Company: EQS
Filing Date: 2025-05-12
Form Type: DEF 14A
Source: 0001712543-25-000028
Chunk: 40

Company: EQUUS TOTAL RETURN, INC.
Filing Date: 2025-05-12
Form: DEF 14A
Chunk 40
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opportunities. Such investment opportunities may be funded with proceeds of an offering of shares of the Company’s common stock
or convertible securities.

Higher Market Capitalization and Liquidity May Make the Company’s Common Stock More Attractive to Investors. If the Company issues additional shares, its market capitalization
and the amount of its publicly tradable common stock may increase, which may afford all holders of its common stock greater liquidity.
A larger market capitalization may make the Company’s stock more attractive to a larger number of investors who have limitations
of the size of companies in which they invest. Furthermore, a larger number of shares outstanding may, over time, increase the Company’s
trading volume, which could decrease the volatility in the secondary market price of its common stock.

Possible Resumption of Dividends.A larger
and more diversified portfolio could provide the Company with more consistent cash flow, which may support the possible resumption of
dividends in the future. Although the Company will continue to seek to generate income sufficient to begin to pay dividends in the future,
the proceeds of future offerings, and the investments thereof, could enable the Company to resume its managed distribution policy and
begin paying dividends.

Reduced Expenses Per Share. An offering that
increases the Company’s total assets may reduce its overall expenses per share due to the spreading of fixed expenses over a larger
asset base. The Company must bear certain fixed expenses, such as certain administrative, governance and compliance costs that do not
generally vary based on its size. On a per share basis, these fixed expenses will be reduced when supported by a larger asset base.

Reinstatement of RIC Status. Until the fourth
quarter of 2024, the Company qualified as a registered investment company (“RIC”) under Regulation M of the
Internal Revenue Code which enabled it to pass through income and net realized gains to shareholders without incurring federal income
tax applicable to corporations. RIC rules require qualifying companies to meet certain asset and diversification tests. Accordingly, during
the period that the Company qualified as a RIC, it would, prior to the end of each fiscal quarter, acquire, on a temporary basis, U.S.
Treasury securities on margin to simultaneously increase its gross assets and the proportion of total assets held in qualifying investments
in order to ensure compliance with RIC requirements. During the fourth quarter of 2024, the Company elected to not qualify as a RIC, principally
due to the increasing amount of U.S. Treasury securities that it was required