Company: EQS
Filing Date: 2025-04-23
Form Type: PRE 14A
Source: 0001712543-25-000025
Chunk: 43

Company: EQUUS TOTAL RETURN, INC.
Filing Date: 2025-04-23
Form: PRE 14A
Chunk 43
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 Company’s common stock to decline in anticipation of sales of its common stock below NAV, thus causing the
Company’s shares to trade at a discount to NAV. The 1940 Act establishes a connection between common stock sale price and NAV because,
when stock is sold or otherwise issued at a sale price below NAV, the resulting increase in the number of outstanding shares is not accompanied
by a proportionate increase in the net assets of the issuer. The Board will consider the potential dilutive effect of the issuance of
shares at a price below NAV, including possible measures to avoid or reduce the potential dilutive effect on existing stockholders when
considering whether to authorize any such issuance pursuant to the stockholder approval being sought here.

| 36 |

While the Board will consider anti-dilutive measures,
stockholders should also consider that they currently have no subscription, preferential or preemptive rights to additional shares of
the common stock proposed to be authorized for issuance pursuant to this proposal, and thus any future issuance of common stock at a price
below NAV will dilute such stockholders’ holdings of common stock as a percentage of shares outstanding. Further, if current stockholders
of the Company do not purchase any shares in the open market to maintain their percentage interest, regardless of whether such offering
is above or below the then-current NAV, their voting power will be diluted.

Dilutive Effect of Investment Note Conversion and Warrants Exercise

The following table illustrates the dilutive effect
of the possible conversion of the Investment Note and exercise of the Warrants. The table assumes a principal amount of the Investment
Note of $2,000,000 and Warrants to purchase 2,000,000 shares of Equus common stock for an exercise price of $1.50 per share, or $3,000,000
in the aggregate. Based on these assumptions, the Investment Note and Warrants Issuance, if converted into shares of common stock of the
Company pursuant to the terms of such instruments, would result in the following effects to NAV and existing stockholders:

|                                                |     |                                               |     |                             |     |                                                  |     |                                                 |     |                                                        |     |                   |     |                               |     |                                              |     | Decrease in NAV per Share from Conversion of Investment Note and Exercise of Warrants |     |          |
| Equus Net Assets Prior to Conversion/ Exercise |     | Aggregate Conversion Amt. / Exercise Price(2) |     |                 Conversion/ 
 Exercise Price per