Company: EQS
Filing Date: 2025-04-10
Form Type: 10-K
Source: 0001712543-25-000016
Chunk: 5

Company: EQUUS TOTAL RETURN, INC.
Filing Date: 2025-04-10
Form: 10-K
Item: Item 1
Chunk 5
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 the owner or issuer of the securities acquired. Management structures the
terms of a proposed investment, including the purchase price, the type of security to be purchased and our future involvement in the portfolio
company’s business. We seek to structure the terms of the investment to provide for the capital needs of the portfolio company while
maximizing our opportunities for current income and capital appreciation. In addition, we may invest with other co-investors including
private equity firms, business development companies, small business investment companies, venture capital groups, institutional investors
and individual investors.

Providing Management Assistance
and Monitoring of Investments. Successful private equity investments typically require active monitoring of, and significant participation
in, major business decisions of portfolio companies. In several cases, officers and directors of the Fund serve as members of the governing
boards of portfolio companies. Such management assistance is required of a BDC under the 1940 Act. We seek to provide guidance and management
assistance with respect to such matters as capital structure, acquisitions, budgets, profit goals, corporate strategy, portfolio management
and potential sale of the company or other exit strategies. In connection with their service as directors of portfolio companies, officers
and directors of the Fund may receive and retain directors’ fees or reimbursement for expenses incurred, and may participate in
incentive stock option plans for non-employee directors, if any. When necessary and as requested by any portfolio company, Management,
on behalf of the Fund, may also assign staff professionals with financial or management expertise to assist portfolio company management.

Follow-OnInvestments

Following our
initial investment, a portfolio company may request that we make follow-on investments by providing additional equity or loans needed
to fully implement its business plans to develop a new line of business or to recover from unexpected business problems or other purposes.
In addition, follow-on investments may be made to exercise warrants or other preferential rights granted to the Fund or otherwise to increase
our position in a portfolio company. We may make follow-on investments in portfolio companies from cash on hand or borrow all or a portion
of the funds required. If we are unable to make follow-on investments due to lack of available capital, the portfolio company in need
of the investment may be negatively impacted, we may be required to subordinate our debt interest in the portfolio company to a new lender,
and/or our equity interest in the portfolio company may be diluted if outside equity capital is required.

Disposition ofInvestments

The method and
timing of the disposition of our investments in portfolio companies are