealized appreciation or depreciation included in the determination
of net assets. Valuations of portfolio securities are performed in accordance with accounting principles generally accepted in
the United States of America and the financial reporting policies of the Securities and Exchange Commission (&ldquo;SEC&rdquo;).
The applicable methods prescribed by such principles and policies are described below:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><B><I>Publicly-traded portfolio securities</I></B>&mdash;Investments
in companies whose securities are publicly traded are generally valued at their quoted market price at the close of business on
the valuation date</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><B><I>Privately-held portfolio securities</I></B>&mdash;The
fair value of investments for which no market exists is determined on the basis of procedures established in good faith by our
Board of Directors. As a general principle, the current &ldquo;fair value&rdquo; of an investment would be the amount we might
reasonably expect to receive for it upon its current sale, in an orderly manner. Appraisal valuations are necessarily subjective
and the estimated values arrived at by the Fund may differ materially from amounts actually received upon the disposition of portfolio
securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">During the first twelve months after an investment
is made, the original investment value is utilized to determine the fair value unless significant developments have occurred during
this twelve month period which would indicate a material effect on the portfolio company (such as results of operations or changes
in general market conditions). After the twelve month period, or if material events have occurred within the twelve month period,
Fund management considers a two step process when appraising investments of privately held companies. The first step involves determining
the enterprise value of the portfolio company. During this step, Fund management considers three different valuation approaches:
a market approach, an income approach, and an asset approach. The particular facts and circumstances of each portfolio company
determine which approach, or combination of approaches, will be utilized. The second step when appraising equity investments of
privately held companies involves allocating value to the various debt and equity securities of the company. Fund management allocates
value to these securities based on their relative priorities. For equity securities such as warrants, the Fund may also incorporate
alternative methodologies including the Black-Scholes Option Pricing Model and the Monte Carlo Simulation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><B>Market approach</B> &ndash; The market approach
typically employed by Fund management calculates the enterprise value of a company as&nbsp;a multiple of earnings before interest,
taxes, depreciation and amortization (&ldquo;EBITDA&rdquo;) generated by the company for the trailing twelve month period.&nbsp;
Adjustments to the company&rsquo;s EBITDA, including those for non-recurring items, may be considered. Multiples are estimated
based on current market conditions and past experience in the private company marketplace and are subjective in nature. The Fund
will apply liquidity and other discounts it deems appropriate to equity valuations where applicable. The Fund may also use, when
available, third-party transactions in a portfolio company&rsquo;s securities as the basis of valuation (the &ldquo;private market
method&rdquo;). The private market method will be used only with respect to completed transactions or firm offers made by sophisticated,
independent investors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><B>Income approach</B> &ndash; The income approach
typically utilized by Fund management calculates the enterprise value of a company utilizing a discounted cash flow model incorporating
projected future cash flows of the company.&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">Projected future cash flows consider the historical performance
of the company as well as current and projected market participant performance. Discount rates are estimated based on current market
conditions and past experience in the private company marketplace and are subjective in nature. The Fund will apply liquidity and
other discounts it deems appropriate to equity valuations where applicable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><B>Asset approach </B>&ndash;&nbsp;The
Fund considers the asset approach during the first twelve months after an investment is made, and the Fund considers the
asset approach to determine the fair value of significantly deteriorated investments demonstrating circumstances indicative
of a liquidation analysis. This situation may arise when a portfolio company: 1) cannot generate adequate cash flow to meet
the principal and interest payments on its indebtedness; 2) is not successful in refinancing the its debt upon&nbsp;maturity;
3) Fund management believes the credit quality of a loan has deteriorated due to changes in the business and underlying asset
or market conditions may result in the company&rsquo;s inability to meet future obligations; or 4) the portfolio
company&rsquo;s reorganization or bankruptcy. Consideration is also given as to whether a liquidation event would be orderly
or forced.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Fund management considers that the Fund&rsquo;s
general intent is to hold its loans to maturity when appraising its privately held debt investments. As such, Fund management believes
that the fair value will not exceed the cost of the investment. However, in addition to the previously described analysis involving
allocation of value to the debt instrument, the Fund performs a yield analysis to determine if a debt security has been impaired.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 22.5pt 0 0; text-indent: 0.5in">Certificates of deposit purchased
by the Fund generally will be valued at their face value, plus interest accrued to the date of valuation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 22.5pt 0 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">The Audit Committee of the Board of Directors
may engage independent, third-party valuation firms to conduct independent appraisals and review management&rsquo;s preliminary
valuations of each privately-held investment in order to make their own independent assessment. Any third-party valuation data
would be considered as one of many factors in a fair value determination. The Audit Committee then would recommend the fair values
for all privately-held securities based on all relevant factors to the Board of Directors for final approval.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Because of the inherent uncertainty of the
valuation of portfolio securities which do not have readily ascertainable market values, amounting to $21.7 million and $27.7
million as of June 30, 2011 and December 31, 2010, respectively, our fair value determinations may materially differ from the
values that would have been used had a ready market existed for the securities. As of June 30, 2011, one of the Fund&rsquo;s
portfolio investments, the Orco Germany S.A. 4% bonds due May 2012, is publicly listed on the Euro MTF Market of the
Luxemburg Stock Exchange. However, there has been no recent trading activity. There were no publicly traded securities as
of December 31, 2010.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">On a daily basis, 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 reports those amounts to Lipper Analytical Services,
Inc. Weekly and daily net asset values appear in various publications, including <I>Barron&rsquo;s</I> and <I>The Wall Street Journal</I>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 22.5pt 0 0; text-indent: 0.5in"><B>Deferred Offering Costs&mdash;</B>Accumulation
of costs related to the offering whereby we will sell additional shares or rights to acquire shares at a market price that may
have been below net asset value. The main components of the costs are legal fees and consultant&rsquo;s fees specifically related
to the offering.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 22.5pt 0 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 22.5pt 0 0; text-indent: 0.5in">Offering costs of $0.3
million were expensed at June 30, 2011 due to an extended review and comment of our registration statement on Form N-2 filed
in connection with the offering, which has not been declared effective by the SEC and will likely require significant
revisions in order to become effective.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 22.5pt 0 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 22.5pt 0 0; text-indent: 0.5in"><B>Investment
Transactions</B>&mdash;Investment transactions are recorded on the accrual method. Realized gains and losses on
investments sold are computed on a specific identification basis where possible. We classify our investments in accordance
with the requirements of the 1940 Act. Under the 1940 Act, &ldquo;Control Investments&rdquo; are defined as investments in
companies in which the Fund owns more than 25% of the voting securities or maintains greater than 50% of the board
representation. Under the 1940 Act, &ldquo;Affiliate Investments&rdquo; are defined as those non-control investments in
companies in which the Fund owns between 5% and 25% of the voting securities. Under the 1940 Act, &ldquo;Non-affiliate
Investments&rdquo; are defined as investments that are neither Control Investments nor Affiliate Investments.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><B>Interest Income Recognition</B>&mdash;We
record interest income, adjusted for amortization of premium and accretion of discount, on an accrual basis to the extent that
we expect to collect such amounts. We accrete or amortizes discounts</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0">and premiums on securities purchased over the life
of the respective security using the effective yield method. The amortized cost of investments represents the original cost adjusted
for the accretion of discount and/or amortization of premium on debt securities. We stop accruing interest on investments when
we determine that interest is no longer collectible. If the Fund receives any cash after determining that interest is no longer
collectible, it treats such cash as payment on the principal balance until the entire principal balance has been repaid, before
it recognizes any additional interest income.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><B>Payment in Kind
Interest (PIK)</B>&mdash;We have loans in our portfolio that may pay PIK interest. We add PIK interest, if any, computed at
the contractual rate specified in each loan agreement, to the principal balance of the loan and record the same as interest
income. To maintain our status as a RIC, we must pay out to stockholders this non-cash source of income in the form of
dividends even if we have not yet collected any cash in respect of such investments.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><B>Cash Flows</B>&mdash;For purposes of the
Statements of Cash Flows, we consider all highly liquid temporary cash investments purchased with an original maturity of three
months or less to be cash equivalents. We include our investing activities within cash flows from operations. We exclude &ldquo;Restricted
Cash&nbsp;&amp; Temporary Cash Investments&rdquo; used for purposes of complying with RIC requirements from cash equivalents.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><B>Income Taxes</B>&mdash;We intend to comply
with the requirements of the Internal Revenue Code necessary to qualify as a regulated investment company and, as such, will not
be subject to federal income taxes on otherwise taxable income (including net realized capital gains) which is distributed to stockholders.
Therefore, no provision for federal income taxes is recorded in the financial statements. We borrow money from time to time to
maintain our tax status under the Internal Revenue Code as a RIC. See Note 2 for further discussion of the Fund&rsquo;s RIC borrowings.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Texas margin tax applies to legal entities conducting
business in Texas. The margin tax is based on our Texas sourced taxable margin. The tax is calculated by applying a tax rate to
a base that considers both revenue and expenses and therefore has the characteristics of an income tax.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><B>Fair Value Measurement</B>&mdash;In September
2006, the Financial Accounting Standard Board (FASB) issued guidance regarding Fair Value Measurements which defined fair value,
established a framework for measuring fair value, outlined a fair value hierarchy based on inputs used to measure fair value and
enhanced disclosure requirements for fair value measurements. The guidance did not change existing guidance as to whether an instrument
is carried at fair value. We adopted changes issued by the FASB to fair value disclosures of financial instruments which define
fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">We have categorized all investments recorded
at fair value based upon the level of judgment associated with the inputs used to measure their fair value. Hierarchical levels,
directly related to the amount of subjectivity associated with the inputs to fair valuation of these assets and liabilities, are
as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in">Level 1&mdash;Inputs are unadjusted, quoted prices in
active markets for identical assets at the measurement date. The types of assets carried at Level 1 fair value generally are equities
listed in active markets.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in">Level 2&mdash;Inputs (other than quoted prices included
in Level 1) are either directly or indirectly observable for the asset in connection with market data at the measurement date and
for the extent of the instrument&rsquo;s anticipated life. Fair valued assets that are generally included in this category are
warrants held in a public company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in">Level 3&mdash;Inputs reflect management&rsquo;s best estimate
of what market participants would use in pricing the asset at the measurement date. It includes prices or valuations that require
inputs that are both significant to the fair value measurement and unobservable. Generally, assets carried at fair value and included
in this category are debt, warrants and/or other equity investments held in a private company. As previously described, Fund management
considers a two step process when appraising investments of privately held companies. The first step involves determining the enterprise
value of the portfolio company. During this step, Fund management considers three different valuation approaches: a market approach,
an income approach, an asset approach. The particular facts and circumstances of each portfolio company determine which approach,
or combination of approaches, will be utilized. The second step when appraising equity investments of privately held companies
involves allocating value to the various debt and equity securities of the company. Fund management allocates value to these securities
based on their relative priorities. For equity securities such as warrants, the Fund may</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in">also incorporate alternative methodologies
including the Black-Scholes Option Pricing Model. Yield analysis is also employed to determine if a debt security has been impaired.&nbsp;</P>

<P STYLE="font: 11pt Calibri, Halvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">We will record unrealized depreciation on
investments when we determine that the fair value of a security is less than its cost basis, and will record unrealized
appreciation when we determine that the fair value is greater than its cost basis.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">As of June 30, 2011, investments measured at
fair value on a recurring basis are categorized in the tables below based on the lowest level of significant input to the valuations:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 9pt Arial; margin: 0; text-indent: 24.5pt; color: Red"><B></B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center">&nbsp;</TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="11" STYLE="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Fair Value Measurements As of June 30, 2011</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-style: italic; text-align: left; padding-bottom: 1pt; vertical-align: bottom; border-bottom: Black 1pt solid"><B>(in
    thousands)</B></TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">Total</TD><TD STYLE="font-size: 8pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 8pt; text-align: center; border-bottom: Black 1pt solid">Quoted Prices in Active Markets for Identical Assets (Level 1)</TD><TD STYLE="font-size: 8pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 8pt; text-align: center; border-bottom: Black 1pt solid">Significant Other Observable Inputs (Level 2)</TD><TD STYLE="font-size: 8pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 8pt; text-align: center; border-bottom: Black 1pt solid">Significant Unobservable Inputs (Level 3)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>Assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;Investments:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 42%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Control investments</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">15,832</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">15,832</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Affiliate investments</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">50</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">50</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-affiliate investments</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">5,805</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; padding-bottom: 1pt; border-bottom: Black 1pt solid">&mdash; &nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">5,805</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Total investments</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">21,687</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">21,687</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Temporary cash investments</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">15,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">15,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; vertical-align: bottom">Total investments and temporary cash investments</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">36,687</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">15,000</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">21,687</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>


<P STYLE="font: 9pt Arial; margin: 0; text-indent: 24.5pt; color: Red"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">As of December&nbsp;31, 2010, investments measured
at fair value on a recurring basis are categorized in the tables below based on the lowest level of significant input to the valuations:&nbsp;</P>

<P STYLE="font: 9pt Arial, Helvetica, Sans-Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center">&nbsp;</TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="11" STYLE="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Fair Value Measurements As of December 31, 2010</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom">
    <TD STYLE="font-style: italic; padding-bottom: 1pt; border-bottom: Black 1pt solid"><B>(in thousands)</B></TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom">Total</TD><TD STYLE="font-size: 8pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 8pt; border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom">Quoted Prices in Active Markets for Identical Assets (Level 1)</TD><TD STYLE="font-size: 8pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 8pt; border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom">Significant Other Observable Inputs (Level 2)</TD><TD STYLE="font-size: 8pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 8pt; border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom">Significant Unobservable Inputs (Level 3)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>Assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;Investments:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 8pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 42%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Control investments</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">17,576</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">17,576</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Affiliate investments</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">762</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">762</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-affiliate investments</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">9,324</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">9,324</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Total investments</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">27,662</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">27,662</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Temporary cash investments</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">15,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">15,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 2.5pt">Total investments and temporary cash investments</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">42,662</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">15,000</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">27,662</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">The following table provides a reconciliation
of fair value changes during the six months ending June 30, 2011 for all investments for which we determine fair value using unobservable
(Level 3) factors:&nbsp;</P>

<P STYLE="font: 9pt Arial, Helvetica, Sans-Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 9pt Arial, Helvetica, Sans-Serif; margin: 0; text-indent: 24.5pt"></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: left; width: 100%"><A HREF="#TableOfContents" TITLE="Table of Contents" STYLE="font-style: italic">Table of Contents</A></TD></TR></TABLE></DIV>
    <!-- Field: /Page -->
<P STYLE="font: 9pt Arial, Helvetica, Sans-Serif; margin: 0; text-indent: 24.5pt"></P>

<P STYLE="font: 9pt Arial; margin: 0 0 6pt; color: Red"><B></B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="1" STYLE="text-align: center; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="15" STYLE="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Fair value measurements using significant unobservable inputs (Level 3)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="1" STYLE="font-weight: bold; font-style: italic; text-align: left; padding-bottom: 1pt; vertical-align: bottom; border-bottom: Black 1pt solid">(in thousands)</TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Control Investments</TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Affiliate Investments</TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Non-affiliate Investments</TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Total</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 40%">Fair value as of December&nbsp;31, 2010</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">17,576</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">762</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">9,324</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">27,662</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Unrealized appreciation (depreciation)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8,302</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(139</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,410</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11,573</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Issuances</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">186</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,083</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,269</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Settlements</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">(10,232</TD><TD STYLE="text-align: left; padding-bottom: 1pt">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">(573</TD><TD STYLE="text-align: left; padding-bottom: 1pt">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">(10,012</TD><TD STYLE="text-align: left; padding-bottom: 1pt">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">(20,817</TD><TD STYLE="text-align: left; padding-bottom: 1pt">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1pt">Fair value as of June 30, 2011</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">15,832</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">50</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">5,805</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: right">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">21,687</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
</TABLE>


<P STYLE="font: 9pt Arial; margin: 0 0 6pt; color: Red"><B></B></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">The following table provides a reconciliation
of fair value changes during the six months ending June 30, 2010 for all investments for which we determine fair value using unobservable
(Level 3) factors:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="1" STYLE="font-size: 4pt; text-align: center; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-size: 7.5pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="15" STYLE="font-size: 7.5pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Fair&nbsp;value&nbsp;measurements&nbsp;using&nbsp;significant&nbsp;unobservable&nbsp;inputs&nbsp; (Level&nbsp;3) <BR></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="1" STYLE="font-size: 10pt; font-weight: bold; font-style: italic; text-align: left; vertical-align: bottom; border-bottom: Black 1pt solid">(in thousands) <BR></TD><TD STYLE="font-size: 7.5pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 7.5pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Control<BR> &nbsp;&nbsp;Investments&nbsp;&nbsp; <BR></TD><TD STYLE="font-size: 7.5pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 7.5pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Affiliate<BR> &nbsp;&nbsp;Investments&nbsp;&nbsp; <BR></TD><TD STYLE="font-size: 7.5pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 7.5pt; font-weight: bold; text-align: center; padding-bottom: 1pt; border-bottom: Black 1pt solid">Non-affiliate<BR> &nbsp;&nbsp;Investments&nbsp;&nbsp; <BR></TD><TD STYLE="font-size: 7.5pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 7.5pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Total <BR></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 40%; text-indent: -12pt; padding-left: 12pt">Fair value as of December&nbsp;31, 2009</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">28,729</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">2,128</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">11,554</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">42,411</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -12pt; padding-left: 12pt">Total realized gains (losses)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -12pt; padding-left: 12pt">Change in unrealized appreciation (depreciation)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(6,174</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(780</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(5,375</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(12,329</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -12pt; padding-left: 12pt">Purchases, issuances and settlements, net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,143</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(50</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,774</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,967</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -12pt; padding-left: 12pt">Change in control</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(665</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">665</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt; text-indent: -12pt; padding-left: 12pt">Transfers in (out)&nbsp;of Level 3</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 1pt; padding-left: 0.1in">&nbsp;</TD><TD STYLE="font-size: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1pt; text-indent: -12pt; padding-left: 12pt">Fair value as of June&nbsp;30, 2010</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">21,412</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">633</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">5,070</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">27,115</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 1pt; padding-bottom: 1pt; padding-left: 0.1in">&nbsp;</TD><TD STYLE="font-size: 0.75pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 0.75pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 0.75pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-size: 0.75pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 0.75pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 0.75pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 0.75pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-size: 0.75pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 0.75pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 0.75pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 0.75pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-size: 0.75pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 0.75pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 0.75pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 0.75pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-size: 0.75pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>(4) <U>Related Party Transactions and Agreements </U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">As compensation for services to the Fund, each
Independent Director receives an annual fee of $20,000 paid quarterly in arrears, a fee of $2,000 for each meeting of the Board
of Directors attended in person, a fee of $1,000 for participation in each telephonic meeting of the Board and a fee of $1,000
for each committee meeting attended, and reimbursement of all out-of-pocket expenses relating to attendance at such meetings. A
quarterly fee of $2,500 is paid to the Chairman of the Audit Committee and a quarterly fee of $3,750 is paid to the Chairman of
the Independent Directors. The Fund incurred $207,943 and $233,243 as of June 30, 2011 and June 30, 2010 respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Beginning July 2010, in respect of
services provided to the Fund by members of the Board not in connection with their roles and duties as directors, the Fund
pays a rate of $250 per hour for services rendered. The Fund incurred $113,188 which is included in compensation expense
as of June 30, 2011 in the statement of operations and $117,188 which is included in deferred offering costs on the
balance sheet as of June 30, 2011 for services provided by Kenneth I. Denos, Secretary and Chief Compliance Officer of the
Fund.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">On December 17, 2010, the Fund entered
into a consulting (&ldquo;Consulting Agreement&rdquo;) with John A. Hardy, the Fund&rsquo;s Executive Chairman.&nbsp; The
Consulting Agreement provides for base compensation to Mr. Hardy of $200,000 per annum, commencing June 1, 2010, and a bonus
based upon achievement of certain criteria.&nbsp; The bonus is subject to a payout cap of $150,000 for each fiscal year that
the Consulting Agreement is in effect, and any bonus earned that exceeds the payout cap will be carried over into subsequent
fiscal years.&nbsp; If the Consulting Agreement is terminated without cause, as defined therein, Mr. Hardy will be entitled
to receive one year&rsquo;s base consulting fee, together with all bonuses earned and unpaid up until the date of
termination.&nbsp; Mr. Hardy is not entitled to participate in any employee-related benefits, including health, life and
disability plans, of the Fund.&nbsp; In January 2011, the Fund disposed of certain</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0">investments and received $10.0 million in
cash. Mr. Hardy received a cash bonus of $150,000 for fiscal 2011 as a result of the completion of this transaction and,
pursuant to the Consulting Agreement, is not entitled to be paid any additional bonus for the remainder of fiscal 2011.&nbsp;
As of June 30, 2011, the Fund incurred compensation expense of $250,000 relating to Mr. Hardy&rsquo;s Consulting Agreement
which included the $150,000 cash bonus for fiscal 2011 described above.&nbsp; Mr. Hardy has permanently waived his right to
$561,662 of earned but unpaid bonus under the Consulting Agreement for fiscal 2010 and has further permanently waived his
right to $633,302 of earned but unpaid bonus in connection with activities of the Fund during the first six months of 2011. </P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">In June 2010, the Fund ratified and approved
the use of A+ Filings, LLC (&ldquo;A+ Filings&rdquo;) to file its reports with the Securities and Exchange Commission. Mr. Kenneth
I. Denos, Secretary of the Fund, holds a majority of the voting shares of A+ Filings. The Fund incurred $11,000 in services rendered
by A+ Filings during the six months ended June 30, 2011.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>(5) <U>Dividends</U> </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">On March&nbsp;24, 2009, the Fund announced that
it suspended its managed distribution policy and payment of quarterly distributions for an indefinite period. We will continue
to pay out net investment income and/or realized capital gains, if any, on an annual basis as required under the Investment Company
Act of 1940.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>(6) <U>Portfolio Securities </U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">During the six months ended June 30,
2011, we made a follow-on investment of $0.2 million in Spectrum Management, LLC. On April 27, 2011, we announced that we
had entered into two separate transactions involving the purchase of an aggregate of 11,408 bonds (&ldquo;Bonds&rdquo;)
issued by Orco Germany S.A., a commercial and multi-family residential real estate holding company and developer based in
Berlin. The consideration provided to the selling bondholders consisted of an aggregate of 1,700,000 newly issued shares of
common stock of the Fund. We received 8,890 of the Bonds on April 27, 2011. On May 9, 2011, one of these agreements was
amended and restated to provide for an additional 45 days to deliver the remaining 2,518 of the Bonds in exchange for
providing to the Fund approximately $1.6 million in cash as security for such delivery. As the remaining bonds were not
delivered by the specified date, the cash collateral became free and clear property of the Fund on June 23, 2011.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">The following table includes significant investment
activity during the six months ended June&nbsp;30, 2011 (in thousands):</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 9pt Arial; margin: 0; text-indent: 24.5pt; color: Red"><B></B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="1" STYLE="text-align: center; padding-bottom: 1pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></TD>
    <TD COLSPAN="15" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>Investment
    Activity</B></FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></TD>
    <TD COLSPAN="3" STYLE="text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="1" STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></TD>
    <TD COLSPAN="7" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>New
    Investments</B></FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></TD>
    <TD COLSPAN="7" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>Existing
    Investments</B></FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="1" STYLE="font-weight: bold; text-align: left; padding-bottom: 1pt; border-bottom: Black 1pt solid; vertical-align: bottom"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>Portfolio
    Company</B></FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>Cash</B></FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>Non-Cash</B></FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>Follow-On</B></FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>PIK</B></FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>Total</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 35%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Orco Germany SA</FONT></TD><TD STYLE="width: 2%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="width: 9%; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">67</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 2%; font-family: Helv"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; font-family: Helv; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="width: 9%; font-family: Helv; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">3,016</FONT></TD><TD STYLE="width: 1%; font-family: Helv; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 2%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="width: 9%; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&mdash;&nbsp;&nbsp;</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 2%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left">$<FONT STYLE="font: 10pt Times New Roman, Times, Serif"></FONT></TD><TD STYLE="width: 9%; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&mdash;&nbsp;&nbsp;</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 2%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="width: 9%; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">3,083</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Spectrum Management, LLC</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&mdash;&nbsp;&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&mdash;&nbsp;&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font-family: Helv; padding-bottom: 1pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-family: Helv; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"></FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font-family: Helv; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">187</FONT></TD><TD STYLE="padding-bottom: 1pt; font-family: Helv; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&mdash;&nbsp;&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">187</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">67</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">3,016</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">187</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&mdash;&nbsp;&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">3,270</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
</TABLE>


<P STYLE="font: 9pt Arial; margin: 0; text-indent: 24.5pt; color: Red"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 4.5pt 0 0; text-indent: 0.5in">During the six months ended June 30,
2011, we realized net capital losses of $10.9 million, including the following significant transactions (in thousands):</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 4.5pt 0 0; text-indent: 0.5in"></P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; border-collapse: collapse; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: windowtext 0.5pt solid; font-weight: bold; width: 39%">Portfolio Company</TD>
    <TD STYLE="border-bottom: windowtext 0.5pt solid; font-weight: bold; width: 19%">Industry</TD>
    <TD STYLE="border-bottom: windowtext 0.5pt solid; font-weight: bold; width: 23%">Type</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 0.5pt solid; font-weight: bold; text-align: center; width: 18%">Realized Gain (Loss)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; vertical-align: top">Riptide Entertainment LLC<BR>
</TD>
    <TD>Entertainment and<BR>
 leisure</TD>
    <TD>Membership interest and<BR>
 subordinated debt</TD>
    <TD STYLE="text-align: left; vertical-align: top">$<BR>
</TD>
    <TD STYLE="text-align: right; vertical-align: top">(10,074)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; vertical-align: top">London Bridge Entertainment Partners Ltd<BR>
</TD>
    <TD>Entertainment and<BR>
 leisure</TD>
    <TD>Secured and subordinated <BR>
debt</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right; vertical-align: top">(992)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>RP&amp;C International Investments LLC</TD>
    <TD>Healthcare</TD>
    <TD>Membership interest</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">138</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt">Various others</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: right">(1)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double">$</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(10,929)</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 4.5pt 0 0; text-indent: 0.5in"></P>

<P STYLE="font: 11pt Calibri, Halvetica, Sans-Serif; margin: 4.5pt 0 0; text-indent: 0.5in"><FONT STYLE="font: 9pt Arial; color: Red"><B></B></FONT></P>


<P STYLE="font: 11pt Calibri, Halvetica, Sans-Serif; margin: 4.5pt 0 0; text-indent: 0.5in"><B> </B><FONT STYLE="font: 10pt Times New Roman, Times, Serif">During
the six months ended June&nbsp;30, 2011, we received $0.2 million from Sovereign Business Forms, Inc. in the form of principal
payments. During the six months ended June 30, 2011, we sold our promissory notes in 1848 Capital Partners, LLC (&ldquo;1848&rdquo;),
Big Apple Entertainment Partners, LLC (&ldquo;Big Apple&rdquo;), and London Bridge Entertainment Partners, Ltd (&ldquo;London
Bridge&rdquo;) and certain assets of Riptide Entertainment Partners, LLC (&ldquo;Riptide&rdquo;) in which we hold a 64.67% membership
interest.&nbsp; All of these assets were sold to Capital Markets Acquisition Partners,</FONT></P>

<P STYLE="font: 11pt Calibri, Halvetica, Sans-Serif; margin: 4.5pt 0 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"></FONT></P>

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    <!-- Field: /Page -->
<P STYLE="font: 11pt Calibri, Halvetica, Sans-Serif; margin: 4.5pt 0 0; text-indent: 0.5in"></P>

<P STYLE="font: 11pt Calibri, Halvetica, Sans-Serif; margin: 4.5pt 0 0; text-indent: 0"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">LLC
for a combined price of $10 million, with $9.8 million allocated to the promissory notes held by the Fund and $0.2 million to
Riptide.&nbsp; The Fund allocated the proceeds to the promissory notes resulting in a realized loss of approximately $0.9 million
at London Bridge.&nbsp; In addition, the monies provided to Riptide were sufficient to satisfy its outstanding liabilities, resulting
in a value of $0.&nbsp;We also received $0.8 million in connection with the sale and redemption of our membership interest in
RP&amp;C International Investments LLC.</FONT></P>

<P STYLE="font: 11pt Calibri, Halvetica, Sans-Serif; margin: 4.5pt 0 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Net unrealized depreciation on investments decreased by $11.6 million, during the six months
ended June 30, 2011, to a net unrealized depreciation of $15.7 million.&nbsp; Such increase in depreciation resulted from the
following changes:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 7.5pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 6%; padding-top: 4.5pt; line-height: 115%; font-size: 10pt">(i)</TD>
    <TD STYLE="width: 2%; padding-top: 4.5pt; line-height: 115%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 92%; padding-top: 4.5pt; line-height: 115%; font-size: 10pt">Decline in fair market value of ConGlobal Industries Holding, Inc. (&ldquo;ConGlobal&rdquo;) of $2.5 million due to lower storage revenues for containers</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-top: 4.5pt; line-height: 115%; font-size: 10pt">(ii)</TD>
    <TD STYLE="padding-top: 4.5pt; line-height: 115%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="padding-top: 4.5pt; line-height: 115%; font-size: 10pt">Transfer of unrealized depreciation to realized depreciation for London Bridge Entertainment Partners, Ltd. (&ldquo;London Bridge&rdquo;) of $0.8 million due to the sale of the promissory note</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-top: 4.5pt; line-height: 115%; font-size: 10pt">(iii)</TD>
    <TD STYLE="padding-top: 4.5pt; line-height: 115%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="padding-top: 4.5pt; line-height: 115%; font-size: 10pt">Transfer of unrealized depreciation to realized depreciation for Riptide Entertainment Partners, LLC. (&ldquo;Riptide&rdquo;) of $10.1 million due to the sale of the promissory notes and the winding up of the entity</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-top: 4.5pt; line-height: 115%; font-size: 10pt">(iv)</TD>
    <TD STYLE="padding-top: 4.5pt; line-height: 115%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="padding-top: 4.5pt; line-height: 115%; font-size: 10pt">Transfer of unrealized appreciation to realized appreciation for RP&amp;C International Investments, LLC (&ldquo;RP&amp;C&rdquo;) of $0.1 million due to the maturity of the investment</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-top: 4.5pt; line-height: 115%; font-size: 10pt">(v)</TD>
    <TD STYLE="padding-top: 4.5pt; line-height: 115%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="padding-top: 4.5pt; line-height: 115%; font-size: 10pt">Increase in fair market value of Sovereign Business Forms, Inc. (&ldquo;Sovereign&rdquo;) of $0.6 million due to improved operating performance</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-top: 4.5pt; line-height: 115%; font-size: 10pt">(vi)</TD>
    <TD STYLE="padding-top: 4.5pt; line-height: 115%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="padding-top: 4.5pt; line-height: 115%; font-size: 10pt">Increase in fair market value of Spectrum Management, Inc. (&ldquo;Spectrum&rdquo;) of $0.2 million due to the extension of maturity of outstanding debt and the reduction of the risk associated with this potential default.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-top: 4.5pt; line-height: 115%; font-size: 10pt">(vii)</TD>
    <TD STYLE="padding-top: 4.5pt; line-height: 115%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="padding-top: 4.5pt; line-height: 115%; font-size: 10pt">Increase in the fair market value of Orco Germany S.A. bonds of $2.7 million due to the difference in the
market price of Equus shares used as consideration for the bonds on the date of acquisition.</TD></TR>
</TABLE>
<P STYLE="font: 11pt Calibri, Halvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">During the six months ended June&nbsp;30, 2010,
we received payment in full of a promissory note issued by Trulite, in the amount of $2.6 million, which included interest income
of $0.3 million and received a distribution from Equity Media Development Company, LLC of $1.0 million.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">During the six months ended June&nbsp;30, 2010,
we also had investment activity of $0.5 million in several follow-on investments, including $0.3 million in the form of accrued
interest and dividends received in the form of paid-in-kind (PIK). The following table includes significant investment activity
during the six months ended June&nbsp;30, 2010 (in thousands):</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="1" STYLE="text-align: center; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="15" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Investment Activity</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="1" STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="7" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">New Investments</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="7" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Existing Investments</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="1" STYLE="font-weight: bold; text-align: left; padding-bottom: 1pt; vertical-align: bottom; border-bottom: Black 1pt solid">Portfolio Company</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Cash</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">PIK</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Follow-On</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">PIK</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Total</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 35%">Trulite, Inc.</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 2%; font-family: Helv">&nbsp;</TD>
    <TD STYLE="width: 1%; font-family: Helv; text-align: left">$</TD><TD STYLE="width: 9%; font-family: Helv; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="width: 1%; font-family: Helv; text-align: left">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">200</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">200</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt">1848 Capital Partners LLC</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-family: Helv; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="font-family: Helv; text-align: left">&nbsp;</TD><TD STYLE="font-family: Helv; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-family: Helv; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">144</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">144</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1pt">London Bridge Entertainment Partners Ltd.</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-family: Helv; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="font-family: Helv; text-align: left">&nbsp;</TD><TD STYLE="font-family: Helv; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-family: Helv; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">109</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">109</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt">Big Apple Entertainment Partners LLC</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; padding-bottom: 1pt; border-bottom: Black 1pt solid">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; padding-bottom: 1pt; border-bottom: Black 1pt solid">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">80</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">80</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">200</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">333</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">533</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"></P>

<P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Net unrealized depreciation on investments increased
by $ 12.3&nbsp;million during the six months ended June&nbsp;30, 2010, to a net unrealized depreciation of $ 27.6 million. Such
increase in depreciation resulted primarily from the following changes:</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 61pt; text-align: right">(i)&nbsp;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Decline in estimated fair market value of 1848 Capital Partners LLC (&ldquo;1848&rdquo;)
of $2.4 million. The management of 1848 has indicated that the company will have to raise outside capital to repay the promissory
note due to the Fund upon maturity in January 2011. Due to the uncertainty of the recoverability of the promissory note, the Fund
determined that the fair value of the promissory note &nbsp;</TD></TR></TABLE>

<P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0 0 0 81pt; text-indent: -25.95pt"></P>

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<P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0 0 0 81pt; text-indent: -25.95pt">&nbsp;</P>

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<TD STYLE="width: 61pt; text-align: right">&nbsp;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">was impaired. The promissory note is personally guaranteed jointly and severally
by the principals of 1848, who also guarantee the Big Apple Entertainment Partners LLC and London Bridge Entertainment Partners
Ltd promissory notes.</TD></TR></TABLE>






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<TD STYLE="width: 61pt; text-align: right">(ii) </TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify"> Decline in fair market value of Equus Media Development Company, LLC (&ldquo;EMDC&rdquo;) of
                                                                                  $2.3 million. In June, the Fund received a distribution of $1.0&nbsp;million from EMDC. Currently, EMDC holds $1.7 million in
                                                                                  cash and has a remaining funding commitment of $0.6 under its agreement with Kopleson Entertainment. In addition, if Kopleson
                                                                                  Entertainment generates $0.2 million of income for EMDC, that event will trigger an additional $1.0 million funding
                                                                                  obligation of EMDC. EMDC has written down the fair value of its asset.</TD></TR>                                                                                                                                                                  <TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="text-align: justify">&nbsp;</TD></TR>
</TABLE>

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<TD STYLE="width: 61pt; text-align: right">(iii)&nbsp;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Decline in fair market value of Infinia Corporation of $1.5 million. Infinia has informed
the Fund of its significant capital and liquidity needs. Based on these factors, the nominal equity holdings of the Fund and the
future potential dilution, the Fund has written down the investment to $0.&nbsp;</TD></TR>                                                                                          <TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="text-align: justify">&nbsp;</TD></TR>
</TABLE>

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<TD STYLE="width: 61pt; text-align: right">(iv)&nbsp;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Decline in fair market value of London Bridge Entertainment Partners Ltd (&ldquo;London
Bridge&rdquo;) of $2.5 million. London Bridge has experienced a working capital shortfall and required an additional $0.6 million
investment from the Fund in July 2010. Based on the current condition of London Bridge, the Fund determined the fair value of
the loan was impaired. The loan is senior in liquidation preference and is guaranteed by the management principals, many of whom
guarantee the 1848 Capital Partners LLC and Big Apple Entertainment Partners LLC promissory notes.&nbsp;</TD></TR>                                                                                                                  <TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="text-align: justify">&nbsp;</TD></TR>
</TABLE>

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<TD STYLE="width: 61pt; text-align: right">(v)&nbsp;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Decline in fair market value of Riptide Entertainment, LLC (&ldquo;Riptide&rdquo;)
of $3.0 million. Riptide owns subordinated debt interest in both Big Apple Entertainment Partners LLC and London Bridge directly
and through derivative entities and equity directly in London Bridge. The Fund has determined the value of these investments to
be impaired based on the operating results and liquidity concerns of both companies.&nbsp;</TD></TR>                                                                                                    <TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="text-align: justify">&nbsp;</TD></TR>
</TABLE>

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<TD STYLE="width: 61pt; text-align: right">(vi)&nbsp;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Decline in fair market value of ConGlobal Industries Holding, Inc. (&ldquo;ConGlobal&rdquo;)
of $0.9 million. ConGlobal has experienced a decline in its storage business due to the increasing activity of shipping containers.
While the activity has contributed to revenue through other services of the company, the contribution margin of these services
is less than the storage revenue and has had a negative impact on its operating cash flow.&nbsp;</TD></TR>
</TABLE>

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<TD STYLE="width: 61pt; text-align: right">(vii)&nbsp;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Increase in fair market value of The Bradshaw Group of $0.1 million. The Bradshaw
Group has seen an incremental increase in business activity during the past twelve months which has improved the value of the
Fund&rsquo;s equity holdings.&nbsp;</TD></TR>                                             <TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="text-align: justify">&nbsp;</TD></TR>
</TABLE>

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<TD STYLE="width: 61pt; text-align: right">(viii)&nbsp;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Increase in fair market value of PalletOne, Inc. of $0.1 million. PalletOne, Inc.
has continued to generate cash flows which have reduced debt levels. The Fund believes the performance of the company in recent
years and its continued debt reduction initiatives have created value for its equity holdings.&nbsp;</TD></TR>                                                                                                              <TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="text-align: justify">&nbsp;</TD></TR>
</TABLE>

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<TD STYLE="width: 61pt; text-align: right">(ix)&nbsp;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Increase in fair market value of Sovereign Business Forms, Inc. (&ldquo;Sovereign&rdquo;)
of $0.3 million. Sovereign has continued to reduce its debt which has caused a corresponding increase to the value of the equity
held by the Fund in Sovereign.&nbsp;</TD></TR>                                              <TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="text-align: justify">&nbsp;</TD></TR>
</TABLE>

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<TD STYLE="width: 61pt; text-align: right">(x)&nbsp;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Increase in fair market value of Trulite, Inc. (&ldquo;Trulite&rdquo;) of $0.1 million.
The Fund holds approximately nine million warrants in Trulite, many with a nominal exercise price. Based on Trulite&rsquo;s recent
equity raise and repayment of the Fund&rsquo;s debt, the Fund determined the warrants have increased in value.&nbsp;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>(9) <U>Recent Accounting Pronouncements</U></B></P>

<P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">In January 2010, the FASB issued changes to
disclosure requirements for fair value measurements. Specifically, the changes require a reporting entity to disclose, in the reconciliation
of fair value measurements using significant unobservable inputs (Level 3), separate information about purchases, sales, issuances,
and settlements (that is, on a gross basis rather than as one net number). These changes become effective for the Fund beginning
January&nbsp;1, 2011. Other than the additional disclosure requirements, the adoption of this standard did not have a material
effect on our financial position and results of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">In May 2011, the FASB issued changes to
disclosure requirements for fair value measurements which resulted in a consistent definition of fair value and
common requirements for measurement of and disclosure about fair value</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0">between GAAP and IFRS. These changes become effective
for interim and annual periods beginning after December 15, 2011. The Fund is currently assessing the potential impact that
the adoption of this standard may have on our financial position and results of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>(10) <U>Subsequent Events </U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Management performed an evaluation of the Fund&rsquo;s
activity through the date the financial statements were issued, noting the following subsequent events: </P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">On July 1, 2011,we sold U.S. Treasury
bills for $15.0 million and repaid the margin loan.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">On August 4, 2011, we invested $0.1
million in Spectrum Management, LLC as a follow-on investment in the form of a 16% promissory note facility.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B><U><A NAME="a_010"></A>Item&nbsp;2.</U> <U>Management&rsquo;s Discussion and
Analysis of Financial Condition and Results of Operations. </U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B><U>Overview</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Equus is a Business Development Corporation
(&ldquo;BDC&rdquo;) that provides financing solutions for privately held middle market and small capitalization companies. We
began operations in 1983 and have been a publicly traded closed-end fund since 1991. Our investment objective is to seek the highest
total return, consisting of capital appreciation and current income.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">The valuation of the Fund&rsquo;s investments
is the most significant area of judgment impacting the financial statements. The Fund&rsquo;s portfolio investments are valued
at estimates of fair value, with the net change in unrealized appreciation or depreciation included in the determination of net
assets. Almost all of the long-term investments are in privately-held or restricted securities, the valuation of which is necessarily
subjective. Actual values may differ materially from the Fund&rsquo;s estimated fair value.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Most of the Fund&rsquo;s portfolio companies
utilize leverage, and the leverage magnifies the return on its investments. For example, if a portfolio company has a total enterprise
value of $10.0 million and $7.5 million in funded indebtedness, its equity is valued at $2.5 million. If the enterprise value increases
or decreases by 20%, to $12.0 million or $8.0 million, respectively, the value of the equity increases or decreases by 80%, to
$4.5 million or $0.5 million, respectively. This disproportionate increase or decrease adds a level of volatility to the Fund&rsquo;s
equity-oriented portfolio securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">We are an internally managed fund, inasmuch
as we directly employ our management team and incur the costs and expenses associated with Fund operations. There is no outside
investment advisory organization providing services to us under a fee-based advisory agreement, or an administrative organization
charging us for services rendered. We expect that, because of internalized management, certain expenses of the Fund will not increase
commensurate with an increase in the size of the Fund and, therefore, we can achieve efficiencies in our cost structure if we are
able to grow the Fund.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Effective August 11, 2006, we began to employ
a total return investment strategy. The total return strategy combines both growth and income investments and is intended to strike
a balance between the potential for gain and the risk of loss.&nbsp;In the growth category, we are a &ldquo;growth-at- reasonable-price&rdquo;
investor.&nbsp;We invest primarily in privately owned companies and are open to virtually any potential growth investment in the
privately owned arena.&nbsp;However, our primary aim is to identify and acquire only those equity securities that meet our criteria
for selling at reasonable prices.&nbsp;The income investments made consist principally of purchasing debt&nbsp;financing with the
objective of generating regular interest income as well as long-term capital appreciation through the exercise and sale of warrants
received in connection with the financing.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Since the Fund is a closed-end BDC, stockholders
have no right to present their shares to the Fund for redemption. Because the shares continue to trade at a discount, the Board
of Directors has determined that it would be in the best interest of the Fund&rsquo;s stockholders for the Fund to be authorized
to attempt to reduce or eliminate the market value discount from net asset value. Accordingly, from time to time the Fund may,
but is not required to, repurchase its shares (including by means of tender offers) to attempt to reduce or eliminate the discount
or to increase the net asset value of those shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>Significant Developments </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">The following are key activities occurring during
the quarter:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 48.95pt; text-indent: 0.5in">(i)&#9;<B>Investment in
Orco Germany S.A.</B> On April 27, 2011, the Fund announced that it had entered into two separate transactions involving
the purchase of an aggregate of 11,408 Orco Germany S.A. (&ldquo;Orco,&rsquo; the &ldquo;Bonds&rdquo;) 4% bonds due May 2012
.. Orco is a commercial and multi-family residential real estate holding company and developer based in Berlin.
The consideration provided to the selling bondholders consisted of an aggregate of 1,700,000 newly issued shares of common
stock of the Fund. The Fund received 8,890 of the Bonds on April 27, 2011. On May 9, 2011, one of these agreements was
amended and restated to provide for an additional 45 days to deliver the remaining 2,518 of the Bonds in exchange for
providing to the Fund approximately $1.6 million in cash as security for such delivery. As the remaining bonds were not
delivered by the specified date, the cash collateral became free and clear property of the Fund on June 23, 2011.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 48.95pt; text-indent: 0.5in">&nbsp;</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 48.95pt; text-indent: 0.5in">(ii)&#9;<B>Leadership Changes.</B>
On June&nbsp;7, 2011, the Fund announced that its Board of Directors appointed Alessandro Benedetti as the Fund's Executive Chairman
and John Hardy as the Fund's Chief Executive Officer. Previous to their appointments, Mr. Benedetti was an independent member of
the Fund's Board of Directors, and Mr. Hardy was the Fund's Executive Chairman. Mr. Benedetti, is an Italian national with decades
of business experience in a diverse range of industries including telecoms, agro-industrial engineering, mining, real estate, renewable
and nonrenewable energy and investment companies. He is fully conversant with business conditions and operating procedures in the
world's key markets, especially Western and Eastern Europe, Scandinavia, CIS, Africa, North America and the Middle East. Mr.&nbsp;Hardy
has had extensive experience in the insurance, finance and banking sectors, as well as international mergers and acquisitions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 48.95pt; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 48.95pt; text-indent: 0.5in">(iii)&#9;<B>Annual Shareholder
Meeting.</B> On June 10, 2011, the Fund held its Annual Share Meeting. Shareholders approved the election of nine director nominees
and the appointment of UHY LLP as the Fund&rsquo;s independent auditor for the fiscal year 2011.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>Significant Accounting Policies </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">The following is a summary of significant accounting
policies followed by the Fund in the preparation of its financial statements:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><B>Use of Estimates</B>&mdash;The preparation
of financial statements in accordance with accounting principles generally accepted in the United States of America requires us
to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Although we believe
the estimates and assumptions used in preparing these financial statements and related notes are reasonable in light of known facts
and circumstances, actual results could differ from those estimates.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><B>Valuation of Investments</B>&mdash;<B> </B>Portfolio
investments are carried at fair value with the net change in unrealized appreciation or depreciation included in the determination
of net assets. Valuations of portfolio securities are performed in accordance with accounting principles generally accepted in
the United States of America and the financial reporting policies of the Securities and Exchange Commission (&ldquo;SEC&rdquo;).
The applicable methods prescribed by such principles and policies are described below:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Publicly-traded portfolio securities&mdash;Investments
in companies whose securities are publicly traded are generally valued at their quoted market price at the close of business on
the valuation date.&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><I>Privately-held portfolio securities</I>&mdash;The
fair value of investments for which no market exists is determined on the basis of procedures established in good faith by our
Board of Directors. As a general principle, the current &ldquo;fair value&rdquo; of an investment would be the amount we might
reasonably expect to receive for it upon its current sale, in an orderly manner. Appraisal valuations are necessarily subjective
and the estimated values arrived at by the Fund may differ materially from amounts actually received upon the disposition of portfolio
securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">During the first twelve months after an investment
is made, the Fund utilizes the original investment amount to determine the fair value unless significant developments have occurred
during this twelve month period which would</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0">indicate a material effect on the portfolio company
(such as results of operations or changes in general market conditions). After the twelve month period, or if material events
have occurred within the twelve month period, Fund management considers a two step process when appraising investments of privately
held companies. The first step involves determining the enterprise value of the portfolio company. During this step, Fund management
considers three different valuation approaches: a market approach, an income approach, and an asset approach. The particular facts
and circumstances of each portfolio company determine which approach, or combination of approaches, will be utilized. The second
step when appraising equity investments of privately held companies involves allocating value to the various debt and equity securities
of the company. Fund management allocates value to these securities based on their relative priorities. For equity securities
such as warrants, the Fund may also incorporate alternative methodologies including the Black-Scholes Option Pricing Model and
the Monte Carlo Simulation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Market approach &ndash; The market approach
typically employed by Fund management calculates the enterprise value of a company as&nbsp;a multiple of earnings before interest,
taxes, depreciation and amortization (&ldquo;EBITDA&rdquo;) generated by the company for the trailing twelve month period.&nbsp;
Adjustments to the company&rsquo;s EBITDA, including those for non-recurring items, may be considered. Multiples are estimated
based on current market conditions and past experience in the private company marketplace and are subjective in nature. The Fund
will apply liquidity and other discounts it deems appropriate to equity valuations where applicable. The Fund may also use, when
available, third-party transactions in a portfolio company&rsquo;s securities as the basis of valuation (the &ldquo;private market
method&rdquo;). The private market method will be used only with respect to completed transactions or firm offers made by sophisticated,
independent investors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Income approach &ndash; The income approach
typically utilized by Fund management calculates the enterprise value of a company utilizing a discounted cash flow model incorporating
projected future cash flows of the company.&nbsp; Projected future cash flows consider the historical performance of the company
as well as current and projected market participant performance. Discount rates are estimated based on current market conditions
and past experience in the private company marketplace and are subjective in nature. The Fund will apply liquidity and other discounts
it deems appropriate to equity valuations where applicable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Asset approach &ndash; The Fund considers the
asset approach to determine the fair value of significantly deteriorated investments demonstrating circumstances indicative of
a liquidation analysis. This situation may arise when a portfolio company: 1) cannot generate adequate cash flow to meet the principal
and interest payments on its indebtedness; 2) is not successful in refinancing its debt upon&nbsp;maturity; 3) Fund management
believes the credit quality of a loan has deteriorated due to changes in the business and underlying asset or market conditions
may result in the company&rsquo;s inability to meet future obligations; or 4) the portfolio company&rsquo;s reorganization or bankruptcy.
Consideration is also given as to whether a liquidation event would be orderly or forced.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Fund management considers that the Fund&rsquo;s
general intent is to hold its loans to maturity when appraising its privately held debt investments. As such, Fund management believes
that the fair value will not exceed the cost of the investment. However, in addition to the previously described analysis involving
allocation of value to the debt instrument, the Fund performs a yield analysis to determine if a debt security has been impaired.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Certificates of deposit purchased by the Fund
generally will be valued at their face value, plus interest accrued to the date of valuation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">The Audit Committee of the Board of Directors
may engage independent, third-party valuation firms to conduct independent appraisals and review management&rsquo;s preliminary
valuations of each privately-held investment that the Fund (a)&nbsp;has held for more than one year and (b)&nbsp;holds on its books
at a fair value of at least $2.0 million in order to make their own independent assessment. Any third-party valuation data would
be considered as one of many factors in a fair value determination. The Audit Committee then would recommend the fair values for
all privately-held securities based on all relevant factors to the Board of Directors for final approval.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Because of the inherent uncertainty of the valuation
of portfolio securities which do not have readily ascertainable market values, amounting to $21.7 million and $27.7 million as
of June 30, 2011 and December 31, 2010, respectively, our fair value determinations may materially differ from the values that
would have been used had a ready market existed for the securities. As of June 30, 2011, one of the Fund&rsquo;s portfolio investments,
4% bonds due May 2012 issued by Orco Germany S.A., is publicly listed on the Euro MTF Market of the Luxemburg Stock Exchange.
However, there has been no recent trading activity. There were no publicly traded securities as at December 31, 2010.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">On a daily basis, we adjust our net asset value
for the changes in the value of our publicly held securities, if</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0">applicable, and material changes in the value of
private securities, generally determined on a quarterly basis or as announced in a press release, and reports those amounts to
Lipper Analytical Services, Inc. Weekly and daily net asset values appear in various publications, including <I>Barron&rsquo;s
</I>and <I>The Wall Street Journal</I>. </P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0.5in 0 0; text-indent: 0.5in"><B>Deferred Offering Costs</B>&mdash;Accumulation
of costs related to the offering whereby we will sell additional shares or rights to acquire shares at a market price that may
have been below net asset value. The main components of the costs are legal fees and consultant&rsquo;s fees specifically related
to the offering.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0.5in 0 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0.5in 0 0; text-indent: 0.5in"><B>Investment Transactions</B>&mdash;Investment
transactions are recorded on the accrual method. Realized gains and losses on investments sold are computed on a specific identification
basis.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">We classify our investments in accordance with
the requirements of the 1940 Act. Under the 1940 Act, &ldquo;Control Investments&rdquo; are defined as investments in companies
in which we own more than 25% of the voting securities or maintains greater than 50% of the board representation. Under the 1940
Act, &ldquo;Affiliate Investments&rdquo; are defined as those non-control investments in companies in which we own between 5% and
25% of the voting securities. Under the 1940 Act, &ldquo;Non-affiliate Investments&rdquo; are defined as investments that are neither
Control Investments nor Affiliate Investments.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><B>Federal Income Taxes</B>&mdash;We intend
to comply with the requirements of the Code necessary for us to qualify as a RIC. So long as it complies with these requirements,
the Fund generally will not be subject to corporate-level federal income taxes on otherwise taxable income (including net realized
capital gains) distributed to stockholders. Therefore, the Fund did not record a provision for federal income taxes in its financial
statements. The Fund may borrow money from time to time to maintain its status as a RIC under the Code.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><B>Interest Income Recognition</B>&mdash;We
record interest income, adjusted for amortization of premium and accretion of discount, on an accrual basis to the extent that
we expect to collect such amounts. We stop accruing interest on investments when we determine that interest is no longer collectible.
If we receive any cash after determining that interest is no longer collectible, we treat such cash as payment on the principal
balance until the entire principal balance has been repaid, before we recognize any additional interest income. We accrete or amortize
discounts and premiums on securities purchased over the life of the respective security using the effective yield method. The amortized
cost of investments represents the original cost adjusted for the accretion of discount and/or amortization of premium on debt
securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><B>Payment in Kind Interest (PIK)</B>&mdash;We
have loans in our portfolio that may pay PIK interest. We add PIK interest, if any, computed at the contractual rate specified
in each loan agreement, to the principal balance of the loan and recorded as interest income. To maintain our status as a RIC,
we must pay out to stockholders this non-cash source of income in the form of dividends even if we have not yet collected any cash
in respect of such investments.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>Current Market Conditions</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Overall economic conditions have stabilized
in the first half of 2011, as the U.S. economy has expanded at a modest rate.&nbsp; However, the economic recovery has been hampered
by persistent high unemployment levels and increased uncertainty related to U.S. government deficit spending, debt levels, and potential
foreign government defaults.&nbsp; Further, the banking industry continues to experience additional bank failures as regulators
continue to impose strict capital requirements.&nbsp; Additionally, future economic expansion and business investment is threatened
by perceptions of higher taxes and healthcare costs, as well as the uncertainty surrounding government deficit spending and debt
limits.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Market conditions for business transactions
including mergers and acquisitions and private equity investments improved throughout 2010 and have effectively plateaued at these
levels through the first six months of 2011as low interest rates have reduced capital costs, some banks are lending more aggressively,
valuations have increased and buyer and seller expectations have converged.&nbsp; These conditions were contributors to an upturn
in transaction volume during 2010 and the first quarter 2011 since declining significantly in 2009.&nbsp; In addition, corporations
have been deleveraging and are holding significant amounts of cash and many have begun to focus on acquisitions as part of future
growth plans.&nbsp; Private equity firms have access to historically large amounts of committed capital as private equity activity
has been lower than anticipated for nearly two years and fund raising was robust heading into the economic downturn.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Consistent with other companies in the financial
services sector, our performance has been adversely affected. Between December 31, 2008 and June 30, 2011 our net asset value declined
from $9.16 per share to $3.92 per share.&nbsp; This further impacted the closing price of our common stock, as it declined approximately
25.6% during 2009 and a</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0">further 21.9% during 2010 and, as of June 30, 2011, is trading at a 38.8% discount to our net asset value.</P>

<P STYLE="font: 11pt Calibri, Halvetica, Sans-Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">We have continued to execute certain initiatives
to enhance liquidity, achieve a lower operational cost structure, provide more assistance to portfolio companies and enhance communication
with shareholders.&nbsp; Specifically, we changed the composition of our Board of Directors and Management, terminated certain
of our follow-on investments, internalized the management of the Fund, suspended our managed distribution policy, sold certain
of our portfolio investments for cash, and modified our investment strategy to pursue shorter term liquidation opportunities.&nbsp;
We believe these actions continue to be necessary to protect capital and liquidity during this turbulent economic period in order
to preserve and enhance shareholder value.&nbsp; We also expect that, because of management internalization, certain expenses
of the Fund will not increase commensurate with an increase in the size of the Fund and, therefore, we can achieve efficiencies
in our cost structure if we are able to grow the Fund.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>Liquidity and Capital Resources </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">We generate cash primarily from maturities,
sales of securities and borrowings, as well as capital gains realized upon the sale of portfolio investments. 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.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Because of the nature and size of the portfolio
investments, we may periodically borrow funds to make qualifying investments to maintain its tax status as a RIC. During the three
months ended June 30, 2011 and 2010, we borrowed 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.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">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.
Net taxable investment income and net taxable realized gains from the sales of portfolio investments are intended to be distributed
at least annually, to the extent such amounts are not reserved for payment of expenses and contingencies or to make follow-on or
new investments. Pursuant to the restrictions in the existing line of credit, the Fund is not allowed to incur additional indebtedness
unless approved by the lender.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">The Fund reserves the right to retain net long-term
capital gains in excess of net short-term capital losses for reinvestment or to pay contingencies and expenses. Such retained amounts,
if any, will be taxable to the Fund as long-term capital gains and stockholders will be able to claim their proportionate share
of the federal income taxes paid on such gains as a credit against their own federal income tax liabilities. Stockholders will
also be entitled to increase the adjusted tax basis of their Fund shares by the difference between their undistributed capital
gains and their tax credit.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">We are evaluating the impact of current market
conditions on our portfolio company valuations and their ability to provide current income. We have followed valuation techniques
in a consistent manner; 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.</P>

<P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>Results of Operations </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>Investment Income and Expense </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Net investment loss after all expenses was $1.2
million and $0.6&nbsp;million for the three months ended June 30, 2011 and 2010, respectively and $1.9 million and $0.7 million
for the six months ended June 30, 2011 and 2010, respectively. The increase in net investment loss generated at June 30, 2011 compared
to June 30, 2010 is due primarily to the decrease in total investment income for the periods.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Total income from portfolio securities was $0.4
million and $0.8 million for the three months ended June 30, 2011 and 2010, respectively, and $0.8 million and $1.7 million for
the six months ended June 30, 2011, and 2010, respectively. The decrease was primarily due to the decline in income producing investments
resulting from the monetizations of 1848 Capital Partners LLC, Big Apple Entertainment Partners LLC and London Bridge Entertainment
Partners Ltd.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Total expenses increased from $1.5 million
for the three months ended June 30, 2010 to $1.6 million for the three months ended June 30, 2011. This $0.1 million increase
was largely due to the decrease in legal fees ($0.4 million) and solicitation costs ($0.2 million) associated with the Fund&rsquo;s
annual shareholder meeting held in May 2010 and resulting proxy context, offset by the increase in compensation expense and settlement
expense and offering expense for the three months ended June 30, 2011. Total expenses increased from $2.4 million for the six
months ended June 30, 2010 to $2.7 million for the six months ended June 30, 2011, due primarily to the write-off of deferred
offering costs. </P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0pt; text-indent: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0pt; text-indent: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><B>Realized Gains and Losses </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">During the six months ended June 30, 2011, we
realized net capital losses of $10.9 million, including the following significant transactions (in thousands):</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"></P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; border-collapse: collapse; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: windowtext 0.5pt solid; font-weight: bold; width: 36%">Portfolio Company</TD>
    <TD STYLE="border-bottom: windowtext 0.5pt solid; font-weight: bold; width: 21%">Industry</TD>
    <TD STYLE="border-bottom: windowtext 0.5pt solid; font-weight: bold; width: 23%">Type</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 0.5pt solid; font-weight: bold; text-align: center; width: 19%">Realized Gain (Loss)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; vertical-align: top">Riptide Entertainment LLC<BR>
</TD>
    <TD>Entertainment and <BR>
leisure</TD>
    <TD>Membership interest and<BR>
 subordinated debt</TD>
    <TD STYLE="text-align: left; vertical-align: top">$</TD>
    <TD STYLE="text-align: right; vertical-align: top">(10,074)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; vertical-align: top">London Bridge Entertainment Partners Ltd<BR>
</TD>
    <TD>Entertainment and <BR>
leisure</TD>
    <TD>Secured and subordinated <BR>
debt</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right; vertical-align: top">(992)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>RP&amp;C International Investments LLC</TD>
    <TD>Healthcare</TD>
    <TD>Membership interest</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">138</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt">Various others</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: right">(1)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double">$</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(10,929)</TD></TR>
</TABLE>

<P STYLE="font: 9pt Arial; margin: 0; text-indent: 24.5pt; color: Red"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">During the six months ended June&nbsp;30, 2010,
we realized net capital losses of $0.005 million from the sale of U.S. Treasury Bills.</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>Changes in Unrealized Appreciation/Depreciation of Portfolio
Securities </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Net unrealized depreciation on investments decreased
by $11.6 million, during the six months ended June 30, 2011, to a net unrealized depreciation of $15.7 million.&nbsp; Such decrease
in depreciation resulted from the following changes:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 7.5pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 5%; padding-top: 4.5pt; line-height: 115%; font-size: 10pt">(i)</TD>
    <TD STYLE="width: 2%; padding-top: 4.5pt; line-height: 115%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 93%; padding-top: 4.5pt; line-height: 115%; font-size: 10pt">Decline in fair market value of ConGlobal Industries Holding, Inc. (&ldquo;ConGlobal&rdquo;) of $2.5 million due to lower storage revenues for containers.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-top: 4.5pt; line-height: 115%; font-size: 10pt">(ii)</TD>
    <TD STYLE="padding-top: 4.5pt; line-height: 115%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="padding-top: 4.5pt; line-height: 115%; font-size: 10pt">Transfer of unrealized depreciation to realized depreciation for London Bridge Entertainment Partners, Ltd. (&ldquo;London Bridge&rdquo;) of $0.8 million due to the sale of the promissory note.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-top: 4.5pt; line-height: 115%; font-size: 10pt">(iii)</TD>
    <TD STYLE="padding-top: 4.5pt; line-height: 115%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="padding-top: 4.5pt; line-height: 115%; font-size: 10pt">Transfer of unrealized depreciation to realized depreciation for Riptide Entertainment Partners, LLC. (&ldquo;Riptide&rdquo;) of $10.1 million due to the sale of the promissory notes and the winding up of the entity.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-top: 4.5pt; line-height: 115%; font-size: 10pt">(iv)</TD>
    <TD STYLE="padding-top: 4.5pt; line-height: 115%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="padding-top: 4.5pt; line-height: 115%; font-size: 10pt">Transfer of unrealized appreciation to realized appreciation for RP&amp;C International Investments, LLC (&ldquo;RP&amp;C&rdquo;) of $0.1 million due to the maturity of the investment.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-top: 4.5pt; line-height: 115%; font-size: 10pt">(v)</TD>
    <TD STYLE="padding-top: 4.5pt; line-height: 115%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="padding-top: 4.5pt; line-height: 115%; font-size: 10pt">Increase in fair market value of Sovereign Business Forms, Inc. (&ldquo;Sovereign&rdquo;) of $0.6 million due to improved operating performance.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-top: 4.5pt; line-height: 115%; font-size: 10pt">(iv)</TD>
    <TD STYLE="padding-top: 4.5pt; line-height: 115%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="padding-top: 4.5pt; line-height: 115%; font-size: 10pt">Increase in fair market value of Spectrum Management, Inc.
        (&ldquo;Spectrum&rdquo;) of $0.2 million due to the extension of maturity of outstanding debt and the reduction of the risk associated
        with this potential default.&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-top: 4.5pt; line-height: 115%; font-size: 10pt">(vii)</TD>
    <TD STYLE="padding-top: 4.5pt; line-height: 115%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="padding-top: 4.5pt; line-height: 115%; font-size: 10pt">Increase in the fair market value of Orco Germany S.A. bonds of $2.7 million due to the difference in the
market price of Equus shares used as consideration for the bonds on the date of acquisition.</TD></TR>
</TABLE>
<P STYLE="font: 11pt Calibri, Halvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Net unrealized depreciation on investments increased
by $12.3 million during the six months ended June&nbsp;30, 2010, to a net unrealized depreciation of $27.6 million. The depreciation
of portfolio securities resulted primarily from the following changes:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

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<TD STYLE="width: 61pt; text-align: right">(i)&nbsp;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Decline in estimated fair market value of 1848 Capital Partners LLC (&ldquo;1848&rdquo;)
of $2.4 million. The management of 1848 has indicated that the company will have to raise outside capital to repay the promissory
note due to the Fund upon maturity in January 2011. Due to the uncertainty of the recoverability of the promissory note, the Fund
determined that the fair value of the promissory note was &nbsp;&nbsp;&nbsp;</TD></TR></TABLE>



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<TD STYLE="width: 61pt; text-align: right"></TD></TR></TABLE>

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<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify"><TD STYLE="width: 61pt; text-align: right">&nbsp;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">impaired. The promissory note is personally guaranteed jointly and severally
by the principals of 1848, who also guarantee the Big Apple Entertainment Partners LLC and London Bridge Entertainment Partners
Ltd promissory notes. </TD></TR>                               <TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="text-align: justify">&nbsp;</TD></TR>
</TABLE>



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<TD STYLE="width: 61pt; text-align: right">(ii)</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Decline in fair market value of Equus Media Development Company, LLC (&ldquo;EMDC&rdquo;) of
                                                                                  $2.3 million. In June, the Fund received a distribution of $1.0 million from EMDC. Currently EMDC holds $1.7
                                                                                  million in cash and has a remaining funding commitment of $0.6 under its agreement with Kopleson Entertainment.
                                                                                  In addition, if Kopleson Entertainment generates $0.2 million of income for EMDC, that event will trigger an additional $1.0
                                                                                  million funding obligation of EMDC. EMDC has written down the fair value of its assets.</TD></TR>                                                                                                                                                                                   <TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="text-align: right"></TD><TD>&nbsp;</TD><TD STYLE="text-align: justify">&nbsp;</TD></TR>
</TABLE>


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<TD STYLE="width: 61pt; text-align: right">(iii)&nbsp;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Decline in fair market value of Infinia Corporation of $1.5 million. Infinia has informed the Fund of its significant capital and liquidity needs. Based on these factors, the nominal equity holdings of the Fund, and
the future potential dilution, the Fund has written down the investment to $0.</TD></TR>                                                                                                    <TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="text-align: right"></TD><TD></TD><TD STYLE="text-align: justify">&nbsp;</TD></TR>
</TABLE>



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<TD STYLE="width: 61pt; text-align: right">(iv)&nbsp;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Decline in fair market value of London Bridge Entertainment Partners Ltd (&ldquo;London
Bridge&rdquo;) of $2.5 million. London Bridge has experienced a working capital shortfall and required an additional $0.6 million
investment from the Fund in July 2010. Based on the current condition of London Bridge, the Fund determined the fair value of
the loan was impaired. The loan is senior in liquidation preference and is guaranteed by the management principals, many of which
guarantee the 1848 Capital Partners LLC and Big Apple Entertainment Partners LLC promissory notes.&nbsp;&nbsp;</TD></TR>                                                                                                                        <TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="text-align: right"></TD><TD></TD><TD STYLE="text-align: justify">&nbsp;</TD></TR>
</TABLE>



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<TD STYLE="width: 61pt; text-align: right">(v)&nbsp;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Decline in fair market value of Riptide Entertainment, LLC (&ldquo;Riptide&rdquo;)
of $3.0 million. Riptide owns subordinated debt interest in both Big Apple Entertainment Partners LLC and London Bridge directly
and through derivative entities and equity directly in London Bridge. The Fund has determined the value of these investments to
be impaired based on the operating results and liquidity concerns of both companies.&nbsp;&nbsp;</TD></TR>                                                                                                          <TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="text-align: right"></TD><TD></TD><TD STYLE="text-align: justify">&nbsp;</TD></TR>
</TABLE>



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<TD STYLE="width: 61pt; text-align: right">(vi)&nbsp;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Decline in fair market value of ConGlobal Industries Holding, Inc. (&ldquo;ConGlobal&rdquo;)
of $0.9 million. ConGlobal has experienced a decline in its storage business due to the increasing activity of shipping containers.
While the activity has contributed to revenue through other services of the company, the contribution margin of these services
is less than the storage revenue and has had a negative impact on its operating cash flow.&nbsp;&nbsp;</TD></TR>                                                                                                                <TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="text-align: right"></TD><TD></TD><TD STYLE="text-align: justify">&nbsp;</TD></TR>
</TABLE>



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<TD STYLE="width: 61pt; text-align: right">(vii)&nbsp;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Increase in fair market value of The Bradshaw Group of $0.1 million. The Bradshaw
Group has seen an incremental increase in business activity during the past twelve months which has improved the value of the
Fund&rsquo;s equity holdings&nbsp;&nbsp;</TD></TR>                                                  <TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="text-align: right"></TD><TD></TD><TD STYLE="text-align: justify">&nbsp;</TD></TR>
</TABLE>



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<TD STYLE="width: 61pt; text-align: right">(viii)&nbsp;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Increase in fair market value of PalletOne, Inc. of $0.1 million. PalletOne, Inc.
has continued to generate cash flows which have reduced debt levels. The Fund believes the performance of the company in recent
years and its continued debt reduction initiatives has created value for its equity holdings.&nbsp;&nbsp;</TD></TR>                                                                                                                   <TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="text-align: right"></TD><TD></TD><TD STYLE="text-align: justify">&nbsp;</TD></TR>
</TABLE>



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<TD STYLE="width: 61pt; text-align: right">(ix)&nbsp;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Increase in fair market value of Sovereign Business Forms, Inc. (&ldquo;Sovereign&rdquo;)
of $0.3 million. Sovereign has continued to reduce its debt which has caused a corresponding increase to the value of the equity
held by the Fund in Sovereign.&nbsp;&nbsp;</TD></TR>                                                    <TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="text-align: right"></TD><TD></TD><TD STYLE="text-align: justify">&nbsp;</TD></TR>
</TABLE>



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<TD STYLE="width: 61pt; text-align: right">(x)&nbsp;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Increase in fair market value of Trulite, Inc. (&ldquo;Trulite&rdquo;) of $0.1 million.
The Fund holds approximately nine million warrants in Trulite, many with a nominal exercise price. Based on Trulite&rsquo;s recent
equity raise and repayment of the Fund&rsquo;s debt, the Fund determined the warrants have increased in value.&nbsp;&nbsp;</TD></TR></TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>Dividends </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">On March&nbsp;24, 2009, we announced that we
suspended our managed distribution policy and payment of quarterly distributions for an indefinite period, following the distribution
of the first quarter dividend, paid on March&nbsp;30, 2009. We will continue to pay out net investment income and/or realized capital
gains, if any, on an annual basis as required under the Investment Company Act of 1940.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>Portfolio Investments </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">During the six months ended June&nbsp;30, 2011,
we received $0.2 million from Sovereign Business Forms, Inc. in the form of principal payments. We sold our promissory notes in
1848 Capital Partners, LLC (&ldquo;1848&rdquo;), Big Apple Entertainment Partners, LLC (&ldquo;Big Apple&rdquo;), and London Bridge
Entertainment Partners, Ltd (&ldquo;London Bridge&rdquo;) and certain assets of Riptide Entertainment Partners, LLC (&ldquo;Riptide&rdquo;)
in which we hold a 64.67% membership interest.&nbsp; All of these assets were sold to Capital Markets Acquisition Partners, LLC
for a combined price of $10 million, with $9.8 million allocated to the promissory notes held by the Fund and $0.2 million to
Riptide.&nbsp; The Fund allocated the proceeds to the promissory notes resulting in a realized loss of approximately $0.9 million
at London Bridge.&nbsp; In addition, the monies provided to Riptide were sufficient to satisfy its outstanding liabilities, resulting
in a value of $0.&nbsp;We also received $0.8 million in connection with the sale and redemption of our membership interest in
RP&amp;C International Investments LLC.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">During the six months ended June 30, 2011, we
made a follow-on investment of $0.2 million in Spectrum Management, LLC. On April 27, 2011, we announced that we had entered into
two separate transactions involving the purchase of an aggregate of 11,408 4% bonds due May 2012 (&ldquo;Bonds&rdquo;) issued by
Orco Germany S.A., a commercial and multi-family residential real estate holding company and developer based in Berlin. The consideration
provided to the selling bondholders consisted of an aggregate of 1,700,000 newly issued shares of common stock of the Fund. We
received 8,890 of the Bonds on April 27, 2011. On May 9, 2011, one of these agreements was amended and restated to provide for
an additional 45 days to deliver 2,518 of the Bonds in exchange for providing to the Fund approximately $1.6 million in cash as
security for such delivery. As the remaining bonds were not delivered by the specified date, the cash collateral became free and
clear property of the Fund on June 23, 2011.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">The following table includes significant investment
activity during the six months ended June 30, 2011 (in thousands):</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 9pt Arial; margin: 0; text-indent: 24.5pt; color: Red"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="1" STYLE="text-align: center; padding-bottom: 1pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></TD>
    <TD COLSPAN="15" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>Investment
    Activity</B></FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></TD>
    <TD COLSPAN="3" STYLE="text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="1" STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></TD>
    <TD COLSPAN="7" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>New
    Investments</B></FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></TD>
    <TD COLSPAN="7" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>Existing
    Investments</B></FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="1" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>Portfolio
    Company</B></FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>Cash</B></FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>Non-Cash</B></FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>Follow-On</B></FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>PIK</B></FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>Total</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 35%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Orco Germany SA</FONT></TD><TD STYLE="width: 2%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="width: 9%; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">67</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 2%; font-family: Helv"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; font-family: Helv; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="width: 9%; font-family: Helv; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">3,016</FONT></TD><TD STYLE="width: 1%; font-family: Helv; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 2%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="width: 9%; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&mdash;&nbsp;&nbsp;</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 2%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="width: 9%; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&mdash;&nbsp;&nbsp;</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 2%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="width: 9%; text-align: right">3,083</TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Spectrum Management, LLC</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&mdash;&nbsp;&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&mdash;&nbsp;&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font-family: Helv; padding-bottom: 1pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-family: Helv; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"></FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font-family: Helv; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">187</FONT></TD><TD STYLE="padding-bottom: 1pt; font-family: Helv; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&mdash;&nbsp;&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">187</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">67</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">3,016</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">187</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&mdash;&nbsp;&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">3,270</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
</TABLE>


<P STYLE="font: 9pt Arial; margin: 0; text-indent: 24.5pt; color: Red"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 4.5pt 0 0; text-indent: 0.5in">During the six months ended June&nbsp;30,
2010, we also had investment activity of $0.5 million in several follow-on investments, including $0.3 million in the form of accrued
interest and dividends received in the form of paid-in-kind (PIK). The following table includes significant investment activity
during the six months ended June&nbsp;30, 2010 (in thousands):</P>

<P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="1" STYLE="font-size: 4pt; text-align: center; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><B>&nbsp;</B></TD>
    <TD COLSPAN="15" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> <FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>Investment
Activity</B></FONT></TD><TD STYLE="font-size: 4pt; padding-bottom: 1pt"><B>&nbsp;</B></TD>
    <TD COLSPAN="3" STYLE="font-size: 4pt; text-align: center"><B>&nbsp;</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="1" STYLE="font-size: 4pt; text-align: center; padding-bottom: 1pt"><B>&nbsp;</B></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><B>&nbsp;</B></TD>
    <TD COLSPAN="7" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><B>New&nbsp;Investments <BR></B></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><B>&nbsp;</B></TD>
    <TD COLSPAN="7" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><B>Existing&nbsp;Investments
    <BR></B></TD><TD STYLE="font-size: 4pt; padding-bottom: 1pt"><B>&nbsp;</B></TD>
    <TD COLSPAN="3" STYLE="font-size: 4pt; text-align: center"><B>&nbsp;</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="1" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><B>Portfolio Company <BR></B></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><B>&nbsp;</B></TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><B>Cash <BR></B></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><B>&nbsp;</B></TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><B>PIK <BR></B></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><B>&nbsp;</B></TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt; border-bottom: Black 1pt solid"><B>Follow-On
    <BR></B></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><B>&nbsp;</B></TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><B>PIK <BR></B></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><B>&nbsp;</B></TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><B>Total</B> <BR></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 35%; text-indent: -12pt; padding-left: 12pt">Trulite, Inc.</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">200</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">200</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -12pt; padding-left: 12pt">1848 Capital Partners LLC</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">144</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">144</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -12pt; padding-left: 12pt">London Bridge Entertainment Partners Ltd.</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">109</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">109</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt; text-indent: -12pt; padding-left: 12pt">Big Apple Entertainment Partners LLC</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">80</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">80</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 4pt; padding-bottom: 1pt; padding-left: 0.1in">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">200</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">333</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">533</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 1pt; padding-bottom: 1pt; padding-left: 0.1in">&nbsp;</TD><TD STYLE="font-size: 0.75pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 0.75pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 0.75pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-size: 0.75pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 0.75pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 0.75pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 0.75pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-size: 0.75pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 0.75pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 0.75pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 0.75pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-size: 0.75pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 0.75pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 0.75pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 0.75pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-size: 0.75pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 0.75pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 0.75pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 0.75pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-size: 0.75pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>Subsequent Events</B><U> </U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Management performed an evaluation of the Fund&rsquo;s
activity through the date the financial statements were issued, noting the following subsequent events:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">On July&nbsp;1, 2011, we sold U.S. Treasury
bills for $15.0 million and repaid the margin loan.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">On July 9, 2011 Spectrum Management, LLC
entered into a three month exclusivity agreement with a potential</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0">buyer of its asset tracking business which expires
on October 11, 2011. The potential buyer has also written the company an indication of interest letter with a purchase price of
$10.0 million and, should a transaction commence, has proposed to finance the transaction with $7.5 million in cash and $2.5 million
in a contingent payment agreement. The closing of the transaction is subject to the completion of financial and operational due
diligence, successful negotiation and completion of documentation, approval of third party financing, and approval of the board
of directors and shareholders of Spectrum. The timing and final terms of this transaction are uncertain and have not been included
in our valuation analysis. </P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">On August 4, 2011, we invested $0.1
million in Spectrum Management, LLC as a follow-on investment in the form of a 16% promissory note facility.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B><U><A NAME="a_011"></A>Item&nbsp; 3.</U> <U>Quantitative and Qualitative Disclosure
about Market Risk </U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">We are subject to financial market risks, including
changes in interest rates with respect to investments in debt </P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">securities and outstanding debt payable, as well as changes in marketable
equity security prices. In the future, the Fund may invest in companies outside the United States, including in Europe and Asia,
which would give rise to exposure to foreign currency value fluctuations. We do not use derivative financial instruments to mitigate
any of these risks. The return on investments is generally not affected by foreign currency fluctuations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Our investments in portfolio securities consist
of some fixed-rate debt securities. Since the debt securities are generally priced at a fixed rate, changes in interest rates do
not directly affect interest income. In addition, changes in market interest rates are not typically a significant factor in the
determination of fair value of these debt securities, since the securities are generally held to maturity. We determine their fair
values based on the terms of the relevant debt security and the financial condition of the issuer.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">A major portion of our investment portfolio
consists of debt and equity investments in private companies. Modest changes in public market equity prices generally do not significantly
impact the estimated fair value of these investments.</P>

<P STYLE="font: 11pt Calibri, Halvetica, Sans-Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">However, significant changes in market equity
prices can have a longer-term effect on valuations of private companies, which could affect the carrying value and the amount and
timing of gains or losses realized on these investments. A small portion of the investment portfolio also consists of common stocks
in publicly traded companies. These investments are directly exposed to equity price risk, in that a hypothetical ten percent change
in these equity prices would result in a similar percentage change in the fair value of these securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">We are classified as a
&ldquo;non-diversified&rdquo; investment company under the Investment Company Act, which means we are not limited in the
proportion of our assets that may be invested in the securities of a single user. The value of one segment called Business
Products and Services include three portfolio companies and was 20.4% of the net asset value and 40.1% of our investments in
portfolio company securities (at fair value) as of June 30, 2011. Changes in business or industry trends or in the
financial condition, results of operations, or the market&rsquo;s assessment of any single portfolio company will affect the
net asset value and the market price of our common stock to a greater extent than would be the case if we were a
&ldquo;diversified&rdquo; company holding numerous investments.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B><U><A NAME="a_012"></A>Item&nbsp; 4.</U> <U>Controls and Procedures </U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">The Fund maintains disclosure controls and other
procedures that are designed to ensure that information required to be disclosed by the Fund in the reports that it files or submits
under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC&rsquo;s rules
and forms, and that such information is accumulated and communicated to the Fund&rsquo;s management, including its Chief Executive
Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">The Fund&rsquo;s management, with the participation
of the Fund&rsquo;s Chief Executive Officer and Chief Financial Officer, have evaluated the effectiveness of the design and operations
of the Fund&rsquo;s &ldquo;disclosure controls and procedures&rdquo; (as defined in Rule 13a-15(e) under the Securities Exchange
Act of 1934) as of June 30, 2011. Based on their evaluation, the Fund&rsquo;s Chief Executive Officer and Chief Financial Officer
concluded that the Fund&rsquo;s disclosure controls and procedures were effective at a reasonable assurance level. There has been
no change in the Fund&rsquo;s internal control over financial reporting during the quarter ended June 30, 2011, that has materially
affected, or is reasonably likely to materially affect, the Fund&rsquo;s internal control over financial reporting.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B><A NAME="a_013"></A>Part II. Other Information</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 55.05pt; text-indent: -55.05pt"><B><U><A NAME="a_014"></A>Item&nbsp; 1. </U> <U>Legal
Proceedings</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 55.05pt; text-indent: -55.05pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 55.05pt; text-indent: -55.05pt"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">On June&nbsp;30, 2009, the Fund received a
&ldquo;Wells&rdquo; notice from the staff of the Securities and Exchange Commission (&ldquo;SEC&rdquo;). Based on discussions
with the SEC staff, the Fund believes that the issues the staff intends to pursue relate to a one-time administrative fee that
the Fund paid in 2005 and the compensation of a certain Fund officer during approximately the same time period. The Wells notice
notified the Fund that the staff intends to recommend that the SEC bring a civil action against the Fund for possible violations
of the securities laws. The Fund has been cooperating with the SEC in this inquiry. In accordance with SEC procedures, the Fund
has presented its perspective on these issues to the staff. The SEC has not made a formal decision regarding an enforcement proceeding
in respect of the Fund.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">On March 10, 2010, American General Life Insurance
Company (&ldquo;American General&rdquo;) filed a complaint against the Fund in the District Court of Harris County, Texas, in
connection with an office lease entered into by our former administrator with American General. The complaint by American General
seeks to hold the Fund liable for unpaid rent, improvements, and attorneys fees totaling approximately $450,000. We agreed to
a settlement with American General in exchange for a one-time payment of $120,000, which was paid in June 7, 2011.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">On April&nbsp;26, 2010, the SEC also subpoenaed
records of the Fund in connection with certain trades in the Fund&rsquo;s shares by SPQR Capital LLP, SAE Capital Ltd., Versatile
Systems Inc., Mobiquity Investments Limited, and anyone associated with those entities. The Fund has fully cooperated with the
SEC&rsquo;s request.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">On June 9, 2011, RNR Production, Land and
Cattle Company, Inc. filed a lawsuit against the Fund and each of the members of the Board in the District Court of Harris
County, Texas, seeking, among other remedies, unspecified direct and distinct actual, consequential, and special damages for
breach of fiduciary duty, failure to disclose certain information to its shareholders, and oppressing minority shareholders.
The Fund is contesting these claims and is also seeking a potential settlement in respect of the same. While discussions are
ongoing, the Fund has accrued an amount in respect of a potential settlement that is probable and estimable.</P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 55.05pt; text-indent: -55.05pt"><B><U><A NAME="a_015"></A>Item 1A.</U> <U>Risk Factors
</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 55.05pt; text-indent: -55.05pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">There have been no material changes in the Fund&rsquo;s
risk factors from the disclosure set forth in the Annual Report on Form 10-K for the year ended December&nbsp;31, 2010.</P>

<P STYLE="font: 11pt Calibri, Halvetica, Sans-Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Readers should carefully consider these risks
and all other information contained in the annual report on Form 10-K, including the Fund&rsquo;s consolidated financial statements
and the related notes thereto. The risks and uncertainties described below are not the only ones facing the Fund. Additional risks
and uncertainties not presently known to the Fund, or not presently deemed material by the Fund, may also impair its operations
and performance.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Readers should carefully consider these risks
and all other information contained in the annual report on Form 10-K, including the Fund&rsquo;s consolidated financial statements
and the related notes thereto. The risks and uncertainties described below are not the only ones facing the Fund. Additional risks
and uncertainties not presently known to the Fund, or not presently deemed material by the Fund, may also impair its operations
and performance.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B><U><A NAME="a_016"></A>Item&nbsp; 6.</U> <U>Exhibits </U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 24.45pt; text-indent: -24.5pt">3. Articles of Incorporation and
by-laws</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 4%; padding-top: 4.5pt; line-height: 115%">(a)</TD>
    <TD STYLE="width: 2%; padding-top: 4.5pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="width: 94%; padding-top: 4.5pt; line-height: 115%">Restated Certificate of Incorporation of the Fund, as amended. [Incorporated by reference to Exhibit 3(a) to Registrant&rsquo;s Annual Report on Form 10-K for the year ended December&nbsp;31, 2007]</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-top: 4.5pt; line-height: 115%">(b)</TD>
    <TD STYLE="padding-top: 4.5pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-top: 4.5pt; line-height: 115%">Certificate of Merger dated June&nbsp;30, 1993, between the Fund and Equus Investments Incorporated [Incorporated by reference to Exhibit 3(c) to Registrant&rsquo;s Annual Report on Form 10-K for the year ended December&nbsp;31, 2007]</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-top: 4.5pt; line-height: 115%">(c)</TD>
    <TD STYLE="padding-top: 4.5pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-top: 4.5pt; line-height: 115%">Amended and Restated Bylaws of the Fund. [Incorporated by reference to Exhibit 3(b) to Registrant&rsquo;s Current Report on Form 8-K filed on December 16, 2010.]</TD></TR>
</TABLE>
<P STYLE="font: 11pt Calibri, Halvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 24.45pt; text-indent: -24.5pt">10. Material Contracts.</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 4%; padding-top: 4.5pt; line-height: 115%">(a)</TD>
    <TD STYLE="width: 2%; padding-top: 4.5pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="width: 94%; padding-top: 4.5pt; line-height: 115%">Safekeeping Agreement between the Fund and Amegy Bank dated August&nbsp;16, 2008.&nbsp;[Incorporated by reference to Exhibit&nbsp;10(c) to Registrant&rsquo;s Annual Report on Form 10-K for the year ended December&nbsp;31, 2008.]</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-top: 4.5pt; line-height: 115%">(b)</TD>
    <TD STYLE="padding-top: 4.5pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-top: 4.5pt; line-height: 115%">Form of Indemnification Agreement between the Fund and its directors and certain officers. [Incorporated by reference to Exhibit 10(g) to Registrant&rsquo;s Annual Report on Form 10-K for the year ended December&nbsp;31, 2004.]</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-top: 4.5pt; line-height: 115%">(c)</TD>
    <TD STYLE="padding-top: 4.5pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-top: 4.5pt; line-height: 115%">Form of Release Agreement between the Fund and certain of its officers and former officers. [Incorporated by reference to Exhibit 10(h) to Registrant&rsquo;s Annual Report on Form 10-K for the year ended December&nbsp;31, 2004.]</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-top: 4.5pt; line-height: 115%">(d)</TD>
    <TD STYLE="padding-top: 4.5pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-top: 4.5pt; line-height: 115%">Code of Ethics of the Fund (Rule 17j-1) [Incorporated by reference to
    Exhibit 10(f) to Registrant&rsquo;s Annual Report on Form 10-K for the year ended December 31, 2009.]
    </TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-top: 4.5pt; line-height: 115%">(e)</TD>
    <TD STYLE="padding-top: 4.5pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-top: 4.5pt; line-height: 115%; text-decoration: none">Purchase and Sale Agreement between the Fund and Kekovia Enterprises Company Limited, dated April 21, 2011. [Incorporated by reference to Exhibit 10(e) to Registrant&rsquo;s Form 10-Q for the quarter ended March 31, 2011.]</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-top: 4.5pt; line-height: 115%">(f)</TD>
    <TD STYLE="padding-top: 4.5pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-top: 4.5pt; line-height: 115%; text-decoration: none">Purchase and Sale Agreement between the Fund and Khan Investments Ltd., dated April 20, 2011. [Incorporated by reference to Exhibit 10(f) to Registrant&rsquo;s Form 10-Q for the quarter ended March 31, 2011.]</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-top: 4.5pt; line-height: 115%">(g)</TD>
    <TD STYLE="padding-top: 4.5pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-top: 4.5pt; line-height: 115%; text-decoration: none">Amended and Restated Purchase and Sale Agreement between the Fund and Khan Investments Ltd., dated May 9, 2011. [Incorporated by reference to Exhibit 10(g) to Registrant&rsquo;s Form 10-Q for the quarter ended March 31, 2011.]</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 13.5pt 0 0 24.45pt; text-indent: -24.5pt">31. Rule 13a-14(a)/15d-14(a)
Certifications</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 4%; padding-top: 13.5pt; line-height: 115%">1.</TD>
    <TD STYLE="width: 2%; padding-top: 13.5pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="width: 94%; padding-top: 13.5pt; line-height: 115%; text-decoration: none">Certification by Chief Executive Officer</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-top: 13.5pt; line-height: 115%">2.</TD>
    <TD STYLE="padding-top: 13.5pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-top: 13.5pt; line-height: 115%; text-decoration: none">Certification by Chief Financial Officer</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 13.5pt 0 0 24.45pt; text-indent: -24.5pt">32. Section&nbsp;1350 Certifications&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 4%; padding-top: 13.5pt; line-height: 115%">1.</TD>
    <TD STYLE="width: 2%; padding-top: 13.5pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="width: 94%; padding-top: 13.5pt; line-height: 115%">Certification by Chief Executive Officer</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-top: 13.5pt; line-height: 115%">2.</TD>
    <TD STYLE="padding-top: 13.5pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-top: 13.5pt; line-height: 115%; text-decoration: none">Certification by Chief Financial Officer</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 24.45pt; text-indent: -24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 24.45pt; text-indent: -24.5pt"></P>

<P STYLE="font: 11pt Calibri, Halvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0 0 10pt">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><A NAME="a_017"></A>SIGNATURE</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 9pt 0 0; text-indent: 0.5in">Pursuant to the requirements of Section&nbsp;13
or 15(d) of the Securities Exchange Act of 1934, the Registrant has caused this report to be signed by the undersigned, thereunto
duly authorized.</P>

<P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: top; padding-left: 0.1in; line-height: 115%; font-size: 4pt">&nbsp;</TD>
    <TD STYLE="width: 21%; vertical-align: bottom; padding-left: 0.1in; line-height: 115%; font-size: 4pt">&nbsp;</TD>
    <TD STYLE="width: 43%; vertical-align: bottom; line-height: 115%">&nbsp; &nbsp;EQUUS TOTAL RETURN, INC.</TD></TR>
<TR>
    <TD STYLE="line-height: 115%; font-size: 12pt">&nbsp;</TD>
    <TD STYLE="line-height: 115%; font-size: 12pt">&nbsp;</TD>
    <TD STYLE="line-height: 115%; font-size: 12pt">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; line-height: 115%">Date: August 15, 2011</TD>
    <TD STYLE="vertical-align: bottom; padding-left: 0.1in; line-height: 115%; font-size: 4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><U>_____________/s/ John A. Hardy_____________</U></P>
        <P STYLE="font: 4pt Times New Roman, Times, Serif; margin: 1pt 0 0; text-align: center">&nbsp;</P></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-left: 0.1in; line-height: 115%; font-size: 4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-left: 0.1in; line-height: 115%; font-size: 4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; line-height: 115%; font-weight: bold; text-align: center">John A. Hardy</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-left: 0.1in; line-height: 115%; font-size: 4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-left: 0.1in; line-height: 115%; font-size: 4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; line-height: 115%; font-weight: bold; text-align: center">Chief Executive Officer</TD></TR>
</TABLE>
<P STYLE="font: 7.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 12pt 0 6pt">&nbsp;</P>

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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 10pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"></P>

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<DOCUMENT>
<TYPE>EX-31.1
<SEQUENCE>2
<FILENAME>ex31_1sarbanes302hardy.htm
<DESCRIPTION>SARBANES OXLEY 302 JOHN HARDY
<TEXT>
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<P STYLE="margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"><A HREF="f10qequus.htm#TableOfContents"><B>EXHIBIT 31.1</B></A></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center"><B>Form of Quarterly Certification Required
</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><A NAME="a_018"></A><B>by Rules 13a-14 and 15d-14 under the Securities
Exchange Act of 1934 </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 9pt 0 0">I, John A. Hardy, certify that:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 9pt 0 0"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 39pt; text-align: right">1.&nbsp;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">I have reviewed this Quarterly Report on Form 10-Q of Equus Total Return, Inc.;&nbsp;&nbsp;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 39pt; text-align: right">2.&nbsp;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Based on my knowledge, this quarterly report does not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under
which such statements were made, not misleading with respect to the period covered by this quarterly report;&nbsp;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 39pt; text-align: right">3.&nbsp;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Based on my knowledge, the financial statements, and other financial information included
in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows
of the registrant as of, and for, the periods presented in this quarterly report;&nbsp;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 39pt; text-align: right">4.&nbsp;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">The registrant&rsquo;s other certifying officer and I are responsible for establishing
and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant
and we have:&nbsp;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 61pt; text-align: right">a.&nbsp;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Designed such disclosure controls and procedures or caused such disclosure controls
and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including
its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this
quarterly report is being prepared;&nbsp;&nbsp;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 61pt; text-align: right">b.&nbsp;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Designed such internal control over financial reporting, or caused such internal control
over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of consolidated financial statements for external purposes in accordance with generally accepted
accounting principles;&nbsp;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 61pt; text-align: right">c.&nbsp;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Evaluated the effectiveness of the registrant&rsquo;s disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of
the period covered by this report based on such evaluation;&nbsp;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 61pt; text-align: right">d.&nbsp;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Disclosed in this report any change in the registrant&rsquo;s internal control over
financial reporting that occurred during the registrant&rsquo;s most recent fiscal quarter (the registrant&rsquo;s first fiscal
quarter in the case of a quarterly report) that has materially affected, or is reasonably likely to materially affect, the registrant&rsquo;s
internal control over financial reporting, and;&nbsp;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 39pt; text-align: right">5.&nbsp;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">The registrant&rsquo;s other certifying officers and I have disclosed, based on our
most recent evaluation of the internal control over financial reporting, to the registrant&rsquo;s auditors and the audit committee
of registrant&rsquo;s board of directors (or persons performing the equivalent function):&nbsp;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 61pt; text-align: right">a.&nbsp;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">All significant deficiencies and material weaknesses in the design or operation of
internal controls over financial reporting, which are reasonably likely to adversely affect the registrant&rsquo;s ability to
record, process, summarize and report financial information; and&nbsp;&nbsp;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 61pt; text-align: right">b.&nbsp;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Any fraud, whether or not material, that involves management or other employees who
have a significant role in the registrant&rsquo;s internal controls.&nbsp;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 9pt 0 0">Date: August 15, 2011</P>

<P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE ALIGN="RIGHT" CELLSPACING="0" CELLPADDING="0" STYLE="width: 30%; border-collapse: collapse">
<TR>
    <TD STYLE="width: 100%; font: 0.5pt/115% Calibri, Halvetica, Sans-Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">/s/ John A. Hardy</P>
        <P STYLE="font: 4pt Times New Roman, Times, Serif; margin: 1pt 0 0; text-align: center; border-top: Black 1pt solid">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font: bold 10pt/115% Times New Roman, Times, Serif; text-align: center">John A. Hardy</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font: bold 10pt/115% Times New Roman, Times, Serif; text-align: center">Chief Executive Officer</TD></TR>
</TABLE>

<P STYLE="margin: 0"></P>

</BODY>
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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.2
<SEQUENCE>3
<FILENAME>ex31_2sarbanes302hudson.htm
<DESCRIPTION>SARBANES OXLEY 302 L'SHERYL HUDSON
<TEXT>
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<HEAD>
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</HEAD>
<BODY STYLE="font: 11pt Times New Roman, Times, Serif">

<P STYLE="margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: right"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: right"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: right">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: right"><B><A HREF="f10qequus.htm#TableOfContents">EXHIBIT 31.2</A></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: right"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center"><B>Form of Quarterly Certification Required
</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B><A NAME="a_021"></A>by Rules 13a-14 and 15d-14 under the Securities
Exchange Act of 1934 </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 9pt 0 0">I, L&rsquo;Sheryl D. Hudson, certify that:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 9pt 0 0"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 39pt; text-align: right">1.&nbsp;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">I have reviewed this Quarterly Report on Form 10-Q of Equus Total Return, Inc.;&nbsp;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 39pt; text-align: right">2.&nbsp;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Based on my knowledge, this quarterly report does not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under
which such statements were made, not misleading with respect to the period covered by this quarterly report;&nbsp;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 39pt; text-align: right">3.&nbsp;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Based on my knowledge, the financial statements, and other financial information included
in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows
of the registrant as of, and for, the periods presented in this quarterly report;&nbsp;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 39pt; text-align: right">4.&nbsp;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">The registrant&rsquo;s other certifying officer and I are responsible for establishing
and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant
and we have:&nbsp;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 61pt; text-align: right">a.&nbsp;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Designed such disclosure controls and procedures or caused such disclosure controls
and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including
its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this
quarterly report is being prepared;&nbsp;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 61pt; text-align: right">b.&nbsp;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Designed such internal control over financial reporting, or caused such internal control
over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of consolidated financial statements for external purposes in accordance with generally accepted
accounting principles;&nbsp;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 61pt; text-align: right">c.&nbsp;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Evaluated the effectiveness of the registrant&rsquo;s disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of
the period covered by this report based on such evaluation;&nbsp;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 61pt; text-align: right">d.&nbsp;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Disclosed in this report any change in the registrant&rsquo;s internal control over
financial reporting that occurred during the registrant&rsquo;s most recent fiscal quarter (the registrant&rsquo;s first fiscal
quarter in the case of a quarterly report) that has materially affected, or is reasonably likely to materially affect, the registrant&rsquo;s
internal control over financial reporting, and;&nbsp;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 39pt; text-align: right">5.&nbsp;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">The registrant&rsquo;s other certifying officers and I have disclosed, based on our
most recent evaluation of the internal control over financial reporting, to the registrant&rsquo;s auditors and the audit committee
of registrant&rsquo;s board of directors (or persons performing the equivalent function):&nbsp;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 61pt; text-align: right">a.&nbsp;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">All significant deficiencies and material weaknesses in the design or operation of
internal controls over financial reporting, which are reasonably likely to adversely affect the registrant&rsquo;s ability to
record, process, summarize and report financial information; and&nbsp;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 61pt; text-align: right">b.&nbsp;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Any fraud, whether or not material, that involves management or other employees who
have a significant role in the registrant&rsquo;s internal controls.&nbsp;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 9pt 0 0">Date: August 15, 2011</P>

<P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE ALIGN="RIGHT" CELLSPACING="0" CELLPADDING="0" STYLE="width: 30%; border-collapse: collapse">
<TR>
    <TD STYLE="width: 100%; font: 0.5pt/115% Calibri, Halvetica, Sans-Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">/s/ L&rsquo;Sheryl D. Hudson</P>
        <P STYLE="font: 4pt Times New Roman, Times, Serif; margin: 1pt 0 0; text-align: center; border-top: Black 1pt solid">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font: bold 10pt/115% Times New Roman, Times, Serif; text-align: center">L&rsquo;Sheryl D. Hudson</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font: bold 10pt/115% Times New Roman, Times, Serif; text-align: center">Chief Financial Officer</TD></TR>
</TABLE>

<P STYLE="margin: 0"></P>

</BODY>
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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.1
<SEQUENCE>4
<FILENAME>ex32_1sarbanes906hardy.htm
<DESCRIPTION>SARBANES OXLEY 906 JOHN HARDY
<TEXT>
<HTML>
<HEAD>
     <TITLE></TITLE>
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<BODY STYLE="font: 11pt Times New Roman, Times, Serif">

<P STYLE="margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: right"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: right">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: right">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: right">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: right"><A HREF="f10qequus.htm#TableOfContents"><B>EXHIBIT 32.1</B></A></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: right"><B></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center">CERTIFICATION PURSUANT TO</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><A NAME="a_020"></A>SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">(18 U.S.C. SECTION 1350)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 9pt 0 0; text-indent: 24.5pt">In connection with the accompanying Quarterly
Report of Equus Total Return, Inc. (the &ldquo;Fund&rdquo;) on Form 10-Q for the quarter ended June 30, 2011 (the &ldquo;Report&rdquo;),
I, John A. Hardy, Executive Chairman of the Company, hereby certify, pursuant to 18 U.S.C. Section&nbsp;1350, as adopted pursuant
to Section&nbsp;906 of the Sarbanes-Oxley Act of 2002, that:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 9pt 0 0; text-indent: 24.5pt"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 39pt; text-align: right">(1)&nbsp;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">To my knowledge, the Report fully complies with the requirements of Section&nbsp;13(a)
or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and&nbsp;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 39pt; text-align: right">(2)&nbsp;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">The information contained in the Report fairly presents, in all material respects,
the financial condition and results of operations of the Fund.&nbsp;</TD></TR></TABLE>

<P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="width: 50%; font: 0.5pt/115% Calibri, Halvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="width: 50%; font: 0.5pt/115% Calibri, Halvetica, Sans-Serif">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; font: 10pt/115% Times New Roman, Times, Serif">Dated: August&nbsp;15,&nbsp; 2011</TD>
    <TD STYLE="vertical-align: bottom">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">/s/ John A. Hardy</P>
        <P STYLE="font: 4pt Times New Roman, Times, Serif; margin: 1pt 0 0; text-align: center; border-top: Black 1pt solid">&nbsp;</P></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; font: 4pt/2pt Times New Roman, Times, Serif; padding-left: 0.1in">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>John A. Hardy</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0.75pt; text-align: center"><B>Chief Executive Officer</B></P></TD></TR>
</TABLE>

<P STYLE="margin: 0"></P>

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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.2
<SEQUENCE>5
<FILENAME>ex32_2sarbanes906hudson.htm
<DESCRIPTION>SARBANES OXLEY 906 L'SHERYL HUDSON
<TEXT>
<HTML>
<HEAD>
     <TITLE></TITLE>
</HEAD>
<BODY STYLE="font: 11pt Times New Roman, Times, Serif">

<P STYLE="margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"><A HREF="f10qequus.htm#TableOfContents"><B>EXHIBIT 32.2</B></A></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: center">CERTIFICATION PURSUANT TO</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><A NAME="a_019"></A>SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">(18 U.S.C. SECTION 1350)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 9pt 0 0; text-indent: 24.5pt">In connection with the accompanying Quarterly
Report of Equus Total Return, Inc. (the &ldquo;Fund&rdquo;) on Form 10-Q for the quarter ended June 30, 2011 (the &ldquo;Report&rdquo;),
I, L&rsquo;Sheryl D. Hudson, Chief Financial Officer of the Company, hereby certify, pursuant to 18 U.S.C Section&nbsp;1350, as
adopted pursuant to Section&nbsp;906 of the Sarbanes-Oxley Act of 2002, that:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 9pt 0 0; text-indent: 24.5pt"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 39pt; text-align: right">(1)&nbsp;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">To my knowledge, the Report fully complies with the requirements of Section&nbsp;13(a)
or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and&nbsp;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 39pt; text-align: right">(2)&nbsp;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">The information contained in the Report fairly presents, in all material respects,
the financial condition and results of operations of the Fund.&nbsp;</TD></TR></TABLE>

<P STYLE="font: 9pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="width: 50%; font: 0.5pt/115% Calibri, Halvetica, Sans-Serif">&nbsp;</TD>
    <TD STYLE="width: 50%; font: 0.5pt/115% Calibri, Halvetica, Sans-Serif">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; font: 10pt/115% Times New Roman, Times, Serif">Dated: August&nbsp;15, 2011</TD>
    <TD STYLE="vertical-align: bottom">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">/s/ L&rsquo;Sheryl D. Hudson</P>
        <P STYLE="font: 4pt Times New Roman, Times, Serif; margin: 1pt 0 0; text-align: center; border-top: Black 1pt solid">&nbsp;</P></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; font: 4pt/2pt Times New Roman, Times, Serif; padding-left: 0.1in">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>L&rsquo;Sheryl D. Hudson</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0.75pt; text-align: center"><B>Chief Financial Officer</B></P></TD></TR>
</TABLE>

<P STYLE="margin: 0"></P>

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</SEC-DOCUMENT>
