Company: EQS
Filing Date: 2025-04-10
Form Type: 10-K
Source: 0001712543-25-000016
Chunk: 7

Company: EQUUS TOTAL RETURN, INC.
Filing Date: 2025-04-10
Form: 10-K
Item: Item 1
Chunk 7
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 in increased volatility and result
in a significant and rapid change in its value.

Our general
intent is to hold our loans to maturity when appraising our privately held debt investments. As such, we believe the fair value will not
exceed the cost of the investment; however, we perform a yield analysis to determine if a debt security has been impaired.

Our Management
may engage independent, third-party valuation firms to conduct independent appraisals and review Management’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. Management would then present its fair value recommendations to the Audit Committee
of the Board of Directors for review. Following review and any adjustments required thereby, the Audit Committee would, in turn, recommend
the fair values for all of the Fund’s portfolio investments to the Board of Directors for final approval.

To the
extent that market quotations are readily available for our investments and such investments are freely transferable, we value them at
the closing market price on the date of valuation. For securities which are of the same class as a class of public securities but are
restricted from free trading (such as Rule 144 stock), we establish our valuation by discounting the closing market price to reflect the
estimated impact of illiquidity caused by such restrictions. We generally hold investments in debt securities to maturity. Accordingly,
we determine the fair value of debt securities on the basis of the terms of the debt securities and the financial condition of the issuer.
We value certificates of deposit at their face value, plus interest accrued to the date of valuation.

Our Board reviews
the valuation policies on a quarterly basis to determine their appropriateness and reserves the right to hire and, from time to time,
utilizes independent valuation firms to review Management’s valuation methodology or to conduct an independent valuation.

Competition

We compete with
a large number of public and private equity and mezzanine funds and other financing sources, including traditional financial services
companies such as finance companies and commercial banks. Many of our competitors are substantially larger and have considerably greater
financial, technical and marketing resources. Our competitors may have a lower cost of funds and many have access to funding sources not
available to us. In addition, certain of our competitors may have higher risk tolerances or different risk assessments, which could allow
them to consider a wider variety of investments and establish more relationships and build their respective market shares. In addition,
many