Equus Shareholders Grant Authorization to Withdraw BDC Election
03 Novembre 2022 - 10:27PM
Equus Total Return, Inc. (NYSE: EQS) (“Equus” or the “Company”)
today announced that shareholders, collectively holding 7,166,015
shares (53.01% of the Company’s issued and outstanding common
stock), have authorized the Company’s Board of Directors
(hereinafter, the “Board”) to cause the Company’s withdrawal of its
election to be classified as a business development company (“BDC”)
under the Investment Company Act of 1940 (the “1940 Act”) as part
of a potential strategic transformation of Equus into an operating
company. In connection with this authorization, the Company has
filed an Information Statement on Schedule 14C, dated November 3,
2022.
Over the past several years, the Company has examined a number
of potential transactions in a variety of sectors, including
natural resources, containers and packaging, real estate, media,
technology, telecommunications, and energy. Recently, the Company
has concentrated its efforts on evaluating potential transactions
in midstream and upstream oil and gas production and development.
These evaluations have included consideration of potential
strategic transactions to maximize value to shareholders as an
operating company not subject to the 1940 Act. The authorization
granted by the Company’s shareholders allows the Board to withdraw
the Company’s BDC authorization on or prior to February 28, 2023 as
part of a potential strategic transformation of Equus into an
operating company. Although Equus has been authorized to withdraw
and terminate the Company’s BDC election under the 1940 Act, it
will not submit any such withdrawal unless and until Equus has
entered into a definitive agreement to acquire an operating
company.
Risks and Uncertainties
The transformation of Equus into an operating company is subject
to various conditions, risks, and uncertainties. Such risks should
be considered in addition to the items identified as “Risk Factors”
in the Company’s most recent Annual Report on Form 10-K filed with
the Securities and Exchange Commission (the “SEC”) on March 30,
2022.
Potential Advantages
The Company believes that an operating company structure, in
lieu of a closed-end fund structure, could be advantageous to Equus
and its shareholders in various ways, including: (i) a greater
number of growth opportunities through merger with and acquisition
of other operating companies, (ii) a valuation of Equus based on
typical operating criteria such as earnings, revenue, and gross
profit, instead of net asset value, (iii) lower proportional
compliance costs due to Equus not being regulated under the 1940
Act, and (iv) greater flexibility to issue common and preferred
equity, as well as other types of securities as consideration for
acquisitions and growth of the Company.
Forward-Looking Statements
This press release contains certain forward-looking statements
regarding possible future circumstances. These forward-looking
statements are based upon the Company’s current expectations and
assumptions and are subject to various risks and uncertainties that
could cause actual results to differ materially from those
contemplated in such forward-looking statements including, in
particular, the performance of the Company, including our ability
to achieve our expected financial and business objectives, our
ability to execute our reorganization under the Plan and complete
the transactions contemplated thereby, the other risks and
uncertainties described herein, as well as those contained in the
Company’s filings with the SEC. Actual results, events, and
performance may differ. Readers are cautioned not to place undue
reliance on these forward-looking statements, which speak only as
to the date hereof. The Company undertakes no obligation to release
publicly any revisions to these forward-looking statements that may
be made to reflect events or circumstances after the date hereof or
to reflect the occurrence of unanticipated events. The inclusion of
any statement in this release does not constitute an admission by
the Company or any other person that the events or circumstances
described in such statements are material.
Contacts:
Patricia Baronowski Pristine Advisers, LLC(631) 756-2486
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