Company: EQS
Filing Date: 2025-05-12
Form Type: DEF 14A
Source: 0001712543-25-000028
Chunk: 43

Company: EQUUS TOTAL RETURN, INC.
Filing Date: 2025-05-12
Form: DEF 14A
Chunk 43
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 the Company or number of offerings that the Company may conduct under this proposal for the one-year
period that authorization is granted. Further, in conjunction with the authorization given in Proposal 5 – to issue shares of Equus
in excess of 19.99% of outstanding shares, the Company will only be limited to its number of authorized shares in issuing additional shares
of common stock below NAV. Currently, the Company has 100,000,000 shares of common stock authorized pursuant to its Certificate of Incorporation
and has 13,586,173 shares of common stock outstanding. This means that the Company could issue up to 86,413,827 additional shares, or
more than six times the number of shares currently outstanding.

In addition, stockholders should consider the risk
that the approval of this proposal could cause the market price of the 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.

| 37 |

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