Company: EQS
Filing Date: 2025-04-10
Form Type: 10-K
Source: 0001712543-25-000016
Chunk: 0

Company: EQUUS TOTAL RETURN, INC.
Filing Date: 2025-04-10
Form: 10-K
Item: Item 1
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Item 1. Business

Equus Total
Return, Inc. (“we,” “us,” “our,” “ Equus” the “ Company” or the “ Fund”),
a Delaware corporation, was formed by Equus Investments II, L. P. (the “ Partnership”) on August 16, 1991. On July 1, 1992,
the Partnership was reorganized and all of the assets and liabilities of the Partnership were transferred to the Fund in exchange for
shares of common stock of the Fund. On August 11, 2006, our shareholders approved the change of the Fund’s investment strategy to
a total return investment objective. This strategy seeks to provide the highest total return, consisting of capital appreciation and current
income. In connection with this strategic investment change, the shareholders also approved the change of name from Equus II Incorporated
to Equus Total Return, Inc.

We attempt
to maximize the return to stockholders in the form of current investment income and long-term capital gains by investing in the debt and
equity securities of companies with a total enterprise value between $5.0 million and $75.0 million, although we may engage in transactions
with smaller or larger investee companies from time to time. We seek to invest primarily in companies pursuing growth either through acquisition
or organically, leveraged buyouts, management buyouts and recapitalizations of existing businesses or special situations. Our income-producing
investments consist principally of debt securities, including bonds, subordinated debt, debt convertible into common or preferred stock,
or debt combined with warrants and common and preferred stock. Debt and preferred equity financing may also be used to create long-term
capital appreciation through the exercise and sale of warrants received in connection with a financing. We seek to achieve capital appreciation
by making investments in equity and equity-oriented securities issued by privately-owned companies or smaller public companies in transactions
negotiated directly with such companies.

Equus is
a closed-end management investment company that has elected to be treated as a business development company (“ BDC”) under
the Investment Company Act of 1940 (“1940 Act”). In order to remain a BDC, we must meet certain specified requirements under
the 1940 Act, including investing at least 70% of our assets in eligible portfolio companies and limiting the amount of leverage we incur.
Prior to the fourth quarter of 2024, Equus was also a regulated investment company (“ RIC”) under Subchapter M of the U. S