Company: EQS
Filing Date: 2025-04-23
Form Type: PRE 14A
Source: 0001712543-25-000025
Chunk: 48

Company: EQUUS TOTAL RETURN, INC.
Filing Date: 2025-04-23
Form: PRE 14A
Chunk 48
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 issuer’s outstanding voting securities.

As described under Proposal 4 above, the Company
has issued the Investment Note and Warrants, each of which are convertible or exercisable into shares of the Company’s common stock
at a price of $1.50 per share. Excluding the conversion of accrued interest on the Investment Note, the Investment Note and Warrants (collectively,
the “Convertible Securities”) are collectively convertible or exercisable into an aggregate of 3,333,333 shares
of Equus common stock, or approximately 24.5% of the Company’s shares currently issued and outstanding.

In addition, the Convertible Securities contain an
adjustment mechanism that will decrease the relevant conversion or exercise price if the Company issues shares of its common stock at
a price less than $1.50 per share (there is no corresponding upward adjustment mechanism for issuances above $1.50). Consequently, the
number of shares of common stock underlying the Convertible Securities could be higher than 24.5% of the Company’s outstanding shares.
Moreover, the Investment Note bears interest at the rate of 10.0% per annum, which amount is also convertible at $1.50 per share and subject
to the adjustment mechanism. With or without the adjustment mechanism, the conversion of the Convertible Securities would exceed the 19.99%
limit set forth under Section 312.03(c) of the NYSE Listing Manual.

The issuance of the Convertible Securities
is part of a broader financing strategy of the Company to secure investment capital in order to grow and diversify its investment portfolio.
Such financing may take the form of sales of common stock or instruments convertible into common stock. Although the amount of any such
financing has not been determined, the issuance of such securities, separate from the Convertible Securities, will likely exceed the 19.99%
threshold, either individually or collectively.

Accordingly, the Board has therefore approved, and
recommends that the Company’s stockholders adopt, a proposal to approve, for purposes of the rules of NYSE, the potential issuance
of more than 19.99% of the Company’s outstanding shares of common stock in connection with the following:

| · | Conversion of the Investment Note; |

| · | Exercise of the Warrants; and |

| · | A public or private sale or issuance of equity securities                                                                   
 of the Company in one or more future offerings in exchange for such consideration as the Board deems reasonably sufficient. |

For purposes of this