Company: EQS
Filing Date: 2025-04-10
Form Type: 10-K
Source: 0001712543-25-000016
Chunk: 9

Company: EQUUS TOTAL RETURN, INC.
Filing Date: 2025-04-10
Form: 10-K
Item: Item 1
Chunk 9
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i) acquiring
or merging with an operating company based in the energy, natural resources, technology, or financial services sectors, and (ii) terminating
the Fund’s election to be classified as a BDC under the 1940 Act. Notwithstanding any future authorization to withdraw our BDC election,
we will also require a separate affirmative vote of the holders of a majority of our outstanding voting securities to consummate a transformation
of Equus and change the nature of our business (see “Significant Developments− Authorization to Withdraw BDC Election”above).

Temporary Investments. Pending investment in portfolio companies, we invest our available funds in interest- bearing bank accounts, money market mutual funds,
U. S. Treasury securities and/or certificates of deposit with maturities of less than one year (collectively, “ Temporary Investments”).
Temporary Investments may also include commercial paper (rated or unrated) and other short-term securities. Temporary Investments constituting
cash, cash items, securities issued or guaranteed by the U. S. Treasury or U. S. Government agencies and high quality debt securities (commercial
paper rated in the two highest rating categories by Moody’s Investor Services, Inc. or Standard & Poor’s Corporation,
or if not rated, issued by a company having an outstanding debt issue so rated, with maturities of less than one year at the time of investment)
will qualify for determining whether we have 70% of our total assets invested in qualifying assets or in qualified Temporary Investments
for purposes of the BDC provisions of the 1940Act.

Leverage. We are permitted by the 1940 Act, under specified conditions, to issue multiple classes of senior debt and a single class of preferred
stock senior to the common stock if our asset coverage, as defined in the 1940 Act, is at least 150% after the issuance of the debt or
the senior stockholders’ interests. In addition, provisions must be made to prohibit any distribution to common stockholders or
the repurchase of any shares unless the asset coverage ratio is at least 150% at the time of the distribution or repurchase.

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  TableOfContents  

Fund Share
Sales Below Net Asset Value. To the extent we remain a BDC, we generally may sell our common stock at a price that is below the prevailing
net asset value per share only upon the approval of the policy by stockholders holding a majority of our issued shares, including a majority
of shares held by nonaffiliated stockholders