Equus Announces Second Quarter Net Asset Value - Seite 2

 

Increase in the Value of Equus Energy.  The price of crude oil, which began the second quarter of 2020 at $20.48 per barrel, ended the quarter at $40.65, largely as a result of the partial resumption of economic activity in states and countries that had imposed significant restrictions on their populations in connection with the onset of COVID-19.  Principally due to such price increases, the value of this investment increased from $4.5 million at March 31, 2020 to $5.5 million at June 30, 2020.  The Fund received advice and assistance from a third-party valuation firm to support its determination of the fair value of this investment (see A Note About the Coronavirus and Other Events below).
 

Increase in the Value of MVC Capital Shares.  The trading price of MVC Capital, Inc.’s (“MVC”) common stock increased from $4.37 per share on March 31, 2020 to $6.53 per share as of June 30, 2020.  The Fund received $67,293 in cash and 4,449 MVC shares as stock dividends during the quarter, resulting in a total of 578,596 MVC shares held at June 30, 2020.  The fair value of this holding increased from $2.5 million at March 31, 2020 to $3.8 million as of June 30, 2020.

A Note About The Coronavirus and Other Events

The Impact of the Coronavirus Generally.  In 2019, SARS-CoV-2, a highly contagious pathogen which causes COVID-19, coronavirus disease, or simply, the ‘coronavirus’, arose in Wuhan Province, China. The coronavirus has had a substantial detrimental impact on markets and economic forecasts for governments and businesses worldwide.  During the first and second quarters of 2020, national, state, and local governments across the United States implemented significant travel, movement, and assembly restrictions, as well as restrictions on the movement of goods, all of which have had, and are expected to continue to have, a material adverse impact upon consumer and business demand.  Commencing in the second quarter of 2020, certain states began to ease such restrictions, but such efforts may not be sufficient to stimulate the resumption of economic activity at levels that existed prior to the onset of the coronavirus.  Moreover, the easing of such restrictions has resulted in an increased number of coronavirus infections, which in turn has caused states to delay or even reverse allowances for movement and assembly, each of which are expected to protract the adverse economic effects of the coronavirus.  If the coronavirus continues to spread, or if the economic disruption caused thus far by the coronavirus continues, our operations and financial condition could be materially adversely affected.