Correspondence 0001712543-23-000090 from EQUUS TOTAL RETURN, INC. (EQS)
EQUUS TOTAL RETURN, INC.
Date: Nov. 21, 2023 · CIK: 0000878932 · Accession: 0001712543-23-000090
AI Filing Summary & Sentiment
File numbers found in text: 814-0098
Letter
VIA EDGAR Division of Investment Management Washington, D.C. 20549 Telephone: (202) 551-6983 email: longjw@sec.gov Re: Equus Total Return, Inc. (“Equus” or the “Fund”) Annual Report on Form 10-K for the Year Ended December 31, 2022 (File No. 814-0098)
Dear Mr. Long:
As you know, Equus is a closed-end fund that has elected to be classified as a business development company (“BDC”) pursuant to the Investment Company Act of 1940 (the “1940 Act”). On behalf of Equus, this letter serves as the Fund’s follow-up response to comments received from the Division of Investment Management (the “Division”) on behalf of the Securities and Exchange Commission (the “Commission”) via telephone on November 6, 2023 concerning the Fund’s Annual Report on Form 10-K for the year ended December 31, 2022, as filed with the Commission on March 31, 2023 (sometimes referred to hereinafter as the “2022 10-K”) and the Fund’s subsequent disclosure obligations pursuant to the 1940 Act and the Securities Exchange Act of 1934 (the “Exchange Act”). This letter supplements our previous response filed on October 19, 2023. We thank you for your input and this letter is intended to respond accordingly.
COMMENT:
On the Schedule of Investments in the 2022 10-K, please identify non-qualified assets and explain in the footnotes to the Schedule the significance of non-qualified assets.
RESPONSE: We have added a footnote to the Schedule of Investments in our most recent filing on Form 10-Q which states the following:
(1) Under Section 55(a) of the 1940 Act, qualifying assets must represent at least 70% of the total assets of the Fund at the time of acquisition of such qualifying assets. As of September 30, 2023 none of the Fund’s total assets were considered non-qualifying assets.
In the notes to the financial statements, we have provided further clarification as follows:
As a business development company (“BDC”), we may invest up to 30% of our assets in non-qualifying portfolio investments, as permitted by the Investment Company Act of 1940 (the “1940 Act”). Specifically, we may invest up to 30% of our assets in entities that are not considered “eligible portfolio companies” (as defined in the 1940 Act), including companies located outside of the United States, entities that are operating pursuant to certain exceptions under the 1940 Act, and publicly-traded entities with a market capitalization exceeding $250 million. As of September 30, 2023, we had invested 50.4% of our assets in securities of portfolio companies that constituted qualifying investments under the 1940 Act. As of September 30, 2023, none of our investments are considered non-qualifying assets as all of our investments are in enterprises that are considered eligible portfolio companies the 1940 Act. We provide significant managerial assistance to our portfolio companies that comprise 100% of the total value of the investments in portfolio securities as of September 30, 2023.
700 LOUISIANA STREET
48TH FLOOR
HOUSTON, TX 77002
TEL: (713) 529-0900
FAX: (713) 529-9545
Mr. Jeff Long
Division of Investment Management
U.S. Securities and Exchange Commission
November 14, 2023
We note that the above paragraph was included in previous 10-K filings of the Fund but, as per our discussion, as been adjusted to make it more clear to the reader.
* * * *
We will file this letter as correspondence via EDGAR contemporaneous with its dispatch to you via email. In the meantime, please feel free to call me at the number above or respond via email or facsimile if you have any further comments or questions.
Sincerely,
/s/ Kenneth I. Denos
Show Raw Text
CORRESP
1
filename1.htm
November 21, 2023
VIA EDGAR
Mr. Jeff Long
Division of Investment Management
U.S. Securities and Exchange Commission
100 F Street, N.E.
Washington, D.C. 20549
Telephone: (202) 551-6983
email: longjw@sec.gov
Re: Equus Total Return, Inc. (“Equus” or the “Fund”) Annual Report on Form 10-K for the Year Ended December
31, 2022 (File No. 814-0098)
Dear Mr. Long:
As you know, Equus is a closed-end fund that has elected
to be classified as a business development company (“BDC”) pursuant to the Investment Company Act of 1940 (the “1940
Act”). On behalf of Equus, this letter serves as the Fund’s follow-up response to comments received from the Division of Investment
Management (the “Division”) on behalf of the Securities and Exchange Commission (the “Commission”) via telephone
on November 6, 2023 concerning the Fund’s Annual Report on Form 10-K for the year ended December 31, 2022, as filed with the Commission
on March 31, 2023 (sometimes referred to hereinafter as the “2022 10-K”) and the Fund’s subsequent disclosure obligations
pursuant to the 1940 Act and the Securities Exchange Act of 1934 (the “Exchange Act”). This letter supplements our previous
response filed on October 19, 2023. We thank you for your input and this letter is intended to respond accordingly.
COMMENT:
On the Schedule of Investments in the 2022 10-K, please identify
non-qualified assets and explain in the footnotes to the Schedule the significance of non-qualified assets.
RESPONSE: We have added a footnote to the Schedule
of Investments in our most recent filing on Form 10-Q which states the following:
(1) Under Section 55(a) of the 1940 Act, qualifying assets must represent at least 70% of the total assets
of the Fund at the time of acquisition of such qualifying assets. As of September 30, 2023 none of the Fund’s total assets were
considered non-qualifying assets.
In the notes to the financial statements, we have provided
further clarification as follows:
As a business development company (“BDC”), we may
invest up to 30% of our assets in non-qualifying portfolio investments, as permitted by the Investment Company Act of 1940 (the “1940
Act”). Specifically, we may invest up to 30% of our assets in entities that are not considered “eligible portfolio companies”
(as defined in the 1940 Act), including companies located outside of the United States, entities that are operating pursuant to certain
exceptions under the 1940 Act, and publicly-traded entities with a market capitalization exceeding $250 million. As of September 30, 2023,
we had invested 50.4% of our assets in securities of portfolio companies that constituted qualifying investments under the 1940 Act. As
of September 30, 2023, none of our investments are considered non-qualifying assets as all of our investments are in enterprises that
are considered eligible portfolio companies the 1940 Act. We provide significant managerial assistance to our portfolio companies that
comprise 100% of the total value of the investments in portfolio securities as of September 30, 2023.
700 LOUISIANA STREET
48TH FLOOR
HOUSTON, TX 77002
TEL: (713) 529-0900
FAX: (713) 529-9545
Mr. Jeff Long
Division of Investment Management
U.S. Securities and Exchange Commission
November 14, 2023
We note that the above paragraph was included in previous
10-K filings of the Fund but, as per our discussion, as been adjusted to make it more clear to the reader.
* * * *
We will file this letter as correspondence via EDGAR
contemporaneous with its dispatch to you via email. In the meantime, please feel free to call me at the number above or respond via email
or facsimile if you have any further comments or questions.
Sincerely,
/s/ Kenneth I. Denos
Kenneth I. Denos
Secretary and Chief Compliance Officer
Equus Total Return, Inc.
700 LOUISIANA STREET
48TH FLOOR
HOUSTON, TX 77002
TEL: (713) 529-0900
FAX: (713) 529-9545
2