CAPITAL SOUTHWEST CORP 10-K

Item 7A. Quantitative and Qualitative Disclosures about Market Risk We are subject to market risk. Market risk includes risk that arise from changes in interest rates, commodity prices, equity prices and other market changes that affect market sensitive instruments. The prices of securities held by us may decline in response to certain events, including those directly involving the companies in which we invest; conditions affecting the general economy; overall market changes, including an increase in market volatility; interest rate volatility, including elevated interest rates; inflationary pressures; legislative reform; and local, regional, national or geopolitical, social or economic instability. Interest Rate Risk We are subject to interest rate risk. Interest rate risk is defined as the sensitivity of our current and future earnings to interest rate volatility, variability of spread relationships, the difference in re-pricing internals between our assets and liabilities and the effect that interest rates may have on our cash flows. Changes in the general level of interest rates can affect our net interest income, which is the difference between the interest income earned on interest earning assets and our interest expense 67 Table of Contents incurred in connection with our interest-bearing liabilities. Changes in interest rates can also affect, among other things, our ability to acquire and originate loans and securities and the value of our investment portfolio. Our net investment income is affected by fluctuations in various interest rate indices, including SOFR and Prime rates, to the extent our debt investments include floating interest rates. See Item 1A. Risk Factors "We are exposed to risks associated with changes in interest rates" for more information. Our interest expenses also will be affected by changes in the published SOFR rate in connection with our Credit Facilities. The interest rates on the October 2026 Notes, the January 2026 Notes, the August 2028 Notes and the SBA Debentures are fixed for the life of such debt. Our risk management systems and procedures are designed to identify and analyze our risk, to set appropriate policies and limits and to continually monitor these risks. We regularly assess our interest rate risk and manage our interest rate exposure on an ongoing basis by comparing our interest rate sensitive assets to our interest rate sensitive liabilities. Based on that review, we determine whether or not any hedging transactions are necessary to mitigate exposure to changes in interest rates. As of March 31, 2024, we were not a party to any hedging arrangements. As of March 31, 2024, approximately 97.4% of our debt investment portfolio (at fair value) bore interest at floating rates, 96.5% of which were subject to contractual minimum interest rates. Our Corporate Credit Facility bears interest on a per annum basis equal to the applicable Adjusted Term SOFR rate plus 2.15%. We pay unused commitment fees of 0.50% to 1.00% per annum, based on utilization. The SPV Credit Facility bears interest at a three-month Term SOFR plus 2.50% per annum during the revolving period ending on March 20, 2027 and three-month Term SOFR plus an applicable margin of 2.85% thereafter. SPV pays unused commitment fees of (i) 0.10% through April 20, 2024 and (ii) 0.35% thereafter, on the unused lender commitments under the SPV Credit Facility. The following table shows the approximate annualized increase or decrease in net investment income due to hypothetical base rate changes in interest rates (considering interest rate floors for variable rate instruments), assuming no changes in our investments and borrowings as of March 31, 2024. Basis Point Change Increase (decrease) in net investment income (in thousands) Increase (decrease) net investment income per share (200 bps) $ (21,181) $ (0.47) (150 bps) (15,886) (0.35) (100 bps) (10,591) (0.24) (50 bps) (5,295) (0.12) 50 bps 5,295 0.12 Although we believe that the foregoing analysis is indicative of our sensitivity to interest rate changes, it does not adjust for potential changes in the credit market, credit quality, size and composition of the assets in our portfolio. It also does not adjust for other business developments, including future borrowings that could affect the net increase in net assets resulting from operations, or net income. It also does not assume any repayments or fees from borrowers. Accordingly, no assurances can be given that actual results would not differ materially from the table above. Because we currently borrow, and plan to borrow in the future, money to make investments, our net investment income is dependent upon the difference between the rate at which we borrow funds and the rate at which we invest the funds borrowed. Accordingly, there can be no assurance that a significant change in interest rates will not have a material adverse effect on our net investment income. In periods of rising interest rates, our cost of funds would increase, which could reduce our net investment income if there is not a corresponding increase in interest income generated by our investment portfolio. 68 Table of Contents Item 8. Consolidated Financial Statements and Supplementary Data Index to Financial Statements Page Reports of Independent Registered Public Accounting Firm (PCAOB ID: 49 ) 70 Consolidated Statements of Assets and Liabilities as of March 31, 2024 and 2023 73 Consolidated Statements of Operations for Years Ended March 31, 2024, 2023 and 2022 74 Consolidated Statements of Changes in Net Assets for Years Ended March 31, 2024, 2023 and 2022 75 Consolidated Statements of Cash Flows for Years Ended March 31, 2024, 2023 and 2022 76 Consolidated Schedules of Investments as of March 31, 2024 and 2023 77 Notes to Consolidated Financial Statements 120 69 Table of Contents Report of Independent Registered Public Accounting Firm Shareholders and the Board of Directors of Capital Southwest Corporation and Subsidiaries Opinion on the Financial Statements We have audited the accompanying consolidated statements of assets and liabilities of Capital Southwest Corporation and Subsidiaries (the Company), including the consolidated schedules of investments, as of March 31, 2024 and 2023, the related consolidated statements of operations, changes in net assets, and cash flows for each of the three years in the period ended March 31, 2024, and the related notes to the consolidated financial statements and the Schedule of Investments in and Advances to Affiliates of the Company listed in Schedule 12-14 for the year ended March 31, 2024 (collectively, the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of March 31, 2024 and 2023, and the results of its operations, changes in net assets, and cash flows for each of the three years in the period ended March 31, 2024, in conformity with accounting principles generally accepted in the United States of America, and in our opinion, the related Schedule of Investments in and Advances to Affiliates, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of March 31, 2024, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013, and our report dated May 21, 2024, expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of March 31, 2024 and 2023, by correspondence with the custodians or the portfolio companies and other appropriate procedures where replies were not received. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Fair value of investments using significant unobservable inputs As discussed in Note 4, at March 31, 2024, the fair value of the Company’s investments categorized as Level 3 investments within the fair value hierarchy (Level 3 investments) totaled $1,476.561 million. Level 3 investments represent investments whose values are based on unobservable inputs that are significant to the overall fair value measurement. Management estimates the fair value of the Company’s Level 3 investments by applying the methodologies outlined in Notes 2 and 4 to the financial statements. 70 Table of Contents We identified the fair value of Level 3 investments, excluding those valued using third party broker quotes as the significant unobservable input, as a critical audit matter because of the management judgment necessary to select the valuation techniques used to estimate the fair value of the Level 3 investments and to estimate the significant unobservable inputs used in those valuation techniques. Auditing the fair value of the Company’s Level 3 investments is complex and involved a high degree of auditor judgment and increased audit effort, including the use of valuation specialists, as the valuation techniques, unobservable inputs and assumptions used by management are highly judgmental and changes could have a significant impact on the fair value measurements of such investments. The audit procedures we performed to address this critical audit matter included the following, among others: • We obtained an understanding of the relevant controls related to management’s valuation of Level 3 fair value measurements, including those related to management’s selection of valuation techniques and estimates of significant unobservable inputs, and tested such controls for design and operating effectiveness. • For a sample of investments, we performed the following procedures, among others: ◦ We evaluated the appropriateness of the Company’s valuation techniques by reviewing the reasonableness of significant changes in those valuation techniques from the prior year-end, if applicable, and also comparing to those used by market participants. ◦ We tested the reasonableness of assumptions used by management to estimate the unobservable inputs, including market yield, financial performance measures, and discount rates, by comparing these inputs to market information obtained from external sources. • For a sample of investments, we utilized valuation specialists to evaluate of the Company’s valuation techniques by comparing them to those used by market participants and testing the reasonableness of the assumptions used by management by comparing them to market data. • We evaluated the Company’s historical ability to estimate fair value by comparing the transaction price of available transactions occurring subsequent to the prior period valuation date against the fair value estimate determined by the Company in the prior period. • We evaluated subsequent events and other available information and considered whether this information corroborated or contradicted the Company’s year-end valuations. /s/ RSM US LLP We have served as the Company's auditor since 2017. Chicago, Illinois May 21, 2024 71 Table of Contents Report of Independent Registered Public Accounting Firm Shareholders and the Board of Directors of Capital Southwest Corporation and Subsidiaries Opinion on the Internal Control Over Financial Reporting We have audited Capital Southwest Corporation and Subsidiaries' (the Company) internal control over financial reporting as of March 31, 2024, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of March 31, 2024, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated statements of assets and liabilities, including the consolidated schedules of investments, as of March 31, 2024 and 2023, the related consolidated statements of operations, changes in net assets, and cash flows for each of the three years in the period ended March 31, 2024, and the related notes to the consolidated financial statements (collectively, the financial statements) of the Company and our report dated May 21, 2024 expressed an unqualified opinion. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting in the accompanying Management’s Reports on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control Over Financial Reporting A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company's assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ RSM US LLP Chicago, Illinois May 21, 2024 72 Table of Contents CAPITAL SOUTHWEST CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES (In thousands, except shares and per share data) March 31, March 31, 2024 2023 Assets Investments at fair value: Non-control/Non-affiliate investments (Cost: $ 1,276,690 and $ 947,829 , respectively) $ 1,286,355 $ 966,627 Affiliate investments (Cost: $ 200,013 and $ 191,523 , respectively) 190,206 188,505 Control investments (Cost: $ 0 and $ 80,800 , respectively) — 51,256 Total investments (Cost: $ 1,476,703 and $ 1,220,152 , respectively) 1,476,561 1,206,388 Cash and cash equivalents 32,273 21,585 Receivables: Dividends and interest 22,928 18,430 Escrow 16 363 Other 7,276 647 Income tax receivable 336 368 Debt issuance costs (net of accumulated amortization of $ 7,741 and $ 5,642 , respectively) 10,928 3,717 Other assets 6,440 6,186 Total assets $ 1,556,758 $ 1,257,684 Liabilities SBA Debentures (net of $ 4,305 and $ 3,670 , respectively, of unamortized debt issuance costs) $ 148,695 $ 116,330 January 2026 Notes (net of $ 612 and $ 949 , respectively, of unamortized debt issuance costs) 139,388 139,051 October 2026 Notes (net of $ 1,923 and $ 2,737 , respectively, of unamortized debt issuance costs) 148,077 147,263 August 2028 Notes (net of $ 2,182 and $ 0 , respectively, of unamortized debt issuance costs) 69,693 — Credit Facilities 265,000 235,000 Other liabilities 17,381 16,761 Accrued restoration plan liability 570 598 Income tax payable 281 156 Deferred tax liability 11,997 12,117 Total liabilities 801,082 667,276 Commitments and contingencies (Note 11) Net Assets Common stock, $ 0.25 par value: authorized, 75,000,000 shares at March 31, 2024 and 40,000,000 shares at March 31, 2023; issued, 45,050,759 shares at March 31, 2024 and 38,415,937 shares at March 31, 2023 11,263 9,604 Additional paid-in capital 796,945 646,586 Total distributable (loss) earnings ( 52,532 ) ( 41,845 ) Treasury stock - at cost, no shares at March 31, 2024 and 2,339,512 shares at March 31, 2023 — ( 23,937 ) Total net assets 755,676 590,408 Total liabilities and net assets $ 1,556,758 $ 1,257,684 Net asset value per share ( 45,050,759 shares outstanding at March 31, 2024 and 36,076,425 shares outstanding at March 31, 2023) $ 16.77 $ 16.37 The accompanying Notes are an integral part of these Consolidated Financial Statements. 73 Table of Contents CAPITAL SOUTHWEST CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except shares and per share data) Years Ended March 31, 2024 2023 2022 Investment income: Interest income: Non-control/Non-affiliate investments $ 133,329 $ 87,982 $ 58,136 Affiliate investments 17,209 11,658 7,122 Payment-in-kind interest income: Non-control/Non-affiliate investments 7,737 2,382 2,051 Affiliate investments 2,471 3,060 1,160 Dividend income: Non-control/Non-affiliate investments 3,533 1,824 1,654 Affiliate investments 230 141 28 Control investments 7,983 7,337 6,720 Fee income: Non-control/Non-affiliate investments 4,257 4,057 4,833 Affiliate investments 759 638 494 Control investments 82 100 — Other income 545 121 17 Total investment income 178,135 119,300 82,215 Operating expenses: Compensation 10,631 9,870 8,838 Share-based compensation 4,518 3,705 3,585 Interest 43,088 28,873 19,924 Professional fees 3,705 3,180 2,489 General and administrative 5,244 4,632 4,077 Total operating expenses 67,186 50,260 38,913 Income before taxes 110,949 69,040 43,302 Federal income, excise and other taxes 1,135 630 181 Deferred taxes ( 191 ) ( 301 ) 434 Total income tax provision 944 329 615 Net investment income $ 110,005 $ 68,711 $ 42,687 Realized (loss) gain Non-control/Non-affiliate investments $ ( 18,062 ) $ ( 5,872 ) $ 7,136 Affiliate investments ( 6,500 ) ( 11,027 ) 140 Control investments ( 15,047 ) — — Income tax provision ( 286 ) ( 130 ) ( 1,442 ) Total net realized (loss) gain on investments, net of tax ( 39,895 ) ( 17,029 ) 5,834 Net unrealized appreciation (depreciation) on investments Non-control/Non-affiliate investments 1,584 ( 6,942 ) 20,940 Affiliate investments ( 6,688 ) 6,014 ( 4,750 ) Control investments 18,727 ( 11,147 ) ( 2,755 ) Income tax benefit (provision) 17 ( 6,514 ) ( 1,968 ) Total net unrealized appreciation (depreciation) on investments, net of tax 13,640 ( 18,589 ) 11,467 Net realized and unrealized (losses) gains on investments ( 26,255 ) ( 35,618 ) 17,301 Realized loss on extinguishment of debt ( 361 ) — ( 17,087 ) Realized loss on disposal of fixed assets — — ( 86 ) Net increase in net assets from operations $ 83,389 $ 33,093 $ 42,815 Pre-tax net investment income per share - basic and diluted $ 2.72 $ 2.30 $ 1.90 Net investment income per share – basic and diluted $ 2.70 $ 2.29 $ 1.87 Net increase in net assets from operations – basic and diluted $ 2.05 $ 1.10 $ 1.87 Weighted average shares outstanding – basic and diluted 40,727,133 30,015,533 22,839,835 The accompanying Notes are an integral part of these Consolidated Financial Statements. 74 Table of Contents CAPITAL SOUTHWEST CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS (In thousands, except shares) Common Stock Treasury Stock Additional Paid-In Capital Total Distributable Earnings (Loss) Total Net Asset Value Number of Shares Par Value Number of Shares Par Value Balances at March 31, 2021 21,005,324 $ 5,836 2,339,512 $ ( 23,937 ) $ 356,447 $ ( 2,095 ) $ 336,251 Issuance of common stock 3,872,031 969 — — 97,138 — 98,107 Share-based compensation — — — — 3,585 — 3,585 Issuance of common stock under restricted stock plan, net of forfeitures 133,289 33 — — ( 33 ) — — Common stock withheld for payroll taxes upon vesting of restricted stock ( 52,124 ) ( 13 ) — — ( 1,395 ) — ( 1,408 ) Dividends to shareholders — — — — — ( 58,624 ) ( 58,624 ) Change in restoration plan liability — — — — 141 — 141 Reclassification for certain permanent book-to-tax differences — — — — ( 7,648 ) 7,648 — Net investment income — — — — — 42,687 42,687 Net realized loss on investments, extinguishment of debt and disposal of fixed assets — — — — — ( 11,339 ) ( 11,339 ) Net unrealized appreciation on investments — — — — — 11,467 11,467 Balances at March 31, 2022 24,958,520 $ 6,825 2,339,512 $ ( 23,937 ) $ 448,235 $ ( 10,256 ) $ 420,867 Issuance of common stock 10,969,898 2,742 — — 200,039 — 202,781 Share-based compensation — — — — 3,705 — 3,705 Issuance of common stock under restricted stock plan, net of forfeitures 197,597 49 — — ( 49 ) — — Common stock withheld for payroll taxes upon vesting of restricted stock ( 49,590 ) ( 12 ) — — ( 1,009 ) — ( 1,021 ) Dividends to shareholders — — — — — ( 71,102 ) ( 71,102 ) Change in restoration plan liability — — — — 2,085 — 2,085 Reclassification for certain permanent book-to-tax differences — — — — ( 6,420 ) 6,420 — Net investment income — — — — — 68,711 68,711 Net realized loss on investments — — — — — ( 17,029 ) ( 17,029 ) Net unrealized depreciation on investments — — — — — ( 18,589 ) ( 18,589 ) Balances at March 31, 2023 36,076,425 $ 9,604 2,339,512 $ ( 23,937 ) $ 646,586 $ ( 41,845 ) $ 590,408 Issuance of common stock 8,733,315 2,183 — — 179,204 — 181,387 Cancellation of treasury shares — ( 585 ) ( 2,339,512 ) 23,937 ( 23,352 ) — — Share-based compensation — — — — 4,518 — 4,518 Issuance of common stock under restricted stock plan, net of forfeitures 293,816 74 — — ( 74 ) — — Common stock withheld for payroll taxes upon vesting of restricted stock ( 52,797 ) ( 13 ) — — ( 1,050 ) — ( 1,063 ) Dividends to shareholders — — — — — ( 102,925 ) ( 102,925 ) Change in restoration plan liability — — — — ( 38 ) — ( 38 ) Reclassification for certain permanent book-to-tax differences — — — — ( 8,849 ) 8,849 — Net investment income — — — — — 110,005 110,005 Net realized loss on investments and extinguishment of debt — — — — — ( 40,256 ) ( 40,256 ) Net unrealized appreciation on investments — — — — — 13,640 13,640 Balances at March 31, 2024 45,050,759 $ 11,263 — $ — $ 796,945 $ ( 52,532 ) $ 755,676 75 Table of Contents CAPITAL SOUTHWEST CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) Years Ended March 31, 2024 2023 2022 Cash flows from operating activities Net increase in net assets from operations $ 83,389 $ 33,093 $ 42,815 Adjustments to reconcile net increase in net assets from operations to net cash used in operating activities: Purchases and originations of investments ( 497,486 ) ( 433,200 ) ( 499,218 ) Proceeds from sales and repayments of debt investments in portfolio companies 191,407 139,051 259,158 Proceeds from sales and return of capital of equity investments in portfolio companies 4,131 2,664 11,881 Proceeds from return of capital of investment in I-45 SLF LLC 12,800 — — Payment of accreted original issue discounts 2,163 1,570 3,692 Payment of accrued payment-in-kind interest — 1,313 3,485 Depreciation and amortization 4,304 2,750 2,230 Net pension benefit ( 66 ) ( 24 ) ( 132 ) Realized loss (gain) on investments before income tax 39,983 17,222 ( 6,617 ) Realized loss on extinguishment of debt 361 — 17,103 Realized loss on disposal of fixed assets — — 86 Net unrealized (appreciation) depreciation on investments before income tax ( 13,623 ) 12,075 ( 13,435 ) Accretion of discounts on investments ( 5,163 ) ( 3,842 ) ( 3,005 ) Payment-in-kind interest ( 11,234 ) ( 5,965 ) ( 4,190 ) Share-based compensation expense 4,518 3,705 3,585 Deferred income taxes ( 119 ) 6,369 2,402 Changes in other assets and liabilities: Increase in dividend and interest receivable ( 4,829 ) ( 6,803 ) ( 1,539 ) Decrease (increase) in escrow receivables 272 756 ( 159 ) Decrease (increase) in tax receivable 31 ( 209 ) ( 4 ) Decrease (increase) in other receivables 627 1,591 ( 2,067 ) Increase in other assets ( 706 ) ( 128 ) ( 3,090 ) Increase (decrease) in taxes payable 126 ( 1,085 ) 1,191 Increase in other liabilities 618 1,997 3,153 Net cash used in operating activities ( 188,496 ) ( 227,100 ) ( 182,675 ) Cash flows from investing activities Acquisition of fixed assets ( 13 ) ( 281 ) ( 1,995 ) Net cash used in investing activities ( 13 ) ( 281 ) ( 1,995 ) Cash flows from financing activities Proceeds from common stock offering 181,453 202,956 98,141 Equity offering costs paid — ( 102 ) — Borrowings under credit facility 305,000 185,000 315,000 Repayments of credit facility ( 275,000 ) ( 155,000 ) ( 230,000 ) Debt issuance costs paid ( 10,183 ) ( 1,248 ) ( 3,865 ) Proceeds from issuance of SBA Debentures 32,196 78,052 39,026 Proceeds from issuance of October 2026 Notes — — 146,414 Proceeds from issuance of August 2028 Notes 69,719 — — Redemption of October 2024 Notes — — ( 125,000 ) Payment for debt extinguishment costs — — ( 15,196 ) Dividends to shareholders ( 102,925 ) ( 71,102 ) ( 58,624 ) Common stock withheld for payroll taxes upon vesting of restricted stock ( 1,063 ) ( 1,021 ) ( 1,408 ) Net cash provided by financing activities 199,197 237,535 164,488 Net increase in cash and cash equivalents 10,688 10,154 ( 20,182 ) Cash and cash equivalents at beginning of period 21,585 11,431 31,613 Cash and cash equivalents at end of period $ 32,273 $ 21,585 $ 11,431 Supplemental cash flow disclosures: Cash paid for income taxes $ 1,176 $ 1,896 $ 461 Cash paid for interest 37,753 25,466 18,404 Distributions in kind received 72,481 — — The accompanying Notes are an integral part of these Consolidated Financial Statements. 76 Table of Contents CAPITAL SOUTHWEST CORPORATION AND SUBSIDIARIES CONSOLIDATED SCHEDULE OF INVESTMENTS March 31, 2024 Portfolio Company 1,5,6,7,18,21 Type of Investment 2 Current Interest Rate 3 Acquisition Date 14 Maturity Principal Cost 12,17 Fair Value 4 Debt Investments Aerospace & Defense ADS TACTICAL, INC. First Lien SOFR+ 5.75 % (Floor 1.00 %)/M, Current Coupon 11.19 % 3/5/2024 3/19/2026 $ 1,625 $ 1,609 $ 1,625 EDGE AUTONOMY HOLDINGS, LLC Revolving Loan 10 SOFR+ 7.50 % (Floor 2.00 %) 4/21/2023 4/21/2028 — ( 97 ) — First Lien - Term Loan A SOFR+ 6.50 % (Floor 2.00 %)/Q, Current Coupon 11.98 % 4/21/2023 4/21/2028 11,250 10,959 11,250 First Lien - Term Loan B SOFR+ 8.50 % (Floor 2.00 %)/Q, Current Coupon 13.98 % 4/21/2023 4/21/2028 11,250 10,962 11,250 21,824 22,500 STELLANT MIDCO, LLC First Lien SOFR+ 5.50 % (Floor 0.75 %)/S, Current Coupon 11.04 % 3/7/2024 10/2/2028 1,794 1,781 1,794 First Lien SOFR+ 5.75 % (Floor 0.75 %)/S, Current Coupon 11.19 % 3/7/2024 10/2/2028 796 781 796 2,562 2,590 Subtotal: Aerospace & Defense ( 3.54 %)* 25,995 26,715 Business Services BURNING GLASS INTERMEDIATE HOLDING COMPANY, INC. Revolving Loan 10 SOFR+ 5.00 % (Floor 1.00 %) 2/22/2024 6/10/2028 — ( 3 ) — First Lien SOFR+ 5.00 % (Floor 1.00 %)/M, Current Coupon 10.43 % 2/22/2024 6/10/2028 2,500 2,471 2,500 2,468 2,500 C&M CONVEYOR, INC. First Lien - Term Loan A 15 SOFR+ 5.50 % (Floor 1.50 %)/M, Current Coupon 10.94 % 1/3/2023 9/30/2026 6,500 6,406 6,500 First Lien - Term Loan B 15 SOFR+ 7.50 % (Floor 1.50 %)/M, Current Coupon 12.94 % 1/3/2023 9/30/2026 6,500 6,407 6,500 12,813 13,000 DYNAMIC COMMUNITIES, LLC 6 First Lien - Term Loan A SOFR+ 5.50 % PIK (Floor 2.00 %)/M, Current Coupon 10.93 % 12/20/2022 12/31/2026 4,250 4,234 4,249 First Lien - Term Loan B SOFR+ 7.50 % PIK (Floor 2.00 %)/M, Current Coupon 12.93 % 12/20/2022 12/31/2026 4,359 4,336 4,359 8,570 8,608 77 Table of Contents CAPITAL SOUTHWEST CORPORATION AND SUBSIDIARIES CONSOLIDATED SCHEDULE OF INVESTMENTS March 31, 2024 Portfolio Company 1,5,6,7,18,21 Type of Investment 2 Current Interest Rate 3 Acquisition Date 14 Maturity Principal Cost 12,17 Fair Value 4 FS VECTOR LLC Revolving Loan 10 SOFR+ 7.50 % (Floor 2.00 %) 4/26/2023 4/26/2028 — ( 33 ) — First Lien - Term Loan A SOFR+ 6.50 % (Floor 2.00 %)/Q, Current Coupon 11.98 % 4/26/2023 4/26/2028 9,000 8,845 8,919 First Lien - Term Loan B SOFR+ 8.50 % (Floor 2.00 %)/Q, Current Coupon 13.98 % 4/26/2023 4/26/2028 9,000 8,846 8,919 17,658 17,838 GAINS INTERMEDIATE, LLC Revolving Loan 10 SOFR+ 7.50 % (Floor 2.00 %) 12/15/2022 12/15/2027 — ( 37 ) — First Lien - Term Loan A SOFR+ 6.50 % (Floor 2.00 %)/Q, Current Coupon 12.09 % 12/15/2022 12/15/2027 7,125 7,012 7,125 First Lien - Term Loan B SOFR+ 8.50 % (Floor 2.00 %)/Q, Current Coupon 14.09 % 12/15/2022 12/15/2027 7,125 7,011 7,125 13,986 14,250 LIGHTBOX INTERMEDIATE, L.P. First Lien SOFR+ 5.00 %/Q, Current Coupon 10.56 % 3/4/2024 5/9/2026 5,444 5,419 5,281 MAKO STEEL LP Revolving Loan 10 SOFR+ 7.50 % (Floor 0.75 %) 3/15/2021 3/13/2026 — ( 15 ) — First Lien SOFR+ 7.50 % (Floor 0.75 %)/Q, Current Coupon 12.98 % 3/15/2021 3/13/2026 7,727 7,658 7,727 7,643 7,727 RESEARCH NOW GROUP, INC. First Lien SOFR+ 5.50 % (Floor 1.00 %)/Q, Current Coupon 11.07 % 3/18/2024 12/20/2024 4,649 4,636 2,804 Second Lien 16 SOFR+ 9.50 % (Floor 1.00 %)/Q, Current Coupon 15.07 % 12/8/2017 12/20/2025 10,500 10,245 2,940 14,881 5,744 RETAIL SERVICES WIS CORPORATION First Lien SOFR+ 8.35 % (Floor 1.00 %)/Q, Current Coupon 13.81 % 3/7/2024 5/20/2025 2,676 2,658 2,651 SPOTLIGHT AR, LLC Revolving Loan 10 SOFR+ 6.75 % (Floor 1.00 %) 12/8/2021 6/8/2026 — ( 19 ) — First Lien SOFR+ 6.75 % (Floor 1.00 %)/Q, Current Coupon 12.23 % 12/8/2021 6/8/2026 6,637 6,566 6,637 6,547 6,637 78 Table of Contents CAPITAL SOUTHWEST CORPORATION AND SUBSIDIARIES CONSOLIDATED SCHEDULE OF INVESTMENTS March 31, 2024 Portfolio Company 1,5,6,7,18,21 Type of Investment 2 Current Interest Rate 3 Acquisition Date 14 Maturity Principal Cost 12,17 Fair Value 4 SYSTEC CORPORATION Revolving Loan SOFR+ 7.50 % (Floor 1.00 %)/Q, Current Coupon 12.98 % 20 8/13/2021 8/13/2025 2,000 1,986 1,984 First Lien SOFR+ 7.50 % (Floor 1.00 %)/Q, Current Coupon 12.98 % 8/13/2021 8/13/2025 8,440 8,375 8,372 10,361 10,356 US COURTSCRIPT HOLDINGS, INC. First Lien SOFR+ 6.00 % (Floor 1.00 %)/Q, Current Coupon 11.59 % 5/17/2022 5/17/2027 14,800 14,589 14,800 WINTER SERVICES OPERATIONS, LLC Revolving Loan 10 SOFR+ 8.00 % (Floor 1.00 %)/Q, Current Coupon 13.58 % 20 11/19/2021 11/19/2026 3,556 3,447 3,449 First Lien - Term Loan A SOFR+ 7.00 % (Floor 1.00 %)/Q, Current Coupon 12.59 % 20 1/16/2024 11/19/2026 15,967 15,675 15,488 First Lien - Term Loan B SOFR+ 9.00 % (Floor 1.00 %)/Q, Current Coupon 14.59 % 20 1/16/2024 11/19/2026 15,967 15,674 15,488 Delayed Draw Term Loan SOFR+ 8.00 % (Floor 1.00 %/Q, Current Coupon 13.59 % 11/19/2021 11/19/2026 4,133 4,067 4,009 38,863 38,434 ZENFOLIO INC. Revolving Loan 10 SOFR+ 9.00 % (Floor 1.00 %)/Q, Current Coupon 14.48 % 7/17/2017 12/31/2026 2,000 1,976 1,980 First Lien SOFR+ 9.00 % (Floor 1.00 %)/Q, Current Coupon 14.48 % 20 7/17/2017 12/31/2026 19,744 19,577 19,547 21,553 21,527 Subtotal: Business Services ( 22.41 %)* 178,009 169,353 Consumer Products & Retail ALLIANCE SPORTS GROUP, L.P. Unsecured convertible Note 6.00 % PIK 7/15/2020 9/30/2024 173 173 173 ATS OPERATING, LLC Revolving Loan 10 SOFR+ 6.50 % (Floor 1.00 %)/Q, Current Coupon 12.09 % 1/18/2022 1/18/2027 500 472 500 First Lien - Term Loan A SOFR+ 5.50 % (Floor 1.00 %)/Q, Current Coupon 11.09 % 1/18/2022 1/18/2027 9,250 9,139 9,250 First Lien - Term Loan B SOFR+ 7.50 % (Floor 1.00 %)/Q, Current Coupon 13.09 % 1/18/2022 1/18/2027 9,250 9,136 9,250 18,747 19,000 79 Table of Contents CAPITAL SOUTHWEST CORPORATION AND SUBSIDIARIES CONSOLIDATED SCHEDULE OF INVESTMENTS March 31, 2024 Portfolio Company 1,5,6,7,18,21 Type of Investment 2 Current Interest Rate 3 Acquisition Date 14 Maturity Principal Cost 12,17 Fair Value 4 CATBIRD NYC, LLC 6 Revolving Loan 10 SOFR+ 7.00 % (Floor 1.00 %) 10/15/2021 10/15/2026 — ( 41 ) — First Lien SOFR+ 7.00 % (Floor 1.00 %)/Q, Current Coupon 12.48 % 10/15/2021 10/15/2026 15,100 14,926 15,100 14,885 15,100 HEAT TRAK, LLC First Lien SOFR+ 9.50 % (Floor 2.00 %)/Q, Current Coupon 14.98 % 6/12/2023 6/9/2028 11,500 10,308 11,270 HYBRID APPAREL, LLC Second Lien 15 SOFR+ 8.25 % (Floor 1.00 %)/Q, Current Coupon 13.84 % 6/30/2021 6/30/2026 15,929 15,769 15,929 ISAGENIX INTERNATIONAL, LLC First Lien SOFR+ 5.50 % (Floor 1.00 %)/S, Current Coupon 11.04 % 3/6/2024 4/14/2028 724 724 634 LASH OPCO, LLC Revolving Loan SOFR+ 7.75 % (Floor 1.00 %)/Q, Current Coupon 13.17 % 20 12/29/2021 9/18/2025 824 814 808 First Lien SOFR+ 2.65 %, 5.10 % PIK (Floor 1.00 %)/Q, Current Coupon 13.16 % 12/29/2021 3/18/2026 16,733 16,477 16,399 17,291 17,207 REVO BRANDS, INC. Revolving Loan 10 SOFR+ 7.50 % (Floor 1.50 %) 2/21/2024 2/21/2029 — ( 137 ) — First Lien - Term Loan A SOFR+ 6.50 % (Floor 1.50 %)/Q, Current Coupon 11.81 % 2/21/2024 2/21/2029 11,167 10,947 10,947 First Lien - Term Loan B SOFR+ 7.50 % (Floor 1.50 %)/Q, Current Coupon 12.81 % 2/21/2024 2/21/2029 11,167 10,947 10,947 First Lien - Term Loan C SOFR+ 8.50 % (Floor 1.50 %)/Q, Current Coupon 13.81 % 2/21/2024 2/21/2029 11,167 10,947 10,947 32,704 32,841 RTIC SUBSIDIARY HOLDINGS, LLC Revolving Loan 10 SOFR+ 7.75 % (Floor 1.25 %)/M, Current Coupon 13.17 % 20 9/1/2020 9/1/2025 1,068 1,063 1,060 First Lien SOFR+ 7.75 % (Floor 1.25 %)/M, Current Coupon 13.18 % 9/1/2020 9/1/2025 5,684 5,660 5,639 6,723 6,699 80 Table of Contents CAPITAL SOUTHWEST CORPORATION AND SUBSIDIARIES CONSOLIDATED SCHEDULE OF INVESTMENTS March 31, 2024 Portfolio Company 1,5,6,7,18,21 Type of Investment 2 Current Interest Rate 3 Acquisition Date 14 Maturity Principal Cost 12,17 Fair Value 4 TRU FRAGRANCE & BEAUTY LLC Revolving Loan 10 SOFR+ 6.25 % (Floor 1.50 %)/Q, Current Coupon 11.58 % 3/22/2024 3/21/2029 100 20 98 First Lien - Term Loan A SOFR+ 5.25 % (Floor 1.50 %)/Q, Current Coupon 10.58 % 3/22/2024 3/21/2029 15,251 14,948 14,948 First Lien - Term Loan B SOFR+ 7.25 % (Floor 1.50 %)/Q, Current Coupon 12.58 % 3/22/2024 3/21/2029 15,251 14,948 14,948 29,916 29,994 YS GARMENTS, LLC First Lien SOFR+ 7.50 % (Floor 1.00 %)/Q, Current Coupon 12.92 % 3/19/2024 8/9/2026 2,953 2,946 2,401 Subtotal: Consumer Products & Retail ( 20.01 %)* 150,186 151,248 Consumer Services AIR CONDITIONING SPECIALIST, INC. 6 Revolving Loan 10 SOFR+ 7.25 % (Floor 1.00 %)/Q, Current Coupon 12.84 % 11/9/2021 11/9/2026 825 813 825 First Lien SOFR+ 7.25 % (Floor 1.00 %)/Q, Current Coupon 12.84 % 11/9/2021 11/9/2026 24,407 24,116 24,407 Delayed Draw Term Loan 10 SOFR+ 7.25 % (Floor 1.00 %) 12/15/2023 11/9/2026 — — — 24,929 25,232 LIFT BRANDS, INC. Tranche A Term Loan SOFR+ 7.50 % (Floor 1.00 %)/M, Current Coupon 12.93 % 2/1/2024 6/29/2025 2,452 2,452 2,403 Tranche B Term Loan 9.50 % PIK 2/1/2024 6/29/2025 661 661 601 Tranche C Loan — % 2/1/2024 6/29/2025 565 565 514 3,678 3,518 NATIONAL CREDIT CARE, LLC First Lien - Term Loan A SOFR+ 6.50 % (Floor 1.00 %)/Q, Current Coupon 11.93 % 12/23/2021 12/23/2026 11,875 11,734 11,875 First Lien - Term Loan B SOFR+ 7.50 % (Floor 1.00 %)/Q, Current Coupon 12.93 % 12/23/2021 12/23/2026 11,875 11,732 5,106 23,466 16,981 81 Table of Contents CAPITAL SOUTHWEST CORPORATION AND SUBSIDIARIES CONSOLIDATED SCHEDULE OF INVESTMENTS March 31, 2024 Portfolio Company 1,5,6,7,18,21 Type of Investment 2 Current Interest Rate 3 Acquisition Date 14 Maturity Principal Cost 12,17 Fair Value 4 POOL SERVICE HOLDINGS, LLC 6 Revolving Loan SOFR+ 6.50 % (Floor 2.00 %)/Q, Current Coupon 11.82 % 20 12/20/2023 12/20/2028 1,000 981 980 First Lien SOFR+ 6.50 % (Floor 2.00 %)/Q, Current Coupon 11.83 % 12/20/2023 12/20/2028 5,000 4,904 4,900 Delayed Draw Term Loan 10 SOFR+ 6.50 % (Floor 2.00 %)/Q, Current Coupon 11.81 % 12/20/2023 12/20/2028 600 517 588 6,402 6,468 ROOF OPCO, LLC Revolving Loan 10 SOFR+ 7.50 % (Floor 1.00 %) 8/27/2021 8/27/2026 — ( 29 ) — First Lien - Term Loan A SOFR+ 6.50 % (Floor 1.00 %)/Q, Current Coupon 12.09 % 8/27/2021 8/27/2026 13,261 13,079 12,638 First Lien - Term Loan B SOFR+ 8.50 % (Floor 1.00 %)/Q, Current Coupon 14.09 % 4/12/2023 8/27/2026 13,261 13,079 12,638 26,129 25,276 TMT BHC BUYER, INC. Revolving Loan 10 SOFR+ 6.00 % (Floor 1.50 %) 3/7/2024 3/7/2029 — ( 99 ) — First Lien SOFR+ 6.00 % (Floor 1.50 %)/Q, Current Coupon 11.33 % 3/7/2024 3/7/2029 10,000 9,802 9,802 Delayed Draw Term Loan 10 SOFR+ 6.00 % (Floor 1.50 %) 3/7/2024 3/7/2029 — ( 49 ) — 9,654 9,802 ZIPS CAR WASH, LLC Delayed Draw Term Loan - A SOFR+ 7.25 % (Floor 1.00 %)/M, Current Coupon 12.68 % 2/11/2022 12/31/2024 15,719 15,519 15,656 Delayed Draw Term Loan - B SOFR+ 7.25 % (Floor 1.00 %)/M, Current Coupon 12.68 % 20 2/11/2022 12/31/2024 3,940 3,891 3,924 19,410 19,580 Subtotal: Consumer Services ( 14.14 %)* 113,668 106,857 Containers & Packaging LLFLEX, LLC First Lien 15 SOFR+ 9.00 %, 0.50 % PIK (Floor 1.00 %)/Q, Current Coupon 14.98 % 8/16/2021 8/14/2026 10,795 10,662 9,176 Subtotal: Containers & Packaging ( 1.21 %)* 10,662 9,176 82 Table of Contents CAPITAL SOUTHWEST CORPORATION AND SUBSIDIARIES CONSOLIDATED SCHEDULE OF INVESTMENTS March 31, 2024 Portfolio Company 1,5,6,7,18,21 Type of Investment 2 Current Interest Rate 3 Acquisition Date 14 Maturity Principal Cost 12,17 Fair Value 4 Distribution KMS, INC. First Lien 15 SOFR+ 9.25 % (Floor 1.00 %)/Q, Current Coupon 14.70 % 10/4/2021 10/2/2026 17,856 17,720 15,892 Subtotal: Distribution ( 2.10 %)* 17,720 15,892 Education STUDENT RESOURCE CENTER LLC 6 First Lien 16 8.50 % PIK 12/31/2022 12/30/2027 9,644 9,503 3,376 WALL STREET PREP, INC. Revolving Loan 10 SOFR+ 7.00 % (Floor 1.00 %) 7/19/2021 7/20/2026 — ( 9 ) — First Lien SOFR+ 7.00 % (Floor 1.00 %)/Q, Current Coupon 12.48 % 7/19/2021 7/20/2026 9,239 9,142 9,239 9,133 9,239 Subtotal: Education ( 1.67 %)* 18,636 12,615 Energy Services (Midstream) ACE GATHERING, INC. Second Lien 15 SOFR+ 8.00 % (Floor 2.00 %)/M, Current Coupon 13.59 % 12/13/2018 12/14/2026 4,793 4,749 4,793 PIPELINE TECHNIQUE LTD. 9,22 Revolving Loan 10 SOFR+ 7.25 % (Floor 1.00 %)/Q, Current Coupon 12.77 % 20 8/23/2022 8/19/2027 1,056 1,010 1,056 First Lien SOFR+ 7.25 % (Floor 1.00 %)/Q, Current Coupon 12.84 % 8/23/2022 8/19/2027 7,583 7,473 7,583 8,483 8,639 Subtotal: Energy Services (Midstream) ( 1.78 %)* 13,232 13,432 Energy Services (Upstream) WELL-FOAM, INC. Revolving Loan 10 SOFR+ 8.00 % (Floor 1.00 %) 9/9/2021 9/9/2026 — ( 46 ) — First Lien SOFR+ 8.00 % (Floor 1.00 %)/Q, Current Coupon 13.48 % 9/9/2021 9/9/2026 12,541 12,401 12,541 12,355 12,541 Subtotal: Energy Services (Upstream) ( 1.66 %)* 12,355 12,541 Environmental Services ARBORWORKS, LLC 6 Revolving Loan 10 15.00 % PIK 11/6/2023 11/6/2028 1,569 1,569 1,569 First Lien SOFR+ 6.50 % PIK (Floor 1.00 %)/Q, Current Coupon 11.94 % 11/6/2023 11/6/2028 3,123 3,123 3,123 4,692 4,692 83 Table of Contents CAPITAL SOUTHWEST CORPORATION AND SUBSIDIARIES CONSOLIDATED SCHEDULE OF INVESTMENTS March 31, 2024 Portfolio Company 1,5,6,7,18,21 Type of Investment 2 Current Interest Rate 3 Acquisition Date 14 Maturity Principal Cost 12,17 Fair Value 4 ISLAND PUMP AND TANK, LLC Revolving Loan 10 SOFR+ 7.00 % (Floor 2.00 %) 3/2/2023 8/3/2026 — ( 20 ) — First Lien - Term Loan A SOFR+ 6.00 % (Floor 2.00 %)/Q Current Coupon 11.59 % 20 2/23/2024 8/3/2026 12,000 11,797 12,000 First Lien - Term Loan B SOFR+ 7.00 % (Floor 2.00 %)/Q, Current Coupon 12.59 % 20 2/23/2024 8/3/2026 12,000 11,797 12,000 First Lien - Term Loan C SOFR+ 8.00 % (Floor 2.00 %)/Q, Current Coupon 13.59 % 20 2/23/2024 8/3/2026 12,000 11,796 12,000 35,370 36,000 LIGHTING RETROFIT INTERNATIONAL, LLC 6 Revolving Loan 10 7.50 % 12/31/2021 12/31/2025 729 729 714 First Lien 7.50 % 12/31/2021 12/31/2025 5,091 5,091 4,984 Second Lien 16 10.00 % PIK 12/31/2021 12/31/2026 5,208 5,208 4,917 11,028 10,615 VEREGY CONSOLIDATED, INC. First Lien SOFR+ 6.00 % (Floor 1.00 %)/Q, Current Coupon 11.57 % 2/29/2024 11/3/2027 1,546 1,544 1,515 Subtotal: Environmental Services ( 6.99 %)* 52,634 52,822 Financial Services JACKSON HEWITT TAX SERVICE, INC. First Lien SOFR+ 8.50 % (Floor 2.50 %)/Q, Current Coupon 13.83 % 9/14/2023 9/14/2028 10,000 9,862 9,850 NINJATRADER, INC. Revolving Loan 10 SOFR+ 7.00 % (Floor 1.00 %) 12/18/2019 12/18/2026 — ( 3 ) — First Lien SOFR+ 7.00 % (Floor 1.00 %)/Q, Current Coupon 12.48 % 12/18/2019 12/18/2026 34,698 34,278 34,698 34,275 34,698 VIDA CAPITAL, INC. First Lien SOFR+ 6.00 %/M, Current Coupon 11.44 % 3/15/2024 10/1/2026 2,362 2,342 2,065 Subtotal: Financial Services ( 6.17 %)* 46,479 46,613 Food, Agriculture & Beverage AMERICAN NUTS OPERATIONS LLC First Lien - Term Loan A 16 SOFR+ 8.75 %, 1.00 % PIK (Floor 1.00 %)/Q, Current Coupon 15.23 % 3/11/2022 4/10/2026 12,944 12,903 10,356 First Lien - Term Loan B 16 SOFR+ 10.75 %, 1.00 % PIK (Floor 1.00 %)/Q, Current Coupon 17.23 % 3/11/2022 4/10/2026 12,106 12,057 7,276 24,960 17,632 84 Table of Contents CAPITAL SOUTHWEST CORPORATION AND SUBSIDIARIES CONSOLIDATED SCHEDULE OF INVESTMENTS March 31, 2024 Portfolio Company 1,5,6,7,18,21 Type of Investment 2 Current Interest Rate 3 Acquisition Date 14 Maturity Principal Cost 12,17 Fair Value 4 FOOD PHARMA SUBSIDIARY HOLDINGS, LLC First Lien SOFR+ 6.50 % (Floor 1.00 %)/M, Current Coupon 11.93 % 6/1/2021 6/1/2026 7,030 6,930 7,030 GULF PACIFIC ACQUISITION, LLC Revolving Loan 10 SOFR+ 6.00 % (Floor 1.00 %)/Q, Current Coupon 11.46 % 20 9/30/2022 9/29/2028 454 439 436 First Lien SOFR+ 6.00 % (Floor 1.00 %)/Q, Current Coupon 11.45 % 9/30/2022 9/29/2028 3,606 3,547 3,461 Delayed Draw Term Loan 10 SOFR+ 6.00 % (Floor 1.00 %)/Q, Current Coupon 11.48 % 9/30/2022 9/29/2028 300 286 288 4,272 4,185 INW MANUFACTURING, LLC First Lien SOFR+ 5.75 % (Floor 0.75 %)/Q, Current Coupon 11.31 % 3/6/2024 3/25/2027 2,100 2,062 1,681 MAMMOTH BORROWCO, INC. Revolving Loan 10 SOFR+ 6.25 % (Floor 1.50 %)/Q, Current Coupon 11.57 % 20 11/30/2023 11/30/2028 1,800 1,713 1,755 First Lien - Term Loan A SOFR+ 5.25 % (Floor 1.50 %)/Q, Current Coupon 10.59 % 11/30/2023 11/30/2028 10,750 10,495 10,481 First Lien - Term Loan B SOFR+ 7.25 % (Floor 1.50 %)/Q, Current Coupon 12.59 % 11/30/2023 11/30/2028 10,750 10,495 10,481 Delayed Draw Term Loan 10 SOFR+ 6.25 % (Floor 1.50 %)/Q, Current Coupon 11.58 % 20 11/30/2023 11/30/2028 1,550 1,497 1,511 24,200 24,228 MUENSTER MILLING COMPANY, LLC Revolving Loan SOFR+ 8.00 % (Floor 1.00 %) 8/10/2021 8/10/2026 — ( 47 ) — First Lien SOFR+ 8.00 % (Floor 1.00 %)/Q, Current Coupon 13.48 % 8/10/2021 8/10/2026 21,800 21,536 21,364 21,489 21,364 NEW SKINNY MIXES, LLC Revolving Loan 10 SOFR+ 8.00 % (Floor 2.00 %)/Q, Current Coupon 13.53 % 12/21/2022 12/21/2027 500 440 500 First Lien SOFR+ 8.00 % (Floor 2.00 %)/Q, Current Coupon 13.53 % 12/21/2022 12/21/2027 13,000 12,791 13,000 Delayed Draw Term Loan 10 SOFR+ 8.00 % (Floor 2.00 %) 12/21/2022 12/21/2027 — ( 23 ) — 13,208 13,500 Subtotal: Food, Agriculture & Beverage ( 11.86 %)* 97,121 89,620 85 Table of Contents CAPITAL SOUTHWEST CORPORATION AND SUBSIDIARIES CONSOLIDATED SCHEDULE OF INVESTMENTS March 31, 2024 Portfolio Company 1,5,6,7,18,21 Type of Investment 2 Current Interest Rate 3 Acquisition Date 14 Maturity Principal Cost 12,17 Fair Value 4 Healthcare Products COMMAND GROUP ACQUISITION, LLC 6 First Lien SOFR+ 8.00 % (Floor 2.00 %)/Q, Current Coupon 13.31 % 2/15/2024 2/15/2029 6,000 5,882 5,882 LGM PHARMA, LLC Revolving Loan 10 SOFR+ 8.00 % (Floor 1.00 %) 11/28/2023 11/20/2026 — ( 26 ) — First Lien - Term Loan A SOFR+ 7.00 % (Floor 1.00 %)/M, Current Coupon 12.43 % 11/28/2023 11/20/2026 4,872 4,834 4,872 First Lien - Term Loan B SOFR+ 9.00 % (Floor 1.00 %)/M, Current Coupon 14.43 % 11/28/2023 11/20/2026 4,872 4,834 4,872 First Lien SOFR+ 8.00 % (Floor 1.00 %)/M, Current Coupon 13.43 % 11/28/2023 11/20/2026 4,988 4,897 4,987 Delayed Draw Term Loan SOFR+ 8.00 % (Floor 1.00 %)/M, Current Coupon 13.43 % 3/16/2018 11/20/2026 4,269 4,223 4,269 Unsecured convertible note 9,13 25.00 % PIK 12/21/2021 12/31/2024 144 144 136 18,906 19,136 LIGHTNING INTERMEDIATE II, LLC Revolving Loan 10 SOFR+ 6.50 % (Floor 1.00 %) 6/6/2022 6/7/2027 — ( 23 ) — First Lien SOFR+ 6.50 % (Floor 1.00 %)/S, Current Coupon 11.93 % 6/6/2022 6/7/2027 22,135 21,826 21,029 21,803 21,029 LKC TECHNOLOGIES, INC. Revolving Loan 10 SOFR+ 7.00 % (Floor 2.00 %) 6/7/2023 6/7/2028 — ( 33 ) — First Lien SOFR+ 7.00 % (Floor 2.00 %)/Q, Current Coupon 12.59 % 6/7/2023 6/7/2028 5,917 5,813 5,917 5,780 5,917 MICROBE FORMULAS LLC Revolving Loan 10 SOFR+ 6.00 % (Floor 1.00 %) 4/4/2022 4/3/2028 — ( 22 ) — First Lien SOFR+ 6.00 % (Floor 1.00 %)/M, Current Coupon 11.43 % 4/4/2022 4/3/2028 10,016 9,873 10,016 9,851 10,016 SCRIP INC. First Lien SOFR+ 8.00 % (Floor 2.00 %)/M, Current Coupon 13.45 % 3/21/2019 3/19/2027 16,583 16,505 16,416 Subtotal: Healthcare Products ( 10.37 %)* 78,727 78,396 86 Table of Contents CAPITAL SOUTHWEST CORPORATION AND SUBSIDIARIES CONSOLIDATED SCHEDULE OF INVESTMENTS March 31, 2024 Portfolio Company 1,5,6,7,18,21 Type of Investment 2 Current Interest Rate 3 Acquisition Date 14 Maturity Principal Cost 12,17 Fair Value 4 Healthcare Services AAC NEW HOLDCO INC. First Lien 18.00 % PIK 12/11/2020 6/25/2025 14,364 14,364 14,206 Delayed Draw Term Loan 18.00 % PIK 1/31/2023 6/25/2025 433 430 428 14,794 14,634 CAVALIER BUYER, INC. Revolving Loan 10 SOFR+ 8.00 % (Floor 2.00 %) 2/10/2023 2/10/2028 — ( 31 ) — First Lien SOFR+ 8.00 % (Floor 2.00 %)/Q, Current Coupon 13.45 % 2/10/2023 2/10/2028 6,500 6,392 6,500 6,361 6,500 CDC DENTAL MANAGEMENT CO., LLC Revolving Loan 10 SOFR+ 8.00 % (Floor 2.00 %) 10/31/2023 10/31/2028 — ( 37 ) — First Lien - Term Loan A SOFR+ 7.00 % (Floor 2.00 %)/Q, Current Coupon 12.33 % 10/31/2023 10/31/2028 5,500 5,397 5,390 First Lien - Term Loan B SOFR+ 9.00 % (Floor 2.00 %)/Q, Current Coupon 14.33 % 10/31/2023 10/31/2028 5,500 5,396 5,390 10,756 10,780 CENTRAL MEDICAL SUPPLY LLC 6 Revolving Loan 10 SOFR+ 9.00 % (Floor 1.75 %)/Q, Current Coupon 14.46 % 20 5/22/2020 5/22/2025 700 693 700 First Lien SOFR+ 9.00 % (Floor 1.75 %)/Q, Current Coupon 14.48 % 5/22/2020 5/22/2025 7,540 7,500 7,540 Delayed Draw Capex Term Loan 10 SOFR+ 9.00 % (Floor 1.75 %)/Q, Current Coupon 14.48 % 5/22/2020 5/22/2025 101 94 101 8,287 8,341 CITYVET, INC. First Lien SOFR+ 7.00 % (Floor 2.00 %)/Q, Current Coupon 12.43 % 9/6/2023 9/6/2028 15,000 14,725 15,000 Delayed Draw Term Loan 10 SOFR+ 7.00 % (Floor 2.00 %) 9/6/2023 9/6/2028 — ( 44 ) — 14,681 15,000 HH-INSPIRE ACQUISITION, INC. Revolving Loan 10 SOFR+ 8.00 % (Floor 2.00 %)/Q, Current Coupon 13.44 % 20 4/3/2023 4/3/2028 719 703 653 First Lien SOFR+ 8.00 % (Floor 2.00 %)/Q, Current Coupon 13.48 % 4/3/2023 4/3/2028 7,975 7,796 7,242 8,499 7,895 87 Table of Contents CAPITAL SOUTHWEST CORPORATION AND SUBSIDIARIES CONSOLIDATED SCHEDULE OF INVESTMENTS March 31, 2024 Portfolio Company 1,5,6,7,18,21 Type of Investment 2 Current Interest Rate 3 Acquisition Date 14 Maturity Principal Cost 12,17 Fair Value 4 INSTITUTES OF HEALTH, LLC Revolving Loan 10 SOFR+ 8.00 % (Floor 2.00 %) 9/29/2023 9/29/2028 — ( 18 ) — First Lien - Term Loan A SOFR+ 7.00 % (Floor 2.00 %)/Q, Current Coupon 12.33 % 9/29/2023 9/29/2028 7,500 7,361 7,297 First Lien - Term Loan B SOFR+ 9.00 % (Floor 2.00 %)/Q, Current Coupon 14.33 % 9/29/2023 9/29/2028 7,500 7,361 7,297 14,704 14,594 LAB LOGISTICS, LLC First Lien SOFR+ 7.25 % (Floor 1.00 %)/M, Current Coupon 12.68 % 20 2/22/2024 9/25/2024 7,958 7,954 7,959 NEUROPSYCHIATRIC HOSPITALS, LLC Revolving Loan SOFR+ 8.00 % (Floor 1.00 %)/Q, Current Coupon 13.48 % 5/14/2021 5/14/2026 5,000 4,955 5,000 First Lien - Term Loan A SOFR+ 7.00 % (Floor 1.00 %)/Q, Current Coupon 12.48 % 3/21/2023 5/14/2026 7,424 7,355 7,395 First Lien - Term Loan B SOFR+ 9.00 % (Floor 1.00 %)/Q, Current Coupon 14.48 % 3/21/2023 5/14/2026 7,424 7,355 7,424 First Lien - Term Loan C SOFR+ 10.00 % (Floor 1.00 %)/Q, Current Coupon 15.48 % 3/21/2023 5/14/2026 5,148 5,051 5,148 First Lien - Term Loan D SOFR+ 8.00 % (Floor 1.00 %)/Q, Current Coupon 13.48 % 10/27/2023 5/14/2026 12,973 12,695 12,973 37,411 37,940 OPCO BORROWER, LLC Revolving Loan 10 SOFR+ 6.50 % (Floor 1.00 %) 8/19/2022 8/19/2027 — ( 6 ) — First Lien SOFR+ 6.50 % (Floor 1.00 %)/M, Current Coupon 11.91 % 8/19/2022 8/19/2027 8,661 8,600 8,661 Second Lien 12.50 % 8/19/2022 2/19/2028 3,000 2,792 3,000 11,386 11,661 ROSELAND MANAGEMENT, LLC 6 Revolving Loan 10 SOFR+ 7.00 % (Floor 2.00 %) 11/9/2018 11/12/2024 — — — First Lien SOFR+ 7.00 % (Floor 2.00 %)/Q, Current Coupon 12.48 % 11/9/2018 11/12/2024 14,906 14,889 14,906 14,889 14,906 SPECTRUM OF HOPE, LLC First Lien SOFR+ 8.00 % (Floor 1.00 %)/Q, Current Coupon 13.48 % 9/6/2022 6/11/2024 22,188 22,130 20,833 STATINMED, LLC 6 First Lien 16 SOFR+ 9.50 % PIK (Floor 2.00 %)/M, Current Coupon 14.94 % 7/1/2022 7/1/2027 7,560 7,560 4,914 88 Table of Contents CAPITAL SOUTHWEST CORPORATION AND SUBSIDIARIES CONSOLIDATED SCHEDULE OF INVESTMENTS March 31, 2024 Portfolio Company 1,5,6,7,18,21 Type of Investment 2 Current Interest Rate 3 Acquisition Date 14 Maturity Principal Cost 12,17 Fair Value 4 VERSICARE MANAGEMENT LLC Revolving Loan 10 SOFR+ 8.00 % (Floor 1.00 %) 8/18/2022 8/18/2027 — ( 34 ) — First Lien - Term Loan A SOFR+ 7.00 % (Floor 1.00 %)/Q, Current Coupon 12.59 % 8/18/2022 8/18/2027 12,200 11,994 12,200 First Lien - Term Loan B SOFR+ 9.00 % (Floor 1.00 %)/Q, Current Coupon 14.59 % 7/14/2023 8/18/2027 12,200 11,994 12,200 23,954 24,400 Subtotal: Healthcare Services ( 26.51 %)* 203,366 200,357 Industrial Products DAMOTECH INC. 9,22 Revolving Loan 10 SOFR+ 7.00 % (Floor 2.00 %) 7/7/2023 7/7/2028 — ( 51 ) — First Lien - Term Loan A SOFR+ 6.00 % (Floor 2.00 %)/Q, Current Coupon 11.48 % 7/7/2023 7/7/2028 5,100 5,009 4,998 First Lien - Term Loan B SOFR+ 8.00 % (Floor 2.00 %)/Q, Current Coupon 13.48 % 7/7/2023 7/7/2028 5,100 5,009 4,998 Delayed Draw Term Loan SOFR+ 7.00 % (Floor 2.00 %)/Q, Current Coupon 12.48 % 7/7/2023 7/7/2028 3,000 2,944 3,000 12,911 12,996 GPT INDUSTRIES, LLC 6 Revolving Loan 10 SOFR+ 8.00 % (Floor 2.00 %) 1/30/2023 1/31/2028 — ( 45 ) — First Lien 19 SOFR+ 8.00 % (Floor 2.00 %)/Q, Current Coupon 13.59 % 1/30/2023 1/31/2028 6,004 5,903 6,004 5,858 6,004 THE PRODUCTO GROUP, LLC First Lien SOFR+ 8.00 % (Floor 1.00 %)/M, Current Coupon 13.44 % 12/31/2021 12/31/2026 17,447 17,218 17,447 Subtotal: Industrial Products ( 4.82 %)* 35,987 36,447 Industrial Services BP LOENBRO HOLDINGS INC. Revolving Loan 10 SOFR+ 6.25 % (Floor 1.50 %) 2/9/2024 2/1/2029 — ( 21 ) — First Lien SOFR+ 6.25 % (Floor 1.50 %)/Q, Current Coupon 11.66 % 2/9/2024 2/1/2029 9,798 9,607 9,607 Delayed Draw Term Loan 10 SOFR+ 6.25 % (Floor 1.50 %) 2/9/2024 2/1/2029 — ( 11 ) — 9,575 9,607 89 Table of Contents CAPITAL SOUTHWEST CORPORATION AND SUBSIDIARIES CONSOLIDATED SCHEDULE OF INVESTMENTS March 31, 2024 Portfolio Company 1,5,6,7,18,21 Type of Investment 2 Current Interest Rate 3 Acquisition Date 14 Maturity Principal Cost 12,17 Fair Value 4 USA DEBUSK, LLC First Lien SOFR+ 6.00 % (Floor 1.00 %)/M, Current Coupon 11.43 % 2/25/2020 9/8/2026 11,381 11,285 11,381 First Lien SOFR+ 6.50 % (Floor 1.00 %)/M, Current Coupon 11.93 % 11/21/2023 9/8/2026 1,660 1,631 1,660 12,916 13,041 Subtotal: Industrial Services ( 3.00 %)* 22,491 22,648 Media & Marketing 360 QUOTE TOPCO, LLC Revolving Loan SOFR+ 6.50 % (Floor 1.00 %)/Q, Current Coupon 11.95 % 6/16/2022 6/16/2027 3,346 3,313 2,676 First Lien 19 SOFR+ 6.50 %, 3.00 % PIK (Floor 1.00 %)/Q, Current Coupon 14.95 % 6/16/2022 6/16/2027 23,372 23,131 18,698 26,444 21,374 ACCELERATION, LLC Revolving Loan 10 SOFR+ 8.75 % (Floor 1.00 %) 6/13/2022 6/14/2027 — ( 64 ) — First Lien - Term Loan A SOFR+ 7.75 % (Floor 1.00 %)/Q, Current Coupon 13.34 % 6/13/2022 6/14/2027 8,917 8,791 8,917 First Lien - Term Loan B SOFR+ 8.75 % (Floor 1.00 %)/Q, Current Coupon 14.34 % 6/13/2022 6/14/2027 8,917 8,790 8,917 First Lien - Term Loan C SOFR+ 9.75 % (Floor 1.00 %)/Q, Current Coupon 15.34 % 6/13/2022 6/14/2027 8,917 8,789 8,917 26,306 26,751 ACCELERATION PARTNERS, LLC First Lien 8 SOFR+ 8.11 % (Floor 1.00 %)/Q, Current Coupon 13.59 % 20 12/1/2020 12/1/2025 19,550 19,283 19,550 BOND BRAND LOYALTY ULC 9,22 Revolving Loan 10 SOFR+ 7.00 % (Floor 2.00 %) 5/1/2023 5/1/2028 — ( 32 ) — First Lien - Term Loan A SOFR+ 6.00 % (Floor 2.00 %)/Q, Current Coupon 11.48 % 5/1/2023 5/1/2028 8,955 8,801 8,785 First Lien - Term Loan B SOFR+ 8.00 % (Floor 2.00 %)/Q, Current Coupon 13.48 % 5/1/2023 5/1/2028 8,955 8,800 8,776 17,569 17,561 CRAFTY APES, LLC First Lien 8 SOFR+ 9.25 % PIK (Floor 1.00 %)/M, Current Coupon 14.58 % 6/9/2021 10/31/2025 16,644 16,576 15,778 90 Table of Contents CAPITAL SOUTHWEST CORPORATION AND SUBSIDIARIES CONSOLIDATED SCHEDULE OF INVESTMENTS March 31, 2024 Portfolio Company 1,5,6,7,18,21 Type of Investment 2 Current Interest Rate 3 Acquisition Date 14 Maturity Principal Cost 12,17 Fair Value 4 EXACT BORROWER, LLC Revolving Loan 10 SOFR+ 7.50 % (Floor 2.00 %) 12/7/2022 8/6/2027 — ( 35 ) — First Lien - Term Loan A SOFR+ 7.50 % (Floor 2.00 %)/Q, Current Coupon 12.98 % 12/7/2022 8/6/2027 7,777 7,656 7,777 First Lien - Term Loan B SOFR+ 7.50 % (Floor 2.00 %)/Q, Current Coupon 12.98 % 12/7/2022 8/6/2027 7,777 7,655 7,777 Delayed Draw Term Loan SOFR+ 7.50 % (Floor 2.00 %)/Q, Current Coupon 12.98 % 12/7/2022 8/6/2027 2,068 2,025 2,068 Promissory Note 13.574 % 12/7/2022 12/6/2028 385 385 385 17,686 18,007 IGNITE VISIBILITY LLC Revolving Loan 10 SOFR+ 6.00 % (Floor 1.50 %) 12/1/2023 12/1/2028 — ( 27 ) — First Lien - Term Loan A SOFR+ 5.00 % (Floor 1.50 %)/M, Current Coupon 10.33 % 12/1/2023 12/1/2028 5,000 4,929 4,930 First Lien - Term Loan B SOFR+ 7.00 % (Floor 1.50 %)/M, Current Coupon 12.33 % 12/1/2023 12/1/2028 5,000 4,929 4,930 Delayed Draw Term Loan 10 SOFR+ 6.00 % (Floor 1.50 %) 12/1/2023 12/1/2028 — ( 18 ) — 9,813 9,860 INFOLINKS MEDIA BUYCO, LLC First Lien SOFR+ 5.75 % (Floor 1.00 %)/M, Current Coupon 11.18 % 11/1/2021 10/30/2026 8,171 8,068 8,171 OUTERBOX, LLC 6 Revolving Loan 10 SOFR+ 7.00 % (Floor 1.00 %) 6/8/2022 6/8/2027 — ( 19 ) — First Lien SOFR+ 7.00 % (Floor 1.00 %)/Q, Current Coupon 12.59 % 6/8/2022 6/8/2027 14,625 14,468 14,522 14,449 14,522 Subtotal: Media & Marketing ( 20.06 %)* 156,194 151,574 Restaurants ONE GROUP, LLC First Lien SOFR+ 7.00 % (Floor 1.00 %)/M, Current Coupon 12.44 % 2/22/2024 10/29/2026 9,972 9,876 9,876 Delayed Draw Term Loan 10 SOFR+ 7.00 % (Floor 1.00 %) 2/22/2024 10/29/2026 — — — 9,876 9,876 91 Table of Contents CAPITAL SOUTHWEST CORPORATION AND SUBSIDIARIES CONSOLIDATED SCHEDULE OF INVESTMENTS March 31, 2024 Portfolio Company 1,5,6,7,18,21 Type of Investment 2 Current Interest Rate 3 Acquisition Date 14 Maturity Principal Cost 12,17 Fair Value 4 SWENSONS DRIVE-IN RESTAURANTS, LLC Revolving Loan 10 SOFR+ 7.50 % (Floor 2.00 %) 9/27/2023 9/27/2028 — ( 27 ) — First Lien - Term Loan A SOFR+ 6.50 % (Floor 2.00 %)/Q, Current Coupon 11.83 % 9/27/2023 9/27/2028 8,000 7,852 7,840 First Lien - Term Loan B SOFR+ 8.50 % (Floor 2.00 %)/Q, Current Coupon 13.83 % 9/27/2023 9/27/2028 8,000 7,852 7,840 15,677 15,680 Subtotal: Restaurants ( 3.38 %)* 25,553 25,556 Software & IT Services ACACIA BUYERCO V LLC Revolving Loan 10 SOFR+ 6.50 % (Floor 1.00 %) 11/25/2022 11/26/2027 — ( 29 ) — First Lien - Term Loan A SOFR+ 6.50 % (Floor 1.00 %)/Q, Current Coupon 12.09 % 11/25/2022 11/26/2027 5,000 4,921 5,000 Delayed Draw Term Loan SOFR+ 6.50 % (Floor 1.00 %)/Q, Current Coupon 12.09 % 11/25/2022 11/26/2027 7,500 7,350 7,500 12,242 12,500 CADMIUM, LLC Revolving Loan SOFR+ 8.00 % (Floor 1.00 %)/Q, Current Coupon 13.56 % 1/7/2022 12/22/2026 615 612 615 First Lien SOFR+ 0.00 %, 8.00 % PIK (Floor 1.00 %)/Q, Current Coupon 13.56 % 1/7/2022 12/22/2026 7,505 7,461 7,505 8,073 8,120 COREL, INC. 9,22 First Lien SOFR+ 5.00 % /Q, Current Coupon 10.44 % 3/4/2024 7/2/2026 4,862 4,791 4,794 GRAMMATECH, INC. 6 Revolving Loan 10 SOFR+ 9.50 % (Floor 2.00 %) 11/1/2019 11/1/2024 — ( 5 ) — First Lien SOFR+ 9.50 % (Floor 2.00 %)/Q, Current Coupon 14.98 % 11/1/2019 11/1/2024 1,000 998 1,000 993 1,000 ISI ENTERPRISES, LLC Revolving Loan 10 SOFR+ 7.00 % (Floor 1.00 %) 10/1/2021 10/1/2026 — ( 20 ) — First Lien SOFR+ 7.00 % (Floor 1.00 %)/Q, Current Coupon 12.59 % 10/1/2021 10/1/2026 5,000 4,945 5,000 4,925 5,000 Subtotal: Software & IT Services ( 4.16 %)* 31,024 31,414 92 Table of Contents CAPITAL SOUTHWEST CORPORATION AND SUBSIDIARIES CONSOLIDATED SCHEDULE OF INVESTMENTS March 31, 2024 Portfolio Company 1,5,6,7,18,21 Type of Investment 2 Current Interest Rate 3 Acquisition Date 14 Maturity Principal Cost 12,17 Fair Value 4 Specialty Chemicals SOUTH COAST TERMINALS, LLC Revolving Loan 10 SOFR+ 6.00 % (Floor 1.00 %) 12/13/2021 12/11/2026 — ( 21 ) — First Lien SOFR+ 6.00 % (Floor 1.00 %)/M, Current Coupon 11.43 % 12/13/2021 12/11/2026 14,413 14,243 14,269 14,222 14,269 Subtotal: Specialty Chemicals ( 1.89 %)* 14,222 14,269 Technology Products & Components EMERALD TECHNOLOGIES (U.S.) ACQUISITIONCO, INC. First Lien - Term B Loan SOFR+ 6.25 % (Floor 1.00 %)/Q, Current Coupon 11.74 % 3/12/2024 12/29/2027 3,496 3,460 3,216 TRAFERA, LLC (FKA TRINITY 3, LLC) First Lien 15 SOFR+ 7.00 % (Floor 1.00 %)/Q, Current Coupon 12.48 % 9/30/2020 9/30/2025 5,675 5,645 5,590 Unsecured convertible note 9,13 12.00 % PIK 2/7/2022 3/31/2026 75 75 75 5,720 5,665 Subtotal: Technology Products & Components ( 1.18 %)* 9,180 8,881 Telecommunications INTERMEDIA HOLDINGS, INC. First Lien SOFR+ 6.00 % (Floor 1.00 %)/M, Current Coupon 11.43 % 3/14/2024 7/21/2025 5,231 5,209 5,178 LOGIX HOLDINGS COMPANY, LLC First Lien P+ 4.75 % (Floor 2.00 %)/Q, Current Coupon 13.25 % 3/11/2024 12/22/2024 3,555 3,551 2,755 MERCURY ACQUISITION 2021, LLC First Lien SOFR+ 8.00 % (Floor 1.00 %)/Q, Current Coupon 13.59 % 12/6/2021 12/7/2026 12,957 12,802 11,338 Second Lien SOFR+ 11.00 % (Floor 1.00 %)/Q, Current Coupon 16.59 % 12/6/2021 12/7/2026 2,927 2,891 2,195 15,693 13,533 U.S. TELEPACIFIC CORP. First Lien SOFR+ 1.00 %, 6.00 % PIK (Floor 1.00 %)/Q, Current Coupon 12.49 % 3/19/2024 5/2/2026 2,409 2,409 923 Third Lien — 3/18/2024 5/2/2027 230 230 54 2,639 977 Subtotal: Telecommunications ( 2.97 %)* 27,092 22,443 Transportation & Logistics EVEREST TRANSPORTATION SYSTEMS, LLC First Lien SOFR+ 8.00 % (Floor 1.00 %)/M, Current Coupon 13.43 % 11/9/2021 8/26/2026 6,521 6,483 5,934 93 Table of Contents CAPITAL SOUTHWEST CORPORATION AND SUBSIDIARIES CONSOLIDATED SCHEDULE OF INVESTMENTS March 31, 2024 Portfolio Company 1,5,6,7,18,21 Type of Investment 2 Current Interest Rate 3 Acquisition Date 14 Maturity Principal Cost 12,17 Fair Value 4 GUARDIAN FLEET SERVICES, INC. First Lien SOFR+ 7.25 %, 1.75 % PIK (Floor 2.50 %)/Q, Current Coupon 14.48 % 2/10/2023 2/10/2028 9,575 9,361 9,096 ITA HOLDINGS GROUP, LLC 6 Revolving Loan 10 SOFR+ 9.00 %, 2.00 % PIK (Floor 2.00 %)/Q, Current Coupon 16.48 % 6/21/2023 6/21/2027 2,468 2,411 2,468 First Lien - Term Loan SOFR+ 8.00 %, 2.00 % PIK (Floor 2.00 %)/Q, Current Coupon 15.48 % 6/21/2023 6/21/2027 13,038 11,186 13,038 First Lien - Term B Loan SOFR+ 10.00 %, 2.00 % PIK (Floor 2.00 %)/Q, Current Coupon 17.48 % 6/21/2023 6/21/2027 13,038 11,174 13,038 Delayed Draw Term Loan - A 10 SOFR+ 8.00 %, 2.00 % PIK (Floor 2.00 %)/Q, Current Coupon 15.48 % 6/21/2023 6/21/2027 1,058 1,034 1,058 Delayed Draw Term Loan - B 10 SOFR+ 10.00 %, 2.00 % PIK (Floor 2.00 %)/Q, Current Coupon 17.48 % 6/21/2023 6/21/2027 1,058 1,034 1,058 26,839 30,660 Subtotal: Transportation & Logistics ( 6.05 %)* 42,683 45,690 Total: Debt Investments ( 177.93 %)* $ 1,383,216 $ 1,344,559 94 Table of Contents CAPITAL SOUTHWEST CORPORATION AND SUBSIDIARIES CONSOLIDATED SCHEDULE OF INVESTMENTS March 31, 2024 Portfolio Company 1,5,6,7,18,21 Type of Investment 2 Current Interest Rate 3 Acquisition Date 14 Maturity Principal Cost 12,17 Fair Value 4 Equity Investments Business Services DYNAMIC COMMUNITIES, LLC 6 250,000 Class A Preferred Units 9,13 12/20/2022 — $ — $ 250 $ 317 5,435,211.03 Class B Preferred Units 9,13 12/20/2022 — — 2,218 — 255,984.22 Class C Preferred Units 9,13 12/20/2022 — — — — 2,500,000 Common units 9,13 12/20/2022 — — — — 2,468 317 FS VECTOR LLC 1,000 Common units 9,11,13 4/26/2023 — — 1,000 1,000 SPOTLIGHT AR, LLC 750 Common Units 9,11,13 12/8/2021 — — 750 1,164 US COURTSCRIPT HOLDINGS, INC. 1,000,000 Class D-3 LP Units 9,13 5/17/2022 — — 1,000 1,346 211,862.61 Class D-4 LP Units 9,13 10/31/2022 — — 212 273 211,465.87 Class D-5 LP Units 9,13 1/10/2023 — — 211 269 1,423 1,888 Subtotal: Business Services ( 0.58 %)* 5,641 4,369 Consumer Products and Retail ALLIANCE SPORTS GROUP, L.P. 3.88 % membership preferred interest 8/1/2017 — — 2,500 646 ATS OPERATING, LLC 1,000,000 Preferred units 9,13 1/18/2022 — — 1,000 1,220 CATBIRD NYC, LLC 6 1,000,000 Class A units 9,11,13 10/15/2021 — — 1,000 1,781 500,000 Class B units 9,10,11,13 10/15/2021 — — 500 757 1,500 2,538 HEAT TRAK, LLC Warrants (Expiration - June 9, 2033) 9,13 6/12/2023 — — 1,104 742 SHEARWATER RESEARCH, INC. 22 1,200,000 Class A Preferred Units 9,11,13 4/30/2021 — — 603 644 40,000 Class A Common Units 9,13 4/30/2021 — — 33 787 636 1,431 TRU FRAGRANCE & BEAUTY LLC 1,000,000 Preferred Units 9,13 3/22/2024 — — 1,000 1,000 Subtotal: Consumer Products and Retail ( 1.00 %)* 7,740 7,577 Consumer Services AIR CONDITIONING SPECIALIST, INC. 6 1,006,045.85 Preferred Units 9,13 11/9/2021 — — 1,344 3,319 NATIONAL CREDIT CARE, LLC 191,049.33 Class A-3 Preferred units 9,11,13 3/17/2022 — — 2,000 1,362 POOL SERVICE PARTNERS, INC. 6 10,000 Common units 9,13 12/20/2023 — — 1,000 1,384 95 Table of Contents CAPITAL SOUTHWEST CORPORATION AND SUBSIDIARIES CONSOLIDATED SCHEDULE OF INVESTMENTS March 31, 2024 Portfolio Company 1,5,6,7,18,21 Type of Investment 2 Current Interest Rate 3 Acquisition Date 14 Maturity Principal Cost 12,17 Fair Value 4 ROOF OPCO, LLC 535,714.29 Class A Units 9,13 9/23/2022 — — 750 775 250,000 Class B Units 9,13 4/13/2023 — — 250 262 1,000 1,037 TMT BHC BUYER, INC. 500,000.00 Class A Units 9,13 3/7/2024 — — 500 500 Subtotal: Consumer Services ( 1.01 %)* 5,844 7,602 Distribution BINSWANGER HOLDING CORP. 900,000 shares of common stock 3/9/2017 — — 900 598 Subtotal: Distribution ( 0.08 %)* 900 598 Education STUDENT RESOURCE CENTER LLC 6 10,502,487.46 Preferred Units 12/31/2022 — — 5,845 — 2,000,000.00 Preferred Units 9,13 12/31/2022 — — — — 5,845 — WALL STREET PREP, INC. 1,000,000 Class A-1 Preferred Shares 9,13 7/19/2021 — — 1,000 2,012 Subtotal: Education ( 0.27 %)* 6,845 2,012 Environmental Services ARBORWORKS, LLC 6 100 Class A Units 9,13 11/17/2021 — — 100 5 13,898.32 Class A-1 Preferred Units 11/6/2023 — — 3,170 3,170 13,898.32 Class B-1 Preferred Units 11/6/2023 — — — — 1,666.67 Class A-1 Common Units 11/6/2023 — — — — 3,270 3,175 ISLAND PUMP AND TANK, LLC 1,204,099.26 Preferred units 9,13 3/2/2023 — — 1,212 2,325 LIGHTING RETROFIT INTERNATIONAL, LLC 6 208,333.3333 Series A Preferred units 9,13 12/31/2021 — — — — 203,124.9999 Common units 9,13 12/31/2021 — — — — — — Subtotal: Environmental Services ( 0.73 %)* 4,482 5,500 Financial Services NINJATRADER, INC. 2,000,000 Preferred Units 9,11,13 12/18/2019 — — 2,000 17,771 Subtotal: Financial Services ( 2.35 %)* 2,000 17,771 Food, Agriculture & Beverage AMERICAN NUTS OPERATIONS LLC 3,000,000 units of Class A common stock 9,13 4/10/2018 — — 3,000 — FOOD PHARMA SUBSIDIARY HOLDINGS, LLC 75,000 Class A Units 9,13 6/1/2021 — — 750 1,815 MAMMOTH BORROWCO, INC. 1,000,000 Class A Preferred Units 9,13 11/30/2023 — — 1,000 1,000 96 Table of Contents CAPITAL SOUTHWEST CORPORATION AND SUBSIDIARIES CONSOLIDATED SCHEDULE OF INVESTMENTS March 31, 2024 Portfolio Company 1,5,6,7,18,21 Type of Investment 2 Current Interest Rate 3 Acquisition Date 14 Maturity Principal Cost 12,17 Fair Value 4 MUENSTER MILLING COMPANY, LLC 1,000,000 Class A units 9,13 12/15/2022 — — 1,000 633 1,130,387.32 Class A-1 Units 9,13 12/20/2023 — — 500 316 1,500 949 Subtotal: Food, Agriculture & Beverage ( 0.50 %)* 6,250 3,764 Healthcare Products COMMAND GROUP ACQUISITION, LLC 6 1,250,000 Preferred Units 9,13 2/15/2024 — — 1,250 1,250 LGM PHARMA, LLC 142,278.89 units of Class A common stock 9,13 11/15/2017 — — 1,600 5,258 LIGHTNING INTERMEDIATE II, LLC 0.42 % LLC interest 9,11,13 6/6/2022 — — 600 263 LKC TECHNOLOGIES, INC. 1,000,000 Class A units 9,13 6/7/2023 — — 1,000 1,460 SCRIP INC. 100 shares of common stock 3/21/2019 — — 1,000 751 Subtotal: Healthcare Products ( 1.19 %)* 5,450 8,982 Healthcare Services AAC NEW HOLDCO INC. 374,543 shares common stock 12/11/2020 — — 1,785 1,173 Warrants (Expiration - December 11, 2025) 12/11/2020 — — 2,198 1,030 3,983 2,203 ASC ORTHO MANAGEMENT COMPANY, LLC 2,572 Common Units 9,13 8/31/2018 — — 1,026 619 CAVALIER BUYER, INC. 690,324 Preferred Units 9,13 2/10/2023 — — 690 726 690,324 Class A-1 Units 9,13 2/10/2023 — — — — 690 726 CDC DENTAL MANAGEMENT CO., LLC 1,568.70 Class Y Preferred Units 9,13 10/31/2023 — — 1,000 1,000 CENTRAL MEDICAL SUPPLY LLC 6 2,620,670 Preferred Units 9,13 5/22/2020 — — 1,224 1,360 DELPHI LENDER HOLDCO LLC 254 Common units 6/9/2023 — — — — HH-INSPIRE ACQUISITION, INC. 108,211.4 Preferred units 9,13 4/3/2023 — — 343 323 INSTITUTES OF HEALTH, LLC 100,000 Class A Preferred Units 9,13 9/29/2023 — — 1,000 1,000 OPCO BORROWER, LLC Warrants (Expiration - August 19, 2029) 8/19/2022 — — 207 1,006 ROSELAND MANAGEMENT, LLC 6 3,364 Class A-2 Units 3/31/2023 — — 202 762 1,100 Class A-1 Units 9/26/2022 — — 66 183 16,084 Class A Units 11/9/2018 — — 1,517 747 1,785 1,692 SPECTRUM OF HOPE, LLC 1,074,786 Common units 9,13 2/17/2023 — — 1,075 661 97 Table of Contents CAPITAL SOUTHWEST CORPORATION AND SUBSIDIARIES CONSOLIDATED SCHEDULE OF INVESTMENTS March 31, 2024 Portfolio Company 1,5,6,7,18,21 Type of Investment 2 Current Interest Rate 3 Acquisition Date 14 Maturity Principal Cost 12,17 Fair Value 4 STATINMED, LLC 6 4,718.62 Class A Preferred Units 7/1/2022 — — 4,838 — 39,097.96 Class B Preferred Units 7/1/2022 — — 1,400 — 6,238 — Subtotal: Healthcare Services ( 1.40 %)* 18,571 10,590 Industrial Products DAMOTECH INC. 22 1,127 Preferred units 9,13 7/7/2023 — — 1,127 1,228 1,127 Class A Common units 9,13 7/7/2023 — — — 355 1,127 1,583 GPT INDUSTRIES, LLC 6 1,000,000 Class A Preferred Units 9,13 1/30/2023 — — 1,000 2,064 THE PRODUCTO GROUP, LLC 1,500,000 Class A units 9,11,13 12/31/2021 — — 1,500 12,054 Subtotal: Industrial Products ( 2.08 %)* 3,627 15,701 Media & Marketing ACCELERATION, LLC 13,451.22 Preferred Units 9,13 6/13/2022 — — 893 1,554 1,611.22 Common Units 9,13 6/13/2022 — — 107 — 1,000 1,554 ACCELERATION PARTNERS, LLC 1,019 Preferred Units 9,13 12/1/2020 — — 1,019 1,063 1,019 Class A Common Units 9,13 12/1/2020 — — 14 — 1,033 1,063 BOND BRAND LOYALTY ULC 22 1,000 Preferred units 9,13 5/1/2023 — — 1,000 799 1,000 Class A common units 9,13 5/1/2023 — — — — 1,000 799 EXACT BORROWER, LLC 615.156 Common units 12/7/2022 — — 615 945 IGNITE VISIBILITY LLC 833 Preferred Units 9,13 12/1/2023 — — 833 833 833 Class A Common Units 9,13 12/1/2023 — — 167 167 1,000 1,000 INFOLINKS MEDIA BUYCO, LLC 1.67 % LP interest 9,10,11,13 10/29/2021 — — 588 1,121 OUTERBOX, LLC 6 6,308.2584 Class A common units 9,13 6/8/2022 — — 631 581 SONOBI, INC. 6 500,000 Class A Common Units 9,13 9/17/2020 — — 500 1,958 VISTAR MEDIA INC. 171,617 shares of Series A preferred stock 9,13 4/3/2019 — — 1,874 8,485 Subtotal: Media & Marketing ( 2.32 %)* 8,241 17,506 Software & IT Services ACACIA BUYERCO V LLC 1,000,000 Class B-2 Units 9,13 11/25/2022 — — 1,000 1,000 GRAMMATECH, INC. 6 1,000 Class A units 11/1/2019 — — 1,000 — 360.06 Class A-1 units 1/10/2022 — — 360 — 1,360 — 98 Table of Contents CAPITAL SOUTHWEST CORPORATION AND SUBSIDIARIES CONSOLIDATED SCHEDULE OF INVESTMENTS March 31, 2024 Portfolio Company 1,5,6,7,18,21 Type of Investment 2 Current Interest Rate 3 Acquisition Date 14 Maturity Principal Cost 12,17 Fair Value 4 ISI ENTERPRISES, LLC 1,000,000 Series A Preferred units 10/1/2021 — — 1,000 1,296 166,667 Series A-1 Preferred units 6/7/2023 — — 167 706 1,167 2,002 VTX HOLDINGS, INC. 1,597,707 Series A Preferred units 9,13 7/23/2019 — — 1,598 3,466 Subtotal: Software & IT Services ( 0.86 %)* 5,125 6,468 Technology Products & Components FLIP ELECTRONICS, LLC 2,446,170 Common Units 9,11,13 1/4/2021 — — 2,892 9,505 TRAFERA, LLC (FKA TRINITY 3, LLC) 896.43 Class A units 9,13 11/15/2019 — — 1,205 583 Subtotal: Technology Products & Components ( 1.33 %)* 4,097 10,088 Telecommunications BROAD SKY NETWORKS LLC 1,131,579 Series A Preferred units 9,13 12/11/2020 — — 1,132 1,393 89,335 Series C Preferred units 9,13 10/21/2022 — — 89 159 1,221 1,552 MERCURY ACQUISITION 2021, LLC 12,059,033 Series A Units 9,13 12/6/2021 — — — — Subtotal: Telecommunications ( 0.21 %)* 1,221 1,552 Transportation & Logistics GUARDIAN FLEET SERVICES, INC. 1,500,000 Class A Units 9,13 2/10/2023 — — 1,500 1,584 Warrants (Expiration - February 10, 2033) 9,13 2/10/2023 — — 80 42 Warrants (Expiration - November 30, 2033) 9,13 11/30/2023 — — 20 24 Warrants (Expiration - January 24, 2034) 9,13 1/24/2024 — — 24 24 1,624 1,674 ITA HOLDINGS GROUP, LLC 6 Warrants (Expiration - March 29, 2029) 9,13 3/29/2019 — — 538 4,005 Warrants (Expiration - June 21, 2033) 9,13 6/21/2023 — — 3,791 3,869 9.25 % Class A Membership Interest 9,11,13 2/14/2018 — — 1,500 2,374 5,829 10,248 Subtotal: Transportation & Logistics ( 1.58 %)* 7,453 11,922 Total: Equity Investments ( 17.47 %)* $ 93,487 $ 132,002 Total: Investments ( 195.40 %)* $ 1,476,703 $ 1,476,561 * Value as a percent of net assets. All amounts are stated in U.S. Dollars. 99 Table of Contents 1. All debt investments are income-producing, unless otherwise noted. Equity investments are non-income producing, unless otherwise noted. 2. All of the Company’s investments, the investments of Capital Southwest SPV LLC ("SPV") and the investments of SBIC I (as defined below) are pledged as collateral for the Company’s senior secured revolving credit facility, the SPV's financing credit facility or in support of the SBA-guaranteed debentures to be issued by Capital Southwest SBIC I, LP, the Company's wholly-owned subsidiary that operates as a small business investment company ("SBIC I"), respectively. 3. The majority of investments bear interest at a rate that may be determined by reference to Secured Overnight Financing Rate ("SOFR") or Prime (“P”) and reset daily (D), monthly (M), quarterly (Q), or semiannually (S). For each investment, the Company has provided the spread over SOFR or Prime and the current contractual interest rate in effect at March 31, 2024. Certain investments are subject to an interest rate floor. Certain investments, as noted, accrue payment-in-kind ("PIK") interest. SOFR based contracts may include a credit spread adjustment (the "Adjustment") that is charged in addition to the stated spread. The Adjustment is applied when the SOFR rate, plus the Adjustment, exceeds the stated floor rate, as applicable. As of March 31, 2024, SOFR based contracts in the portfolio had Adjustments ranging from 0.00 % to 0.26161 %. 4. The Company's investment portfolio is comprised entirely of debt and equity securities of privately held companies for which quoted prices falling within the categories of Level 1 and Level 2 inputs are not readily available. Therefore, the Company values all of its portfolio investments at fair value, as determined in good faith by the valuation committee comprised of certain officers of the Company (the "Valuation Committee") as the valuation designee of the Board of Directors (the "Valuation Designee") pursuant to Rule 2a-5 under the Investment Company Act of 1940, as amended (the “1940 Act”), using significant unobservable Level 3 inputs. Refer to Note 4 - Fair Value Measurements for further discussion. 5. Non-Control/Non-Affiliate investments are generally defined by the 1940 Act, as investments that are neither control investments nor affiliate investments. At March 31, 2024, the Company held $ 1,286.4 million of non-control/non-affiliate investments, which represented approximately 87.1 % of the Company’s investment assets. The fair value of these investments as a percent of net assets is 170.2 %. 6. Affiliate investments are generally defined by the 1940 Act as investments in which between 5% and 25% of the voting securities are owned and the investments are not classified as control investments. At March 31, 2024, the Company held $ 190.2 million of affiliate investments, which represented approximately 12.9 % of the Company’s investment assets. The fair value of these investments as a percent of net assets is 25.2 %. 7. Control investments are generally defined by the 1940 Act as investments in which more than 25% of the voting securities are owned. At March 31, 2024, the Company did not hold any control investments. 8. The investment is structured as a first lien last out term loan. 9. Indicates assets that are not considered "qualifying assets" under Section 55(a) of the 1940 Act. Qualifying assets must represent at least 70% of total assets at the time of acquisition of any additional non-qualifying assets. As of March 31, 2024, approximately 10.6 % of the Company's total assets (at fair value) were non-qualifying assets. 10. The investment has an unfunded commitment as of March 31, 2024. Refer to Note 11 - Commitments and Contingencies for further discussion. 11. Income producing through dividends or distributions. 12. As of March 31, 2024, the cumulative gross unrealized appreciation for U.S. federal income tax purposes was approximately $ 96.3 million; cumulative gross unrealized depreciation for federal income tax purposes was $ 96.4 million. Cumulative net unrealized depreciation was $ 0.1 million, based on a tax cost of $ 1,471.1 million. 13. Investment is held through a wholly-owned taxable subsidiary. 14. The Company generally acquires its investments in private transactions exempt from registration under the Securities Act of 1933, as amended (the "Securities Act"). These investments, which, as of March 31, 2024, represented 195.4 % of the Company's net assets or 94.8 % of the Company's total assets, are generally subject to certain limitations on resale, and may be deemed "restricted securities" under the Securities Act. 15. The investment is structured as a split lien term loan, which provides the Company with a first lien priority on certain assets of the obligor and a second lien priority on different assets of the obligor. 16. Investment is on non-accrual status as of March 31, 2024, meaning the Company has ceased to recognize interest income on the investment. 100 Table of Contents 17. Negative cost in this column represents the original issue discount of certain undrawn revolvers and delayed draw term loans. 18. Equity ownership may be held in shares or units of a company that is either wholly owned by the portfolio company or under common control by the same parent company to the portfolio company. 19. The investment is structured as a first lien first out term loan. 20. The rate presented represents a weighted average rate for borrowings under the facility as of March 31, 2024. 21. Unless otherwise noted, all portfolio company headquarters are based in the United States. 22. Portfolio company headquarters are located outside of the United States. As of March 31, 2024, there were no investments that represented greater than 5% of our total assets. The accompanying Notes are an integral part of these Consolidated Financial Statements. 101 Table of Contents CAPITAL SOUTHWEST CORPORATION AND SUBSIDIARIES CONSOLIDATED SCHEDULE OF INVESTMENTS March 31, 2023 Portfolio Company 1,18 Type of Investment 2 Industry Current Interest Rate 3 Acquisition Date 14 Maturity Principal Cost 12,17 Fair Value 4 Non-control/Non-affiliate Investments 5 360 QUOTE TOPCO, LLC Revolving Loan Media & marketing SOFR+ 6.50 % (Floor 1.00 %)/Q, Current Coupon 11.55 % 6/16/2022 6/16/2027 $ 3,250 $ 3,209 $ 3,006 First Lien 19 SOFR+ 6.50 % (Floor 1.00 %)/Q, Current Coupon 11.55 % 6/16/2022 6/16/2027 25,000 24,674 23,125 27,883 26,131 AAC NEW HOLDCO INC. First Lien Healthcare services 18.00 % PIK 12/11/2020 6/25/2025 10,199 10,199 9,842 Delayed Draw Term Loan 10 18.00 % PIK 1/31/2023 6/25/2025 274 270 264 374,543 shares common stock — 12/11/2020 — — 1,785 716 Warrants (Expiration - December 11, 2025) — 12/11/2020 — — 2,198 881 14,452 11,703 ACACIA BUYERCO V LLC Revolver Loan 10 Software & IT services SOFR+ 6.50 % (Floor 1.00 %) 11/25/2022 11/26/2027 — ( 37 ) — First Lien - Term Loan A SOFR+ 6.50 % (Floor 1.00 %)/Q, Current Coupon 11.35 % 11/25/2022 11/26/2027 5,000 4,905 4,920 Delayed Draw Term Loan 10 SOFR+ 6.50 % (Floor 1.00 %)/Q, Current Coupon 11.43 % 11/25/2022 11/26/2027 7,500 7,332 7,380 1,000,000 Class B-2 Units 9,13 — 11/25/2022 — — 1,000 1,000 13,200 13,300 ACCELERATION, LLC Revolving Loan 10 Media & marketing SOFR+ 8.50 % (Floor 1.00 %)/Q, Current Coupon 13.56 % 20 6/13/2022 6/14/2027 3,700 3,616 3,700 First Lien - Term Loan A SOFR+ 7.50 % (Floor 1.00 %)/Q, Current Coupon 12.35 % 6/13/2022 6/14/2027 9,228 9,067 9,228 First Lien - Term Loan B SOFR+ 8.50 % (Floor 1.00 %)/Q, Current Coupon 13.35 % 6/13/2022 6/14/2027 9,228 9,066 9,228 First Lien - Term Loan C SOFR+ 9.50 % (Floor 1.00 %)/Q, Current Coupon 14.35 % 6/13/2022 6/14/2027 9,228 9,066 9,228 Delayed Draw Term Loan 10 SOFR+ 8.50 % (Floor 1.00 %) 6/13/2022 6/14/2027 — ( 42 ) — 13,451.22 Preferred Units 9,13 — 6/13/2022 — — 893 1,482 1,611.22 Common Units 9,13 — 6/13/2022 — — 107 165 31,773 33,031 102 Table of Contents CAPITAL SOUTHWEST CORPORATION AND SUBSIDIARIES CONSOLIDATED SCHEDULE OF INVESTMENTS March 31, 2023 Portfolio Company 1,18 Type of Investment 2 Industry Current Interest Rate 3 Acquisition Date 14 Maturity Principal Cost 12,17 Fair Value 4 ACCELERATION PARTNERS, LLC First Lien 8 Media & marketing SOFR+ 8.15 % (Floor 1.00 %)/Q, Current Coupon 12.90 % 20 12/1/2020 12/1/2025 19,550 19,162 19,550 1,019 Preferred Units 9,13 — 12/1/2020 — — 1,019 1,223 1,019 Class A Common Units 9,13 — 12/1/2020 — — 14 — 20,195 20,773 ACE GATHERING, INC. Second Lien 15 Energy services (midstream) SOFR+ 12.00 % (Floor 2.00 %)/Q, Current Coupon 16.85 % 12/13/2018 12/13/2023 7,698 7,668 7,082 ALLIANCE SPORTS GROUP, L.P. Unsecured convertible Note Consumer products & retail 6.00 % PIK 7/15/2020 9/30/2024 173 173 201 3.88 % membership preferred interest — 8/1/2017 — — 2,500 2,691 2,673 2,892 AMERICAN NUTS OPERATIONS LLC First Lien - Term Loan A Food, agriculture and beverage SOFR+ 6.75 %, 1.00 % PIK (Floor 1.00 %)/Q, Current Coupon 12.49 % 3/11/2022 4/10/2026 11,716 11,667 10,978 First Lien - Term Loan B SOFR+ 8.75 %, 1.00 % PIK (Floor 1.00 %)/Q, Current Coupon 14.49 % 3/11/2022 4/10/2026 11,716 11,667 9,958 3,000,000 units of Class A common stock 9,13 — 4/10/2018 — — 3,000 — 26,334 20,936 AMERICAN TELECONFERENCING SERVICES, LTD. Revolving Loan 10,16 Telecommunications P+ 5.50 %/Q (Floor 2.00 %), Current Coupon 9.00 % 9/17/2021 4/7/2023 862 853 44 First Lien 16 P+ 5.50 %/Q (Floor 2.00 %), Current Coupon 9.00 % 9/21/2016 6/8/2023 4,899 4,858 251 5,711 295 ARBORWORKS, LLC Revolving Loan 10 Environmental services L+ 7.00 %, 3.00 % PIK (Floor 1.00 %)/Q, Current Coupon 14.83 % 11/17/2021 11/9/2026 2,000 1,956 1,502 First Lien L+ 7.00 %, 3.00 % PIK (Floor 1.00 %)/Q, Current Coupon 14.85 % 11/17/2021 11/9/2026 12,610 12,417 9,470 100 Class A Units 9,13 — 11/17/2021 — — 100 — 14,473 10,972 ASC ORTHO MANAGEMENT COMPANY, LLC 2,572 Common Units 9,13 Healthcare services — 8/31/2018 — — 1,026 847 103 Table of Contents CAPITAL SOUTHWEST CORPORATION AND SUBSIDIARIES CONSOLIDATED SCHEDULE OF INVESTMENTS March 31, 2023 Portfolio Company 1,18 Type of Investment 2 Industry Current Interest Rate 3 Acquisition Date 14 Maturity Principal Cost 12,17 Fair Value 4 ATS OPERATING, LLC Revolving Loan 10 Consumer products & retail SOFR+ 6.50 % (Floor 1.00 %)/Q, Current Coupon 11.39 % 1/18/2022 1/18/2027 500 462 492 First Lien - Term Loan A SOFR+ 5.50 % (Floor 1.00 %)/Q, Current Coupon 10.35 % 1/18/2022 1/18/2027 9,250 9,104 9,102 First Lien - Term Loan B SOFR+ 7.50 % (Floor 1.00 %)/Q, Current Coupon 12.35 % 1/18/2022 1/18/2027 9,250 9,102 9,102 1,000,000 Preferred units 9,13 — 1/18/2022 — — 1,000 1,000 19,668 19,696 BINSWANGER HOLDING CORP. 900,000 shares of common stock Distribution — 3/9/2017 — — 900 — BROAD SKY NETWORKS LLC 1,131,579 Series A Preferred units 9,13 Telecommunications — 12/11/2020 — — 1,132 1,649 89,335 Series C Preferred units 9,13 — 10/21/2022 — — 89 130 1,221 1,779 C&M CONVEYOR, INC. First Lien - Term Loan A 15 Business services SOFR+ 7.50 % (Floor 1.50 %)/M, Current Coupon 12.28 % 1/3/2023 9/30/2026 6,500 6,377 6,377 First Lien - Term Loan B 15 SOFR+ 5.50 % (Floor 1.50 %)/M, Current Coupon 10.28 % 1/3/2023 9/30/2026 6,500 6,377 6,377 12,754 12,754 CADMIUM, LLC Revolving Loan Software & IT services L+ 7.00 % (Floor 1.00 %)/Q, Current Coupon 12.16 % 1/7/2022 12/22/2026 615 611 594 First Lien L+ 7.00 % (Floor 1.00 %)/Q, Current Coupon 12.16 % 1/7/2022 12/22/2026 7,385 7,326 7,134 7,937 7,728 CAMIN CARGO CONTROL, INC. First Lien Energy services (midstream) SOFR+ 6.50 % (Floor 1.00 %)/M, Current Coupon 11.42 % 6/2/2021 6/4/2026 5,692 5,652 5,692 CAVALIER BUYER, INC. Revolving Loan 10 Healthcare services SOFR+ 8.00 % (Floor 2.00 %) 2/10/2023 2/10/2028 — ( 19 ) — First Lien SOFR+ 8.00 % (Floor 2.00 %)/Q, Current Coupon 12.88 % 2/10/2023 2/10/2028 6,500 6,372 6,372 625,000 Preferred Units 9,13 — 2/10/2023 — — 625 625 625,000 Class A-1 Units 9,13 — 2/10/2023 — — — — 6,978 6,997 104 Table of Contents CAPITAL SOUTHWEST CORPORATION AND SUBSIDIARIES CONSOLIDATED SCHEDULE OF INVESTMENTS March 31, 2023 Portfolio Company 1,18 Type of Investment 2 Industry Current Interest Rate 3 Acquisition Date 14 Maturity Principal Cost 12,17 Fair Value 4 CRAFTY APES, LLC First Lien 8 Media & marketing SOFR+ 7.02 % (Floor 1.00 %)/Q, Current Coupon 12.07 % 20 6/9/2021 11/1/2024 15,000 14,911 15,000 EVEREST TRANSPORTATION SYSTEMS, LLC First Lien Transportation & logistics SOFR+ 8.00 % (Floor 1.00 %)/M, Current Coupon 12.91 % 11/9/2021 8/26/2026 8,566 8,498 8,566 EXACT BORROWER, LLC Revolving Loan 10 Media & marketing SOFR+ 7.50 % (Floor 2.00 %) 12/7/2022 8/6/2027 — ( 47 ) — First Lien - Term Loan A SOFR+ 7.50 % (Floor 2.00 %)/Q, Current Coupon 12.24 % 12/7/2022 8/6/2027 9,450 9,271 9,271 First Lien - Term Loan B SOFR+ 7.50 % (Floor 2.00 %)/Q, Current Coupon 12.24 % 12/7/2022 8/6/2027 9,450 9,271 9,271 Delayed Draw Term Loan 10 SOFR+ 7.50 % (Floor 2.00 %) 12/7/2022 8/6/2027 — ( 23 ) — Promissory Note 13.574 % 12/7/2022 12/6/2028 385 385 385 615.156 Common units 12/7/2022 — — 615 770 19,472 19,697 FLIP ELECTRONICS, LLC First Lien Technology products & components SOFR+ 7.50 % (Floor 1.00 %)/Q, Current Coupon 12.41 % 20 1/4/2021 1/2/2026 31,845 31,214 31,845 Delayed Draw Term Loan SOFR+ 7.50 % (Floor 1.00 %)/Q, Current Coupon 12.25 % 3/24/2022 1/2/2026 2,818 2,777 2,818 2,000,000 Common Units 9,11,13 — 1/4/2021 — — 2,000 17,678 35,991 52,341 FM SYLVAN, INC. Revolving Loan 10 Industrial services SOFR+ 8.00 % (Floor 1.00 %)/Q, Current Coupon 12.94 % 11/8/2022 11/8/2027 2,000 1,816 2,000 First Lien SOFR+ 8.00 % (Floor 1.00 %)/Q, Current Coupon 12.85 % 11/8/2022 11/8/2027 11,963 11,737 11,963 13,553 13,963 FOOD PHARMA SUBSIDIARY HOLDINGS, LLC First Lien Food, agriculture & beverage L+ 6.50 % (Floor 1.00 %)/Q, Current Coupon 11.25 % 6/1/2021 6/1/2026 7,030 6,908 7,030 75,000 Class A Units 9,13 — 6/1/2021 — — 750 911 7,658 7,941 105 Table of Contents CAPITAL SOUTHWEST CORPORATION AND SUBSIDIARIES CONSOLIDATED SCHEDULE OF INVESTMENTS March 31, 2023 Portfolio Company 1,18 Type of Investment 2 Industry Current Interest Rate 3 Acquisition Date 14 Maturity Principal Cost 12,17 Fair Value 4 GAINS INTERMEDIATE, LLC Revolving Loan 10 Business services SOFR+ 7.50 % (Floor 2.00 %) 12/15/2022 12/15/2027 — ( 47 ) — First Lien - Term Loan A SOFR+ 6.50 % (Floor 2.00 %)/Q, Current Coupon 11.35 % 12/15/2022 12/15/2027 7,500 7,357 7,358 First Lien - Term Loan B SOFR+ 8.50 % (Floor 2.00 %)/Q, Current Coupon 13.35 % 12/15/2022 12/15/2027 7,500 7,356 7,358 Delayed Draw Term Loan 10 SOFR+ 7.50 % (Floor 2.00 %) 12/15/2022 12/15/2027 — ( 162 ) — 14,504 14,716 GUARDIAN FLEET SERVICES, INC. First Lien Transportation & logistics SOFR+ 7.25 %, 1.75 % PIK (Floor 2.50 %)/Q, Current Coupon 14.05 % 2/10/2023 2/10/2028 4,511 4,376 4,376 1,500,000 Class A Units 9,13 — 2/10/2023 — — 1,500 1,500 Warrants (Expiration - February 10, 2033) — 2/10/2023 — — 80 80 5,956 5,956 GULF PACIFIC ACQUISITION, LLC Revolving Loan 10 Food, agriculture & beverage SOFR+ 6.00 % (Floor 1.00 %)/Q, Current Coupon 10.99 % 20 9/30/2022 9/29/2028 353 335 347 First Lien SOFR+ 6.00 % (Floor 1.00 %)/Q, Current Coupon 11.05 % 9/30/2022 9/29/2028 3,642 3,574 3,573 Delayed Draw Term Loan 10 SOFR+ 6.00 % (Floor 1.00 %)/Q, Current Coupon 11.11 % 9/30/2022 9/29/2028 303 286 297 4,195 4,217 HYBRID APPAREL, LLC Second Lien 15 Consumer products & retail SOFR+ 8.25 % (Floor 1.00 %)/Q, Current Coupon 13.10 % 6/30/2021 6/30/2026 15,750 15,528 13,120 INFOLINKS MEDIA BUYCO, LLC First Lien Media & marketing L+ 5.50 % (Floor 1.00 %)/Q, Current Coupon 10.66 % 11/1/2021 10/30/2026 7,653 7,537 7,653 Delayed Draw Term Loan 10 L+ 5.50 % (Floor 1.00 %) 11/1/2021 10/30/2026 — ( 16 ) — 1.68 % LP interest 9,10,11,13 — 10/29/2021 — — 588 944 8,109 8,597 106 Table of Contents CAPITAL SOUTHWEST CORPORATION AND SUBSIDIARIES CONSOLIDATED SCHEDULE OF INVESTMENTS March 31, 2023 Portfolio Company 1,18 Type of Investment 2 Industry Current Interest Rate 3 Acquisition Date 14 Maturity Principal Cost 12,17 Fair Value 4 ISI ENTERPRISES, LLC Revolving Loan 10 Software & IT services L+ 7.00 % (Floor 1.00 %) 10/1/2021 10/1/2026 — ( 28 ) — First Lien L+ 7.00 % (Floor 1.00 %)/Q, Current Coupon 11.75 % 10/1/2021 10/1/2026 5,000 4,926 5,000 1,000,000 Series A Preferred units — 10/1/2021 — — 1,000 1,000 5,898 6,000 ISLAND PUMP AND TANK, LLC Revolving Loan 10 Environmental services SOFR+ 7.50 % (Floor 2.00 %)/Q, Current Coupon 12.67 % 3/2/2023 8/3/2026 500 471 471 First Lien SOFR+ 7.50 % (Floor 2.00 %)/Q Current Coupon 12.66 % 3/2/2023 8/3/2026 9,000 8,823 8,823 750,000 Preferred units 9,13 — 3/2/2023 — — 750 750 10,044 10,044 JVMC HOLDINGS CORP. First Lien Financial services L+ 6.50 % (Floor 1.00 %)/M, Current Coupon 11.34 % 2/28/2019 2/28/2024 6,132 6,117 6,132 KMS, INC. 15 First Lien Distribution L+ 7.25 % (Floor 1.00 %)/Q, Current Coupon 12.44 % 10/4/2021 10/2/2026 15,800 15,681 14,299 Delayed Draw Term Loan 10 L+ 7.25 % (Floor 1.00 %)/Q, Current Coupon 12.44 % 10/4/2021 10/2/2026 2,228 2,174 2,016 17,855 16,315 LASH OPCO, LLC Revolving Loan 10 Consumer products & retail L+ 7.00 % (Floor 1.00 %)/S, Current Coupon 11.89 % 20 12/29/2021 9/18/2025 343 336 330 First Lien L+ 7.00 % (Floor 1.00 %)/S, Current Coupon 11.84 % 12/29/2021 3/18/2026 10,532 10,315 10,110 10,651 10,440 LGM PHARMA, LLC First Lien Healthcare products L+ 8.50 % (Floor 1.00 %), 1.00 % PIK/Q, Current Coupon 14.16 % 11/15/2017 11/15/2023 11,477 11,436 11,477 Delayed Draw Term Loan L+ 10.00 % (Floor 1.00 %), 1.00 % PIK/Q, Current Coupon 15.66 % 7/24/2020 11/15/2023 2,501 2,491 2,501 Unsecured convertible note 9,13 25.00 % PIK 12/21/2021 12/31/2024 113 113 113 142,278.89 units of Class A common stock 9,13 — 11/15/2017 — — 1,600 1,692 15,640 15,783 107 Table of Contents CAPITAL SOUTHWEST CORPORATION AND SUBSIDIARIES CONSOLIDATED SCHEDULE OF INVESTMENTS March 31, 2023 Portfolio Company 1,18 Type of Investment 2 Industry Current Interest Rate 3 Acquisition Date 14 Maturity Principal Cost 12,17 Fair Value 4 LIGHTNING INTERMEDIATE II, LLC Revolving Loan 10 Healthcare products SOFR+ 6.50 % (Floor 1.00 %) 6/6/2022 6/7/2027 — ( 31 ) — First Lien SOFR+ 6.50 % (Floor 1.00 %)/S, Current Coupon 11.54 % 6/6/2022 6/7/2027 22,714 22,318 22,305 0.88 % LLC interest 9,13 — 6/6/2022 — — 600 416 22,887 22,721 LLFLEX, LLC First Lien 15 Containers & packaging L+ 9.00 % (Floor 1.00 %)/Q, Current Coupon 13.75 % 8/16/2021 8/14/2026 10,835 10,656 10,131 MAKO STEEL LP Revolving Loan 10 Business services L+ 7.25 % (Floor 0.75 %)/S, Current Coupon 11.89 % 20 3/15/2021 3/13/2026 943 921 939 First Lien L+ 7.25 % (Floor 0.75 %)/Q, Current Coupon 12.30 % 3/15/2021 3/13/2026 7,879 7,778 7,839 8,699 8,778 MERCURY ACQUISITION 2021, LLC First Lien Telecommunications L+ 8.00 % (Floor 1.00 %)/Q, Current Coupon 12.75 % 12/6/2021 12/7/2026 12,344 12,150 11,949 Second Lien L+ 11.00 % (Floor 1.00 %)/Q, Current Coupon 15.75 % 12/6/2021 12/7/2026 2,759 2,715 2,593 2,089,599 Series A units 9,13 — 12/6/2021 — — — 770 14,865 15,312 MICROBE FORMULAS LLC Revolving Loan 10 Healthcare products SOFR+ 6.25 % (Floor 1.00 %) 4/4/2022 4/3/2028 — ( 27 ) — First Lien SOFR+ 6.25 % (Floor 1.00 %)/M, Current Coupon 11.09 % 4/4/2022 4/3/2028 11,621 11,421 11,505 11,394 11,505 MUENSTER MILLING COMPANY, LLC Revolving Loan 10 Food, agriculture & beverage SOFR+ 7.25 % (Floor 1.00 %) 8/10/2021 8/10/2026 — ( 67 ) — First Lien SOFR+ 7.25 % (Floor 1.00 %)/Q, Current Coupon 11.99 % 8/10/2021 8/10/2026 21,800 21,457 21,800 1,000,000 Class A units 9,13 — 12/15/2022 — — 1,000 1,185 22,390 22,985 108 Table of Contents CAPITAL SOUTHWEST CORPORATION AND SUBSIDIARIES CONSOLIDATED SCHEDULE OF INVESTMENTS March 31, 2023 Portfolio Company 1,18 Type of Investment 2 Industry Current Interest Rate 3 Acquisition Date 14 Maturity Principal Cost 12,17 Fair Value 4 NATIONAL CREDIT CARE, LLC First Lien - Term Loan A Consumer services L+ 6.50 % (Floor 1.00 %)/Q, Current Coupon 11.25 % 12/23/2021 12/23/2026 9,716 9,564 9,550 First Lien - Term Loan B L+ 7.50 % (Floor 1.00 %)/Q, Current Coupon 12.25 % 12/23/2021 12/23/2026 9,716 9,563 9,550 191,049.33 Class A-3 Preferred units 9,11,13 — 3/17/2022 — — 2,000 2,000 21,127 21,100 NEUROPSYCHIATRIC HOSPITALS, LLC Revolving Loan Healthcare services L+ 8.00 % (Floor 1.00 %)/Q, Current Coupon 12.75 % 5/14/2021 5/14/2026 4,400 4,338 4,180 First Lien - Term Loan A L+ 7.00 % (Floor 1.00 %)/Q, Current Coupon 11.75 % 3/21/2023 5/14/2026 7,478 7,375 7,104 First Lien - Term Loan B L+ 9.00 % (Floor 1.00 %)/Q, Current Coupon 13.75 % 3/21/2023 5/14/2026 7,478 7,375 6,356 First Lien - Term Loan C SOFR+ 10.00 % (Floor 1.00 %)/Q, Current Coupon 15.00 % 3/21/2023 5/14/2026 3,176 3,097 3,097 22,185 20,737 NEW SKINNY MIXES, LLC Revolving Loan 10 Food, agriculture & beverage SOFR+ 8.00 % (Floor 2.00 %) 12/21/2022 12/21/2027 — ( 76 ) — First Lien SOFR+ 8.00 % (Floor 2.00 %)/Q, Current Coupon 12.79 % 12/21/2022 12/21/2027 13,000 12,750 12,753 Delayed Draw Term Loan 10 SOFR+ 8.00 % (Floor 2.00 %) 12/21/2022 12/21/2027 — ( 28 ) — 12,646 12,753 NINJATRADER, INC. Revolving Loan 10 Financial services L+ 6.25 % (Floor 1.00 %) 12/18/2019 12/18/2024 — ( 3 ) — First Lien L+ 6.25 % (Floor 1.00 %)/Q, Current Coupon 11.00 % 12/18/2019 12/18/2024 23,150 22,864 23,150 Delayed Draw Term Loan 10 L+ 6.25 % (Floor 1.00 %) 12/31/2020 12/18/2024 — ( 28 ) — 2,000,000 Preferred Units 9,11,13 — 12/18/2019 — — 2,000 11,138 24,833 34,288 NWN PARENT HOLDINGS, LLC Revolving Loan 10 Software & IT services SOFR+ 8.00 % (Floor 1.00 %)/Q, Current Coupon 12.85 % 20 5/7/2021 5/7/2026 1,020 997 1,006 First Lien SOFR+ 8.00 % (Floor 1.00 %)/Q, Current Coupon 12.87 % 5/7/2021 5/7/2026 12,688 12,519 12,510 13,516 13,516 109 Table of Contents CAPITAL SOUTHWEST CORPORATION AND SUBSIDIARIES CONSOLIDATED SCHEDULE OF INVESTMENTS March 31, 2023 Portfolio Company 1,18 Type of Investment 2 Industry Current Interest Rate 3 Acquisition Date 14 Maturity Principal Cost 12,17 Fair Value 4 OPCO BORROWER, LLC Revolving Loan 10 Healthcare services SOFR+ 6.50 % (Floor 1.00 %) 8/19/2022 8/19/2027 — ( 7 ) — First Lien SOFR+ 6.50 % (Floor 1.00 %)/M, Current Coupon 11.50 % 8/19/2022 8/19/2027 9,052 8,970 9,052 Second Lien 12.50 % 8/19/2022 2/19/2028 3,000 2,755 3,000 Warrants (Expiration - August 19, 2029) — 8/19/2022 — — 207 399 11,925 12,451 PIPELINE TECHNIQUE LTD. 9 Revolving Loan 10 Energy services (midstream) P+ 6.25 % (Floor 2.00 %)/Q, Current Coupon 14.25 % 8/23/2022 8/19/2027 500 441 490 First Lien SOFR+ 7.25 % (Floor 1.00 %)/Q, Current Coupon 12.32 % 8/23/2022 8/19/2027 9,750 9,574 9,565 10,015 10,055 RESEARCH NOW GROUP, INC. Second Lien Business services L+ 9.50 % (Floor 1.00 %)/S, Current Coupon 14.31 % 12/8/2017 12/20/2025 10,500 10,163 6,431 ROOF OPCO, LLC Revolving Loan 10 Consumer services SOFR+ 6.50 % (Floor 1.00 %) 8/27/2021 8/27/2026 — ( 42 ) — First Lien SOFR+ 6.50 % (Floor 1.00 %)/Q, Current Coupon 11.35 % 8/27/2021 8/27/2026 21,633 21,267 21,071 535,714.29 Class A Units 9,13 — 9/23/2022 — — 750 750 21,975 21,821 RTIC SUBSIDIARY HOLDINGS, LLC Revolving Loan 10 Consumer products & retail SOFR+ 7.75 % (Floor 1.25 %)/M, Current Coupon 12.56 % 20 9/1/2020 9/1/2025 822 813 715 First Lien SOFR+ 7.75 % (Floor 1.25 %)/M, Current Coupon 12.52 % 9/1/2020 9/1/2025 6,166 6,123 5,364 6,936 6,079 SCRIP INC. First Lien 8 Healthcare products L+ 10.98 % (Floor 2.00 %)/M, Current Coupon 15.83 % 3/21/2019 3/21/2024 16,750 16,634 15,594 100 shares of common stock — 3/21/2019 — — 1,000 751 17,634 16,345 110 Table of Contents CAPITAL SOUTHWEST CORPORATION AND SUBSIDIARIES CONSOLIDATED SCHEDULE OF INVESTMENTS March 31, 2023 Portfolio Company 1,18 Type of Investment 2 Industry Current Interest Rate 3 Acquisition Date 14 Maturity Principal Cost 12,17 Fair Value 4 SHEARWATER RESEARCH, INC. 9 Revolving Loan 10 Consumer products & retail L+ 6.25 % (Floor 1.00 %) 4/30/2021 4/30/2026 — ( 30 ) — First Lien L+ 6.25 % (Floor 1.00 %)/Q, Current Coupon 11.06 % 4/30/2021 4/30/2026 13,643 13,462 13,643 1,200,000 Class A Preferred Units — 4/30/2021 — — 978 2,558 40,000 Class A Common Units — 4/30/2021 — — 33 85 14,443 16,286 SIB HOLDINGS, LLC Revolving Loan Business services L+ 6.25 % (Floor 1.00 %)/M, Current Coupon 11.23 % 20 10/29/2021 10/29/2026 702 694 681 First Lien L+ 6.25 % (Floor 1.00 %)/M, Current Coupon 11.21 % 10/29/2021 10/29/2026 11,382 11,235 11,040 238,095.24 Common Units 9,13 — 10/29/2021 — — 500 411 12,429 12,132 SOUTH COAST TERMINALS, LLC Revolving Loan 10 Specialty chemicals L+ 5.25 % (Floor 1.00 %) 12/13/2021 12/11/2026 — ( 28 ) — First Lien L+ 5.25 % (Floor 1.00 %)/M, Current Coupon 10.03 % 12/13/2021 12/11/2026 17,839 17,560 17,839 17,532 17,839 SPECTRUM OF HOPE, LLC First Lien Healthcare services SOFR+ 7.50 % (Floor 1.00 %)/M, Current Coupon 12.24 % 9/6/2022 6/11/2024 22,358 22,020 21,934 1,000,000 Common units 9,13 — 2/17/2023 — — 1,000 1,000 23,020 22,934 SPOTLIGHT AR, LLC Revolving Loan 10 Business services L+ 6.75 % (Floor 1.00 %) 12/8/2021 6/8/2026 — ( 28 ) — First Lien L+ 6.75 % (Floor 1.00 %)/Q, Current Coupon 11.50 % 12/8/2021 6/8/2026 7,481 7,370 7,481 750 Common Units 9,11,13 — 12/8/2021 — — 750 972 8,092 8,453 SYSTEC CORPORATION Revolving Loan 10 Business services L+ 7.50 % (Floor 1.00 %)/Q, Current Coupon 12.32 % 20 8/13/2021 8/13/2025 1,600 1,576 1,600 First Lien L+ 7.50 % (Floor 1.00 %)/Q, Current Coupon 12.25 % 8/13/2021 8/13/2025 9,000 8,886 9,000 10,462 10,600 111 Table of Contents CAPITAL SOUTHWEST CORPORATION AND SUBSIDIARIES CONSOLIDATED SCHEDULE OF INVESTMENTS March 31, 2023 Portfolio Company 1,18 Type of Investment 2 Industry Current Interest Rate 3 Acquisition Date 14 Maturity Principal Cost 12,17 Fair Value 4 THE PRODUCTO GROUP, LLC First Lien Industrial products SOFR+ 8.00 % (Floor 1.00 %)/M, Current Coupon 12.92 % 12/31/2021 12/31/2026 17,655 17,355 17,655 1,500,000 Class A units 9,13 — 12/31/2021 — — 1,500 7,833 18,855 25,488 TRAFERA, LLC (FKA TRINITY 3, LLC) First Lien 15 Technology products & components L+ 6.50 % (Floor 1.00 %)/Q, Current Coupon 11.26 % 9/30/2020 9/30/2025 5,775 5,727 5,775 Unsecured convertible note 9,13 10.00 % PIK 2/7/2022 3/31/2026 92 92 92 896.43 Class A units 9,11,13 — 11/15/2019 — — 1,205 1,509 7,024 7,376 US COURTSCRIPT HOLDINGS, INC. First Lien Business services SOFR+ 6.00 % (Floor 1.00 %)/Q, Current Coupon 10.87 % 20 5/17/2022 5/17/2027 16,800 16,540 16,800 1,000,000 Class D-3 LP Units 9,13 — 5/17/2022 — — 1,000 1,354 211,862.61 Class D-4 LP Units 9,13 — 10/31/2022 — — 212 278 211,465.87 Class D-5 LP Units 9,13 — 1/10/2023 — — 211 275 17,963 18,707 USA DEBUSK, LLC First Lien Industrial services L+ 5.75 % (Floor 1.00 %)/M, Current Coupon 10.59 % 2/25/2020 9/8/2026 11,498 11,367 11,498 VERSICARE MANAGEMENT LLC Revolving Loan 10 Healthcare services SOFR+ 8.00 % (Floor 1.00 %) 8/18/2022 8/18/2027 — ( 44 ) — First Lien - Term Loan A SOFR+ 8.00 % (Floor 1.00 %)/Q, Current Coupon 12.85 % 8/18/2022 8/18/2027 13,500 13,256 13,257 Delayed Draw Term Loan 10 SOFR+ 8.00 % (Floor 1.00 %)/Q, Current Coupon 13.16 % 8/18/2022 8/18/2027 2,400 2,332 2,357 15,544 15,614 VISTAR MEDIA INC. 171,617 shares of Series A preferred stock 9,13 Media & marketing — 4/3/2019 — — 1,874 9,054 VTX HOLDINGS, INC. 1,597,707 Series A Preferred units 9,13 Software & IT services — 7/23/2019 — — 1,598 2,694 112 Table of Contents CAPITAL SOUTHWEST CORPORATION AND SUBSIDIARIES CONSOLIDATED SCHEDULE OF INVESTMENTS March 31, 2023 Portfolio Company 1,18 Type of Investment 2 Industry Current Interest Rate 3 Acquisition Date 14 Maturity Principal Cost 12,17 Fair Value 4 WALL STREET PREP, INC. Revolving Loan 10 Education L+ 7.00 % (Floor 1.00 %) 7/19/2021 7/20/2026 — ( 13 ) — First Lien L+ 7.00 % (Floor 1.00 %)/Q, Current Coupon 11.75 % 7/19/2021 7/20/2026 10,588 10,436 10,588 1,000,000 Class A-1 Preferred Shares — 7/19/2021 — — 1,000 1,205 11,423 11,793 WELL-FOAM, INC. Revolving Loan 10 Energy services (upstream) L+ 8.00 % (Floor 1.00 %) 9/9/2021 9/9/2026 — ( 64 ) — First Lien L+ 8.00 % (Floor 1.00 %)/Q, Current Coupon 12.75 % 9/9/2021 9/9/2026 17,730 17,466 17,730 17,402 17,730 WINTER SERVICES OPERATIONS, LLC Revolving Loan 10 Business services L+ 7.00 % (Floor 1.00 %) 11/19/2021 11/19/2026 — ( 65 ) — First Lien L+ 7.00 % (Floor 1.00 %)/Q, Current Coupon 11.75 % 11/19/2021 11/19/2026 20,000 19,693 20,000 Delayed Draw Term Loan 10 L+ 7.00 % (Floor 1.00 %) 11/19/2021 11/19/2026 — ( 32 ) — 19,596 20,000 ZENFOLIO INC. Revolving Loan Business services SOFR+ 9.00 % (Floor 1.00 %)/Q, Current Coupon 13.82 % 7/17/2017 7/17/2025 2,000 1,994 1,954 First Lien SOFR+ 9.00 % (Floor 1.00 %)/Q, Current Coupon 13.82 % 7/17/2017 7/17/2025 18,913 18,762 18,478 20,756 20,432 ZIPS CAR WASH, LLC Delayed Draw Term Loan - A Consumer services SOFR+ 7.25 % (Floor 1.00 %)/M, Current Coupon 12.15 % 20 2/11/2022 3/1/2024 15,840 15,611 15,634 Delayed Draw Term Loan - B SOFR+ 7.25 % (Floor 1.00 %)/M, Current Coupon 12.12 % 20 2/11/2022 3/1/2024 3,970 3,914 3,919 19,525 19,553 Total Non-control/Non-affiliate Investments ( 163.7 % of net assets at fair value) $ 947,829 $ 966,627 113 Table of Contents CAPITAL SOUTHWEST CORPORATION AND SUBSIDIARIES CONSOLIDATED SCHEDULE OF INVESTMENTS March 31, 2023 Portfolio Company 1,18 Type of Investment 2 Industry Current Interest Rate 3 Acquisition Date 14 Maturity Principal Cost 12,17 Fair Value 4 Affiliate Investments 6 AIR CONDITIONING SPECIALIST, INC. Revolving Loan 10 Consumer services SOFR+ 7.25 % (Floor 1.00 %)/Q, Current Coupon 12.40 % 11/9/2021 11/9/2026 $ 800 $ 766 $ 800 First Lien SOFR+ 7.25 % (Floor 1.00 %)/Q, Current Coupon 12.12 % 20 11/9/2021 11/9/2026 27,438 26,940 27,438 766,738.93 Preferred Units 9,13 — 11/9/2021 — — 809 1,202 28,515 29,440 CATBIRD NYC, LLC Revolving Loan 10 Consumer products & retail SOFR+ 7.00 % (Floor 1.00 %) 10/15/2021 10/15/2026 — ( 57 ) — First Lien SOFR+ 7.00 % (Floor 1.00 %)/Q, Current Coupon 11.88 % 10/15/2021 10/15/2026 15,500 15,265 15,500 1,000,000 Class A units 9,11,13 — 10/15/2021 — — 1,000 1,658 500,000 Class B units 9,10,11,13 — 10/15/2021 — — 500 714 16,708 17,872 CENTRAL MEDICAL SUPPLY LLC Revolving Loan 10 Healthcare services L+ 9.00 % (Floor 1.75 %)/Q, Current Coupon 13.75 % 5/22/2020 5/22/2025 300 287 296 First Lien L+ 9.00 % (Floor 1.75 %)/Q, Current Coupon 13.75 % 5/22/2020 5/22/2025 7,500 7,427 7,402 Delayed Draw Capex Term Loan 10 L+ 9.00 % (Floor 1.75 %)/Q, Current Coupon 13.75 % 5/22/2020 5/22/2025 100 87 99 1,380,500 Preferred Units 9,13 — 5/22/2020 — — 976 357 8,777 8,154 CHANDLER SIGNS, LLC 1,500,000 units of Class A-1 common stock 9,13 Business services — 1/4/2016 — — 1,500 3,215 DELPHI BEHAVIORAL HEALTH GROUP, LLC Protective Advance 16 L+ 16.70 % PIK (Floor 1.00 %)/Q, Current Coupon 21.06 % 8/31/2021 4/7/2023 1,448 1,448 — First Lien 16 Healthcare services L+ 11.00 % PIK (Floor 1.00 %)/S, Current Coupon 15.74 % 4/8/2020 4/7/2023 1,649 1,649 — First Lien 16 L+ 9.00 % PIK (Floor 1.00 %)/S, Current Coupon 14.13 % 4/8/2020 4/7/2023 1,829 1,829 — 1,681.04 Common Units — 4/8/2020 — — 3,615 — 8,541 — 114 Table of Contents CAPITAL SOUTHWEST CORPORATION AND SUBSIDIARIES CONSOLIDATED SCHEDULE OF INVESTMENTS March 31, 2023 Portfolio Company 1,18 Type of Investment 2 Industry Current Interest Rate 3 Acquisition Date 14 Maturity Principal Cost 12,17 Fair Value 4 DYNAMIC COMMUNITIES, LLC First Lien - Term Loan A Business services SOFR+ 4.50 % PIK (Floor 2.00 %)/Q, Current Coupon 9.41 % 12/20/2022 12/31/2026 3,846 3,826 3,823 First Lien - Term Loan B SOFR+ 6.50 % PIK (Floor 2.00 %)/ Q, Current Coupon 11.41 % 12/20/2022 12/31/2026 3,867 3,844 3,843 250,000 Class A Preferred Units 9,13 — 12/20/2022 — — 250 625 5,435,211.03 Class B Preferred Units 9,13 — 12/20/2022 — — 2,218 2,218 255,984.22 Class C Preferred Units 9,13 — 12/20/2022 — — — — 2,500,000 Common units 9,13 — 12/20/2022 — — — — 10,138 10,509 GPT INDUSTRIES, LLC Revolving Loan 10 Industrial products SOFR+ 9.00 % (Floor 2.00 %) 1/30/2023 1/31/2028 — ( 58 ) — First Lien 19 SOFR+ 9.00 % (Floor 2.00 %)/Q, Current Coupon 13.93 % 1/30/2023 1/31/2028 6,150 6,030 6,030 1,000,000 Class A Preferred Units 9,13 — 1/30/2023 — — 1,000 1,000 6,972 7,030 GRAMMATECH, INC. Revolving Loan 10 Software & IT services SOFR+ 9.50 % (Floor 2.00 %) 11/1/2019 11/1/2024 — ( 14 ) — First Lien SOFR+ 9.50 % (Floor 2.00 %)/Q, Current Coupon 14.24 % 11/1/2019 11/1/2024 10,031 9,967 10,031 1,000 Class A units — 11/1/2019 — — 1,000 — 360.06 Class A-1 units — 1/10/2022 — — 360 372 11,313 10,403 115 Table of Contents CAPITAL SOUTHWEST CORPORATION AND SUBSIDIARIES CONSOLIDATED SCHEDULE OF INVESTMENTS March 31, 2023 Portfolio Company 1,18 Type of Investment 2 Industry Current Interest Rate 3 Acquisition Date 14 Maturity Principal Cost 12,17 Fair Value 4 ITA HOLDINGS GROUP, LLC Revolving Loan Transportation & logistics SOFR+ 9.00 %, 0.50 % PIK (Floor 1.00 %)/Q, Current Coupon 14.35 % 2/14/2018 5/12/2023 7,000 6,974 7,014 First Lien - Term Loan SOFR+ 8.00 %, 0.50 % PIK (Floor 1.00 %)/Q, Current Coupon 13.35 % 2/14/2018 5/12/2023 10,114 10,139 10,114 First Lien - Term B Loan SOFR+ 11.00 %, 0.50 % PIK (Floor 1.00 %)/Q, Current Coupon 16.35 % 6/5/2018 5/12/2023 5,057 5,056 5,068 First Lien - PIK Note A 10.00 % PIK 3/29/2019 5/12/2023 3,271 3,259 3,255 First Lien - PIK Note B 10.00 % PIK 3/29/2019 5/12/2023 129 129 128 Warrants (Expiration - March 29, 2029) 9,13 — 3/29/2019 — — 538 4,046 9.25 % Class A Membership Interest 9,13 — 2/14/2018 — — 1,500 4,348 27,595 33,973 LIGHTING RETROFIT INTERNATIONAL, LLC Revolving Loan 10 Environmental services 7.50 % 12/31/2021 12/31/2025 — — — First Lien 7.50 % 12/31/2021 12/31/2025 5,143 5,143 5,143 Second Lien 16 10.00 % PIK 12/31/2021 12/31/2026 5,208 5,208 3,594 208,333.3333 Series A Preferred units 9,13 — 12/31/2021 — — — — 203,124.9999 Common units 9,13 — 12/31/2021 — — — — 10,351 8,737 OUTERBOX, LLC Revolving Loan 10 Media & marketing SOFR+ 6.75 % (Floor 1.00 %) 6/8/2022 6/8/2027 — ( 25 ) — First Lien SOFR+ 6.75 % (Floor 1.00 %)/Q, Current Coupon 11.56 % 20 6/8/2022 6/8/2027 14,625 14,428 14,552 6,308.2584 Class A common units 9,13 — 6/8/2022 — — 631 773 15,034 15,325 116 Table of Contents CAPITAL SOUTHWEST CORPORATION AND SUBSIDIARIES CONSOLIDATED SCHEDULE OF INVESTMENTS March 31, 2023 Portfolio Company 1,18 Type of Investment 2 Industry Current Interest Rate 3 Acquisition Date 14 Maturity Principal Cost 12,17 Fair Value 4 ROSELAND MANAGEMENT, LLC Revolving Loan 10 Healthcare services SOFR+ 8.00 %, 2.00 % PIK (Floor 2.00 %)/Q, Current Coupon 14.74 % 11/9/2018 11/12/2024 575 566 555 First Lien SOFR+ 8.00 %, 2.00 % PIK (Floor 2.00 %)/Q, Current Coupon 14.74 % 11/9/2018 11/12/2024 15,051 15,008 14,524 3,364 Class A-2 Units — 3/31/2023 — — 202 694 1,100 Class A-1 Units — 9/26/2022 — — 66 161 16,084 Class A Units — 11/9/2018 — — 1,517 422 17,359 16,356 SONOBI, INC. 500,000 Class A Common Units 9,13 Media & marketing — 9/17/2020 — — 500 1,749 STATINMED, LLC First Lien Healthcare services SOFR+ 9.50 % PIK (Floor 2.00 %)/M, Current Coupon 14.28 % 7/1/2022 7/1/2027 7,288 7,288 7,288 Delayed Draw Term Loan SOFR+ 9.50 % PIK (Floor 2.00 %)/M, Current Coupon 14.28 % 12/23/2022 4/15/2023 122 122 122 4,718.62 Class A Preferred Units — 7/1/2022 — — 4,838 3,767 39,097.96 Class B Preferred Units — 7/1/2022 — — 1,400 — 13,648 11,177 STUDENT RESOURCE CENTER LLC First Lien Education 8.50 % PIK 12/31/2022 12/30/2027 8,889 8,727 8,720 10,502,487.46 Preferred Units — 12/31/2022 — — 5,845 5,845 2,000,000.00 Preferred Units 9,13 — 12/31/2022 — — — — 14,572 14,565 Total Affiliate Investments ( 31.9 % of net assets at fair value) $ 191,523 $ 188,505 Control Investments 7 I-45 SLF LLC 9, 10, 11 80 % LLC equity interest Multi-sector holdings — 10/20/2015 — — $ 80,800 $ 51,256 Total Control Investments ( 8.7 % of net assets at fair value) $ 80,800 $ 51,256 TOTAL INVESTMENTS ( 204.3 % of net assets at fair value) $ 1,220,152 $ 1,206,388 117 Table of Contents 1 All debt investments are income-producing, unless otherwise noted. Equity investments are non-income producing, unless otherwise noted. 2 All of the Company’s investments and the investments of SBIC I (as defined below), unless otherwise noted, are pledged as collateral for the Company’s senior secured credit facility or in support of the SBA-guaranteed debentures to be issued by Capital Southwest SBIC I, LP, our wholly-owned subsidiary that operates as a small business investment company ("SBIC I"), respectively. 3 The majority of investments bear interest at a rate that may be determined by reference to Secured Overnight Financing Rate ("SOFR"), London Interbank Offered Rate (“LIBOR” or “L”), or Prime (“P”) and reset daily (D), monthly (M), quarterly (Q), or semiannually (S). For each investment, the Company has provided the spread over SOFR, LIBOR or Prime and the current contractual interest rate in effect at March 31, 2023. Certain investments are subject to an interest rate floor. Certain investments, as noted, accrue payment-in-kind ("PIK") interest. SOFR based contracts may include a credit spread adjustment (the "Adjustment") that is charged in addition to the stated spread. The Adjustment is applied when the SOFR rate, plus the Adjustment, exceeds the stated floor rate, as applicable. As of March 31, 2023, SOFR based contracts in the portfolio had Adjustments ranging from 0.10 % to 0.26161 %. 4 The Company's investment portfolio is comprised entirely of debt and equity securities of privately held companies for which quoted prices falling within the categories of Level 1 and Level 2 inputs are not readily available. Therefore, the Company values all of its portfolio investments at fair value, as determined in good faith by the Board of Directors, using significant unobservable Level 3 inputs. Refer to Note 4 - Fair Value Measurements to our audited consolidated financial statements for further discussion. 5 Non-Control/Non-Affiliate investments are generally defined by the Investment Company Act of 1940, as amended (the “1940 Act”), as investments that are neither control investments nor affiliate investments. At March 31, 2023, approximately 80.1 % of the Company’s investment assets were non-control/non-affiliate investments. The fair value of these investments as a percent of net assets is 163.7 %. 6 Affiliate investments are generally defined by the 1940 Act as investments in which between 5% and 25% of the voting securities are owned and the investments are not classified as control investments. At March 31, 2023, approximately 15.6 % of the Company’s investment assets were affiliate investments. The fair value of these investments as a percent of net assets is 31.9 %. 7 Control investments are generally defined by the 1940 Act as investments in which more than 25% of the voting securities are owned. At March 31, 2023, approximately 4.2 % of the Company’s investment assets were control investments. The fair value of these investments as a percent of net assets is 8.7 %. 8 The investment is structured as a first lien last out term loan. 9 Indicates assets that are not considered "qualifying assets" under Section 55(a) of the 1940 Act. Qualifying assets must represent at least 70% of total assets at the time of acquisition of any additional non-qualifying assets. As of March 31, 2023, approximately 13.9 % of the Company's assets were non-qualifying assets. 10 The investment has an unfunded commitment as of March 31, 2023. Refer to Note 11 - Commitments and Contingencies to our audited consolidated financial statements for further discussion. 11 Income producing through dividends or distributions. 12 As of March 31, 2023, the cumulative gross unrealized appreciation for U.S. federal income tax purposes was approximately $ 72.3 million; cumulative gross unrealized depreciation for federal income tax purposes was $ 76.8 million. Cumulative net unrealized depreciation was $ 4.5 million, based on a tax cost of $ 1,210.8 million. 13 Investment is held through a wholly-owned taxable subsidiary. 14 The Company generally acquires its investments in private transactions exempt from registration under the Securities Act of 1933, as amended (the "Securities Act"). These investments, which as of March 31, 2023 represented 204.3 % of the Company's net assets or 95.9 % of the Company's total assets, are generally subject to certain limitations on resale, and may be deemed "restricted securities" under the Securities Act. 15 The investment is structured as a split lien term loan, which provides the Company with a first lien priority on certain assets of the obligor and a second lien priority on different assets of the obligor. 16 Investment is on non-accrual status as of March 31, 2023, meaning the Company has ceased to recognize interest income on the investment. 118 Table of Contents 17 Negative cost in this column represents the original issue discount of certain undrawn revolvers and delayed draw term loans. 18 Equity ownership may be held in shares or units of a company that is either wholly owned by the portfolio company or under common control by the same parent company to the portfolio company. 19 The investment is structured as a first lien first out term loan. 20 The rate presented represents a weighted-average rate for borrowings under the facility as of March 31, 2023. As of March 31, 2023, there were no investments that represented greater than 5% of our total assets.. The accompanying Notes are an integral part of these Consolidated Financial Statements. 119 Table of Contents Notes to Consolidated Financial Statements 1. ORGANIZATION AND BASIS OF PRESENTATION References in this Annual Report on Form 10-K to “we,” “our,” “us,” “CSWC,” or the “Company” refer to Capital Southwest Corporation, unless the context requires otherwise. Organization Capital Southwest Corporation is an internally managed investment company that specializes in providing customized financing to middle market companies in a broad range of investment segments located primarily in the United States. CSWC has elected to be regulated as a business development company under the 1940 Act. Our common stock currently trades on The Nasdaq Global Select Market under the ticker symbol “CSWC.” We have elected, and intend to qualify annually, to be treated for U.S. federal income tax purposes as a regulated investment company (“RIC”) under Subchapter M of the U.S. Internal Revenue Code of 1986, as amended (the “Code”). As such, we generally will not have to pay U.S. federal income tax at corporate rates on any ordinary income or capital gains that we distribute to our shareholders as dividends. To continue to maintain our RIC tax treatment, we must meet specified source-of-income and asset diversification requirements and timely distribute annually at least 90% of our net ordinary income and realized net short-term capital gains in excess of realized net long-term capital losses, if any. We may be subject to U.S. federal income tax and a 4% U.S. federal excise tax on any income that we do not timely distribute to our shareholders. Our U.S. federal income tax liability may be reduced to the extent that we make certain distributions during the following calendar year and satisfy other procedural requirements. We focus on investing in companies with histories of generating revenues and positive cash flow, established market positions and proven management teams with strong operating discipline. Our core business is to target senior debt investments and equity investments in lower middle market (“LMM”) companies. Our target companies typically have annual earnings before interest, taxes, depreciation and amortization (“EBITDA”) generally between $ 3.0 million and $ 25.0 million, and our investments generally range in size from $ 5.0 million to $ 35.0 million. We make available significant managerial assistance to the companies in which we invest as we believe that providing managerial assistance to an investee company is critical to its business development activities. Capital Southwest Equity Investments, Inc. (the “Taxable Subsidiary”), Capital Southwest SPV LLC (“SPV”), and Capital Southwest SBIC I, LP (“SBIC I”) are wholly owned subsidiaries of the Company and are consolidated in its financial statements. The Taxable Subsidiary was formed to permit us to hold certain interests in portfolio companies that are organized as limited liability companies, or LLCs (or other forms of pass-through entities) and still allow us to satisfy the RIC tax requirement that at least 90% of our gross income for U.S. federal income tax purposes must consist of qualifying investment income. The Taxable Subsidiary has elected to be treated as a corporation for U.S. federal income tax purposes and is subject to U.S. federal income tax at corporate rates based on its taxable income. SPV is a special purpose vehicle that was formed to hold investments for the SPV Credit Facility (as defined below) to support our investment and operating activities. On April 20, 2021, SBIC I received a license from the U.S. Small Business Administration (the “SBA”) to operate as a small business investment company ("SBIC") under Section 301(c) of the Small Business Investment Act of 1958, as amended. SBIC I has an investment strategy substantially similar to ours and makes similar types of investments in accordance with SBA regulations. SBIC I and its general partner are consolidated for financial reporting purposes under generally accepted accounting principles in the United States ("U.S. GAAP"), and the portfolio investments held by it are included in the consolidated financial statements. Basis of Presentation The consolidated financial statements have been prepared in accordance with U.S. GAAP. We meet the definition of an investment company and follow the accounting and reporting guidance in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946, Financial Services – Investment Companies (“ASC 946”). Under rules and regulations applicable to investment companies, we are generally precluded from consolidating any entity other than another investment company, subject to certain exceptions. One of the exceptions to this general principle occurs if the investment company has an investment in an operating company that provides services to the investment company. Accordingly, the consolidated financial statements include the Taxable Subsidiary, SPV, and SBIC I. 120 Table of Contents Portfolio Investment Classification We classify our investments in accordance with the requirements of the 1940 Act. Under the 1940 Act, “Control Investments” are generally defined as investments in which we own more than 25% of the voting securities; “Affiliate Investments” are generally defined as investments in which we own between 5% and 25% of the voting securities, and the investments are not classified as “Control Investments”; and “Non-Control/Non-Affiliate Investments” are generally defined as investments that are neither “Control Investments” nor “Affiliate Investments.” Under the 1940 Act, a BDC must meet certain requirements, including investing at least 70% of its total assets in qualifying assets. As of March 31, 2024, the Company has 89.4 % of its total assets (at fair value) in qualifying assets. The principal categories of qualifying assets relevant to our business are: (1) securities purchased in transactions not involving any public offering from the issuer of such securities, which issuer (subject to certain limited exceptions) is an "eligible portfolio company," or from any person who is, or has been during the preceding 13 months, an affiliated person of an eligible portfolio company, or from any other person, subject to such rules as may be prescribed by the Securities and Exchange Commission ("SEC"); (2) securities of any eligible portfolio company that we control; (3) securities purchased in a private transaction from a U.S. issuer that is not an investment company or from an affiliated person of the issuer, or in transactions incident thereto, if the issuer is in bankruptcy and subject to reorganization or if the issuer, immediately prior to the purchase of its securities was unable to meet its obligations as they came due without material assistance other than conventional lending or financing arrangements; (4) securities of an eligible portfolio company purchased from any person in a private transaction if there is no readily available market for such securities and we already own 60% of the outstanding equity of the eligible portfolio company; (5) securities received in exchange for or distributed on or with respect to securities described in (1) through (4) above, or pursuant to the exercise of warrants or rights relating to such securities; and (6) cash, cash equivalents, U.S. government securities or high-quality debt securities maturing in one year or less from the time of investment. Additionally, in order to qualify for RIC tax treatment for U.S. federal income tax purposes, we must, among other things meet the following requirements: (1) continue to maintain our election as a BDC under the 1940 Act at all times during each taxable year; (2) derive in each taxable year at least 90% of our gross income from dividends, interest, payments with respect to certain securities, loans, gains from the sale of stock or other securities, net income from certain "qualified publicly traded partnerships," or other income derived with respect to our business of investing in such stock or securities; and (3) diversify our holdings in accordance with two diversification requirements: (a) diversify our holdings such that at the end of each quarter of the taxable year at least 50% of the value of our assets consists of cash, cash equivalents, U.S. Government securities, securities of other RICs, and such other securities if such other securities of any one issuer do not represent more than 5% of the value of our assets or more than 10% of the outstanding voting securities of the issuer; and (b) diversify our holdings such that no more than 25% of the value of our assets is invested in the securities, other than U.S. government securities or securities of other RICs, (i) of one issuer, (ii) of two or more issuers that are controlled, as determined under applicable Code rules, by us and that are engaged in the same or similar or related trades or businesses or (iii) of certain "qualified publicly traded partnerships" (collectively, the "Diversification Requirements"); The two Diversification Requirements must be satisfied quarterly. If a RIC satisfies the Diversification Requirements for one quarter, and then, due solely to fluctuations in market value, fails to meet one of the Diversification Requirements in the next quarter, it retains RIC tax treatment. A RIC that fails to meet the Diversification Requirements as a result of a nonqualified acquisition may be subject to excess taxes unless the nonqualified acquisition is disposed of and the Diversification Requirements are satisfied within 30 days of the close of the quarter in which the Diversification Requirements are failed. For the quarter ended March 31, 2024, we satisfied all RIC requirements and have 10.1 % in nonqualified assets according to measurement criteria established in Section 851(d) of the Code. 121 Table of Contents 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The following is a summary of significant accounting policies followed in the preparation of the consolidated financial statements of CSWC. Fair Value Measurements We account for substantially all of our financial instruments at fair value in accordance with ASC Topic 820, Fair Value Measurements and Disclosures (“ASC 820”). ASC 820 defines fair value, establishes a framework used to measure fair value and requires disclosures for fair value measurements, including the categorization of financial instruments into a three-level hierarchy based on the transparency of valuation inputs. ASC 820 requires disclosure of the fair value of financial instruments for which it is practical to estimate such value. We believe that the carrying amounts of our financial instruments such as cash, receivables and payables approximate the fair value of these items due to the short maturity of these instruments. This is considered a Level 1 valuation technique. The carrying value of our credit facilities approximates fair value (Level 3 input). See Note 4 below for further discussion regarding the fair value measurements and hierarchy. Investments Investments are stated at fair value and are determined by the Valuation Committee as the Valuation Designee pursuant to Rule 2a-5 under the 1940 Act, subject to the oversight of our Board of Directors, as described in the Notes to the Consolidated Schedule of Investments and Notes 3 and 4 below. Investments are recorded on a trade date basis. Net Realized Gains or Losses and Net Unrealized Appreciation or Depreciation Realized gains or losses are measured by the difference between the net proceeds from the sale or redemption of an investment or a financial instrument and the cost basis of the investment or financial instrument, without regard to unrealized appreciation or depreciation previously recognized, and includes investments written-off during the period net of recoveries and realized gains or losses from in-kind redemptions. Net unrealized appreciation or depreciation reflects the net change in the fair value of the investment portfolio and financial instruments and the reclassification of any prior period unrealized appreciation or depreciation on exited investments and financial instruments to realized gains or losses. Cash and Cash Equivalents Cash and cash equivalents, which consist of cash and highly liquid investments with an original maturity of three months or less at the date of purchase, are carried at cost, which approximates fair value. Cash may be held in a money market fund from time to time, which is a Level 1 security. At March 31, 2024 and March 31, 2023, cash held in money market funds amounted to $ 18.8 million and $ 8.9 million, respectively. Cash and cash equivalents includes deposits at financial institutions. We deposit our cash balances in financial institutions and, at times, such balances may be in excess of the Federal Deposit Insurance Corporation (“FDIC”) insurance limits. At March 31, 2024 and March 31, 2023, cash balances totaling $ 30.7 million and $ 20.3 million, respectively, exceeded FDIC insurance limits, subjecting us to risk related to the uninsured balance. All of our cash deposits are held at large established high credit quality financial institutions and management believes that the risk of loss associated with any uninsured balances is remote. Segment Information We operate and manage our business in a singular segment. As an investment company, we invest in portfolio companies in various industries and geographic areas as discussed in Note 3. Consolidation As permitted under Regulation S-X and ASC 946, we generally do not consolidate our investment in a portfolio company other than an investment company subsidiary or a controlled operating company whose business consists of providing services to CSWC. Accordingly, we consolidate the results of the Taxable Subsidiary, SPV and SBIC I. All intercompany balances have been eliminated upon consolidation. Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. We have identified investment valuation and revenue recognition as our most critical accounting estimates. Interest and Dividend Income Interest and dividend income is recorded on an accrual basis to the extent amounts are expected to be collected. Dividend income is recognized on the date dividends are declared by the portfolio company or at the point an obligation exists for the portfolio company to make a distribution. Discounts/premiums received to par on loans purchased are capitalized and accreted or amortized into income over the life of the loan using the effective interest method. In accordance with our valuation policy, accrued interest and dividend income is evaluated quarterly for collectability. When we do not expect the debtor to be able to service all of its debt or other obligations, we generally will establish a reserve against interest income receivable, thereby placing the loan or debt security on non-accrual status, and cease to recognize interest income on that loan or debt security until the borrower has demonstrated the ability and intent to pay contractual amounts due. If a loan or debt security’s status significantly improves regarding its ability to service debt or other obligations, it will be 122 Table of Contents restored to accrual basis. As of March 31, 2024, investments on non-accrual status represented approximately 2.3 % of our total investment portfolio at fair value and approximately 3.9 % at cost. As of March 31, 2023, investments on non-accrual status represented approximately 0.3 % of our total investment portfolio at fair value and approximately 1.3 % at cost. To maintain RIC tax treatment, non-cash sources of income, such as accretion of interest income, may need to be paid out to shareholders in the form of distributions, even though CSWC may not have collected the interest income. For the years ended March 31, 2024 and 2023, approximately 2.9 % and 3.2 %, respectively, of CSWC's total investment income was attributable to non-cash interest income for the accretion of discounts associated with debt investments, net of any premium reduction. Payment-in-Kind Interest The Company currently holds, and expects to hold in the future, some investments in its portfolio that contain PIK interest provisions. The PIK interest, computed at the contractual rate specified in each loan agreement, is added to the principal balance of the loan, rather than being paid to the Company in cash, and is recorded as interest income. Thus, the actual collection of PIK interest may be deferred until the time of debt principal repayment. PIK interest, which is a non-cash source of income, is included in the Company’s taxable income and therefore affects the amount the Company is required to distribute to shareholders to maintain its qualification as a RIC for U.S. federal income tax purposes, even though the Company has not yet collected the cash. Generally, when current cash interest and/or principal payments on a loan become past due, or if the Company otherwise does not expect the borrower to be able to service its debt and other obligations, the Company will place the investment on non-accrual status and will generally cease recognizing PIK interest income on that loan for financial reporting purposes until all principal and interest have been brought current through payment or due to a restructuring such that the interest income is deemed to be collectible. The Company writes off any accrued and uncollected PIK interest when it is determined that the PIK interest is no longer collectible. As of March 31, 2024 and March 31, 2023, we have not written off any accrued and uncollected PIK interest from prior periods. For the year ended March 31, 2024, we had five investments for which we stopped accruing PIK interest. For the year ended March 31, 2023, we had three investments for which we stopped accruing PIK interest. For the years ended March 31, 2024 and 2023, approximately 5.7 % and 4.6 %, respectively, of CSWC’s total investment income was attributable to non-cash PIK interest income. Fee Income Fee income, generally collected in advance, includes fees for administration and valuation services rendered by the Company. These fees are typically charged annually and are amortized into income over the year. The Company recognizes nonrecurring fees, including prepayment penalties, waiver fees and amendment fees, as fee income when earned. In addition, the Company also may be entitled to an exit fee that is amortized into income over the life of the loan. Loan exit fees to be paid at the termination of the loan are accreted into fee income over the contractual life of the loan. Warrants In connection with the Company's debt investments, the Company may receive warrants or other equity-related securities from the borrower. The Company determines the cost basis of warrants based upon their respective fair values on the date of receipt in proportion to the total fair value of the debt and warrants received. Any resulting difference between the face amount of the debt and its recorded fair value resulting from the assignment of value to the warrants is treated as original issue discount (“OID”), and accreted into interest income using the effective interest method over the term of the debt investment. Debt Issuance Costs Debt issuance costs include commitment fees and other costs related to the Corporate Credit Facility (as defined below), the SPV Credit Facility (as defined below), the Company's unsecured notes (as discussed further in Note 5) and the debentures guaranteed by the SBA (the "SBA Debentures"). The costs in connection with the credit facilities have been capitalized and are amortized into interest expense over the term of the respective credit facility. The costs in connection with the unsecured notes and the SBA Debentures are a direct deduction from the related debt liability and amortized into interest expense over the term of the January 2026 Notes (as defined below), the October 2026 Notes (as defined below), the August 2028 Notes (as defined below) and the SBA Debentures. Deferred Offering Costs Deferred offering costs include registration expenses related to our shelf registration statement and expenses related to the launch of the "at-the-market" program through which we can sell, from time to time, shares of our common stock (the "Equity ATM Program"). These expenses consist primarily of SEC registration fees, legal fees and accounting fees incurred related thereto. These expenses are included in other assets on the Consolidated Statements of Assets and Liabilities. Upon the completion of an equity offering or a debt offering, the deferred expenses are charged to additional paid-in capital or debt issuance costs, respectively. If there are any deferred offering costs remaining at the expiration of the shelf registration statement, these deferred costs are charged to expense. Realized Losses on Extinguishment of Debt Upon the repayment of debt obligations that are deemed to be extinguishments, the difference between the principal amount due at maturity adjusted for any unamortized debt issuance costs 123 Table of Contents is recognized as a loss (i.e., the unamortized debt issuance costs and any "make-whole" premium payment (as discussed in Note 5)) are recognized as a loss upon extinguishment of the underlying debt obligation). Leases The Company is obligated under an operating lease pursuant to which it is leasing an office facility from a third party with a remaining term of approximately 11.5 years. The operating lease is included as an operating lease right-of-use ("ROU") asset and operating lease liability in the accompanying Consolidated Statements of Assets and Liabilities. The Company does not have any financing leases. The ROU asset represents the Company’s right to use an underlying asset for the lease term and the operating lease liability represents the Company’s obligation to make lease payments arising from such lease. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the remaining lease term. The Company’s lease does not provide an implicit discount rate, and as such the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of the remaining lease payments. Lease expense is recognized on a straight-line basis over the remaining lease term. Federal Income Taxes CSWC has elected, and intends to qualify annually, to be treated for U.S. federal income tax purposes as a RIC under Subsection M of the Code. By meeting these requirements, we will not be subject to U.S. federal income taxes at corporate rates on ordinary income or capital gains timely distributed to shareholders. In order to qualify as a RIC, the Company is required to timely distribute to its shareholders at least 90% of investment company taxable income, as defined by the Code, each year. Investment company taxable income generally differs from net income for financial reporting purposes due to temporary and permanent differences in the recognition of income and expenses. Investment company taxable income generally excludes net unrealized appreciation or depreciation, as investment gains and losses are not included in investment company taxable income until they are realized. Depending on the level of taxable income or capital gains earned in a tax year, we may choose to carry forward taxable income or capital gains in excess of current year distributions into the next year and pay a 4% U.S. federal excise tax on such income. Any such carryover taxable income or capital gains must be distributed through a dividend declared on or prior to the later of (1) the filing of the U.S. federal income tax return for the applicable fiscal year and (2) the fifteenth day of the ninth month following the close of the year in which such taxable income was generated. In lieu of distributing our net capital gains for a year, we may decide to retain some or all of our net capital gains. We will be required to pay a 21% corporate rate U.S. federal income tax on any such retained net capital gains. We may elect to treat such retained capital gain as a deemed distribution to shareholders. Under such circumstances, shareholders will be required to include their share of such retained capital gain in income, but will receive a credit for the amount of U.S. federal income tax paid at corporate rates with respect to their shares. As an investment company that qualifies as a RIC, federal income taxes payable on security gains that we elect to retain are accrued only on the last day of our tax year, December 31. Any net capital gains actually distributed to shareholders and properly reported by us as capital gain dividends are generally taxable to the shareholders as long-term capital gains. See Note 6 for further discussion. The Taxable Subsidiary, a wholly-owned subsidiary of CSWC, is not a RIC and is required to pay taxes at the corporate rate of 21%. For tax purposes, the Taxable Subsidiary has elected to be treated as a taxable entity, and therefore is not consolidated for tax purposes and is taxed at normal corporate tax rates based on taxable income and, as a result of its activities, may generate an income tax provision or benefit. The taxable income, or loss, of the Taxable Subsidiary may differ from its book income, or loss, due to temporary book and tax timing differences and permanent differences. This income tax provision, or benefit, if any, and the related tax assets and liabilities, are reflected in our consolidated financial statements. Management evaluates tax positions taken or expected to be taken in the course of preparing the Company’s consolidated financial statements to determine whether the tax positions are “more-likely-than-not” to be sustained by the applicable tax authority. Tax positions with respect to tax at the CSWC level not deemed to meet the “more-likely-than-not” threshold would be recorded as an expense in the current year. Management’s conclusions regarding tax positions will be subject to review and may be adjusted at a later date based on factors including, but not limited to, on-going analyses of tax laws, regulations and interpretations thereof. The Company has concluded that it does not have any uncertain tax positions that meet the recognition of measurement criteria of ASC Topic 740, Income Taxes , ("ASC 740") for the current period. Also, we account for interest and, if applicable, penalties for any uncertain tax positions as a component of income tax provision. No interest or penalties expense was recorded during the years ended March 31, 2024, 2023, and 2022. Deferred Taxes Deferred tax assets and liabilities are recorded for losses or income at the Taxable Subsidiary using statutory tax rates. A valuation allowance is provided against deferred tax assets when it is more likely than not that some 124 Table of Contents portion or all of the deferred tax asset will not be realized. ASC 740 requires the effects of changes in tax rates and laws on deferred tax balances to be recognized in the period in which the legislation was enacted. See Note 6 for further discussion. Stock-Based Compensation We account for our share-based compensation using the fair value method, as prescribed by ASC Topic 718, Compensation – Stock Compensation . Accordingly, we recognize share-based compensation cost on a straight-line basis for all share-based payments awards granted to employees. For restricted stock awards, we measure the fair value based upon the market price of our common stock on the date of the grant. For restricted stock awards, we amortize this fair value to share-based compensation expense over the vesting term. We recognize forfeitures as they occur. The unvested shares of restricted stock awarded pursuant to CSWC’s equity compensation plans are participating securities and are included in the basic and diluted earnings per share calculation. The right to grant restricted stock awards under the 2010 Plan terminated on July 18, 2021, ten years after the date that the 2010 Restricted Stock Award Plan (the “2010 Plan”) was approved by the Company’s shareholders pursuant to its terms. In connection with the termination of the 2010 Plan, the Board of Directors and shareholders approved the Capital Southwest Corporation 2021 Employee Restricted Stock Award Plan (the "2021 Employee Plan"), which became effective on July 28, 2021, as part of the compensation package for its employees, the terms of which are, in all material respects, identical to the 2010 Plan. On July 19, 2021, we received an exemptive order that supersedes the prior exemptive order relating to the 2010 Plan (the “Order”) to permit the Company to (i) issue restricted stock as part of the compensation package for its employees in the 2021 Employee Plan, and (ii) withhold shares of the Company’s common stock or purchase shares of the Company’s common stock from the participants to satisfy tax withholding obligations relating to the vesting of restricted stock pursuant to the 2021 Employee Plan. In addition, the Board of Directors and shareholders approved the Capital Southwest Corporation 2021 Non-Employee Director Restricted Stock Plan (the "Non-Employee Director Plan"), which became effective on July 27, 2022, as part of the compensation package for non-employee directors of the Board of Directors. In connection therewith, on May 16, 2022, we received an exemptive order that supersedes the Order (the "Superseding Order") and covers both employees and non-employee directors of the Board of Directors. Shareholder Distributions Distributions to common shareholders are recorded on the ex-dividend date. The amount of distributions, if any, is determined by the Board of Directors each quarter and is generally based upon the earnings estimated by management. Net realized capital gains, if any, generally are distributed, although the Company may decide to retain such capital gains for investment. Presentation Presentation of certain amounts in the consolidated financial statements for the prior year comparative consolidated financial statements is updated to conform to the current period presentation. Recently Issued or Adopted Accounting Standards In June 2022, the FASB issued Accounting Standards Update ("ASU") 2022-03, “Fair Value Measurement (Topic 820) - Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions” ("ASC 820") which was issued to (1) clarify the guidance in ASC 820 when measuring the fair value of an equity security subject to contractual restrictions that prohibit the sale of an equity security, (2) amend a related illustrative example, and (3) introduce new disclosure requirements for equity securities subject to contractual sale restrictions that are measured at fair value in accordance with ASC 820. The new guidance is effective for interim and annual periods beginning after December 15, 2023. The Company adopted the guidance during the year ended March 31, 2024 and its adoption did not have a material impact on its consolidated financial statements or its disclosures. In December 2023, the FASB issued ASU 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures," which was issued to enhance the transparency and decision usefulness of income tax disclosures, including an annual requirement to (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold. The new guidance is effective for annual periods beginning after December 15, 2024. The Company is currently evaluating the impact of the new standard on the Company's consolidated financial statements and related disclosures and does not believe it will have a material impact on its consolidated financial statements or its disclosure. 125 Table of Contents 3. INVESTMENTS The following table shows the composition of the investment portfolio, at fair value and cost (with corresponding percentage of total portfolio investments) as of March 31, 2024 and March 31, 2023: Fair Value Percentage of Total Portfolio at Fair Value Percentage of Net Assets at Fair Value Cost Percentage of Total Portfolio at Cost (dollars in thousands) March 31, 2024: First lien loans 1,2 $ 1,309,449 88.7 % 173.3 % $ 1,340,555 90.8 % Second lien loans 2 33,774 2.3 4.5 41,654 2.8 Subordinated debt 3 1,336 0.1 0.2 1,007 0.1 Preferred equity 71,127 4.8 9.4 56,708 3.8 Common equity & warrants 60,875 4.1 8.0 36,779 2.5 $ 1,476,561 100.0 % 195.4 % $ 1,476,703 100.0 % March 31, 2023: First lien loans 1,2 $ 1,000,984 83.0 % 169.5 % $ 1,018,595 83.5 % Second lien loans 2 35,820 3.0 6.1 44,038 3.6 Subordinated debt 3 791 0.1 0.1 763 0.1 Preferred equity 63,393 5.2 10.7 43,634 3.6 Common equity & warrants 54,144 4.5 9.2 32,322 2.6 I-45 SLF LLC 4 51,256 4.2 8.7 80,800 6.6 $ 1,206,388 100.0 % 204.3 % $ 1,220,152 100.0 % 1 Included in first lien loans are loans structured as first lien last out loans. These loans may, in certain cases, be subordinated in payment priority to other senior secured lenders. As of March 31, 2024 and March 31, 2023, the fair value of the first lien last out loans are $ 35.3 million and $ 50.1 million, respectively. 2 Included in first lien loans and second lien loans are loans structured as split lien term loans. These loans provide the Company with a first lien priority on certain assets of the obligor and a second lien priority on different assets of the obligor. As of March 31, 2024 and March 31, 2023, the fair value of the split lien term loans included in first lien loans is $ 43.7 million and $ 45.0 million, respectively. As of March 31, 2024 and March 31, 2023, the fair value of the split lien term loans included in second lien loans is $ 20.7 million and $ 20.2 million, respectively. 3 Included in subordinated debt are unsecured convertible notes with a fair value of $ 0.4 million as of both March 31, 2024 and March 31, 2023. 4 I-45 SLF LLC was a joint venture between CSWC and Main Street Capital Corporation ("I-45 SLF"). This entity primarily invested in syndicated senior secured loans to the upper middle market. The portfolio companies held by I-45 SLF represented a diverse set of industry classifications, which are similar to those in which CSWC invests directly. 126 Table of Contents The following tables show the composition of the investment portfolio by industry, at fair value and cost (with corresponding percentage of total portfolio investments) as of March 31, 2024 and March 31, 2023: Fair Value Percentage of Total Portfolio at Fair Value Percentage of Net Assets at Fair Value Cost Percentage of Total Portfolio at Cost (dollars in thousands) March 31, 2024: Healthcare Services $ 210,947 14.3 % 27.9 % $ 221,937 15.0 % Business Services 173,722 11.8 23.0 183,650 12.4 Media & Marketing 169,080 11.5 22.4 164,435 11.1 Consumer Products and Retail 158,825 10.8 21.0 157,926 10.7 Consumer Services 114,459 7.8 15.1 119,512 8.1 Food, Agriculture & Beverage 93,384 6.3 12.4 103,371 7.0 Healthcare Products 87,378 5.9 11.6 84,177 5.7 Financial Services 64,384 4.4 8.5 48,479 3.3 Environmental Services 58,322 3.9 7.7 57,116 3.9 Transportation & Logistics 57,612 3.9 7.6 50,136 3.4 Industrial Products 52,148 3.5 6.9 39,614 2.7 Software & IT Services 37,882 2.6 5.0 36,149 2.4 Aerospace & Defense 26,715 1.8 3.5 25,995 1.8 Restaurants 25,556 1.7 3.4 25,553 1.7 Telecommunications 23,995 1.6 3.2 28,313 2.0 Industrial Services 22,648 1.5 3.0 22,491 1.5 Technology Products & Components 18,969 1.3 2.5 13,277 0.9 Distribution 16,490 1.1 2.2 18,620 1.3 Education 14,627 1.0 1.9 25,481 1.7 Specialty Chemicals 14,269 1.0 1.9 14,222 1.0 Energy Services (Midstream) 13,432 0.9 1.8 13,232 0.9 Energy Services (Upstream) 12,541 0.8 1.7 12,355 0.8 Containers & Packaging 9,176 0.6 1.2 10,662 0.7 $ 1,476,561 100.0 % 195.4 % $ 1,476,703 100.0 % 127 Table of Contents Fair Value Percentage of Total Portfolio at Fair Value Percentage of Net Assets at Fair Value Cost Percentage of Total Portfolio at Cost (dollars in thousands) March 31, 2023: Media & Marketing $ 149,357 12.4 % 25.3 % $ 139,750 11.5 % Business Services 146,727 12.2 24.9 147,056 12.1 Healthcare Services 126,971 10.5 21.5 143,455 11.8 Consumer Services 91,913 7.6 15.6 91,142 7.5 Consumer Products and Retail 86,385 7.2 14.6 86,607 7.1 Food, Agriculture & Beverage 68,833 5.7 11.7 73,223 6.0 Healthcare Products 66,355 5.5 11.2 67,555 5.5 Technology Products & Components 59,718 5.0 10.1 43,016 3.5 I-45 SLF LLC 1 51,256 4.2 8.7 80,800 6.6 Transportation & Logistics 48,494 4.0 8.2 42,049 3.4 Software & IT Services 47,641 3.9 8.1 47,563 3.9 Financial Services 40,420 3.3 6.8 30,950 2.5 Industrial Products 32,518 2.7 5.5 25,827 2.1 Environmental Services 29,753 2.5 5.0 34,869 2.9 Education 26,357 2.2 4.5 25,995 2.1 Industrial Services 25,460 2.1 4.3 24,920 2.0 Energy Services (Midstream) 22,829 1.9 3.9 23,337 1.9 Specialty Chemicals 17,839 1.5 3.0 17,531 1.4 Energy Services (Upstream) 17,730 1.5 3.0 17,402 1.4 Telecommunications 17,386 1.4 2.9 21,796 1.9 Distribution 16,315 1.4 2.8 18,755 1.5 Containers & Packaging 10,131 0.8 1.7 10,656 0.9 Aerospace & Defense 6,000 0.5 1.0 5,898 0.5 $ 1,206,388 100.0 % 204.3 % $ 1,220,152 100.0 % 1 I-45 SLF was a joint venture between CSWC and Main Street Capital Corporation. This entity primarily invested in syndicated senior secured loans to the upper middle market. The portfolio companies in I-45 SLF represented a diverse set of industry classifications, which are similar to those in which CSWC invests directly. 128 Table of Contents The following tables summarize the composition of the investment portfolio by geographic region of the United States, at fair value and cost (with corresponding percentage of total portfolio investments), as of March 31, 2024 and March 31, 2023: Fair Value Percentage of Total Portfolio at Fair Value Percentage of Net Assets at Fair Value Cost Percentage of Total Portfolio at Cost (dollars in thousands) March 31, 2024: Northeast $ 381,897 25.9 % 50.5 % $ 370,566 25.1 % West 325,666 22.1 43.1 322,616 21.8 Southwest 247,526 16.7 32.8 259,991 17.6 Midwest 241,828 16.4 32.0 243,971 16.5 Southeast 231,842 15.7 30.7 233,042 15.8 International 47,802 3.2 6.3 46,517 3.2 $ 1,476,561 100.0 % 195.4 % $ 1,476,703 100.0 % March 31, 2023: Northeast $ 269,569 22.3 % 45.7 % $ 255,995 21.0 % Southeast 235,782 19.5 39.9 236,333 19.4 Southwest 234,127 19.4 39.6 231,467 19.0 West 233,079 19.3 39.5 232,109 19.0 Midwest 156,233 13.1 26.4 158,989 13.0 I-45 SLF LLC 1 51,256 4.2 8.7 80,800 6.6 International 26,342 2.2 4.5 24,459 2.0 $ 1,206,388 100.0 % 204.3 % $ 1,220,152 100.0 % 1 I-45 SLF was a joint venture between CSWC and Main Street Capital Corporation. This entity primarily invested in syndicated senior secured loans to the upper middle market. The portfolio companies held by I-45 SLF represented a diverse set of geographic regions, which are similar to those in which CSWC invests directly. 4. FAIR VALUE MEASUREMENTS Investment Valuation Process Beginning as of the fiscal quarter ended June 30, 2023, pursuant to Rule 2a-5 under the 1940 Act, the Board of Directors has designated the Valuation Committee comprised of certain officers of the Company as the Valuation Designee to determine the fair value of the Company's investments that do not have readily available market quotations, subject to the oversight of the Board of Directors. The valuation process is led by the valuation team and the Valuation Committee in conjunction with the investment team. The process includes a quarterly review of each investment by our valuation team and the Valuation Committee. Valuations of each portfolio security are prepared quarterly by the valuation team using updated financial and other operational information collected from the investment team. In conjunction with the internal valuation process, the Valuation Committee also has engaged multiple independent consulting firms specializing in financial due diligence, valuation, and business advisory services to provide third-party valuation reviews and an independent range of values for selected investments, which is presented to the Valuation Committee. CSWC also uses a standard internal investment rating system in connection with its investment oversight, portfolio management, and investment valuation procedures for its debt portfolio. This system takes into account both quantitative and qualitative factors of the portfolio company and the investments held therein. 129 Table of Contents There is no single standard for determining fair value in good faith, as fair value depends upon the specific circumstances of each individual investment. While management believes our valuation methodologies are appropriate and consistent with market participants, the recorded fair values of our investments may differ significantly from fair values that would have been used had an active market for the securities existed. In addition, changes in the market environment and other events that may occur over the life of the investments may cause the gains or losses ultimately realized on these investments to be different than the valuations currently assigned. Fair Value Hierarchy CSWC has established and documented processes for determining the fair values of portfolio company investments on a recurring basis in accordance with the 1940 Act and ASC 820. As required by ASC 820, when the inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement in its entirety. For example, a Level 3 fair value measurement may include inputs that are observable (Levels 1 and 2) and unobservable (Level 3). Therefore, unrealized appreciation and depreciation related to such investments categorized within the Level 3 tables below may include changes in fair value that are attributable to both observable inputs (Levels 1 and 2) and unobservable inputs (Level 3). CSWC conducts reviews of fair value hierarchy classifications on a quarterly basis. We also use judgment and consider factors specific to the investment in determining the significance of an input to a fair value measurement. The three levels of valuation inputs established by ASC 820 are as follows: • Level 1: Investments whose values are based on unadjusted quoted prices in active markets for identical assets or liabilities. • Level 2: Investments whose values are based on quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. • Level 3: Investments whose values are based on unobservable inputs that are significant to the overall fair value measurement. As of March 31, 2024 and March 31, 2023, 100 % of the CSWC investment portfolio consisted of privately held debt and equity instruments for which inputs falling within the categories of Level 1 and Level 2 are generally not readily available. Therefore, the Valuation Committee determines the fair value of our investments (excluding investments for which fair value is measured at net asset value ("NAV")) in good faith using Level 3 inputs, pursuant to CSWC's valuation policy and procedures subject to the oversight of the Board of Directors. Investment Valuation Inputs ASC 820 defines fair value in terms of the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date excluding transaction costs. Under ASC 820, the fair value measurement also assumes that the transaction to sell an asset occurs in the principal market for the asset or, in the absence of a principal market, the most advantageous market for the asset. The principal market is the market in which the reporting entity would sell or transfer the asset with the greatest volume and level of activity for the asset. In determining the principal market for an asset or liability under ASC 820, it is assumed that the reporting entity has access to the market as of the measurement date. The Level 3 inputs to CSWC’s valuation process reflect our best estimate of the assumptions that would be used by market participants in pricing the investment in a transaction in the principal or most advantageous market for the asset. The fair value determination of each portfolio investment categorized as Level 3 required one or more of the following unobservable inputs: • financial information obtained from each portfolio company, including unaudited statements of operations and balance sheets for the most recent period available as compared to budgeted numbers; • current and projected financial condition of the portfolio company; • current and projected ability of the portfolio company to service its debt obligations; • type and amount of collateral, if any, underlying the investment; 130 Table of Contents • current financial ratios (e.g., fixed charge coverage ratio, interest coverage ratio and net debt/EBITDA ratio) applicable to the investment; • current liquidity of the investment and related financial ratios (e.g., current ratio and quick ratio); • indicative dealer quotations from brokers, banks, and other market participants; • market yields on other securities of similar risk; • pending debt or capital restructuring of the portfolio company; • projected operating results of the portfolio company; • current information regarding any offers to purchase the investment; • current ability of the portfolio company to raise any additional financing as needed; • changes in the economic environment which may have a material impact on the operating results of the portfolio company; • internal occurrences that may have an impact (both positive and negative) on the operating performance of the portfolio company; • qualitative assessment of key management; • contractual rights, obligations or restrictions associated with the investment; and • other factors deemed relevant. CSWC uses several different valuation approaches depending on the security type including the Market Approach, the Income Approach, the Enterprise Value Waterfall Approach, and the NAV Valuation Method. Market Approach Market Approach is a qualitative and quantitative analysis of the aforementioned unobservable inputs. It is a combination of the Enterprise Value Waterfall Approach and Income Approach as described in detail below. For investments recently originated (within a quarterly reporting period) or where the value has not departed significantly from its cost, we generally rely on our cost basis or recent transaction price to determine the fair value, unless a material event has occurred since origination. Income Approach In valuing debt securities, CSWC typically uses an Income Approach model, which considers some or all of the factors listed above. Under the Income Approach, CSWC develops an expectation of the yield that a hypothetical market participant would require when purchasing each debt investment (the “Required Market Yield”). The Required Market Yield is calculated in a two-step process. First, using quarterly market data we estimate the current market yield of similar debt securities. Next, based on the factors described above, we modify the current market yield for each security to produce a unique Required Market Yield for each of our investments. The resulting Required Market Yield is the significant Level 3 input to the Income Approach model. If, with respect to an investment, the unobservable inputs have not fluctuated significantly from the date the investment was made or have not fluctuated significantly from CSWC’s expectations on the date the investment was made, and there have been no significant fluctuations in the market pricing for such investments, we may conclude that the Required Market Yield for that investment is equal to the stated rate on the investment. In instances where CSWC determines that the Required Market Yield is different from the stated rate on the investment, we discount the contractual cash flows on the debt instrument using the Required Market Yield in order to estimate the fair value of the debt security. In addition, under the Income Approach, CSWC also determines the appropriateness of the use of third-party broker quotes, if any, as a significant Level 3 input in determining fair value. In determining the appropriateness of the use of third-party broker quotes, CSWC evaluates the level of actual transactions used by the broker to develop the quote, whether the quote was an indicative price or binding offer, the depth and consistency of broker quotes, the source of the broker quotes, and the correlation of changes in broker quotes with underlying performance of the portfolio company and other market indices. To the extent sufficient observable inputs are available to determine fair value, CSWC may use third-party broker quotes or other independent pricing to determine the fair value of certain debt investments. Fair value measurements using the Income Approach model can be sensitive to significant changes in one or more of the inputs. A significant increase (decrease) in the Required Market Yield for a particular debt security may result in a lower (higher) fair value for that security. A significant increase (decrease) in a third-party broker quote for a particular debt security may result in a higher (lower) value for that security. 131 Table of Contents Enterprise Value Waterfall Approach In valuing equity securities (including warrants), CSWC estimates fair value using an Enterprise Value Waterfall valuation model. CSWC estimates the enterprise value of a portfolio company and then allocates the enterprise value to the portfolio company’s securities in order of their relative liquidation preference. In addition, CSWC assumes that any outstanding debt or other securities that are senior to CSWC’s equity securities are required to be repaid at par. Additionally, we may estimate the fair value of non-performing debt securities using the Enterprise Value Waterfall approach as needed. To estimate the enterprise value of the portfolio company, CSWC uses a weighted valuation model based on public comparable companies, observable transactions and discounted cash flow analyses. A main input into the valuation model is a measure of the portfolio company’s financial performance, which generally is either earnings before interest, taxes, depreciation and amortization, as adjusted (“Adjusted EBITDA”) or revenues. In addition, we consider other factors, including, but not limited to: (1) offers from third parties to purchase the portfolio company; and (2) the implied value of recent investments in the equity securities of the portfolio company. For certain non-performing assets, we may utilize the liquidation or collateral value of the portfolio company's assets in our estimation of its enterprise value. The significant Level 3 inputs to the Enterprise Value Waterfall model are (1) an appropriate multiple derived from the comparable public companies and transactions, (2) discount rate assumptions used in the discounted cash flow model and (3) a measure of the portfolio company’s financial performance, which generally is either Adjusted EBITDA or revenues. Inputs can be based on historical operating results, projections of future operating results or a combination thereof. The operating results of a portfolio company may be unaudited, projected or pro forma financial information and may require adjustments for certain non-recurring items. CSWC also may consult with the portfolio company’s senior management to obtain updates on the portfolio company’s performance, including information such as industry trends, new product development, loss of customers and other operational issues. Fair value measurements using the Enterprise Value Waterfall model can be sensitive to significant changes in one or more of the inputs. A significant increase (decrease) in either the multiple, Adjusted EBITDA or revenues for a particular equity security would result in a higher (lower) fair value for that security. NAV Valuation Method Under the NAV valuation method, for an investment in an investment fund that does not have a readily determinable fair value, CSWC measures the fair value of the investment predominately based on the NAV of the investment fund as of the measurement date. However, in determining the fair value of the investment, we may consider whether adjustments to the NAV are necessary in certain circumstances, based on the analysis of any restrictions on redemption of our investment as of the measurement date, recent actual sales or redemptions of interests in the investment fund, expected future cash flows available to equity holders, or other uncertainties surrounding CSWC’s ability to realize the full NAV of its interests in the investment fund. 132 Table of Contents The following fair value hierarchy tables set forth our investment portfolio by level as of March 31, 2024 and March 31, 2023 (in thousands): Fair Value Measurements at March 31, 2024 Using Asset Category Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) First lien loans $ 1,309,449 $ — $ — $ 1,309,449 Second lien loans 33,774 — — 33,774 Subordinated debt 1,336 — — 1,336 Preferred equity 71,127 — — 71,127 Common equity & warrants 60,875 — — 60,875 Total Investments $ 1,476,561 $ — $ — $ 1,476,561 Fair Value Measurements at March 31, 2023 Using Asset Category Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) First lien loans $ 1,000,984 $ — $ — $ 1,000,984 Second lien loans 35,820 — — 35,820 Subordinated debt 791 — — 791 Preferred equity 63,393 — — 63,393 Common equity & warrants 54,144 — — 54,144 Investments measured at net asset value 1 51,256 — — — Total Investments $ 1,206,388 $ — $ — $ 1,155,132 1 Certain investments that are measured at fair value using the NAV per share (or its equivalent) practical expedient have not been categorized in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in Consolidated Statements of Assets and Liabilities. For the investment valued at NAV per share at March 31, 2023, the redemption restrictions dictated that we cannot withdraw our membership interest without unanimous approval. We were permitted to sell or transfer our membership interest provided we deliver written notice of such transfer to the other member no later than 60 business days prior to the sale or transfer. 133 Table of Contents The tables below present the Valuation Techniques and Significant Level 3 Inputs (ranges and weighted averages) used in the valuation of CSWC’s debt and equity securities at March 31, 2024 and March 31, 2023. Significant Level 3 Inputs were weighted by the relative fair value of the investments. The tables are not intended to be all inclusive, but instead capture the significant unobservable inputs relevant to our determination of fair value. Fair Value at Significant Valuation March 31, 2024 Unobservable Weighted Type Technique (in thousands) Inputs Range Average First lien loans Income Approach $ 1,211,447 Discount Rate 5.5 % - 43.8 % 13.4 % Third Party Broker Quote 38.3 - 100.0 92.4 Market Approach 98,002 Cost 98.0 - 99.0 98.1 Second lien loans Income Approach 33,774 Discount Rate 13.4 % - 33.3 % 15.6 % Third Party Broker Quote 28.0 - 28.0 28.0 Subordinated debt Income Approach 568 Discount Rate 18.7 % - 18.7 % 18.7 % Third Party Broker Quote 23.3 - 23.3 23.3 Market Approach 210 Cost 94.0 - 100.0 96.1 Enterprise Value Waterfall Approach 558 EBITDA Multiple 5.7 x - 7.9 x 6.4 x Discount Rate 13.2 % - 18.6 % 14.8 % Preferred equity Enterprise Value Waterfall Approach 68,877 EBITDA Multiple 4.3 x - 17.0 x 9.9 x Discount Rate 10.3 % - 38.0 % 16.7 % Market Approach 2,250 Cost 100.0 - 100.0 100.0 Common equity & warrants Enterprise Value Waterfall Approach 60,375 EBITDA Multiple 4.7 x - 15.6 x 8.6 x Discount Rate 10.3 % - 30.2 % 16.0 % Market Approach 500 Cost 100.0 - 100.0 100.0 Total Level 3 Investments $ 1,476,561 134 Table of Contents Fair Value at Significant Valuation March 31, 2023 Unobservable Weighted Type Technique (in thousands) Inputs Range Average First lien loans Income Approach $ 953,918 Discount Rate 6.9 % - 26.2 % 13.0 % Third Party Broker Quote 5.1 - 96.5 93.9 Market Approach 41,923 Cost 94.1 - 98.1 97.9 Enterprise Value Waterfall Approach 5,143 EBITDA Multiple 9.4 x - 9.4 x 9.4 x Discount Rate 27.2 % - 27.2 % 27.2 % Second lien loans Income Approach 32,226 Discount Rate 18.3 % - 34.3 % 25.1 % Third Party Broker Quote 61.3 - 61.3 61.3 Enterprise Value Waterfall Approach 3,594 EBITDA Multiple 9.4 x - 9.4 x 9.4 x Discount Rate 27.2 % - 27.2 % 27.2 % Subordinated debt Market Approach 205 Cost 100.0 - 100.0 100.0 Enterprise Value Waterfall Approach 586 EBITDA Multiple 6.0 x - 7.7 x 6.6 x Discount Rate 20.2 % - 25.0 % 21.8 % Preferred equity Enterprise Value Waterfall Approach 59,518 EBITDA Multiple 4.7 x - 16.7 x 9.8 x Discount Rate 11.7 % - 30.8 % 17.1 % Market Approach 3,875 Cost 100.0 - 100.0 100.0 Common equity & warrants Enterprise Value Waterfall Approach 53,064 EBITDA Multiple 5.5 x - 18.6 x 9.5 x Discount Rate 11.4 % - 36.6 % 18.2 % Market Approach 1,080 Exit Value 100.0 - 100.0 100.0 Total Level 3 Investments $ 1,155,132 Changes in Fair Value Levels We monitor the availability of observable market data to assess the appropriate classification of financial instruments within the fair value hierarchy. Changes in economic conditions or model based valuation techniques may require the transfer of financial instruments from one fair value level to another. During the years ended March 31, 2024 and 2023, we had no transfers between levels. 135 Table of Contents The following tables provide a summary of changes in the fair value of investments measured using Level 3 inputs during the years ended March 31, 2024 and 2023 (in thousands): Fair Value March 31, 2023 Realized & Unrealized Gains (Losses) Purchases of Investments 1 Repayments PIK Interest Capitalized Divestitures Conversion/Exchange of Security 2 Fair Value March 31, 2024 YTD Unrealized Appreciation (Depreciation) on Investments held at period end First lien loans $ 1,000,984 $ ( 25,020 ) $ 520,239 $ ( 176,763 ) $ 10,845 $ ( 13,875 ) $ ( 6,961 ) $ 1,309,449 $ ( 19,824 ) Second lien loans 35,820 342 169 ( 2,913 ) 356 — — 33,774 339 Subordinated debt 791 ( 31 ) 562 ( 19 ) 33 — — 1,336 ( 31 ) Preferred equity 63,393 ( 5,442 ) 10,279 — — ( 273 ) 3,170 71,127 ( 5,340 ) Common equity & warrants 54,144 517 6,281 — — ( 3,858 ) 3,791 60,875 285 Total Investments $ 1,155,132 $ ( 29,634 ) $ 537,530 $ ( 179,695 ) $ 11,234 $ ( 18,006 ) $ — $ 1,476,561 $ ( 24,571 ) Fair Value March 31, 2022 Realized & Unrealized Gains (Losses) Purchases of Investments 1 Repayments PIK Interest Capitalized Divestitures Conversion/Exchange of Security Fair Value March 31, 2023 YTD Unrealized Appreciation (Depreciation) on Investments held at period end First lien loans $ 739,872 $ ( 17,150 ) $ 415,332 $ ( 128,932 ) $ 5,577 $ — $ ( 13,715 ) $ 1,000,984 $ ( 13,189 ) Second lien loans 52,645 ( 7,127 ) 2,990 ( 12,310 ) 314 ( 692 ) — 35,820 ( 5,923 ) Subordinated debt 1,317 ( 398 ) 385 — 74 — ( 587 ) 791 ( 294 ) Preferred equity 44,663 ( 3,360 ) 7,788 — — — 14,302 63,393 ( 267 ) Common equity & warrants 40,514 10,547 5,747 — — ( 2,664 ) — 54,144 11,730 Total Investments $ 879,011 $ ( 17,488 ) $ 432,242 $ ( 141,242 ) $ 5,965 $ ( 3,356 ) $ — $ 1,155,132 $ ( 7,943 ) 1 Includes purchases of new investments, as well as discount accretion on existing investments. Also included are distributions-in-kind of investments received in connection with the dissolution and liquidation of I-45 SLF. See Note 13 - Related Party Transactions for more information. 2 Includes $ 3.8 million of cost basis allocated from first lien debt to warrants. 136 Table of Contents 5. BORROWINGS In accordance with the 1940 Act, effective April 25, 2019, the Company is only allowed to borrow amounts such that its asset coverage (i.e., the ratio of assets less liabilities not represented by senior securities to senior securities such as borrowings), calculated pursuant to the 1940 Act, is at least 150% after such borrowing. The Board of Directors also approved a resolution that limits the Company’s issuance of senior securities such that the asset coverage ratio, taking into account any such issuance, would not be less than 166 %, which became effective April 25, 2019. On August 11, 2021, we received an exemptive order from SEC to permit us to exclude the senior securities issued by SBIC I or any future SBIC subsidiary of the Company from the definition of senior securities in the asset coverage requirement applicable to the Company under the 1940 Act. As of March 31, 2024, the Company’s asset coverage was 221 %. The Company had the following borrowings outstanding as of March 31, 2024 and March 31, 2023 (amounts in thousands): Outstanding Balance Unamortized Debt Issuance Costs and Debt Discount/Premium (1) Recorded Value Estimated Fair Value (2) March 31, 2024 SBA Debentures $ 153,000 $ ( 4,305 ) $ 148,695 $ 141,638 Corporate Credit Facility 265,000 — 265,000 265,000 SPV Credit Facility — — — — January 2026 Notes 140,000 ( 612 ) 139,388 118,249 October 2026 Notes 150,000 ( 1,923 ) 148,077 127,150 August 2028 Notes 71,875 ( 2,182 ) 69,693 74,261 $ 779,875 $ ( 9,022 ) $ 770,853 $ 726,298 March 31, 2023 SBA Debentures $ 120,000 $ ( 3,670 ) $ 116,330 $ 115,836 Corporate Credit Facility 235,000 — 235,000 235,000 January 2026 Notes 140,000 ( 949 ) 139,051 122,768 October 2026 Notes 150,000 ( 2,737 ) 147,263 132,238 $ 645,000 $ ( 7,356 ) $ 637,644 $ 605,842 (1) The unamortized debt issuance costs for the Corporate Credit Facility and the SPV Credit Facility are reflected as Debt issuance costs on the Consolidated Statements of Assets and Liabilities. (2) Each estimated fair value for the SBA Debentures, January 2026 Notes and October 2026 Notes is a Level 3 fair value measurement under ASC 820 based on a valuation model using a discounted cash flow analysis. The estimated fair value of the August 2028 Notes is based on the closing price of the security on The Nasdaq Global Select Market, which is a Level 1 input under ASC 820. The estimated fair value of the Corporate Credit Facility approximates its recorded value due to its variable interest rate. Credit Facilities As of March 31, 2024, the Company had in place one revolving credit facility and one special purpose vehicle financing facility, the Corporate Credit Facility and the SPV Facility, respectively (each defined below and together, the "Credit Facilities"). For the year ended March 31, 2024, the weighted average interest rate on the Credit Facilities was 7.66 %, and the average debt outstanding under the Credit Facilities was $ 217.5 million. Corporate Credit Facility In August 2016, CSWC entered into a senior secured revolving credit facility (the “Corporate Credit Facility”) to provide additional liquidity to support its investment and operational activities. On August 2, 2023, the Company entered into the Third Amended and Restated Senior Secured Revolving Credit Agreement (as amended or otherwise modified from time to time, including the Amendment (as defined below), the "Credit Agreement"). Borrowings under the Corporate Credit Facility accrue interest at a rate equal to the applicable Adjusted Term 137 Table of Contents SOFR plus 2.15 % per annum. The Credit Agreement (1) increased commitments under the Corporate Credit Facility from $ 400 million to $ 435 million from a diversified group of lenders; (2) added an uncommitted accordion feature that could increase the maximum commitments up to $ 750 million; (3) extended the end of the Corporate Credit Facility's revolving period from August 9, 2025 to August 2, 2027 and extended the final maturity from August 9, 2026 to August 2, 2028; and (4) amended several financial covenants. On December 7, 2023, the Company entered into an Incremental Commitment and Assumption Agreement that increased the total commitments under the accordion feature of the Credit Agreement by $ 25 million, which increased total commitments from $ 435 million to $ 460 million. The $ 25 million increase was provided by one new lender, bringing the total bank syndicate to ten participants. On March 1, 2024, the Company entered into Amendment No. 1 to the Credit Agreement (the "Amendment"). The Amendment amends the Credit Agreement and other related loan documents to, among other things, permit the Company to enter into special purpose vehicle financings and exclude assets held by any such special purpose vehicle from the assets pledged as collateral securing the Corporate Credit Facility. CSWC pays unused commitment fees of 0.50 % to 1.00 % per annum, based on utilization, on the unused lender commitments under the Corporate Credit Facility. The Corporate Credit Facility contains certain affirmative and negative covenants, including but not limited to: (1) certain reporting requirements; (2) maintaining RIC and BDC status; (3) maintaining a minimum senior coverage ratio of 2.00 to 1; (4) maintaining a minimum shareholders’ equity; (5) maintaining a minimum consolidated net worth; (6) maintaining a regulatory asset coverage of not less than 150 %; and (7) maintaining an interest coverage ratio of at least 2.00 to 1. The Credit Agreement also contains customary events of default, including, without limitation, nonpayment, misrepresentation of representations and warranties in a material respect, breach of covenant, bankruptcy, and change of control, with customary cure and notice provisions. If the Company defaults on its obligations under the Credit Agreement, the lenders may have the right to foreclose upon and sell, or otherwise transfer, the collateral subject to their security interests. The Corporate Credit Facility is secured by (1) all of the present and future property and assets of the Company and the guarantors and (2) 100% of the equity interests in certain of the Company’s wholly-owned subsidiaries (except for the assets held in SBIC I and SPV). As of March 31, 2024, all of the Company’s assets were pledged as collateral for the Corporate Credit Facility, except for assets held by SBIC I and Capital Southwest SPV. As of March 31, 2024 and 2023, CSWC was in compliance with all financial covenants under the Credit Agreement. The summary information regarding the Corporate Credit Facility is as follows (dollars in thousands): Years Ended March 31, 2024 2023 2022 Interest expense and unused commitment fees $ 17,813 $ 12,008 $ 5,166 Amortization of deferred financing costs 1,813 1,144 992 Total interest and amortization of deferred financing costs $ 19,626 $ 13,152 $ 6,158 Weighted average effective interest rate 7.66 % 5.22 % 2.50 % Average borrowings $ 217,500 $ 213,658 $ 173,500 SPV Credit Facility On March 20, 2024, SPV entered into a Loan Financing and Servicing Agreement (the “Loan Agreement”) for a special purpose vehicle financing credit facility (the “SPV Credit Facility”) to provide additional liquidity to support its investment and operational activities. The SPV Credit Facility includes total commitments of $ 150.0 million of initial commitments with (i) an increase to $ 200.0 million of total commitments on the earlier of (a) June 20, 2024 or (b) the date requested by the Company, in its sole discretion, and (ii) an accordion feature that allows increases up to $ 400 million of total commitments from new and existing lenders on the same terms and conditions as the existing commitments. Borrowings under the SPV Credit Facility bear interest at three-month Term SOFR plus 2.50 % per annum during the revolving period ending on March 20, 2027 and three-month Term SOFR plus an applicable margin of 2.85 % thereafter. SPV pays unused commitment fees of (i) 0.10 % through April 20, 2024 and (ii) 0.35 % thereafter, on the unused lender commitments under the SPV Credit Facility, in addition to other customary fees. The SPV Credit Facility matures on March 20, 2029. 138 Table of Contents The Loan Agreement contains customary terms and conditions, including affirmative and negative covenants. The Loan Agreement also contains customary events of default including, without limitation, nonpayment, misrepresentation of representations and warranties in a material respect, breach of covenant, bankruptcy, and change of control, with customary cure and notice provisions. The SPV Credit Facility is secured by all of the assets of SPV. As of March 31, 2024, SPV was in compliance with all financial covenants under the Loan Agreement. At March 31, 2024, there were no borrowings outstanding under the SPV Credit Facility. For the year ended March 31, 2024, SPV recognized interest expense related to the SPV Credit Facility, including unused commitment fees and amortization of deferred loan costs, of $ 45.0 thousand. October 2024 Notes In September 2019, the Company issued $ 65.0 million in aggregate principal amount of 5.375 % Notes due 2024 (the “Existing October 2024 Notes”). In October 2019, the Company issued an additional $ 10.0 million in aggregate principal amount of the October 2024 Notes (the "Additional October 2024 Notes"). In August 2020, the Company issued an additional $ 50.0 million in aggregate principal amount of the October 2024 Notes (the "New Notes" together with the Existing October 2024 Notes and the Additional October 2024 Notes, the "October 2024 Notes"). The Additional October 2024 Notes and the New Notes were treated as a single series with the Existing October 2024 Notes under the indenture and had the same terms as the Existing October 2024 Notes. The maturity date of the October 2024 Notes was October 1, 2024, and the October 2024 Notes were redeemable in whole or in part at any time prior to July 1, 2024, at par plus a “make-whole” premium, and thereafter at par. The October 2024 Notes bore interest at a rate of 5.375 % per year. On September 24, 2021, the Company redeemed $ 125.0 million in aggregate principal amount of the issued and outstanding October 2024 Notes. The October 2024 Notes were redeemed at 100 % of their principal amount, plus (i) the accrued and unpaid interest thereon, through, but excluding the redemption date, and (ii) a "make-whole" premium. Accordingly, the Company recognized a realized loss on extinguishment of debt, equal to the write-off of the related unamortized debt issuance costs of $ 1.8 million and the "make-whole" premium of $ 15.2 million during the three months ended September 30, 2021. The Company did not recognize any interest expense related to the October 2024 Notes for the years ended March 31, 2024 and 2023. For the year ended March 31, 2022, the Company recognized interest expense related to the October 2024 Notes, including amortization of deferred issuance costs, of $ 3.6 million. From April 1, 2021 through September 24, 2021 (the redemption date of the October 2024 Notes), average borrowings were $ 125.0 million. The October 2024 Notes had a weighted average effective yield of 5.375 %. January 2026 Notes In December 2020, the Company issued $ 75.0 million in aggregate principal amount of 4.50 % Notes due 2026 (the "Existing January 2026 Notes"). The Existing January 2026 Notes were issued at par. In February 2021, the Company issued an additional $ 65.0 million in aggregate principal amount of the January 2026 Notes (the "Additional January 2026 Notes" together with the Existing January 2026 Notes, the "January 2026 Notes"). The Additional January 2026 Notes were issued at a price of 102.11 % of the aggregate principal amount of the Additional January 2026 Notes, resulting in a yield-to-maturity of approximately 4.0 % at issuance. The Additional January 2026 Notes are treated as a single series with the Existing January 2026 Notes under the indenture and have the same terms as the Existing January 2026 Notes. The January 2026 Notes mature on January 31, 2026 and may be redeemed in whole or in part at any time prior to October 31, 2025, at par plus a "make-whole" premium, and thereafter at par. The January 2026 Notes bear interest at a rate of 4.50 % per year, payable semi-annually on January 31 and July 31 of each year. The January 2026 Notes are the direct unsecured obligations of the Company, rank pari passu with the Company's other outstanding and future unsecured unsubordinated indebtedness and are effectively or structurally subordinated to all of the Company's existing and future secured indebtedness, including borrowings under the Credit Facilities and the SBA Debentures. The summary information regarding the January 2026 Notes is as follows (dollars in thousands): 139 Table of Contents Years Ended March 31, 2024 2023 2022 Interest expense and unused commitment fees $ 6,300 $ 6,300 $ 6,300 Amortization of deferred financing costs 337 344 361 Total interest and amortization of deferred financing costs $ 6,637 $ 6,644 $ 6,661 Weighted average effective interest rate 4.46 % 4.46 % 4.46 % Average borrowings $ 140,000 $ 140,000 $ 140,000 The indenture governing the January 2026 Notes contains certain covenants, including certain covenants requiring the Company to comply with Section 18(a)(1)(A) as modified by Section 61(a)(2) of the 1940 Act, or any successor provisions, whether or not the Company continues to be subject to such provisions of the 1940 Act, but giving effect, in either case, to any exemptive relief granted to the Company by the SEC, to comply with Section 18(a)(1)(B) as modified by Section 61(a)(2) of the 1940 Act, or any successor provisions, after giving effect to any exemptive relief granted to the Company by the SEC and subject to certain other exceptions, and to provide financial information to the holders of the January 2026 Notes and the trustee under the indenture if the Company is no longer subject to the reporting requirements under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). These covenants are subject to important limitations and exceptions that are described in the indenture and the third supplemental indenture relating to the January 2026 Notes. In addition, holders of the January 2026 Notes can require the Company to repurchase some or all of the January 2026 Notes at a purchase price equal to 100 % of their principal amount, plus accrued and unpaid interest to, but not including, the repurchase date upon the occurrence of a “Change of Control Repurchase Event,” as defined in the third supplemental indenture relating to the January 2026 Notes. October 2026 Notes In August 2021, the Company issued $ 100.0 million in aggregate principal amount of 3.375 % Notes due 2026 (the "Existing October 2026 Notes"). The Existing October 2026 Notes were issued at a price of 99.418 % of the aggregate principal amount of the Existing October 2026 Notes, resulting in a yield-to-maturity of 3.5 %. In November 2021, the Company issued an additional $ 50.0 million in aggregate principal amount of the October 2026 Notes (the "Additional October 2026 Notes" together with the Existing October 2026 Notes, the "October 2026 Notes"). The Additional October 2026 Notes were issued at a price of 99.993 % of the aggregate principal amount, resulting in a yield-to-maturity of approximately 3.375 % at issuance. The Additional October 2026 Notes are treated as a single series with the Existing October 2026 Notes under the indenture and have the same terms as the Existing October 2026 Notes. The October 2026 Notes mature on October 1, 2026 and may be redeemed in whole or in part at any time prior to July 1, 2026, at par plus a "make-whole" premium, and thereafter at par. The October 2026 Notes bear interest at a rate of 3.375 % per year, payable semi-annually in arrears on April 1 and October 1 of each year. The October 2026 Notes are the direct unsecured obligations of the Company, rank pari passu with the Company's other outstanding and future unsecured unsubordinated indebtedness and are effectively or structurally subordinated to all of the Company's existing and future secured indebtedness, including borrowings under the Credit Facilities and the SBA Debentures. The summary information regarding the October 2026 Notes is as follows (dollars in thousands): Years Ended March 31, 2024 2023 2022 Interest expense and unused commitment fees $ 5,062 $ 5,062 $ 2,658 Amortization of deferred financing costs 814 734 435 Total interest and amortization of deferred financing costs $ 5,876 $ 5,796 $ 3,093 Weighted average effective interest rate 3.50 % 3.50 % 3.50 % Average borrowings 1 $ 150,000 $ 150,000 $ 132,900 1 Average borrowings for the year ended March 31, 2022 are calculated from August 27, 2021 (the issuance date of the October 2026 Notes) through March 31, 2022. 140 Table of Contents The indenture governing the October 2026 Notes contains certain covenants, including certain covenants requiring the Company to comply with Section 18(a)(1)(A) as modified by Section 61(a)(2) of the 1940 Act, or any successor provisions, whether or not the Company continues to be subject to such provisions of the 1940 Act, but giving effect, in either case, to any exemptive relief granted to the Company by the SEC, to comply with Section 18(a)(1)(B) as modified by Section 61(a)(2) of the 1940 Act, or any successor provisions, after giving effect to any exemptive relief granted to the Company by the SEC and subject to certain other exceptions, and to provide financial information to the holders of the October 2026 Notes and the trustee under the indenture if the Company is no longer subject to the reporting requirements under the Exchange Act. These covenants are subject to important limitations and exceptions that are described in the indenture and the fourth supplemental indenture relating to the October 2026 Notes. In addition, holders of the October 2026 Notes can require the Company to repurchase some or all of the October 2026 Notes at a purchase price equal to 100 % of their principal amount, plus accrued and unpaid interest to, but not including, the repurchase date upon the occurrence of a “Change of Control Repurchase Event,” as defined in the fourth supplemental indenture relating to the October 2026 Notes. August 2028 Notes In June 2023, the Company issued approximately $ 71.9 million in aggregate principal amount, including the underwriters' full exercise of their option to purchase an additional $ 9.4 million in aggregate principal amount to cover over-allotments, of 7.75 % notes due 2028 (the "August 2028 Notes"). The August 2028 Notes mature on August 1, 2028 and may be redeemed in whole or in part at any time, or from time to time, at the Company’s option on or after August 1, 2025. The August 2028 Notes bear interest at a rate of 7.75 % per year, payable quarterly on February 1, May 1, August 1 and November 1 of each year. The August 2028 Notes are the direct unsecured obligations of the Company, rank pari passu with the Company's other outstanding and future unsecured unsubordinated indebtedness and are effectively or structurally subordinated to all of the Company's existing and future secured indebtedness, including borrowings under the Credit Facilities and the SBA Debentures. The August 2028 Notes are listed on the Nasdaq Global Select Market under the trading symbol "CSWCZ." The summary information regarding the August 2028 Notes is as follows (dollars in thousands): Years Ended March 31, 2024 2023 2022 Interest expense and unused commitment fees $ 4,425 $ — $ — Amortization of deferred financing costs 423 — — Total interest and amortization of deferred financing costs $ 4,848 $ — $ — Weighted average effective interest rate 7.75 % — % — % Average borrowings 1 $ 71,875 $ — $ — 1 Average borrowings for the year ended March 31, 2024 are calculated from June 14, 2023 (the issuance date of the August 2028 Notes) through March 31, 2024. The indenture governing the August 2028 Notes contains certain covenants, including certain covenants requiring the Company to comply with Section 18(a)(1)(A) as modified by Section 61(a)(2) of the 1940 Act, or any successor provisions, whether or not the Company continues to be subject to such provisions of the 1940 Act, but giving effect, in either case, to any exemptive relief granted to the Company by the SEC, to comply with Section 18(a)(1)(B) as modified by Section 61(a)(2) of the 1940 Act, or any successor provisions, after giving effect to any exemptive relief granted to the Company by the SEC and subject to certain other exceptions, and to provide financial information to the holders of the August 2028 Notes and the trustee under the indenture if the Company is no longer subject to the reporting requirements under the Exchange Act. These covenants are subject to important limitations and exceptions that are described in the indenture and the fifth supplemental indenture relating to the August 2028 Notes. SBA Debentures On April 20, 2021, SBIC I received a license from the SBA to operate as an SBIC under Section 301(c) of the Small Business Investment Act of 1958, as amended. The license allows SBIC I to obtain leverage by issuing SBA Debentures, subject to the issuance of a leverage commitment by the SBA. SBA Debentures are loans issued to an SBIC which have interest payable semi-annually and a ten-year maturity. The interest rate is fixed shortly after issuance at a market-driven spread over U.S. Treasury Notes with ten-year maturities. Interest on SBA Debentures is payable semi-annually on March 1 and September 141 Table of Contents 1. Current statutes and regulations permit SBIC I to borrow up to $ 175 million in SBA Debentures with at least $ 87.5 million in regulatory capital (as defined in the SBA regulations). On May 25, 2021, SBIC I received a leverage commitment from the SBA in the amount of $ 40.0 million to be issued on or prior to September 30, 2025. On January 28, 2022, SBIC I received an additional leverage commitment in the amount of $ 40.0 million to be issued on or prior to September 30, 2026. On November 22, 2022, SBIC I received an additional leverage commitment in the amount of $ 50.0 million to be issued on or prior to September 30, 2027. On December 20, 2023, SBIC I received an additional leverage commitment in the amount of $ 45.0 million to be issued on or prior to September 30, 2028. The SBA may limit the amount that may be drawn each year under these commitments, and each issuance of leverage is conditioned on SBIC I's full compliance, as determined by the SBA, with the terms and conditions set forth in the SBA regulations. As of March 31, 2024, SBIC I had regulatory capital of $ 87.5 million and leverageable capital of $ 87.5 million. As of March 31, 2024, SBIC I had a total leverage commitment from the SBA in the amount of $ 175.0 million, of which $ 22.0 million remains unused. The summary information regarding the SBA Debentures is as follows (dollars in thousands): Years Ended March 31, 2024 2023 2022 Interest expense and fees $ 5,418 $ 2,792 $ 220 Amortization of deferred financing costs 619 426 126 Total interest and amortization of deferred financing costs $ 6,037 $ 3,218 $ 346 Weighted average effective interest rate 4.18 % 3.38 % 1.30 % Average borrowings $ 129,708 $ 82,641 $ 16,971 As of March 31, 2024, the Company's issued and outstanding SBA Debentures mature as follows (amounts in thousands): Pooling Date (1) Maturity Date Fixed Interest Rate Debenture Amount 9/22/2021 9/1/2031 1.575 % $ 15,000 3/23/2022 3/1/2032 3.209 % 25,000 9/21/2022 9/1/2032 4.435 % 40,000 3/22/2023 3/1/2033 5.215 % 40,000 9/20/2023 9/1/2033 5.735 % 10,000 3/20/2024 3/1/2034 5.164 % 15,000 (2) (2) (2) 8,000 $ 153,000 (1) The SBA has two scheduled pooling dates for SBA Debentures (in March and in September). Certain SBA Debentures funded during the reporting periods may not be pooled until the subsequent pooling date. (2) The Company issued $ 8.0 million in SBA Debentures that will pool in September 2024. Until the pooling date, the SBA Debentures bear interest at a fixed rate with a weighted-average interim interest rate of 5.91 %. 142 Table of Contents Contractual Payment Obligations A summary of the Company's contractual payment obligations for the repayment of outstanding indebtedness at March 31, 2024 is as follows: Years Ending March 31, 2025 2026 2027 2028 2029 Thereafter Total SBA Debentures $ — $ — $ — $ — $ — $ 153,000 $ 153,000 Corporate Credit Facility — — — — 265,000 — 265,000 January 2026 Notes — 140,000 — — — — 140,000 October 2026 Notes — — 150,000 — — — 150,000 August 2028 Notes — — — — 71,875 — 71,875 Total $ — $ 140,000 $ 150,000 $ — $ 336,875 $ 153,000 $ 779,875 6. INCOME TAXES We have elected, and intend to qualify annually, to be treated for U.S. federal income tax purposes as a RIC under Subchapter M of the Code and have a tax year end of December 31. In order to qualify as a RIC, we must annually distribute at least 90% of our investment company taxable income, as defined by the Code, to our shareholders in a timely manner. Investment company income generally includes net short-term capital gains but excludes net long-term capital gains. A RIC is not subject to federal income tax on the portion of its ordinary income and capital gains that is distributed to its shareholders, including “deemed distributions” as discussed below. As part of maintaining RIC tax treatment, undistributed taxable income and capital gain, which is subject to a 4% non-deductible U.S. federal excise tax, pertaining to a given fiscal year may be distributed up to 12 months subsequent to the end of that fiscal year, provided such dividends are declared on or prior to the later of (1) the extended due date of the U.S. federal income tax return for the applicable fiscal year and (2) the fifteenth day of the ninth month following the close of the year in which such taxable income was generated. For the tax years ended December 31, 2023, 2022 and 2021, CSWC qualified for RIC tax treatment. We intend to meet the applicable qualifications to be taxed as a RIC in future periods. However, the Company’s ability to meet certain portfolio diversification requirements of RICs in future years may not be controllable by the Company. We have distributed or intend to distribute sufficient dividends to eliminate taxable income for our completed tax years. If we fail to satisfy the 90% distribution requirement or otherwise fail to qualify as a RIC in any tax year, we would be subject to tax in that year on all of our taxable income, regardless of whether we made any distributions to our shareholders. During the quarter ended March 31, 2024, CSWC declared and paid a quarterly dividend in the amount of $ 28.4 million, or $ 0.63 per share ($ 0.57 per share in regular dividends and $ 0.06 per share in supplemental dividends). Our distributions for the tax years ended December 31, 2023, 2022 and 2021 were as follows: 143 Table of Contents 144 Table of Contents Payment Date Cash Dividend Tax Year Ended December 31, 2023 March 31, 2023 1 0.58 June 30, 2023 1 0.59 September 30, 2023 2 0.62 December 31, 2023 2 0.63 2.42 Tax Year Ended December 31, 2022 March 31, 2022 0.48 June 30, 2022 3 0.63 September 30, 2022 0.50 December 31, 2022 1 0.57 2.18 Tax Year Ended December 31, 2021 March 31, 2021 4 0.52 June 30, 2021 4 0.53 September 30, 2021 4 0.54 December 31, 2021 5 0.97 2.56 1. On each of these dates, the dividend paid included a supplemental dividend of $ 0.05 per share. 2. On each of these dates, the dividend paid included a supplemental dividend of $ 0.06 per share. 3. On June 30, 2022, CSWC paid a regular dividend of $ 0.48 per share and a special dividend of $ 0.15 per share. 4. On each of these dates, the dividend paid included a supplemental dividend of $ 0.10 per share. 5. On December 31, 2021, CSWC paid a regular dividend of $ 0.47 per share and a supplemental dividend of $ 0.50 per share. Book and tax basis differences relating to dividends and distributions to our shareholders and other permanent book and tax differences are typically reclassified among the CSWC’s capital accounts. In addition, the character of income and gains to be distributed is determined in accordance with income tax regulations that may differ from U.S. GAAP; accordingly, for the years ended March 31, 2024 and 2023, CSWC reclassified for book purposes amounts arising from permanent book/tax differences related to the tax treatment of return of capital and/or deemed distributions, tax treatment of investments upon disposition, and non-deductible expenses, as follows (amounts in thousands): Years Ended March 31, 2024 2023 Additional capital $ ( 8,849 ) $ ( 6,420 ) Total distributable earnings 8,849 6,420 The determination of the tax attributes for CSWC’s distributions is made annually, based upon its taxable income for the full year and distributions paid for the full year. Therefore, any determination made on an interim basis is forward-looking based on currently available facts, rules and assumptions and may not be representative of the actual tax attributes of distributions determined at tax year end. For tax purposes, the 2023 dividends totaled $ 2.42 per share and were comprised entirely of ordinary income. In addition, 94.17 % of each of the ordinary distributions represent interest-related dividends. 94.17 % of total distributions represent the portion of CSWC’s dividends received by non-U.S. residents and foreign corporation shareholders that are generally exempt from U.S. withholding tax. For tax purposes, the 2022 dividends totaled $ 2.18 per share and were comprised entirely of ordinary income. In addition, 89.74 % of each of the ordinary distributions represent interest-related dividends. 145 Table of Contents 89.74 % of total distributions represent the portion of CSWC’s dividends received by non-U.S. residents and foreign corporation shareholders that are generally exempt from U.S. withholding tax. Ordinary dividend distributions from a RIC do not qualify for the 20% maximum tax rate on dividend income from domestic corporations and qualified foreign corporations, except to the extent that the RIC received the income in the form of qualifying dividends from domestic corporations and qualified foreign corporations. The tax attributes for distributions will generally include both ordinary income and capital gains, but may also include qualified dividends or return of capital. The tax character of distributions paid for the tax years ended December 31, 2023 and 2022 was as follows (amounts in thousands): Twelve Months Ended December 31, 2023 2022 Ordinary income $ 94,139 $ 60,960 Distributions of long term capital gains — — Distributions on tax basis 1 $ 94,139 $ 60,960 1 Includes only those distributions which reduce estimated taxable income. As of March 31, 2024, CSWC estimates that it has cumulative undistributed taxable income of approximately $ 28.8 million, or $ 0.64 per share, that will be carried forward toward distributions to be paid in future periods. We intend to continue to meet the applicable qualifications to be taxed as a RIC in future periods. The following reconciles net increase in net assets resulting from operations to estimated RIC taxable income for the years ended March 31, 2024, 2023, and 2022: Years Ended March 31, Reconciliation of RIC Distributable Income 1 2024 2023 2022 Net increase in net assets from operations $ 83,389 $ 33,093 $ 42,815 Net unrealized (appreciation) depreciation on investments ( 13,640 ) 18,589 ( 11,467 ) (Expense/loss) income/gain recognized for tax on pass-through entities ( 6,383 ) 962 3,753 Loss (gain) recognized on dispositions 16,074 ( 1,473 ) 152 Capital loss carryover 2 26,449 12,796 ( 878 ) Net operating (income) loss - wholly-owned subsidiary ( 5,194 ) 809 ( 10,757 ) Dividend income from wholly-owned subsidiary 2,000 1,068 4,000 Non-deductible tax expense 921 628 65 Loss on extinguishment of debt ( 2,726 ) ( 2,726 ) 12,268 Non-deductible compensation 3,665 3,243 3,679 Compensation related book/tax differences 1,116 812 36 Interest on non-accrual loans 5,636 3,343 4,171 Other book/tax differences 4,403 1,191 1,530 Estimated distributable income before deductions for distributions $ 115,710 $ 72,335 $ 49,367 Distributions 3 : Ordinary $ 101,517 $ 70,034 $ 57,518 Estimated annual RIC undistributed taxable income $ 14,193 $ 2,301 $ ( 8,151 ) 1 The calculation of taxable income for each period is an estimate and will not be finally determined until the Company files its tax return each year. Final taxable income may be different than this estimate. 2 At March 31, 2024, the Company had long-term capital loss carryforwards of $ 60.1 million to offset future capital gains. These capital loss carryforwards are not subject to expiration. 3 Includes only those distributions which reduce estimated distributable income. 146 Table of Contents As of March 31, 2024, 2023 and 2022, the components of estimated RIC accumulated earnings on a tax basis were as follows (amounts in thousands): Years Ended March 31, Components of RIC Accumulated Earnings on a Tax Basis 1 2024 2023 2022 Undistributed ordinary income - tax basis $ 28,845 $ 16,070 $ 12,682 Undistributed net realized (loss) gain ( 60,056 ) ( 30,201 ) ( 17,252 ) Unrealized (depreciation) appreciation on investments ( 68,529 ) ( 61,710 ) ( 20,126 ) Other temporary differences ( 9,584 ) ( 13,639 ) — Components of distributable earnings at year-end $ ( 109,324 ) $ ( 89,480 ) $ ( 24,696 ) 1 The calculation of taxable income for each period is an estimate and will not be finally determined until the Company files its tax return each year. Final taxable income may be different than this estimate. A RIC may elect to retain all or a portion of its net capital gains by designating them as a “deemed distribution” to its shareholders and paying a federal tax on the net capital gains for the benefit of its shareholders. Shareholders then report their share of the retained capital gains on their income tax returns as if it had been received and report a tax credit for tax paid on their behalf by the RIC. Shareholders then add the amount of the “deemed distribution” net of such tax to the basis of their shares. For the tax years ended December 31, 2023, 2022 and 2021, there were no long-term capital gains and therefore had no deemed distributions to our shareholders or federal taxes incurred related to such items. In addition, the Taxable Subsidiary holds a portion of one or more of our portfolio investments that are listed on the Consolidated Schedule of Investments. The Taxable Subsidiary is consolidated for financial reporting purposes in accordance with U.S. GAAP, so that our consolidated financial statements reflect our investments in the portfolio companies owned by the Taxable Subsidiary. The purpose of the Taxable Subsidiary is to permit us to hold certain interests in portfolio companies that are organized as limited liability companies, or LLCs (or other forms of pass-through entities) and still satisfy the RIC tax requirement that at least 90% of our gross income for U.S. federal income tax purposes must consist of qualifying investment income. Absent the Taxable Subsidiary, a proportionate amount of any gross income of a partnership or LLC (or other pass-through entity) portfolio investment would flow through directly to us. To the extent that our income did not consist of investment income, it could jeopardize our ability to qualify as a RIC and therefore cause us to incur significant amounts of U.S. federal income taxes at corporate rates. Where interests in LLCs (or other pass-through entities) are owned by the Taxable Subsidiary, however, the income from those interests is taxed to the Taxable Subsidiary and does not flow through to us, thereby helping us preserve our RIC tax treatment and resultant tax advantages. The Taxable Subsidiary is not consolidated for U.S. federal income tax purposes and may generate an income tax provision as a result of their ownership of the portfolio companies. The income tax provision, or benefit, and the related tax assets and liabilities, if any, are reflected in our Consolidated Statement of Operations. As of March 31, 2024, the cost of investments held at the RIC for U.S. federal income tax purposes was $ 1,425.9 million, with such investments having gross unrealized appreciation of $ 16.7 million and gross unrealized depreciation of $ 85.2 million, resulting in net unrealized depreciation of $ 68.5 million. As of March 31, 2024, the cost of investments held at the Taxable Subsidiary for U.S. federal income tax purposes was $ 45.2 million, with such investments having gross unrealized appreciation of $ 79.6 million and gross unrealized depreciation of $ 11.2 million, resulting in net unrealized appreciation of $ 68.4 million. On a consolidated basis, the total investment portfolio has net unrealized depreciation of $ 0.1 million for U.S. federal income tax purposes. The Taxable Subsidiary is not a RIC and is required to pay taxes at the current corporate rate. For tax purposes, the Taxable Subsidiary has elected to be treated as a taxable entity, and therefore is not consolidated for tax purposes and is taxed at normal corporate tax rates based on its taxable income and, as a result of its activities, may generate an income tax provision or benefit. The taxable income, or loss, of the Taxable Subsidiary may differ from book income, or loss, due to temporary book and tax timing differences and permanent differences. This income tax provision, or benefit, if any, and the related tax assets and liabilities, are reflected in our consolidated financial statements. The Taxable Subsidiary records valuation adjustments related to its investments on a quarterly basis. Deferred taxes related to the unrealized gain/loss on investments are also recorded on a quarterly basis. A valuation allowance is provided against deferred tax assets when it is more likely than not that some portion or all of the deferred tax asset will not be realized. Establishing a valuation allowance of a deferred tax asset requires management to make estimates related to expectations of future taxable income. As of March 31, 2024 and March 31, 2023, the Taxable Subsidiary had a deferred tax liability of $ 12.0 million and $ 12.1 million, respectively. 147 Table of Contents Based on our assessment of our unrecognized tax benefits, management believes that all benefits will be realized and they do not contain any uncertain tax positions. The following table sets forth the significant components of the deferred tax assets and liabilities as of March 31, 2024 and March 31, 2023 (amounts in thousands): March 31, 2024 March 31, 2023 Deferred tax asset: Net operating loss carryforwards $ 159 $ — Interest 965 219 Total deferred tax asset 1,124 219 Deferred tax liabilities: Net unrealized appreciation on investments ( 11,395 ) ( 11,413 ) Net basis differences in portfolio investments ( 1,726 ) ( 923 ) Total deferred tax liabilities ( 13,121 ) ( 12,336 ) Total net deferred tax (liabilities) assets $ ( 11,997 ) $ ( 12,117 ) The income tax provision, or benefit, and the related tax assets and liabilities, generated by CSWC and the Taxable Subsidiary, if any, are reflected in CSWC’s consolidated financial statements. The following table sets forth the significant components of income tax provision as of March 31, 2024, 2023 and 2022 (amounts in thousands): Years Ended March 31, Components of Income Tax Provision 2024 2023 2022 Excise tax $ 872 $ 630 $ 65 Tax provision (benefit) related to Taxable Subsidiary 22 ( 301 ) 550 Other 50 — — Total income tax provision $ 944 $ 329 $ 615 Although we believe our tax returns are correct, the final determination of tax examinations could be different from what was reported on the returns. In our opinion, we have made adequate tax provisions for years subject to examination. Generally, we are currently open to audit under the statute of limitations by the Internal Revenue Service as well as state taxing authorities for the years ended December 31, 2020 through December 31, 2022. 7. SHAREHOLDERS' EQUITY On October 11, 2023, after receiving the requisite shareholder approval, the Company filed an amendment to its Amended and Restated Articles of Incorporation with the office of the Secretary of State of the State of Texas to increase the amount of authorized shares of common stock from 40,000,000 to 75,000,000 . Equity ATM Program On March 4, 2019, the Company established the Equity ATM Program, pursuant to which the Company may offer and sell, from time to time through sales agents, shares of its common stock having an aggregate offering price of up to $ 50.0 million. On February 4, 2020, the Company (i) increased the maximum amount of shares of its common stock to be sold through the Equity ATM Program to $ 100.0 million from $ 50.0 million and (ii) added two additional sales agents to the Equity ATM Program. On May 26, 2021, the Company (i) increased the maximum amount of shares of its common stock to be sold through the Equity ATM Program to $ 250.0 million from $ 100.0 million and (ii) reduced the commission paid to the sales agents for the Equity ATM Program to 1.5 % from 2.0 % of the gross sales price of shares of the Company's common stock sold through the sales agents pursuant to the Equity ATM Program on and after May 26, 2021. On August 2, 2022, the Company increased the maximum amount of shares of its common stock to be sold through the Equity ATM Program to $ 650.0 million from $ 250.0 million. The following table summarizes certain information relating to shares sold under the Equity ATM Program: 148 Table of Contents Years Ended March 31, 2024 2023 Number of shares sold 8,733,315 8,435,462 Gross proceeds received (in thousands) $ 184,217 $ 161,216 Net proceeds received (in thousands) 1 $ 181,453 $ 158,798 Weighted average price per share $ 21.09 $ 19.11 1 Net proceeds reflects proceeds after deducting commissions to the sales agents on shares sold and offering expenses. As of March 31, 2024 and 2023, no proceeds remained receivable. Cumulative to date, the Company has sold 25,346,437 shares of its common stock under the Equity ATM Program at a weighted-average price of $ 20.87 , raising $ 528.9 million of gross proceeds. Net proceeds were $ 520.5 million after commissions to the sales agents on shares sold. As of March 31, 2024, the Company has $ 121.1 million available under the Equity ATM Program. Public Equity Offering On November 17, 2022, the Company completed an underwritten public equity offering of 2,534,436 shares of common stock, including shares issuable pursuant to the underwriters' option to purchase additional shares, at a public offering price of $ 18.15 per share, raising $ 46.0 million of gross proceeds. Net proceeds were $ 44.1 million after deducting underwriting discounts and offering expenses. Share Repurchases The right to grant restricted stock awards under the 2010 Plan terminated on July 18, 2021, ten years after the date that the 2010 Plan was approved by the Company’s shareholders pursuant to its terms. In connection with the termination of the 2010 Plan, the Board of Directors and shareholders approved the 2021 Employee Plan, which became effective on July 28, 2021, as part of the compensation package for its employees, the terms of which are, in all material respects, identical to the 2010 Plan. On July 19, 2021, we received an exemptive order that supersedes the prior exemptive order relating to the 2010 Plan (the “Order”) to permit the Company to (i) issue restricted stock as part of the compensation package for its employees in the 2021 Employee Plan, and (ii) withhold shares of the Company’s common stock or purchase shares of the Company’s common stock from the participants to satisfy tax withholding obligations relating to the vesting of restricted stock pursuant to the 2021 Employee Plan. In addition, the Board of Directors and shareholders approved the Capital Southwest Corporation 2021 Non-Employee Director Restricted Stock Plan (the "Non-Employee Director Plan"), which became effective on July 27, 2022, as part of the compensation package for non-employee directors of the Board of Directors. In connection therewith, on May 16, 2022, we received an exemptive order that supersedes the Order (the "Superseding Order") and covers both employees and non-employee directors of the Board of Directors. The following table summarizes certain information relating to shares repurchased in connection with the vesting of restricted stock awards: Years Ended March 31, 2024 2023 Number of shares repurchased 52,797 49,590 Aggregate cost of shares repurchased (in thousands) $ 1,063 $ 1,021 Weighted average price per share $ 20.13 $ 20.59 On July 28, 2021, the Board of Directors approved a share repurchase program authorizing the Company to repurchase up to $ 20 million of its outstanding shares of common stock in the open market at certain thresholds below its NAV per share, in accordance with guidelines specified in Rules 10b5-1(c)(1)(i)(B) and 10b-18 under the Exchange Act. On August 31, 2021, the Company entered into a share repurchase agreement, which became effective immediately, and the Company will cease purchasing its common stock under the share repurchase program upon the earlier of, among other things: (1) the date on which the aggregate purchase price for all shares equals $ 20 million including, without limitation, all applicable fees, costs and expenses; or (2) upon written notice by the Company to the broker that the share repurchase agreement is terminated. During the years ended March 31, 2024 and 2023, the Company did not repurchase any shares under the share repurchase program. 149 Table of Contents Treasury Stock On April 26, 2023, the Board of Directors approved the cancellation of 2,339,512 shares of treasury stock, which increased authorized and unissued shares by the same amount. 8. STOCK BASED COMPENSATION PLANS Under the 2010 Plan and the 2021 Employee Plan, a restricted stock award is an award of shares of our common stock, which have full voting and dividend rights but are restricted with regard to sale or transfer. Restricted stock awards are independent of stock grants and are generally subject to forfeiture if employment terminates prior to these restrictions lapsing. Unless otherwise specified in the award agreement, these shares vest in equal annual installments over a four-year period from the grant date and are expensed over the vesting period starting on the grant date. The right to grant restricted stock awards under the 2010 Plan terminated on July 18, 2021, ten years after the date that the 2010 Plan was approved by the Company’s shareholders pursuant to its terms. In connection with the termination of the 2010 Plan, the Board of Directors and shareholders approved the 2021 Employee Plan as part of the compensation packages for its employees, the terms of which are, in all material respects, identical to the 2010 Plan. The 2021 Employee Plan makes available for issuance 1,200,000 shares of common stock. As of March 31, 2024, there are 722,267 shares of common stock available for issuance under the 2021 Employee Plan. In addition, the Board of Directors and shareholders approved the Non-Employee Director Plan as part of the compensation package for non-employee directors of the Board of Directors. Under the Non-Employee Director Plan, at the beginning of each one-year term of service on our Board, each non-employee director will receive a number of shares equivalent to $ 50,000 based on the market value at the close of the Nasdaq Global Select Market on the date of grant. These shares will vest one year from the date of the grant and are expensed over the one-year term of non-employee directors. The Non-Employee Director Plan makes available for issuance 120,000 shares of common stock. As of March 31, 2024, there were 96,695 shares of common stock available for issuance under the Non-Employee Director Plan. We expense the cost of the restricted stock awards, which is determined to equal the fair value of the restricted stock award at the date of grant on a straight-line basis over the requisite service period. For these purposes, the fair value of the restricted stock award is determined based upon the closing price of our common stock on the date of the grant. For the fiscal years ended March 31, 2024, 2023 and 2022, we recognized total share based compensation expense of $ 4.5 million (of which $ 0.3 million was related to restricted stock issued to non-employee directors), $ 3.7 million (of which $ 0.2 million was related to restricted stock issued to non-employee directors), and $ 3.6 million, respectively, related to the restricted stock issued. As of March 31, 2024, the total remaining unrecognized compensation expense related to non-vested restricted stock awards was $ 8.3 million, which will be amortized over the weighted-average vesting period of approximately 2.3 years. 150 Table of Contents The following table summarizes the restricted stock outstanding under the 2010 Plan and the 2021 Employee Plan as of March 31, 2024 and 2023: Weighted Average Weighted Average Fair Value Per Remaining Vesting Restricted Stock Awards Number of Shares Share at grant date Term (in Years) Unvested at March 31, 2022 395,993 $ 21.48 2.4 Granted 199,042 21.25 — Vested ( 148,774 ) 20.49 — Forfeited ( 13,550 ) 24.71 — Unvested at March 31, 2023 432,711 $ 21.61 2.4 Granted 284,407 19.86 — Vested ( 156,755 ) 20.93 — Forfeited ( 1,791 ) 23.91 — Unvested at March 31, 2024 558,572 $ 20.90 2.4 The following table summarizes the restricted stock outstanding under the Non-Employee Director Plan as of March 31, 2024 and 2023: Weighted Average Weighted Average Fair Value Per Remaining Vesting Restricted Stock Awards Number of Shares Share at grant date Term (in Years) Unvested at March 31, 2022 — $ — — Granted 12,105 20.66 — Vested — — — Forfeited — — — Unvested at March 31, 2023 12,105 $ 20.66 0.4 Granted 11,200 — — Vested ( 12,105 ) — — Forfeited — — — Unvested at March 31, 2024 11,200 $ 22.33 0.4 9. OTHER EMPLOYEE COMPENSATION We established a 401(k) plan (the “401K Plan”) effective October 1, 2015. All full-time employees are eligible to participate in the 401K Plan. The 401K Plan permits employees to defer a portion of their total annual compensation up to the Internal Revenue Service annual maximum based on age and eligibility. We made contributions to the 401K Plan of up to 4.5 % of the Internal Revenue Service’s annual maximum eligible compensation, all of which is fully vested immediately. During each of the years March 31, 2024, 2023 and 2022, we made matching contributions of approximately $ 0.2 million. 151 Table of Contents 10. RETIREMENT PLANS CSWC sponsors an unfunded Retirement Restoration Plan, which is a nonqualified plan. Unvested accrued benefits under the Retirement Restoration Plan were forfeited as of September 30, 2015. The Retirement Restoration Plan is a frozen plan under which no new service cost is being accrued by plan participants. The following tables set forth the Retirement Restoration Plan’s net pension benefit and benefit obligation amounts for the years ended March 31, 2024, 2023 and 2022, as well as amounts recognized in our Consolidated Statements of Assets and Liabilities at March 31, 2024 and 2023 (amounts in thousands): Years ended March 31, 2024 2023 2022 Net pension cost Interest cost on projected benefit obligation $ 28 $ 90 $ 79 Net amortization ( 47 ) 33 37 Net pension cost from restoration plan $ ( 19 ) $ 123 $ 116 Years ended March 31, 2024 2023 2022 Change in benefit obligation Benefit obligation at beginning of year $ 598 $ 2,707 $ 2,979 Interest cost 28 90 79 Actuarial gain ( 9 ) ( 2,052 ) ( 104 ) Benefits paid ( 47 ) ( 147 ) ( 247 ) Benefit obligation at end of year $ 570 $ 598 $ 2,707 Years ended March 31, 2024 2023 Amounts recognized in our Consolidated Statements of Assets and Liabilities Projected benefit obligation $ ( 570 ) $ ( 598 ) Net actuarial gain recognized as a component of equity ( 1,090 ) ( 1,128 ) Total $ ( 1,660 ) $ ( 1,726 ) Accumulated benefit obligation $ ( 570 ) $ ( 598 ) The corridor approach is used to amortize the actuarial gains or losses based on 10% of the projected benefit obligation. The increase in the actuarial gain in the current year was primarily due to the death of a retired participant in the Retirement Restoration Plan. 152 Table of Contents The following assumptions were used in estimating the actuarial present value of the projected benefit obligations: Years ended March 31, 2024 2023 2022 Discount rate 5.25 % 5.00 % 3.50 % The following assumptions were used in estimating the net periodic (income)/expense: Years ended March 31, 2024 2023 2022 Discount rate 5.00 % 3.50 % 2.75 % Following are the expected benefit payments for the next five years and in the aggregate for the years 2030-2034 (amounts in thousands): 2025 2026 2027 2028 2029 2030-2034 Restoration Plan $ 47 $ 47 $ 47 $ 46 $ 46 $ 220 153 Table of Contents 11. COMMITMENTS AND CONTINGENCIES Commitments In the normal course of business, the Company is a party to financial instruments with off-balance sheet risk, consisting primarily of unused commitments to extend financing to the Company’s portfolio companies. Because commitments may expire without being drawn upon, the total commitment amount does not necessarily represent future cash requirements. Additionally, our commitment to fund delayed draw term loans generally is triggered upon the satisfaction of certain pre-negotiated terms and conditions, such as meeting certain financial performance hurdles or financial covenants, which may limit a borrower's ability to draw on such delayed draw term loans. The balances of unfunded debt commitments as of March 31, 2024 and March 31, 2023 were as follows (amounts in thousands): March 31, March 31, Portfolio Company 2024 2023 Revolving Loans Acacia BuyerCo V LLC $ 2,000 $ 2,000 Acceleration, LLC 5,000 1,300 Air Conditioning Specialist, Inc. 1,675 1,200 American Teleconferencing Services, Ltd. — 154 ArborWorks, LLC 432 1,000 ATS Operating, LLC 1,640 2,000 Bond Brand Loyalty ULC 2,000 — BP Loenbro Holdings Inc. 1,101 — Burning Glass Intermediate Holding Company, Inc. 296 — Catbird NYC, LLC 4,000 4,000 Cavalier Buyer, Inc. 2,000 2,000 CDC Dental Management Co., LLC 2,000 — Central Medical Supply LLC 800 1,200 Damotech Inc. 3,000 — Edge Autonomy Holdings, LLC 4,000 — Exact Borrower, LLC 2,500 2,500 FM Sylvan, Inc. — 8,000 FS Vector LLC 2,000 — Gains Intermediate, LLC 2,500 2,500 GPT Industries, LLC 3,000 3,000 GrammaTech, Inc. 2,500 2,500 Gulf Pacific Acquisition, LLC 555 657 HH-Inspire Acquisition, Inc. 46 — Ignite Visibility LLC 2,000 — Institutes of Health, LLC 1,000 — ISI Enterprises, LLC 2,000 2,000 Island Pump and Tank, LLC 1,500 1,000 ITA Holdings Group, LLC 1,058 — Lash OpCo, LLC — 138 LGM Pharma LLC 1,500 — Lighting Retrofit International, LLC 1,354 2,083 Lightning Intermediate II, LLC 1,852 1,852 LKC Technologies, Inc. 2,000 — Mako Steel LP 1,887 943 154 Table of Contents March 31, March 31, Portfolio Company 2024 2023 Mammoth BorrowCo, Inc. 1,950 — Microbe Formulas LLC 1,627 1,627 Muenster Milling Company, LLC — 7,000 New Skinny Mixes, LLC 3,500 4,000 NinjaTrader, Inc. 2,500 2,500 NWN Parent Holdings, LLC — 480 Opco Borrower, LLC 833 833 Outerbox, LLC 2,000 2,000 Pipeline Technique Ltd. 2,278 2,833 Revo Brands, Inc. 7,000 — Roof OpCo, LLC 3,056 3,056 Roseland Management, LLC 2,000 1,425 RTIC Subsidiary Holdings LLC 301 548 Shearwater Research, Inc. — 2,446 South Coast Terminals LLC 1,935 1,935 Spotlight AR, LLC 2,000 2,000 Swensons Drive-In Restaurants, LLC 1,500 — Systec Corporation — 400 TMT BHC Buyer, Inc. 4,717 — Tru Fragrance & Beauty LLC 3,900 — Versicare Management LLC 2,500 2,500 Wall Street Prep, Inc. 1,000 1,000 Well-Foam, Inc. 4,500 4,500 Winter Services Operations, LLC 3,111 4,444 Zenfolio Inc. 1,000 — Total Revolving Loans 112,404 87,554 Delayed Draw Term Loans AAC New Holdco Inc. — 199 Acacia BuyerCo V LLC — 2,500 Acceleration, LLC — 5,000 Air Conditioning Specialist Inc. 750 — BP Loenbro Holdings Inc. 1,101 — Central Medical Supply LLC 1,400 1,400 CityVet, Inc. 5,000 — Exact Borrower, LLC — 2,500 Gains Intermediate, LLC — 5,000 Gulf Pacific Acquisition, LLC 1,212 1,212 Ignite Visibility LLC 2,000 — Infolinks Media Buyco, LLC — 2,250 ITA Holdings Group, LLC 854 — KMS, LLC — 2,286 Mammoth BorrowCo, Inc. 1,325 — New Skinny Mixes, LLC 3,000 3,000 155 Table of Contents March 31, March 31, Portfolio Company 2024 2023 NinjaTrader, Inc. — 4,692 One Group, LLC 545 — Pool Service Holdings, LLC 5,000 — TMT BHC Buyer, Inc. 5,000 — Versicare Management LLC — 2,600 Winter Services Operations, LLC — 4,444 Total Delayed Draw Term Loans 27,187 37,083 Total Unfunded Debt Commitments $ 139,591 $ 124,637 The following table provides additional information regarding the expiration year of the Company’s unfunded debt commitments (amounts in thousands): March 31, 2024 March 31, 2023 Unfunded Debt Commitments Expiring during: 2024 $ — $ 31,625 2025 26,462 10,637 2026 8,242 6,712 2027 31,417 38,062 2028 31,021 35,318 2029 42,449 2,283 Total Unfunded Debt Commitments $ 139,591 $ 124,637 The balances of unfunded equity commitments as of March 31, 2024 and March 31, 2023 were as follows (amounts in thousands): March 31, 2024 March 31, 2023 Unfunded Equity Commitments Catbird NYC, LLC $ 125 $ 125 Infolinks Media Buyco, LLC 412 412 Total Unfunded Equity Commitments $ 537 $ 537 As of March 31, 2024, total revolving and delayed draw loan commitments included commitments to issue letters of credit through a financial intermediary on behalf of certain portfolio companies. As of March 31, 2024, the Company had $ 0.9 million in letters of credit issued and outstanding under these commitments on behalf of portfolio companies. For all of these letters of credit issued and outstanding, the Company would be required to make payments to third parties if the portfolio companies were to default on their related payment obligations. Of these letters of credit, $ 0.4 million expire in February 2025, $ 0.3 million expire in March 2025, and $ 0.2 million expire in April 2025. As of March 31, 2024, none of the letters of credit issued and outstanding were recorded as a liability on the Company's balance sheet as such letters of credit are considered in the valuation of the investments in the portfolio company. Effective April 1, 2019, ASC 842 required that a lessee evaluate its leases to determine whether they should be classified as operating or financing leases. The Company previously had an operating lease for its office space that commenced October 1, 2014 and expired February 28, 2022. In March 2021, the Company executed an agreement to lease new office space that commenced on February 1, 2022 and expires September 30, 2032. The Company identified the foregoing as an operating lease. ASC 842 indicates that an ROU asset and lease liability should be recorded based on the effective date. As such, CSWC recorded an ROU asset, which is included in other assets on the Consolidated Statements of Assets and Liabilities, and a lease liability, which is included in other liabilities on the Consolidated Statements of Assets and Liabilities, as of February 1, 2022. The Company has recorded lease expense on a straight-line basis. 156 Table of Contents In December 2023, the Company executed an agreement to lease additional office space, which is expected to commence during the third quarter of fiscal year 2025. The additional office space will be approximately 7,100 square feet. This is an amendment of the Company's current lease, which is classified as an operating lease. The term with respect to the additional office space will be 10 years and the term of the current office space will be extended for an additional 3 years. Total lease expense incurred for each of the years ended March 31, 2024, 2023 and 2022 was $ 0.3 million. As of March 31, 2024 and March 31, 2023, the asset related to the operating lease was $ 2.4 million and $ 1.8 million respectively, and the lease liability was $ 3.2 million and $ 2.8 million, respectively. As of March 31, 2024, the remaining lease term was 11.5 years and the discount rate was 7.60 %. The following table shows future minimum payments under the Company's operating leases as of March 31, 2024 (in thousands): Year ending March 31, Rent Commitment 2025 416 2026 426 2027 436 2028 446 2029 457 Thereafter 3,611 Total $ 5,792 Contingencies We may, from time to time, be involved in litigation arising out of our operations in the normal course of business or otherwise. Furthermore, third parties may try to seek to impose liability on us in connection with the activities of our portfolio companies. To our knowledge, we have no currently pending material legal proceedings to which we are party or to which any of our assets are subject. 157 Table of Contents 12. SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) The following presents a summary of the unaudited quarterly consolidated financial information for the years ended March 31, 2024 and 2023 (in thousands except per share amounts): First Second Third Fourth 2024 Quarter Quarter Quarter Quarter Total Net investment income $ 24,556 $ 27,194 $ 28,859 $ 29,396 $ 110,005 Net realized (loss) gain on investments, net of tax ( 12,782 ) 390 ( 7,842 ) ( 19,661 ) ( 39,895 ) Net change in unrealized appreciation (depreciation) on investments, net of tax 12,038 ( 4,599 ) 2,467 3,734 13,640 Realized loss on extinguishment of debt — ( 361 ) — — ( 361 ) Net increase in net assets from operations 23,812 22,624 23,484 13,469 83,389 Pre-tax net investment income per share 0.67 0.67 0.72 0.68 2.72 Net investment income per share 0.65 0.69 0.70 0.67 2.70 Net increase in net assets from operations per share 0.63 0.57 0.57 0.31 2.05 First Second Third Fourth 2023 Quarter Quarter Quarter Quarter Total Net investment income $ 12,438 $ 14,444 $ 19,425 $ 22,404 $ 68,711 Net realized gain (loss) on investments 2,320 ( 8,635 ) ( 11,086 ) 372 ( 17,029 ) Net change in unrealized (depreciation) appreciation on investments, net of tax ( 12,248 ) 3,649 ( 5,390 ) ( 4,600 ) ( 18,589 ) Net increase in net assets from operations 2,510 9,458 2,949 18,176 33,093 Pre-tax net investment income per share 0.50 0.54 0.60 0.65 2.30 Net investment income per share 0.49 0.52 0.62 0.64 2.29 Net increase in net assets from operations per share 0.10 0.34 0.09 0.52 1.10 158 Table of Contents 13. RELATED PARTY TRANSACTIONS As a BDC, we are obligated under the 1940 Act to make available to our portfolio companies significant managerial assistance. “Making available significant managerial assistance” refers to any arrangement whereby we offer to provide significant guidance and counsel concerning the management, operations, or business objectives and policies of a portfolio company. We also are deemed to be providing managerial assistance to all portfolio companies that we control, either by ourselves or in conjunction with others. The nature and extent of significant managerial assistance provided by us will vary according to the particular needs of each portfolio company. During each of the years ended March 31, 2024 and 2023, we did not receive any management fees from our portfolio companies. During the quarter ended March 31, 2024, the board of managers of I-45 SLF approved the dissolution and liquidation of I-45 SLF and the wind up of its affairs, including distributing all of the assets of I-45 SLF to the Company and Main Street Capital Corporation in accordance with their respective residual percentage. In connection with the paydown of I-45 SLF's credit facility, the members of I-45 SLF made additional capital commitments totaling $ 47.0 million, of which $ 37.6 million was contributed by the Company. On January 24, 2024, I-45 SLF paid down the full outstanding balance and terminated its credit facility. In connection with the liquidation of I-45 SLF, the Company received return of capital distributions totaling $ 13.6 million, of which $ 0.8 million is receivable as of March 31, 2024. The Company also received distributions-in-kind of investment assets totaling $ 78.9 million, of which $ 6.4 million is receivable as of March 31, 2024 that are included in other receivables on the Consolidated Statements of Assets and Liabilities. For the year ended March 31, 2024, the Company recognized a realized loss totaling $ 15.0 million relating to the dissolution of I-45 SLF. As of March 31, 2023, we had dividends receivable from I-45 SLF of $ 1.9 million, which were included in dividends and interest receivables on the Consolidated Statements of Assets and Liabilities. Additionally, we recognized administrative fee income from I-45 SLF of $ 0.1 million for the each of the years ended March 31, 2024 and 2023, which was included in fee income on the Consolidated Statement of Operations. 159 Table of Contents 14. SUMMARY OF PER SHARE INFORMATION The following presents a summary of per share data for the years ended March 31, 2024, 2023, 2022, 2021, 2020, 2019, 2018 and 2017 (share amounts presented in thousands). Years Ended March 31, Per Share Data: 2024 2023 2022 2021 2020 2019 2018 2017 Investment income 1 $ 4.37 $ 3.97 $ 3.60 $ 3.57 $ 3.45 $ 3.10 $ 2.18 $ 1.48 Operating expenses 1 ( 1.65 ) ( 1.67 ) ( 1.70 ) ( 1.78 ) ( 1.76 ) ( 1.62 ) ( 1.16 ) ( 0.87 ) Income taxes 1 ( 0.02 ) ( 0.01 ) ( 0.03 ) ( 0.13 ) ( 0.12 ) ( 0.06 ) ( 0.01 ) ( 0.11 ) Net investment income 1 2.70 2.29 1.87 1.66 1.57 1.42 1.01 0.50 Net realized (loss) gain, net of tax 1 ( 0.98 ) ( 0.57 ) 0.26 ( 0.45 ) 2.35 1.24 0.10 0.50 Net unrealized (depreciation) appreciation on investments, net of tax 1 0.34 ( 0.62 ) 0.50 1.51 ( 5.16 ) ( 0.68 ) 1.34 0.49 Realized loss on extinguishment of debt 1 ( 0.01 ) — ( 0.75 ) ( 0.05 ) — — — — Total increase (decrease) from investment operations 2.05 1.10 1.88 2.67 ( 1.24 ) 1.98 2.45 1.49 Accretive effect of share issuances and repurchases 0.86 0.50 1.45 0.30 0.45 0.06 ( 0.04 ) — Dividends to shareholders ( 2.47 ) ( 2.28 ) ( 2.52 ) ( 2.05 ) ( 2.75 ) ( 2.27 ) ( 0.99 ) ( 0.79 ) Spin-off Compensation Plan Distribution, net of tax — — — — — — ( 0.03 ) ( 0.08 ) Issuance of restricted stock 1,2 ( 0.13 ) ( 0.14 ) ( 0.10 ) ( 0.16 ) ( 0.06 ) ( 0.23 ) ( 0.18 ) ( 0.15 ) Common stock withheld for payroll taxes upon vesting of restricted stock ( 0.05 ) ( 0.01 ) ( 0.03 ) — — ( 0.01 ) ( 0.01 ) — Exercise of employee stock options 3 — — — — — ( 0.12 ) 0.01 ( 0.09 ) Share based compensation expense 0.10 0.10 0.14 0.14 0.16 0.13 0.11 0.08 Change in restoration plan — 0.06 0.01 — ( 0.01 ) ( 0.01 ) ( 0.05 ) — Repurchase of common stock — — — — 0.15 — — — Other 4 0.04 0.18 0.02 ( 0.02 ) ( 0.19 ) 0.01 0.01 — (Decrease) increase in net asset value 0.40 ( 0.49 ) 0.85 0.88 ( 3.49 ) ( 0.46 ) 1.28 0.46 Net asset value Beginning of period 16.37 16.86 16.01 15.13 18.62 19.08 17.80 17.34 End of period $ 16.77 $ 16.37 $ 16.86 $ 16.01 $ 15.13 $ 18.62 $ 19.08 $ 17.80 160 Table of Contents Ratios and Supplemental Data Ratio of operating expenses to average net assets 9.82 % 10.06 % 10.31 % 11.51 % 9.87 % 8.61 % 6.35 % 4.95 % Ratio of operating expenses (excluding interest expense) to average net assets 3.52 % 4.28 % 5.03 % 5.43 % 4.94 % 4.75 % 4.72 % 4.60 % Ratio of net investment income to average net assets 16.07 % 13.75 % 11.31 % 10.74 % 8.77 % 7.53 % 5.51 % 2.83 % Portfolio turnover 15.65 % 13.68 % 33.91 % 18.81 % 22.76 % 23.38 % 25.42 % 23.57 % Total investment return 5 55.66 % ( 15.36 ) % 18.10 % 118.56 % ( 37.52 ) % 38.34 % 6.61 % 27.88 % Total return based on change in NAV 6 17.53 % 10.62 % 21.05 % 19.37 % ( 3.97 ) % 9.49 % 12.75 % 7.21 % Per share market value at the end of the period $ 24.96 $ 17.78 $ 23.73 $ 22.16 $ 11.42 $ 21.04 $ 17.02 $ 16.91 Weighted-average basic shares outstanding 40,727 30,016 22,840 19,060 18,000 16,074 16,074 15,825 Weighted-average diluted shares outstanding 40,727 30,016 22,840 19,060 18,000 16,139 16,139 15,877 Common shares outstanding at end of period 45,051 36,076 24,959 21,005 17,998 17,503 16,162 16,011 1 Based on weighted average of common shares outstanding for the period. 2 Reflects impact of the different share amounts as a result of issuance or forfeiture of restricted stock during the period. 3 Net decrease is due to the exercise of employee stock options at prices less than beginning of period net asset value. 4 Includes the impact of the different share amounts as a result of calculating certain per share data based on the weighted-average basic shares outstanding during the period and certain per share data based on the shares outstanding as of a period end. The balance increases with the increase in variability of shares outstanding throughout the year due to share issuance and repurchase activity. 5 Total investment return based on purchase of stock at the current market price on the first day and a sale at the current market price on the last day of each period reported on the table and assumes reinvestment of dividends at prices obtained by CSWC’s dividend reinvestment plan during the period. The return does not reflect any sales load that may be paid by an investor. 6 Total return based on change in NAV was calculated using the sum of ending NAV plus dividends to shareholders and other non-operating changes during the period, as divided by the beginning NAV, and has not been annualized . 161 Table of Contents 15. SUBSEQUENT EVENTS On April 24, 2024, the Board of Directors declared a total dividend of $ 0.63 per share, comprised of a regular dividend of $ 0.57 and a supplemental dividend of $ 0.06 , for the quarter ending June 30, 2024. The record date for the dividend is June 14, 2024. The payment date for the dividend is June 28, 2024. 162 Table of Contents SCHEDULE 12-14 Schedule of Investments in and Advances to Affiliates (In thousands) Portfolio Company Type of Investment (1) March 31, 2024 Principal Amount - Debt Investments Amount of Interest or Dividends Credited in Income (2) Fair Value at March 31, 2023 Gross Additions (3) Gross Reductions (4) Amount of Realized Gain/(Loss) (5) Amount of Unrealized Gain/(Loss) Fair Value at March 31, 2024 Control Investments I-45 SLF LLC 80 % LLC equity interest $ — $ 7,983 $ 51,256 $ 37,600 $ ( 92,536 ) $ ( 15,047 ) $ 18,727 $ — Total Control Investments $ — $ 7,983 $ 51,256 $ 37,600 $ ( 92,536 ) $ ( 15,047 ) $ 18,727 $ — Affiliate Investments Air Conditioning Specialist, Inc. Revolving Loan $ 825 $ 100 $ 800 $ 607 $ ( 575 ) $ 15 $ ( 22 ) $ 825 First Lien 24,407 2,935 27,438 10,999 ( 13,997 ) 175 ( 208 ) 24,407 Delayed Draw Term Loan — 1 — — — — — — 1,006,045.85 Preferred Units — — 1,202 534 — — 1,583 3,319 ArborWorks, LLC Revolving Loan 1,569 69 — 1,569 — — — 1,569 First Lien 3,123 150 — 3,123 — — — 3,123 100 Class A Units — — — — — — 5 5 13,898.32 Class A-1 Preferred Units — — — 3,170 — — — 3,170 13,898.32 Class B-1 Preferred Units — — — — — — — — 1,666.67 Class A-1 Common Units — — — — — — — — Catbird NYC, LLC Revolving Loan — 78 — 1,516 ( 1,500 ) — ( 16 ) — First Lien 15,100 1,979 15,500 62 ( 400 ) — ( 62 ) 15,100 1,000,000 Class A Units — 34 1,658 — — — 123 1,781 500,000 Class B Units — 16 714 — — — 43 757 Central Medical Supply LLC Revolving Loan 700 65 296 406 — — ( 2 ) 700 First Lien 7,540 1,173 7,402 73 — — 65 7,540 Delayed Draw Term Loan 101 28 99 7 — — ( 5 ) 101 2,620,670 Preferred Units — — 357 248 — — 755 1,360 163 Table of Contents Portfolio Company Type of Investment (1) March 31, 2024 Principal Amount - Debt Investments Amount of Interest or Dividends Credited in Income (2) Fair Value at March 31, 2023 Gross Additions (3) Gross Reductions (4) Amount of Realized Gain/(Loss) (5) Amount of Unrealized Gain/(Loss) Fair Value at March 31, 2024 Chandler Signs, LLC 1,500,000 units of Class A-1 common stock — 60 3,215 — ( 3,402 ) 1,902 ( 1,715 ) — Command Group Acquisition, LLC First Lien 6,000 104 — 5,882 — — — 5,882 1,250,000 Preferred Units — — — 1,250 — — — 1,250 Delphi Intermediate Healthco LLC First Lien — — — — — ( 1,649 ) 1,649 — First Lien — — — — — ( 1,829 ) 1,829 — Protective Advance — — — — — ( 1,448 ) 1,448 — 1,681.04 Common Units — — — — — ( 3,615 ) 3,615 — Dynamic Communities, LLC First Lien - Term Loan A 4,250 407 3,823 406 — — 20 4,249 First Lien - Term Loan B 4,359 492 3,843 493 — — 23 4,359 250,000 Class A Preferred units — — 625 — — — ( 308 ) 317 5,435,211.03 Class B Preferred units — — 2,218 — — — ( 2,218 ) — 255,984.22 Class C Preferred units — — — — — — — — 2,500,000 Common units — — — — — — — — GPT Industries, LLC Revolving Loan — 27 — 12 — — ( 12 ) — First lien 6,004 870 6,030 19 ( 146 ) — 101 6,004 1,000,000 Class A Preferred Units — — 1,000 — — — 1,064 2,064 GrammaTech, Inc. Revolving Loan — 9 — 9 — — ( 9 ) — First Lien 1,000 803 10,031 20 ( 9,031 ) 42 ( 62 ) 1,000 1,000 Class A units — — — — — — — — 360.06 Class A-1 units — — 372 — — — ( 372 ) — 164 Table of Contents Portfolio Company Type of Investment (1) March 31, 2024 Principal Amount - Debt Investments Amount of Interest or Dividends Credited in Income (2) Fair Value at March 31, 2023 Gross Additions (3) Gross Reductions (4) Amount of Realized Gain/(Loss) (5) Amount of Unrealized Gain/(Loss) Fair Value at March 31, 2024 ITA Holdings Group, LLC Revolving Loan 2,468 391 7,014 2,443 ( 7,005 ) — 16 2,468 First Lien - Term Loan — 282 10,114 6 ( 10,145 ) — 25 — First Lien - Term Loan B — 189 5,068 17 ( 5,073 ) — ( 12 ) — First Lien - PIK Note A — 88 3,255 168 ( 3,427 ) — 4 — First Lien - PIK Note B — 3 128 6 ( 134 ) — — — First Lien - Term Loan 13,038 1,889 — 11,186 — — 1,852 13,038 First Lien - Term Loan B 13,038 2,082 — 11,174 — — 1,864 13,038 Delayed Draw Term Loan - A 1,058 89 — 1,034 — — 24 1,058 Delayed Draw Term Loan - B 1,058 100 — 1,034 — — 24 1,058 Warrants — — 4,046 — — — ( 41 ) 4,005 Warrants — — — 3,791 — — 78 3,869 9.25 % Class A membership interest — 120 4,348 — — — ( 1,974 ) 2,374 Lighting Retrofit International, LLC (DBA Envocore) Revolving Loan 729 13 — 729 — — ( 15 ) 714 First Lien 5,091 391 5,143 — ( 52 ) — ( 107 ) 4,984 Second Lien 5,208 — 3,594 — — — 1,323 4,917 208,333.3333 Series A Preferred units — — — — — — — — 203,124.9999 Common units — — — — — — — — Outerbox, LLC Revolving Loan — 11 — 6 — — ( 6 ) — First Lien 14,625 1,861 14,552 39 — — ( 69 ) 14,522 6,308.2584 Class A common units — — 773 — — — ( 192 ) 581 Pool Service Partners, Inc. Revolving Loan 1,000 7 — 981 — — ( 1 ) 980 First Lien 5,000 173 — 4,904 — — ( 4 ) 4,900 Delayed Draw Term Loan 600 14 — 518 — — 70 588 10,000 Common units — — — 1,000 — — 384 1,384 165 Table of Contents Portfolio Company Type of Investment (1) March 31, 2024 Principal Amount - Debt Investments Amount of Interest or Dividends Credited in Income (2) Fair Value at March 31, 2023 Gross Additions (3) Gross Reductions (4) Amount of Realized Gain/(Loss) (5) Amount of Unrealized Gain/(Loss) Fair Value at March 31, 2024 Roseland Management, LLC Revolving Loan — 53 555 9 ( 575 ) — 11 — First Lien 14,906 1,887 14,524 26 ( 145 ) — 501 14,906 3,364 Class A-2 Units — — 694 — — — 68 762 1,100 Class A-1 units — — 161 — — — 22 183 16,084 Class A units — — 422 — — — 325 747 Sonobi, Inc. 500,000 Class A Common units — — 1,749 — — — 209 1,958 STATinMED, LLC First Lien 7,560 276 7,288 272 — — ( 2,646 ) 4,914 Delayed Draw Term Loan — 1 122 2 ( 124 ) 1 ( 1 ) — 4,718.62 Class A Preferred Units — — 3,767 — — — ( 3,767 ) — 39,097.96 Class B Preferred Units — — — — — — — — Student Resource Center LLC First Lien 9,644 590 8,720 776 — — ( 6,120 ) 3,376 10,502,487.46 Preferred units — — 5,845 — — — ( 5,845 ) — 2,000,000 Preferred units — — — — — — — — Total Affiliate Investments $ 170,001 $ 19,910 $ 188,505 $ 70,526 $ ( 55,731 ) $ ( 6,406 ) $ ( 6,688 ) $ 190,206 Total Control & Affiliate Investments $ 170,001 $ 27,893 $ 239,761 $ 108,126 $ ( 148,267 ) $ ( 21,453 ) $ 12,039 $ 190,206 (1) The principal amount and ownership detail as shown in the Consolidated Schedules of Investments. (2) Represents the total amount of interest or dividends credited to income for the portion of the year an investment was included in the Control or Affiliate categories, respectively. (3) Gross additions include increases in the cost basis of investments resulting from new portfolio investments, follow-on investments, accrued PIK interest, and accretion of OID. Gross additions also include movement of an existing portfolio company into this category and out of a different category. (4) Gross reductions include decreases in the cost basis of investments resulting from principal repayments or sales and the exchange of one or more existing securities for one or more new securities. Gross reductions also include movement of an existing portfolio company out of this category and into a different category. (5) The schedule does not reflect realized gains or losses on escrow receivables for investments which were previously exited and were not held during the period presented. Gains and losses on escrow receivables are classified in the Consolidated Statements of Operations according to the control classification at the time the investment was exited. 166 Table of Contents Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None.