Company: EQS
Filing Date: 2025-04-10
Form Type: 10-K
Source: 0001712543-25-000016
Chunk: 18

Company: EQUUS TOTAL RETURN, INC.
Filing Date: 2025-04-10
Form: 10-K
Item: Item 2
Chunk 18
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 it would be in the best interest of our stockholders
for the Fund to be authorized to attempt to reduce or eliminate a market value discount from net asset value. Accordingly, from time to
time we may, but are not required to, repurchase our shares (including by means of tender offers) to attempt to reduce or eliminate any
discount or to increase the net asset value of our shares.

Affiliated
Transactions. Many of the transactions involving the Fund and its affiliates (as well as affiliates of such affiliates) require the
prior approval of a majority of the independent directors and a majority of the independent directors having no financial interest in
the transactions. However, certain transactions involving closely affiliated persons of the Fund require the prior approval of the SEC.

Regulated Investment Company TaxStatus

As a BDC,
we have historically operated to qualify as a RIC under Subchapter M of the Internal Revenue Code of 1986, as amended (the " Code"),
although RIC qualification is not a prerequisite to qualifying as a BDC. During the fourth quarter of 2024, we elected to not qualify
as a RIC, although we may seek to requalify at a later date. Because we do not presently qualify as a RIC, in the event that we generate
operating income or net investment income, we will be subject to regular corporate rates of taxation.

If we requalify
as a RIC and annually distribute to our stockholders in a timely manner at least 90% of our investment company taxable income, we will
not be subject to federal income tax on the portion of our taxable income and capital gains we distribute to our stockholders. Taxable
income generally differs from net income as defined by accounting principles generally accepted in the United States due to temporary
and permanent timing differences in the recognition of income and expenses, returns of capital and net unrealized appreciation or depreciation.

While we are not
required to qualify as a RIC to maintain our BDC status, we must continue to qualify as an investment company to obtain RIC status under
the Code, among other requirements. To obtain (or maintain, as the case may be) RIC status, we must (i) continue to qualify as an investment
company; (ii) distribute to our stockholders in a timely manner at least 90% of our investment company taxable income, as defined by the
Code; (iii) derive in each taxable year at least 90% of our gross investment company income from dividends,