Company: EQS
Filing Date: 2025-04-10
Form Type: 10-K
Source: 0001712543-25-000016
Chunk: 41

Company: EQUUS TOTAL RETURN, INC.
Filing Date: 2025-04-10
Form: 10-K
Item: Item 8
Chunk 41
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 5% and 25% of the voting securities. Under the 1940 Act, “ Non-affiliate Investments” are defined as
investments that are neither Control Investments nor AffiliateInvestments.

Interest
and Dividend Income Recognition - We record interest income, adjusted for amortization of premium and accretion of discount, on
an accrual basis to the extent that we expect to collect such amounts. We accrete or amortize discounts and premiums on securities purchased
over the life of the respective security using the effective yield method. The amortized cost of investments represents the original cost
adjusted for the accretion of discount and/or amortization of premium on debt securities. We stop accruing interest on investments when
we determine that interest is no longer collectible. We may also impair the accrued interest when we determine that all or a portion of
the current accrual is uncollectible. If we receive any cash after determining that interest is no longer collectible, we treat such cash
as payment on the principal balance until the entire principal balance has been repaid, before we recognize any additional interest income.
We will write off uncollectible interest upon the occurrence of a definitive event such as a sale, bankruptcy, or reorganization of the
relevant portfolio interest. Dividend income is recorded as dividends are declared by the portfolio company or at the point an obligation
exists for the portfolio company to make a distribution.

Payment
in Kind Interest (PIK) - We may make loans in our portfolio that may pay PIK interest. We add PIK interest, if any, computed at
the contractual rate specified in each loan agreement, to the principal balance of the loan and recorded as interest income. If we seek
to requalify as a RIC, we must pay out to stockholders this non-cash source of income in the form of dividends even if we have not yet
collected any cash in respect of such investments. We will continue to pay out net investment income and/or realized capital gains, if
any, on an annual basis as required under the 1940 Act.

Cash and Cash
Equivalents and Restricted Cash - Cash includes unrestricted demand deposits at highly rated financial institutions and highly
liquid investments with original maturities of three months or less. The Company’s cash balances may exceed Federal Deposit Insurance
Corporation (“ FDIC”) insured limits from time to time. Although the Company bears risk to amounts in excess of those insured
by the FDIC, it does not