Company: EQS
Filing Date: 2025-04-23
Form Type: PRE 14A
Source: 0001712543-25-000025
Chunk: 54

Company: EQUUS TOTAL RETURN, INC.
Filing Date: 2025-04-23
Form: PRE 14A
Chunk 54
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Certain Risks and Potential Disadvantages Associated with a Reverse Stock Split

We cannot assure stockholders that the
Reverse Stock Split, if effected, will sufficiently increase our stock price to ensure compliance with the NYSE’s Average
Price Rule. The effect of a Reverse Stock Split on our stock price cannot be predicted with any certainty, and the history of
reverse stock splits for other companies in our industry is varied, particularly since some investors may view a reverse stock split
negatively. It is possible that our stock price after a Reverse Stock Split will not increase in the same proportion as the
reduction in the number of shares outstanding, causing a reduction in the Company’s overall market capitalization. Further,
even if we implement a Reverse Stock Split, our stock price may decline due to various factors, including our future performance and
general industry, market and economic conditions. This percentage decline, as an absolute number and as a percentage of our overall
market capitalization, may be greater than would occur in the absence of a Reverse Stock Split. In addition, if the Board effected
the Reverse Stock Split to enable the Company to regain compliance with the NYSE’s Average Price Rule, we cannot assure
stockholders that we will continue to be able to maintain compliance with the NYSE’s other rules.

The proposed Reverse Stock Split may decrease
the liquidity of our common stock and result in higher transaction costs. The liquidity of our common stock may be negatively impacted
by the reduced number of shares outstanding after the Reverse Stock Split, which would be exacerbated if the stock price does not increase
following the split. In addition, a Reverse Stock Split would increase the number of stockholders owning “odd lots” of fewer
than 100 shares, trading in which generally results in higher transaction costs. Accordingly, a Reverse Stock Split may not achieve the
desired results of increasing marketability and liquidity as described above.

The implementation of a Reverse Stock Split
would result in an effective increase in the authorized number of shares of common stock available for issuance, which could, under certain
circumstances, have anti-takeover implications. The additional shares of common stock available for issuance could be used by the Company
to oppose a hostile takeover attempt or to delay or prevent changes in control or in our management. Although the Reverse Stock Split
has been prompted by business and financial considerations, and not by the threat of any hostile takeover attempt (nor is the Board currently
aware of any such attempts directed at us), stockholders should be aware that