Company: EQS
Filing Date: 2025-04-10
Form Type: 10-K
Source: 0001712543-25-000016
Chunk: 6

Company: EQUUS TOTAL RETURN, INC.
Filing Date: 2025-04-10
Form: 10-K
Item: Item 1
Chunk 6
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 critical to our ability to realize capital gains and minimize
capital losses. We may dispose of our portfolio securities through a variety of transactions, including recapitalizations, refinancings,
management buyouts, repayments from cash flow, acquisitions of portfolio companies by a third party and outright sales of the Fund’s
securities in a portfolio company. In addition, under certain circumstances we may distribute our portfolio securities in-kind to our
stockholders. In structuring our investments, we endeavor to reach an understanding with the management of the prospective portfolio company
as to the appropriate method and timing of the disposition of the investment. In some cases, we seek registration rights for our portfolio
securities at the time of investment which typically provide that the portfolio company will bear the cost of registration. To the extent
not paid by the portfolio company, the Fund typically bears the costs of disposing of our portfolio investments.

Current PortfolioCompanies

For a description
of our portfolio company investments as of December 31, 2024, see “Management’s Discussion and Analysis of Financial Condition
and Results of Operations - Portfolio Securities.”

   7  

  TableOfContents  

Valuation

On a quarterly
basis, Management values our portfolio investments. These valuations are subject to the approval and adoption of the Board. Valuations
of our portfolio securities at “fair value” are performed in accordance with accounting principles generally accepted in the
United States (“ GAAP”).

The fair value
of investments for which no market exists (which includes most of our investments) is determined through procedures established in good
faith by the Board. As a general principle, the current “fair value” of an investment is the amount the Fund might reasonably
expect to receive upon its sale in an orderly manner. There are a range of values that are reasonable for such investments at any particular
time.

We base our
adjustments to fair value upon such factors as the portfolio company’s earnings, cash flow and net worth, the market prices for
similar securities of comparable companies, an assessment of the company’s current and future financial prospects and various other
factors and assumptions. In the case of unsuccessful or substantially declining operations, we may base a portfolio company’s fair
value upon the company’s estimated liquidation value. Fair valuations are inherently subjective, and our estimate of fair value
may differ materially from amounts actually received upon the disposition of our portfolio securities. Also, any failure by a portfolio
company to achieve its business plan or obtain and maintain its financing arrangements could result