Company: EQS
Filing Date: 2025-04-10
Form Type: 10-K
Source: 0001712543-25-000016
Chunk: 3

Company: EQUUS TOTAL RETURN, INC.
Filing Date: 2025-04-10
Form: 10-K
Item: Item 1
Chunk 3
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 form of current investment income and long-term capital gains by investing
in the debt and equity securities of small and middle market capitalization companies that are generally not publicly traded at the time
of our investment. As a result of our endeavors in the energy sector, we may also seek to purchase or develop working interests, mineral
interests, and revenue leasehold interests in oil and gas properties, although we remain open to exploring investment opportunities in
a variety of other sectors. Should we continue to grow and develop Equus as a closed-end fund or permanent capital vehicle instead of
an operating company, we intend to include investments in progressively larger enterprises.

InvestmentStrategy

Our investment
strategy attempts to strike a balance between the potential for gain and the risk of loss. With respect to capital appreciation, Equus
is a “growth-at-reasonable-price” investor that seeks to identify and acquire securities that meet our criteria for selling
at reasonable prices. We give priority to cash producing investments wherein we invest principally in debt or preferred equity financing
with the objective of generating regular interest and dividend income back to the Fund. 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. Given
market conditions over the past several years and the performance of our portfolio, our Management and Board believe it prudent to continue
to review alternatives to refine and further clarify the current strategies.

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  TableOfContents  

InvestmentCriteria

Consistent
with our investment objective and strategy, our Management evaluates prospective investments based upon the criteria set forth below.
We may modify some or all of these criteria from time to time.

Management
Competency and Ownership. We seek to invest in companies with experienced management teams who have demonstrated a track record of
successful performance. Further, we desire to invest in companies with significant management ownership. We believe that significant management
ownership in small capitalization and middle market companies provides appropriate incentives and an alignment of interests for management
to maximize shareholder value. In addition, we will seek to design compensation and incentive arrangements that align the interests of
the portfolio company’s management with those of the Fund to enhance potential returns.

Substantial
Target Market. We desire to focus on companies whose products or services have favorable growth potential and strong competitive positions
in their respective markets. These positions may be as leadership positions within a given industry or market niche positions in which
the product or service has a demonstrated competitive advantage. The market in which a potential