Company: EQS
Filing Date: 2025-05-12
Form Type: DEF 14A
Source: 0001712543-25-000028
Chunk: 36

Company: EQUUS TOTAL RETURN, INC.
Filing Date: 2025-05-12
Form: DEF 14A
Chunk 36
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-CURRENT NET ASSET VALUE PER SHARE IN CONNECTION WITH

THE CONVERSION OF AN EXISTING INVESTMENT NOTE AND ASSOCIATED EXERCISE OF WARRANTS

AND ALSO IN CONNECTION WITH ONE OR MORE FUTURE OFFERINGS

IN EACH CASE SUBJECT TO THE APPROVAL OF THE BOARD OF DIRECTORS</div>

Background of the Proposal

On February 10, 2025, the Company issued a 1-year
senior convertible promissory note bearing interest at the rate of 10.0% per annum in exchange for $2.0 million in cash (“Investment Note”). The Investment Note is convertible into shares of the Company’s common stock at a conversion price of $1.50
per share. Contemporaneously with the issuance of the Investment Note, the Company also issued two common stock purchase warrants to acquire
an aggregate of 2,000,000 shares of the Company’s common stock at an exercise price of $1.50 per share (collectively, the “Warrants”).

The Company is a closed-end investment company that
has elected to be regulated as a business development company (“BDC”) under the 1940 Act. As a BDC, the Company
is generally prohibited from issuing its common stock at a price below the then-current net asset value per share (“NAV”)
unless it meets certain conditions, including obtaining stockholder approval. Because the conversion price of the Investment Note and
the exercise price of the Warrants are each below NAV, applicable rules of the 1940 Act require that (i) holders of a majority of our
outstanding shares of common stock, as well as (ii) holders of a majority of our common stock held by non-affiliates, approve the issuance
of Equus shares upon such conversion and exercise.

Future Equity Financings

In addition to the Investment Note and Warrants, the
Company is also seeking the approval of its common stockholders so that it may, in one or more public or private offerings of its common
stock, sell or otherwise issue shares of its common stock at a price below its then-current NAV, subject to the approval of the Board
and the conditions set forth in this proposal. If approved, the authorization would be effective for securities issued during a twelve-month
period expiring on the anniversary of the date of the Annual Meeting.

The Board believes that having the flexibility to
issue common stock below NAV in certain instances is in the best interests of the Company and its stockholders. This