CAPITAL SOUTHWEST CORPCSWC
CAPITAL SOUTHWEST CORP Commitments Disclosure
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, 2026 and March 31, 2025 were as follows (amounts in thousands):
| March 31, | March 31, | |||||||||||||
| Portfolio Company | 2026 | 2025 | ||||||||||||
| Revolving Loans | ||||||||||||||
| 360 Quote TopCo, LLC | $ | 904 | $ | — | ||||||||||
| Air Conditioning Specialist, Inc. | 1,215 | 1,910 | ||||||||||||
| American Pet Resort, LLC | 1,500 | — | ||||||||||||
| Apple Roofing Administrative Services, LLC (fka Roof OpCo, LLC) | 1,222 | 3,056 | ||||||||||||
| ArborWorks, LLC | 150 | 1,116 | ||||||||||||
| Arkstone Medical Solutions LLC | 3,500 | — | ||||||||||||
| Armko, LLC | 3,000 | — | ||||||||||||
| ATS Operating, LLC | 640 | 890 | ||||||||||||
| Better Than Home, Inc. | 3,000 | — | ||||||||||||
| Bond Brand Loyalty ULC | 1,200 | 1,200 | ||||||||||||
| BP Loenbro Holdings Inc. | — | 1,321 | ||||||||||||
| Brandner Design, LLC | 204 | 900 | ||||||||||||
| Burning Glass Intermediate Holding Company, Inc. | — | 296 | ||||||||||||
| Campany Roof Maintenance, LLC | — | 1,064 | ||||||||||||
| Catbird NYC, LLC | 3,000 | 4,000 | ||||||||||||
| Cavalier Buyer, Inc. | — | 2,000 | ||||||||||||
| CDC Dental Management Co., LLC | 2,000 | 1,500 | ||||||||||||
| Central Medical Supply LLC | 1,500 | 1,050 | ||||||||||||
| Clearwater Group, LLC | 1,500 | — | ||||||||||||
| Clutch, Inc. | 5,000 | — | ||||||||||||
| Cumbria Capital MSO, LLC | 250 | 1,100 | ||||||||||||
| Damotech Inc. | — | 3,000 | ||||||||||||
| Drive Line Service of Portland, LLC | 2,000 | 2,000 | ||||||||||||
| DWS Buyer LLC | 1,293 | — | ||||||||||||
| Edge Autonomy Holdings, LLC | — | 4,000 | ||||||||||||
| Exact Borrower, LLC | 2,500 | 2,500 | ||||||||||||
| FS Vector LLC | 4,000 | 4,000 | ||||||||||||
| GPT Industries, LLC | — | 3,000 | ||||||||||||
| GrammaTech, Inc. | — | 1,000 | ||||||||||||
| Gravitiq LLC | 5,000 | 5,000 | ||||||||||||
| Gulf Pacific Acquisition, LLC | 253 | 303 | ||||||||||||
| Ignite Visibility LLC | 3,000 | 1,500 | ||||||||||||
| InDinero Group, Inc. | 551 | — | ||||||||||||
| March 31, | March 31, | |||||||||||||
| Portfolio Company | 2026 | 2025 | ||||||||||||
| Institutes of Health, LLC | 1,000 | 1,000 | ||||||||||||
| ISI Enterprises, LLC | 1,100 | 2,000 | ||||||||||||
| Island Pump and Tank, LLC | — | 3,479 | ||||||||||||
| iVueit, LLC | 1,000 | 1,000 | ||||||||||||
| Kindred Pet Service, LLC (fka Red Dog Operations Holding Company LLC) | 1,500 | 2,000 | ||||||||||||
| KMS, LLC | 2,972 | — | ||||||||||||
| Lash OpCo, LLC | 824 | — | ||||||||||||
| LDG Acquisition Company, LLC | 3,000 | — | ||||||||||||
| LEHR Upfitters, LLC | — | 2,623 | ||||||||||||
| LGM Pharma LLC | 1,500 | 1,500 | ||||||||||||
| Lighting Retrofit International, LLC | — | 1,354 | ||||||||||||
| Lightning Intermediate II, LLC | 1,852 | 1,852 | ||||||||||||
| LKC Technologies, Inc. | — | 2,000 | ||||||||||||
| Local Web Leads, LLC | 1,000 | — | ||||||||||||
| Main Line Brands LLC | 2,000 | — | ||||||||||||
| Mammoth BorrowCo, Inc. | 400 | 200 | ||||||||||||
| Microbe Formulas LLC | 1,627 | 1,627 | ||||||||||||
| Mid-Florida Endodontics Management Company, LLC | 3,000 | 3,000 | ||||||||||||
| Mission Critical Group, LLC | 1,902 | — | ||||||||||||
| Monroe Biomedical Research, LLC | 1,250 | — | ||||||||||||
| Musiker Discovery Programs, Inc. | 1,250 | 2,000 | ||||||||||||
| NeuroPsychiatric Hospitals, LLC | 4,000 | 2,000 | ||||||||||||
| New Skinny Mixes, LLC | 4,000 | 3,000 | ||||||||||||
| NinjaTrader, Inc. | — | 2,500 | ||||||||||||
| Patriot Intermediate Holdco, LLC | 8,000 | — | ||||||||||||
| Pipeline Technique Ltd. | 3,333 | 944 | ||||||||||||
| Pool Service Partners, Inc. | 500 | 2,000 | ||||||||||||
| Precision Spray & Coatings, LLC | 500 | — | ||||||||||||
| Pyramids Acquisition, LLC | 3,000 | — | ||||||||||||
| Revo Brands, Inc. | 7,000 | 4,300 | ||||||||||||
| Rodizio Opco LLC | 2,000 | — | ||||||||||||
| Roseland Management, LLC | 2,000 | 2,000 | ||||||||||||
| ServerLIFT, LLC | 5,000 | 4,000 | ||||||||||||
| SocialSEO, LLC | 1,800 | 2,200 | ||||||||||||
| Spherix Global Insights US, Inc. | 3,000 | — | ||||||||||||
| Spotlight AR, LLC | 2,000 | 2,000 | ||||||||||||
| Superior Health Parent LLC | 3,000 | 2,000 | ||||||||||||
| Swensons Drive-In Restaurants, LLC | 1,500 | 1,500 | ||||||||||||
| The Gobel Group, LLC | 1,000 | 1,000 | ||||||||||||
| TMT BHC Buyer, Inc. | 4,717 | 4,717 | ||||||||||||
| Tru Fragrance & Beauty LLC | 2,000 | 4,000 | ||||||||||||
| VP Move Purchaser, Inc. | 4,200 | 3,900 | ||||||||||||
| Wash & Wax Systems LLC | 146 | — | ||||||||||||
| Well Labs Plus, LLC | 3,000 | — | ||||||||||||
| Well-Foam, Inc. | 4,500 | 4,500 | ||||||||||||
| March 31, | March 31, | |||||||||||||
| Portfolio Company | 2026 | 2025 | ||||||||||||
| White Plains Linen LLC | 3,000 | — | ||||||||||||
| Winter Services Operations, LLC | 5,244 | 1,333 | ||||||||||||
| Zenfolio Inc. | 2,500 | 1,500 | ||||||||||||
| Total Revolving Loans | 156,499 | 122,735 | ||||||||||||
| Delayed Draw Term Loans | ||||||||||||||
| Air Conditioning Specialist Inc. | — | 3,229 | ||||||||||||
| American Pet Resort, LLC | 100 | — | ||||||||||||
| Better Than Home, Inc. | 11,700 | — | ||||||||||||
| BP Loenbro Holdings Inc. | — | 1,101 | ||||||||||||
| Central Medical Supply LLC | — | 1,400 | ||||||||||||
| Clearwater Group, LLC | 10,500 | — | ||||||||||||
| Crafty Apes, LLC | 924 | 924 | ||||||||||||
| Cumbria Capital MSO, LLC | 950 | 950 | ||||||||||||
| DWS Buyer LLC | 2,155 | — | ||||||||||||
| Enstoa, Inc. | 5,830 | — | ||||||||||||
| Exact Borrower, LLC | 8,200 | 2,200 | ||||||||||||
| Ignite Visibility LLC | 3,000 | — | ||||||||||||
| ITA Holdings Group, LLC | 3,525 | — | ||||||||||||
| iVueit, LLC | 10,000 | 10,000 | ||||||||||||
| KMS, LLC | — | 2,286 | ||||||||||||
| LDG Acquisition Company, LLC | 12,000 | — | ||||||||||||
| LEHR Upfitters, LLC | — | 5,247 | ||||||||||||
| Mid-Florida Endodontics Management Company, LLC | 9,400 | 10,000 | ||||||||||||
| Mission Critical Group, LLC | 2,130 | — | ||||||||||||
| Monroe Biomedical Research, LLC | 5,000 | — | ||||||||||||
| Muenster Miling Company, LLC | 2,500 | — | ||||||||||||
| Musiker Discovery Programs, Inc. | — | 7,500 | ||||||||||||
| One Group, LLC | — | 545 | ||||||||||||
| Pipeline Technique Ltd. | 10,000 | — | ||||||||||||
| Pool Service Partners, Inc. | — | 6,100 | ||||||||||||
| Superior Health Parent LLC | 4,300 | 10,000 | ||||||||||||
| SureKap, LLC | 7,222 | 7,222 | ||||||||||||
| TMT BHC Buyer, Inc. | — | 5,000 | ||||||||||||
| unWired Broadband, LLC | 8,548 | — | ||||||||||||
| Well Labs Plus, LLC | 3,400 | — | ||||||||||||
| Total Delayed Draw Term Loans | 121,384 | 73,704 | ||||||||||||
| Other | ||||||||||||||
| Broad Sky Networks, LLC | — | 57 | ||||||||||||
| Spectrum of Hope, LLC | — | 411 | ||||||||||||
| Total Other | — | 468 | ||||||||||||
| Total Unfunded Debt Commitments | $ | 277,883 | $ | 196,907 | ||||||||||
The following table provides additional information regarding the expiration year of the Company’s unfunded debt commitments (amounts in thousands):
| March 31, 2026 | March 31, 2025 | |||||||||||||
| Unfunded Debt Commitments | ||||||||||||||
| Expiring during fiscal year ending: | ||||||||||||||
| 2026 | $ | — | $ | 31,354 | ||||||||||
| 2027 | 97,205 | 70,235 | ||||||||||||
| 2028 | 56,592 | 16,420 | ||||||||||||
| 2029 | 38,815 | 42,986 | ||||||||||||
| 2030 | 31,275 | 33,912 | ||||||||||||
| 2031 | 49,703 | 2,000 | ||||||||||||
| 2032 | 4,293 | — | ||||||||||||
| Total Unfunded Debt Commitments | $ | 277,883 | $ | 196,907 | ||||||||||
The balances of unfunded equity commitments as of March 31, 2026 and March 31, 2025 were as follows (amounts in thousands):
| March 31, 2026 | March 31, 2025 | |||||||||||||
| Unfunded Equity Commitments | ||||||||||||||
| Apple Roofing Administrative Services, LLC (fka Roof OpCo, LLC) | $ | 190 | $ | — | ||||||||||
| CapTrin Partners LLC | 50,000 | — | ||||||||||||
| Catbird NYC, LLC | 125 | 125 | ||||||||||||
| Infolinks Media Buyco, LLC | 350 | 411 | ||||||||||||
| Outerbox, LLC | 197 | — | ||||||||||||
| Total Unfunded Equity Commitments | $ | 50,862 | $ | 536 | ||||||||||
As of March 31, 2026, 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, 2026, 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 2027, $0.3 million expire in March 2027, and $0.2 million expire in April 2027. As of March 31, 2026, none of the letters of credit were drawn and as such, were not recorded as a liability on the Company's Consolidated Statements of Assets and Liabilities.
In addition, the Company may guarantee certain obligations in connection with its portfolio companies. Under these guarantee arrangements, payments may be required to be made to third parties if such guarantees are called upon or if the portfolio companies were to default on their related obligations, as applicable. The Company's maximum exposure under these arrangements is $6.4 million; however, the Company expects the risk of future obligation under these arrangements to be remote and as such, no liability was recorded on the Company's Consolidated Statements of Assets and Liabilities.
Leases
In March 2021, the Company executed an agreement to lease office space that commenced on February 1, 2022 and expires September 30, 2035, including the three-year extension pursuant to the amendment described below. 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 "" on the Consolidated Statements of Assets and Liabilities, and a lease liability, which is included in "" on the Consolidated Statements of Assets and Liabilities, as of February 1, 2022. The Company has recorded lease expense on a straight-line basis.
In December 2023, the Company executed an agreement to lease additional office space, which commenced on October 1, 2024 and expires on September 30, 2035. The additional office space is approximately 7,100 square feet. This is an amendment of the Company's current lease, which is classified as an operating lease.
Total lease expense incurred for the years ended March 31, 2026, 2025 and 2024 was $0.5 million, $0.5 million and $0.3 million, respectively. As of March 31, 2026 and March 31, 2025, the asset related to the operating lease was $3.7 million and $3.9 million, respectively, and as of March 31, 2026 and March 31, 2025, the lease liability was $5.0 million and $5.4 million, respectively. As of March 31, 2026, the remaining lease term was 9.5 years and the weighted average discount rate was 7.36%.
The following table shows future minimum payments under the Company's operating leases as of March 31, 2026 (in thousands):
| Year ending March 31, | Rent Commitment | ||||
| 2027 | $ | 715 | |||
| 2028 | 733 | ||||
| 2029 | 752 | ||||
| 2030 | 771 | ||||
| 2031 | 790 | ||||
| Thereafter | 4,198 | ||||
| Total | $ | 7,959 | |||
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.
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Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2026 | May 19, 2026 | Showing above |
| 2025 | May 20, 2025 | |
| 2024 | May 21, 2024 | |
| 2023 | May 23, 2023 | |
About Commitments Disclosures
Commitments and contingencies disclosures catalog a company's off-balance-sheet obligations and legal exposures — purchase commitments, guarantee arrangements, pending litigation, and regulatory proceedings. These items represent potential future cash outflows that may not appear as liabilities on the balance sheet until they become probable and estimable.
Key signals: litigation reserves and disclosed loss ranges quantify management's estimate of legal exposure, but unquantified "reasonably possible" losses often represent the larger risk. Watch for changes in language around pending cases — shifts from "remote" to "reasonably possible" or increases in estimated loss ranges signal deteriorating outcomes. Unconditional purchase obligations and take-or-pay contracts create fixed cost structures that reduce operational flexibility. Guarantee arrangements for subsidiaries or joint ventures can create cascading obligations. Compare the total commitment schedule against projected free cash flow to assess whether the company can meet its obligations without additional financing.