Company: EQS
Filing Date: 2025-04-23
Form Type: PRE 14A
Source: 0001712543-25-000025
Chunk: 52

Company: EQUUS TOTAL RETURN, INC.
Filing Date: 2025-04-23
Form: PRE 14A
Chunk 52
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SE of its failure to comply with Section 802.01C. Nevertheless, as a
cautionary matter, the Company is seeking to provide the Board the discretion to effect the Reverse Stock Split so as to avoid
possible future noncompliance with the Average Price Rule.

Amendment to Charter Required

Under Delaware law, a reverse split of a
corporation’s outstanding shares requires an amendment to its Certificate of Incorporation, for which stockholder approval is
required. The effectiveness of such an amendment or the abandonment thereof, notwithstanding stockholder approval, will be
determined by the Board, at its sole option, following the annual meeting of stockholders. The text of the proposed form of
Certificate of Amendment to our Certificate of Incorporation (the “Certificate of Amendment”) is attached
hereto as Appendix A. If approved by stockholders at the Meeting and implemented by the Board, the Reverse Stock Split will become
effective upon the filing of the Certificate of Amendment with the Secretary of State of the State of Delaware, or such later date
as is chosen by the Board and set forth in the Certificate of Amendment (the “Effective Date”). If the
Board chooses to proceed with the Reverse Stock Split, will publicly announce the Reverse Stock Split ratio chosen by the Board
prior to the Effective Date.

Reasons for a Reverse Stock Split

To Maintain Our Listing on the NYSE.
As discussed above, the primary purpose of the Reverse Stock Split is to raise the per share trading price of the Company’s common
stock in order to maintain its listing on the NYSE. Delisting from the NYSE may adversely affect the Company’s ability to raise
additional financing through the public or private sale of equity securities, may significantly affect the ability of investors to trade
in the Company’s securities, and may negatively affect the value and liquidity of the Company’s common stock. Delisting may
also have other negative impacts, including potential loss of employee confidence, the loss of institutional investors or interest in
business development and investment opportunities.

To Potentially Improve the Marketability and Liquidity of our Common Stock. The Board believes that an increased stock price may also improve the marketability and liquidity
of our common stock. For example, many brokerages, institutional investors and funds have internal policies that either prohibit them
from investing in low-priced stocks or tend to discourage individual brokers from recommending low-priced stocks to their customers by
restricting or limiting the ability to purchase such stocks on margin. Additionally, investors may be dissuaded from