Company: EQS
Filing Date: 2025-05-12
Form Type: DEF 14A
Source: 0001712543-25-000028
Chunk: 41

Company: EQUUS TOTAL RETURN, INC.
Filing Date: 2025-05-12
Form: DEF 14A
Chunk 41
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 to temporarily acquire each quarter. An increase in capital
available for investment into qualifying portfolio companies in diverse industries could help the Company to re-comply with such requirements
and reinstate its status as a RIC.

Status as a BDC and Maintaining a Favorable Debt-to-Equity Ratio. As a BDC, the Company is dependent on its ability to raise capital through the issuance of its common stock and securities
convertible into common stock. Further, BDCs that have adopted the lower asset coverage requirement of 150% must meet a debt-to-equity
ratio of less than 2:1 in order to incur debt or issue senior securities. Therefore, to continue to build the Company’s investment
portfolio, the Company endeavors to maintain consistent access to capital through the public and private debt markets and the public and
private equity markets, enabling it to take advantage of investment opportunities as they arise.

Exceeding the 2:1 debt-to-equity ratio could have
severe negative consequences for the Company, including loss of BDC status. Although the Company does not currently expect that it will
exceed this 2:1 debt-to-equity ratio, the markets in which it operates and the general economy may be volatile and uncertain. Even though
the underlying performance of a particular portfolio company may not indicate an impairment or its inability to repay all principal and
interest in full, volatility in the capital markets may negatively impact the valuations of investments and create unrealized losses on
certain investments. Any such write-downs in value, as well as unrealized losses based on the underlying performance of the Company’s
portfolio companies, if any, will negatively impact stockholders’ equity and the resulting debt-to-equity ratio. Issuing additional
equity would allow the Company to realign its debt-to-equity ratio and avoid these negative consequences. In addition to meeting legal
requirements applicable to BDCs, having a more favorable debt-to-equity ratio would also generally strengthen the Company’s balance
sheet and give it more flexibility to fully execute its business strategy.

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Trading History

The following table sets forth, for each fiscal quarter
during the last three fiscal years, the NAV of the Company’s common stock, the range of high and low closing sales prices of its
common stock as reported on the NYSE and the closing sales price as a discount to NAV. On , 2025, the last reported closing
sales price of the Company’s common stock on the NYSE