CSWC 10-K Fiscal year ended March 31, 2025

Documents Incorporated by Reference

Portions of the registrant’s definitive Proxy Statement for its 2025 Annual Meeting of Shareholders to be filed not later than 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K are incorporated by reference into Part III of this Annual Report on Form 10-K.

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Investing in our securities involves a number of significant risks.  In addition to other information contained in this Annual Report on Form 10-K, investors should consider the following information before making an investment in our securities.  The risks and uncertainties described below could materially adversely affect our business, financial conditions and results of operations. The risks set forth below are not the only risks we face. Additional risks and uncertainties not presently known to us, or not presently deemed material by us, also may impair our operations and performance.  If any of the following risks, or risks not presently known to us, actually occur, the trading price of our securities could decline, and you may lose all or part of your investment.

The following is a summary of the principal risk factors associated with an investment in us. Further details regarding each risk included in the below summary list can be found further below.

• Our financial condition and results of operations will depend on our ability to effectively allocate and manage capital.

• Our business model depends to a significant extent upon strong referral relationships. Our inability to maintain or develop these relationships, as well as the failure of these relationships to generate investment opportunities, could adversely affect our business.

• All of our assets are subject to security interests under our Corporate Credit Facility and our SPV Credit Facility, except for assets held by the SBIC Subsidiaries, and if we default on our obligations under the Corporate Credit Facility or the SPV Credit Facility, we may suffer adverse consequences, including foreclosure on our assets.

• In addition to regulatory limitations on our ability to raise capital, our current debt obligations contain various covenants, that, if not complied with, could accelerate our repayment obligations under the Corporate Credit Facility and/or the SPV Credit Facility, and thereby materially and adversely affecting our liquidity, financial condition, results of operations and ability to pay distributions.

• Because we borrow money to make investments, the potential for gain or loss on amounts invested in us is magnified and may increase the risk of investing in us.

• A failure on our part to maintain our status as a BDC would significantly reduce our operating flexibility.

• We will become subject to U.S. federal income tax imposed at corporate rates if we are unable to qualify as a RIC under subchapter M of the Code.

• Our portfolio investments generally are not publicly traded. As a result, the fair value of these investments may not be readily determinable and will be recorded at fair value as determined in good faith by the Valuation Committee, subject to the oversight of our Board of Directors. As a result, there may be uncertainty as to the value of our portfolio investments.

• We are currently operating in a period of economic uncertainty. Such market conditions may materially and adversely affect debt and equity capital markets, which may have a negative impact on our business, financial condition and results of operations.

• Inflation may adversely affect the business, results of operations and financial condition of our portfolio companies, which may, in turn, impact the valuation of such portfolio companies.

• We operate in a highly competitive market for investment opportunities.

• Our success depends on attracting and retaining qualified personnel in a competitive environment.

• Our investments in portfolio companies involve a number of significant risks.

• Each SBIC Subsidiary has an SBIC license and is subject to SBA regulations, and any failure to comply with SBA regulations could have an adverse effect on our operations.

• We are exposed to risks associated with changes in interest rates.

• The lack of liquidity in our investments may adversely affect our business.

• Defaults by our portfolio companies could harm our operating results.

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• We generally will not control our portfolio companies.

• Investing in shares of our common stock may involve an above average degree of risk.

• Shares of closed-end investment companies, including BDCs, may trade at a discount to their NAV.

• The Notes are unsecured and therefore are effectively subordinated to any existing and future secured indebtedness, including indebtedness under our Corporate Credit Facility.

• The Notes are structurally subordinated to the indebtedness and other liabilities of our subsidiaries, including the SBA-guaranteed debentures and the SPV Credit Facility.

• We may not be able to repurchase the October 2026 Notes upon a Change of Control Repurchase Event.

• We may not have the ability to raise the funds necessary to settle conversions of the 2029 Convertible Notes in cash or to repurchase the 2029 Convertible Notes upon a fundamental change, and our future debt may contain limitations on our ability to pay cash upon conversion or repurchase of the 2029 Convertible Notes.

• If we default on our obligations to pay our other indebtedness, we may not be able to make payments on the Notes.

RISKS RELATED TO OUR BUSINESS AND STRUCTURE

Our financial condition and results of operations will depend on our ability to effectively allocate and manage capital.

Our ability to achieve our investment objective of maximizing risk-adjusted returns to shareholders depends on our ability to effectively allocate and manage capital.  Capital allocation depends in part upon our investment team’s ability to identify, evaluate, invest in and monitor companies that meet our investment criteria.

Achieving our investment objective is largely a function of our investment team’s management of the investment process and our access to investments offering attractive risk adjusted returns.  In addition, members of our investment team may be called upon, from time to time, to provide managerial assistance to some of our portfolio companies.

The results of our operations depend on many factors, including the availability of opportunities for investment, readily accessible short- and long-term funding alternatives in the financial markets and economic conditions. Our ability to make new investments at attractive relative returns is also a function of our marketing and our management of the investment process, as well as conditions in the private credit markets in which we invest. If we fail to invest our capital effectively, our return on equity may be negatively impacted, which could have a material adverse effect on the price of the shares of our common stock.

Any unrealized losses we experience may be an indication of future realized losses, which could reduce our income available to make distributions.

As a BDC, we are required to carry our investments at market value or, if no market quotation is readily available, at fair value as determined in good faith by our Valuation Committee pursuant to a valuation methodology approved by our Board of Directors. Decreases in the market values or fair values of our investments will be recorded as unrealized losses. An unrealized loss could be an indication of a portfolio company’s inability to generate cash flow or meet its repayment obligations. This could result in realized losses in the future and ultimately in reductions of our income available to pay dividends or interest and principal on our securities and could have a material adverse effect on your investment.

Our business model depends to a significant extent upon strong referral relationships.  Our inability to develop or maintain these relationships, as well as the failure of these relationships to generate investment opportunities, could adversely affect our business.

We expect that members of our management team will maintain their relationships with financial sponsors, intermediaries, financial institutions, investment bankers, commercial bankers, financial advisors, attorneys, accountants, consultants and other individuals within our network, and we will rely to a significant extent upon these relationships to provide us with potential investment opportunities.  If our management team fails to maintain its existing relationships or develop new relationships with sources of investment opportunities, we will not be able to effectively invest our capital.  Individuals with whom members of our management team have relationships are not obligated to provide us with investment opportunities; therefore, there is no assurance that these relationships will generate investment opportunities for us.

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All of our assets are subject to security interests under our Corporate Credit Facility and our SPV Credit Facility, except for assets held by the SBIC Subsidiaries, and if we default on our obligations under the Corporate Credit Facility or the SPV Credit Facility, we may suffer adverse consequences, including foreclosure on our assets.

All of our assets are currently pledged as collateral under our Corporate Credit Facility or our SPV Credit Facility, except for assets held by the SBIC Subsidiaries. If we default on our obligations under the Corporate Credit Facility or the SPV Credit Facility, the lenders party thereto may have the right to foreclose upon and sell, or otherwise transfer, the collateral subject to their security interests. In such event, we may be forced to sell our investments to raise funds to repay our outstanding borrowings in order to avoid foreclosure and these forced sales may be at times and prices we would not consider advantageous. Moreover, such deleveraging of the Company could significantly impair our ability to effectively operate our business in the manner in which we have historically operated. As a result, we could be forced to curtail or cease new investment activities and lower or eliminate the dividends that we have historically paid to our shareholders. In addition, if the lenders exercise their right to sell the assets pledged under our Corporate Credit Facility or our SPV Credit Facility, such sales may be completed at distressed sale prices, thereby diminishing or potentially eliminating the amount of cash available to us after repayment of the amounts outstanding under the Corporate Credit Facility or the SPV Credit Facility. These distressed prices could be materially below our most recent valuation of each security, which could have a significantly negative effect on NAV.

In addition to regulatory limitations on our ability to raise capital, our current debt obligations contain various covenants, that, if not complied with, could accelerate our repayment obligations under the Corporate Credit Facility and/or the SPV Credit Facility, and thereby materially and adversely affecting our liquidity, financial condition, results of operations and ability to pay distributions.

We will have a continuing need for capital to finance our investments. As of March 31, 2025, the Corporate Credit Facility provides us with a revolving credit line of up to $485.0 million of which $235.0 million was drawn. As of March 31, 2025, the SPV Credit Facility provides us with total commitments of $200.0 million of which $ 108.0 million was drawn.

The agreement relating to each of the Corporate Credit Facility and the SPV Credit Facility contains customary terms and conditions, including, without limitation, affirmative and negative covenants such as information reporting requirements, minimum consolidated net worth, minimum consolidated interest coverage ratio, minimum asset coverage, and maintenance of RIC tax treatment and BDC status. Each of the Corporate Credit Facility and the SPV Credit Facility also contains customary events of default with customary cure and notice provisions, including, without limitation, nonpayment, misrepresentation of representations and warranties in a material respect, breach of covenants, bankruptcy, and change of control. Each of the Corporate Credit Facility and the SPV Credit Facility permits us to fund additional loans and investments as long as we are within the conditions set out in the related agreements.

Our continued compliance with these covenants depends on many factors, some of which are beyond our control, and there are no assurances that we will continue to comply with these covenants. If we breach a covenant under the terms of the Corporate Credit Facility or the SPV Credit Facility and seek a waiver, we may not be able to obtain a waiver from the required lenders. Our failure to satisfy these covenants could result in foreclosure by our lenders, which would accelerate our repayment obligations under the Corporate Credit Facility or the SPV Credit Facility and thereby have a material adverse effect on our business, liquidity, financial condition, results of operations, and ability to pay distributions to our shareholders.

Because we borrow money to make investments, the potential for gain or loss on amounts invested in us is magnified and may increase the risk of investing in us.

Borrowings to fund investments, also known as leverage, magnify the potential for loss on investments in our indebtedness and gain or loss on investments in our equity capital. As we use leverage to partially finance our investments, you will experience increased risks of investing in our securities. We may borrow from banks and other lenders, including under our Corporate Credit Facility and our SPV Credit Facility, and may issue debt securities or enter into other types of borrowing arrangements in the future. If the value of our assets decreases, leveraging would cause NAV to decline more sharply than it otherwise would have had we not leveraged our business. Similarly, any decrease in our income would cause net investment income to decline more sharply than it would have had we not leveraged our business. Such a decline could negatively affect our ability to pay common stock dividends, scheduled debt payments or other payments related to our securities. Use of leverage is generally considered a speculative investment technique.

As of March 31, 2025, we had $235.0 million borrowings outstanding out of $485 million of total commitments under our Corporate Credit Facility. Borrowings under the Corporate Credit Facility bear 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

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utilization, on the unused lender commitments under the Corporate Credit Facility. The Corporate Credit Facility is secured by all of the Company's assets, except for assets held by the SBIC Subsidiaries and SPV. If we are unable to meet our financial obligations under the Corporate Credit Facility, the lenders under the Corporate Credit Facility may exercise their remedies under the Corporate Credit Facility as the result of a default by us.

As of March 31, 2025, we had $ 108.0 million borrowings outstanding out of the $200 million of total commitments under our SPV Credit Facility. Borrowings under the SPV Credit Facility bear interest, on a per annum basis, equal to three-month Term SOFR plus an applicable margin of 2.50% during the revolving period ending on March 20, 2027 and, thereafter, three-month Term SOFR plus an applicable margin of 2.85%.We pay unused commitment fees of 0.35% per annum on the unused commitments, and we previously paid 0.10% per annum on the unused commitments for a period through April 20, 2024. The SPV Credit Facility is secured by all of SPV's assets. If we are unable to meet our financial obligations under the SPV Credit Facility, the lenders under the SPV Credit Facility may exercise their remedies under the SPV Credit Facility as the result of a default by us.

As of March 31, 2025, the carrying amount of the October 2026 Notes was $ 148.8 million. 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 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 or its subsidiaries' existing and future secured indebtedness, including borrowings under the Corporate Credit Facility, the SPV Credit Facility and the SBA Debentures.

As of March 31, 2025, the carrying amount of the August 2028 Notes was $ 70.2 million. 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 and its subsidiaries' existing and future secured indebtedness, including borrowings under the Corporate Credit Facility, the SPV Credit Facility and the SBA Debentures. The August 2028 Notes are listed on the Nasdaq Global Select Market under the trading symbol "CSWCZ."

As of March 31, 2025, the carrying amount of the 2029 Convertible Notes was $223.1 million. The 2029 Convertible Notes mature on November 15, 2029, unless earlier converted, redeemed or repurchased. The 2029 Convertible Notes bear interest at a rate of 5.125% per year, payable quarterly on February 15, May 15, August 15 and November 15 of each year. The 2029 Convertible 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 or its subsidiaries' existing and future secured indebtedness, including borrowings under the Corporate Credit Facility, the SPV Credit Facility and the SBA Debentures.

Our ability to achieve our investment objective may depend in part on our ability to access additional leverage on favorable terms by borrowing from banks or insurance companies or by issuing debt securities and there can be no assurance that such additional leverage can in fact be achieved.

Illustration. The following table illustrates the effect of leverage on returns from an investment in our common stock assuming various annual returns, net of expenses. The calculations in the table below are hypothetical and actual returns may be higher or lower than those appearing below.

Assumed Return on Our Portfolio (1)

(net of expenses)

			(10.0)%						(5.0)%						0.0%						5.0%						10.0%
Corresponding net return to common shareholder (2)			( 27.29 )%						( 16.64 )%						( 5.98 )%						4.67 %						15.32 %

(1) Assumes $1,882.8 million in total assets, $969.9 million in debt principal outstanding, $883.6 million in net assets and a weighted-average interest rate of 5.28% on our indebtedness based on our financial data available on March 31, 2025. Actual interest payments may be different.

(2) In order for us to cover our annual interest payments on indebtedness, we must achieve annual returns on our March 31, 2025 total assets of at least 2.81%.

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If we do not invest a sufficient portion of our assets in qualifying assets, we could fail to qualify as a BDC or be precluded from investing according to our current business strategy.

As a BDC, we are not permitted to acquire any assets other than “qualifying assets” unless, at the time of and after giving effect to such acquisition, at least 70% of our total assets are qualifying assets.

As of March 31, 2025, 90.0 % of our total assets consisted of qualifying assets. However, we may be precluded from investing in what we believe are attractive investments if those investments are not qualifying assets for purposes of the 1940 Act. Similarly, these rules could prevent us from making follow-on investments in existing portfolio companies, or we could be required to dispose of investments at inopportune or inappropriate times to comply with the 1940 Act (which could result in the dilution of our position). If we need to dispose of investments quickly, it could be difficult to dispose of such investments on favorable terms. We may not be able to find a buyer for such investments and, even if we do find a buyer, we may have to sell the investments at a substantial loss. Any such outcomes could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

A failure on our part to maintain our status as a BDC would significantly reduce our operating flexibility.

If we fail to maintain our status as a BDC, we might be regulated as a closed-end investment company that is required to register under the 1940 Act, which would subject us to additional regulatory restrictions and significantly decrease our operating flexibility. In addition, any such failure could cause an event of default under our outstanding indebtedness, which could have a material adverse effect on our business, financial condition or results of operations.

We will become subject to U.S. federal income tax imposed at corporate rates if we are unable to qualify as a RIC under subchapter M of the Code .

We have elected, and intend to qualify annually, to be treated as a RIC under subchapter M of the Code. No assurance can be given that we will be able to maintain our qualification as a RIC. To qualify as a RIC, we must meet the following annual distribution, income source and asset diversification requirements:

• The annual distribution requirement for a RIC is generally satisfied if we timely distribute (or are deemed to distribute) to our shareholders on an annual basis at least 90% of our net ordinary taxable income and realized short-term capital gains in excess of realized net long-term capital losses. We will be subject to U.S. federal income tax, and possibly 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.

• The source-of-income requirement is satisfied if we obtain at least 90% of our gross income for each taxable year from dividends, interest, payments with respect to certain securities loans, gains from the sale or other disposition of stock or other securities or foreign currencies or other income derived with respect to our business of investing in such stock, securities or currencies and net income derived from an interest in a “qualified publicly traded partnership” (as defined in the Code), or the 90% Income Test.

• The asset diversification requirement is satisfied if we meet certain asset diversification requirements at the end of each quarter of our taxable year.  To satisfy this requirement, at least 50% of the value of our assets must consist of cash, cash items, U.S. Government securities, securities of other RICs, and other securities, provided that such other securities will not include any securities of any one issuer, if our holdings of such issuer constitute more than 5% of the total value of our assets or if we hold more than 10% of the outstanding voting securities of the issuer (which for these purposes includes the equity securities of a “qualified publicly traded partnership”).  In addition, no more than 25% of the value of our assets can be invested in (i) the securities, other than U.S Government securities or securities of other RICs, of one issuer; (ii) the securities, other than securities of other RICs, of two or more issuers that are controlled, as determined under applicable tax rules, by us and that are engaged in the same or similar or related trades or businesses; or (iii) the securities of one or more “qualified publicly traded partnerships.”

Failure to meet these requirements may result in us having to dispose of certain unqualified investments quickly in order to continue to qualify as a RIC. If we fail to qualify as a RIC and, consequently, are subject to U.S. federal income tax, the resulting U.S. federal income tax liability could substantially reduce our net assets, the amount of income available for distribution and the amount of our distributions.

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Even if the Company qualifies as a RIC, it may face tax liabilities that reduce its cash flow.

If we continue to qualify as a RIC under the Code, we generally will not be subject to U.S. federal income tax on income and gains that we timely distribute to our shareholders as dividends. Income derived through the Taxable Subsidiary will be subject to U.S. federal income tax imposed at corporate rates without regard to the Annual Distribution Requirement, and any taxes paid by the Taxable Subsidiary would decrease the cash available for distribution.

Our portfolio investments generally are not publicly traded. As a result, the fair value of these investments may not be readily determinable and will be recorded at fair value as determined in good faith by the Valuation Committee, subject to the oversight of our Board of Directors. As a result, there may be uncertainty as to the value of our portfolio investments.

Under the 1940 Act, we are required to carry our portfolio investments at market value or, if there is no readily available market quotation, at fair value as determined in good faith by the Valuation Committee, subject to the oversight of our Board of Directors. Typically, there is not a public market for the securities of the privately held companies in which we have invested and will continue to invest. As a result, the Valuation Committee values these securities quarterly at fair value based on inputs from our investment team and our third-party valuation firms, subject to the oversight of our Board of Directors.

The determination of fair value and, consequently, the amount of unrealized gains and losses in our portfolio are, to a certain degree, subjective and dependent on our valuation process. Certain factors that may be considered in determining the fair value of our investments include external events, such as private mergers, sales and acquisitions involving comparable companies. Because of the inherent uncertainty of the valuation of portfolio securities that do not have readily available market quotations, our fair value determinations may differ materially from the values a third party would be willing to pay for our portfolio securities or the values that would be applicable to unrestricted securities having a public market.  Due to this uncertainty, our fair value determinations may cause our NAV on a given date to materially understate or overstate the value that we may ultimately realize on one or more of our investments.  As a result, investors purchasing our common stock based on an overstated NAV may pay a higher price than the value of our investments might warrant.  Conversely, investors selling shares during a period in which the NAV understates the value of our investments may receive a lower price for their shares than the value of our investments might warrant.

We are currently operating in a period of economic uncertainty. Such market conditions may materially and adversely affect debt and equity capital markets, which may have a negative impact on our business, financial condition and results of operations.

From time to time, capital markets may experience periods of disruption and instability.  The U.S. capital markets have experienced extreme volatility and disruption following the global outbreak of COVID-19 that began in December 2019, the conflict between Russia and Ukraine that began in late February 2022, the ongoing war in the Middle East, and uncertainties regarding shifts in U.S. and foreign trade, economic and other policies, including with respect to treaties and tariffs. Concerns over inflation, economic recession, interest rate volatility and fluctuations, and geopolitical tension have exacerbated market volatility. We anticipate our and our portfolio companies' business would be materially and adversely affected by a prolonged economic downturn or recession in the United States and other major markets. In addition, disruptions in the capital markets could increase the spread between the yields realized on risk-free and higher risk securities, which could result in illiquidity in parts of the capital markets.

These conditions and future market disruptions and/or illiquidity could have an adverse effect on our (and our portfolio companies') business, financial condition, results of operations and cash flows. Ongoing unfavorable economic conditions also could increase our funding costs, limit our access to the capital markets or result in a decision by lenders not to extend credit to our portfolio companies and/or us. Significant disruption or volatility in the capital markets also may affect the pace of our investment activity and the potential for liquidity events involving our investments. The illiquidity of our investments may make it difficult for us to sell such investments to access capital if required, and as a result, we could realize significantly less than the value at which we have recorded our investments if we were required to sell them for liquidity purposes. These events have limited and could continue to limit our investment originations and our ability to grow and could also have a material negative impact on our operating results and the fair values of our debt and equity investments. Additionally, we may have to access, if available, alternative markets for debt and equity capital. A severe disruption in the global financial markets, deterioration in credit and financing conditions, high interest rates, uncertainty regarding U.S. government spending and deficit levels or other global economic conditions could have a material adverse effect on our business, financial condition and results of operations.

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Even if capital markets remain stable or improve, conditions could deteriorate again in the future. Past economic downturns or recessions have had a significant negative impact on the operating performance and fair value of middle market companies. Despite actions of the U.S. federal government and foreign governments, these events contributed to worsening general economic conditions that materially and adversely impacted the broader financial and credit markets and reduced the availability of debt and equity capital for the market as a whole and financial services firms in particular.

Equity capital may be difficult to raise during periods of adverse or volatile market conditions because, subject to some limited exceptions, as a BDC, we are generally not able to issue additional shares of our common stock at a price less than NAV without first obtaining approval for such issuance from our shareholders and our directors who are not "interested persons" (as such term is used under Section 2(a)(19) of the 1940 Act) of the Company, or independent directors. Volatility and dislocation in the capital markets also can create a challenging environment in which to raise or access debt capital. Under these conditions, it could make it difficult to refinance or extend the maturity of our existing indebtedness or obtain new indebtedness with similar terms and any failure to do so could have a material adverse effect on our business. The debt capital that will be available to us in the future, if at all, may be at a higher cost and on less favorable terms and conditions than what we currently experience, including being at a higher cost in an elevated interest rate environment. If any of these conditions appear, they may have an adverse effect on our business, financial condition, and results of operations.  These events could limit our investment originations, limit our ability to increase returns to equity holders through the effective use of leverage, and negatively impact our operating results.

In addition, significant changes or volatility in the capital markets may also have a negative effect on the valuations of our investments. While most of our investments are not publicly traded, applicable accounting standards require us to assume as part of our valuation process that our investments are sold in a principal market to market participants (even if we plan on holding an investment through its maturity). Significant changes in the capital markets may also affect the pace of our investment activity and the potential for liquidity events involving our investments. Thus, the illiquidity of our investments may make it difficult for us to sell our investments to access capital if required, and as a result, we could realize significantly less than the value at which we have recorded our investments if we were required to sell them for liquidity purposes. An inability to raise or access capital could have a material adverse effect on our business, financial condition or results of operations.

We also face an increased risk of investor, creditor or portfolio company disputes, litigation, and governmental and regulatory scrutiny as a result of current economic and market conditions.

Inflation may adversely affect the business, results of operations and financial condition of our portfolio companies, which may, in turn, impact the valuation of such portfolio companies.

Certain of our portfolio companies may be impacted by inflation, which may, in turn, impact the valuation of such portfolio companies. Inflationary pressures have increased the costs of labor, energy and raw materials and have adversely affected consumer spending, economic growth and our portfolio companies' operations. If such portfolio companies are unable to pass any increases in their costs along to their customers, it could adversely affect their results and their ability to pay interest and principal on our loans, particularly if interest rates remain high in response to inflation. In addition, any projected future decreases in our portfolio companies’ operating results due to inflation could adversely impact the fair value of those investments. Any decreases in the fair value of our investments could result in future unrealized losses and therefore reduce our net assets resulting from operations.

Political, social and economic uncertainty creates and exacerbates risks.

Social, political, economic and other conditions and events (such as natural disasters, epidemics and pandemics, terrorism, conflicts and social unrest) could occur, potentially creating uncertainty and significantly impacting issuers, industries, governments and other systems, including the financial markets, to which companies and their investments are exposed. As global systems, economies and financial markets are increasingly interconnected, events that once had only local impact are now more likely to have regional or even global effects. Events that occur in one country, region or financial market will, more frequently, adversely impact issuers in other countries, regions, or markets, including in established markets, such as the United States. These impacts can be exacerbated by failures of governments and societies to adequately respond to an emerging event or threat.

Uncertainty can result in or coincide with other phenomena, including, among other things: increased volatility in the financial markets for securities, derivatives, loans, credit and currency; a decrease in the reliability of market prices and difficulty in valuing assets (including portfolio company assets); greater fluctuations in spreads on debt investments and currency exchange rates; increased risk of default (by both government and private obligors and issuers); social, economic, and political instability; nationalization of private enterprise; governmental involvement in the economy or in social factors that

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impact the economy; increased threats of tariffs or barriers to trade; changes to governmental regulation and supervision of the loan, securities, derivatives and currency markets and market participants and decreased or revised monitoring of such markets by governments or self-regulatory organizations and reduced enforcement of regulations; limitations on the activities of investors in such markets; controls or restrictions on foreign investment, capital controls and limitations on repatriation of invested capital; the significant loss of liquidity and the inability to purchase, sell and otherwise fund investments or settle transactions (including, but not limited to, a market freeze); substantial, and in some periods extremely high, rates of inflation, which can last many years and have substantial negative effects on credit and securities markets as well as the economy as a whole; economic recessions or downturns; and difficulties in obtaining and/or enforcing legal judgments.

The Republican Party currently controls the Presidency, the Senate and the House of Representatives, which increases the likelihood that legislation may be adopted. Any new or changed laws or regulations, as well as changes in the positions of regulatory agencies, which may lead to changes in the level of oversight in the financial service industry, could have a material adverse effect on our business, and we expect to see continued regulatory uncertainty in the near term. The nature, timing and economic and political effects of potential changes to the current legal and regulatory framework affecting financial institutions remain highly uncertain. The current global economic and political conditions and the uncertainty on applicable laws or regulations that impact us and our portfolio companies could have a significant adverse effect on our and our portfolio companies' business.

Changes to U.S. tariff and import/export regulations may have a negative effect on the operations of our portfolio companies and, in turn, negatively impact us.

The U.S. government has recently imposed, and may in the future increase, tariffs on specific countries and commodities. In response, certain foreign trading partners, and others in the future may, impose retaliatory tariffs on certain U.S. goods. The foregoing has created significant uncertainty about the future relationship between the United States and certain other countries with respect to trade policies, treaties and new and increased tariffs. These developments, or the continued uncertainty relating to U.S. trade policies, may have a material adverse effect on global economic conditions and the stability of global financial markets, and may significantly reduce global trade and, in particular, trade between the impacted nations and the United States. The uncertainty relating to U.S. trade policies has increased market volatility. Any of these factors could depress economic activity and restrict certain of our portfolio companies’ access to suppliers or customers, and increase costs, decrease margins, and reduce the competitiveness of products and services offered by our portfolio companies. The foregoing may adversely affect the revenues and profitability of such portfolio companies and, in turn, negatively affect our results of operations, which could cause the market value of our shares of common stock to decline. It is not possible to predict the impact that these or similar future events will have on the United States and other economies, specific industries, us or our underlying portfolio companies from an economic, tax or regulatory perspective, but any such impact could be material and adverse for us.

The effect of global climate change may impact the operations and valuation of our portfolio companies.

Climate change creates physical and financial risk and our business operations and our portfolio companies may face risks associated with climate change. To the extent weather conditions are affected by climate change, energy use could increase or decrease depending on the duration and magnitude of any changes. Increases in the cost of energy could adversely affect the cost of operations of our portfolio companies if the use of energy products or services is material to their business. A decrease in energy use due to weather changes may affect some of our portfolio companies’ financial condition through, for example, decreased revenues, which may, in turn, impact the valuation of such portfolio companies. Extreme weather conditions (including wildfires, droughts, hurricanes and floods) in general require more system backup, adding to costs, and can contribute to increased system stresses, including service interruptions, which, in turn, may impact the business operations of our portfolio companies.

Some of our portfolio companies may periodically become subject to new or strengthened regulations or legislation to address global climate change, which could increase their operating costs and/or decrease their revenues, which may, in turn, impact their ability to make payments on our investments.

Environmental, social and governance factors may adversely affect our business or cause us to alter our business strategy.

Our business faces increasing public scrutiny related to environmental, social and governance (“ESG”) activities. We risk damage to our brand and reputation if we fail to act responsibly in a number of areas, such as environmental stewardship, corporate governance and transparency. Adverse incidents with respect to ESG activities could impact the value of our brand,

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the cost of our operations and relationships with investors, all of which could adversely affect our business and results of operations. Additionally, new regulatory initiatives related to ESG could adversely affect our business. Compliance with any new laws or regulations increases our regulatory burden and could make compliance more difficult and expensive, affect the manner in which we or our prospective portfolio companies conduct our businesses and adversely affect our profitability.

Downgrades of the U.S. credit rating, automatic spending cuts, or another government shutdown could negatively impact our liquidity, financial condition, and results of operations.

U.S. debt ceiling and budget deficit concerns have increased the possibility of credit-rating downgrades or a recession in the United States. U.S. lawmakers have passed legislation to raise the federal debt ceiling on multiple occasions, but there is no guarantee that any such legislation will be passed in the future. Despite taking action to suspend the debt ceiling, ratings agencies have threatened to lower the long-term sovereign credit rating on the United States, including Fitch downgrading the U.S. government’s credit rating from AAA to AA+ in August 2023 and Moody’s lowering the U.S. government’s credit rating outlook from “stable” to “negative” in November 2023. There is no guarantee that there will not be a further downgrade in the future. The impact of the increased debt ceiling and/or downgrades to the U.S. government’s sovereign credit rating or its perceived creditworthiness could adversely affect the U.S. and global financial markets and economic conditions. These developments could cause interest rates and borrowing costs to rise, which may negatively impact our ability to access the debt markets on favorable terms.

In addition, disagreement over the federal budget has caused the U.S. federal government to shut down for periods of time resulting in, among other things, inadequate funding for and/or the shutdown of certain government agencies, including the SEC and the SBA, on which the operation of our business may rely. Inadequate funding for and/or the shutdown of these or other government agencies prevents them from performing their normal business functions, which could impact, among other things: (i) our portfolio companies’ ability to access the public markets and obtain necessary capital in order to, among other things, properly capitalize, continue or expand operations, or liquidate such investments; (ii) the ability for the SBIC Subsidiaries to originate loans; and (iii) the ability of other governmental agencies to timely review and process regulatory submissions of our portfolio companies, as applicable. Continued adverse political and economic conditions, including a prolonged U.S. federal government shutdown, could have a material adverse effect on our business, financial condition and results of operations.

Our business is dependent on bank relationships and recent strain on the banking system may adversely impact us.

The financial markets have encountered volatility associated with concerns about the balance sheets of banks, especially small and regional banks that may have significant losses associated with investments that make it difficult to fund demands to withdraw deposits and other liquidity needs. Although the federal government previously announced measures to assist these banks and protect depositors, there can be no assurance that similar measures will be implemented during future periods of volatility. Our business is dependent on bank relationships, including small and regional banks, and we proactively monitor the financial health of banks with which we (or our portfolio companies) do or may in the future do business. To the extent that our portfolio companies work with banks that have been, or may be, negatively impacted by the foregoing, such portfolio companies’ ability to access their own cash, cash equivalents and investments may be threatened. In addition, such affected portfolio companies may not be able to enter into new banking arrangements or credit facilities or receive the benefits of their existing banking arrangements or credit facilities. Any such developments could harm our business, financial condition, and operating results, and prevent us from fully implementing our investment plan. Continued strain on the banking system may adversely impact our business, financial condition and results of operations.

Changes in the laws or regulations governing our business or the operations of our portfolio companies, changes in the interpretations thereof or of newly enacted laws or regulations, and any failure by us to comply with these laws or regulations could require changes to certain business practices of us or our portfolio companies, negatively affect the profitability of the operations, cash flows or financial condition of us or our portfolio companies, impose additional costs on us or our portfolio companies or otherwise adversely affect our business or the business of our portfolio companies.

We and our portfolio companies are subject to federal, state and local laws and regulations and are subject to judicial and administrative decisions that affect our business and the operations of our portfolio companies, including our loan originations, maximum interest rates, fees and other charges, disclosures to portfolio companies, the terms of secured transactions, collection and foreclosure procedures and other trade practices. These laws and regulations, as well as their interpretation, may be changed from time to time, and new laws and regulations may be enacted. Any change in the laws or regulations, the interpretations of such laws and regulations, or newly enacted laws or regulations could require changes to certain business practices used by us or our portfolio companies, negatively impact the operations, cash flows or financial condition of us or our portfolio companies, impose additional costs on us or our portfolio companies or otherwise adversely

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affect our business or the business of our portfolio companies. In addition, if we do not comply with applicable laws, regulations and decisions, we may lose licenses needed for the conduct of our business and/or be subject to civil fines and criminal penalties, any of which could have a material adverse effect upon our business, results of operations or financial condition.

We operate in a highly competitive market for investment opportunities .

We compete for attractive investment opportunities with other financial institutions, including BDCs, junior capital lenders, and banks.  Some of these competitors are substantially larger and have greater financial, technical and marketing resources, and some are subject to different, and frequently less stringent, regulations.  Our competitors may have a lower cost of funds and may have access to funding sources that are not available to us.  Furthermore, many of our competitors are not subject to the regulatory restrictions that the 1940 Act imposes on us as a BDC and the Code imposes on us as a RIC.  As a result of this competition, we may not be able to take advantage of attractive investment opportunities from time to time, and there can be no assurance that we will be able to identify and make investments that satisfy our objectives.  A significant increase in the number and/or size of our competitors in our target market could force us to accept less attractive investment terms, which may impact our return on these investments.  We cannot assure you that the competitive pressures we face will not have a materially adverse effect on our business, financial condition and results of operation.

Our success depends on attracting and retaining qualified personnel in a competitive environment.

Sourcing, selecting, structuring and closing our investments depends upon the diligence and skill of our management.  Our management’s capabilities may significantly impact our results of operations.  Our success requires that we retain investment and operations personnel in a competitive environment.  Our ability to attract and retain personnel with the requisite credentials, experience and skills depends on several factors, including, but not limited to, our ability to offer competitive wages, benefits and professional growth opportunities. Many of the entities, including investment funds (such as private equity funds and debt funds) and traditional financial services companies, with which we compete for experienced personnel have greater resources than we have.

The competitive environment for qualified personnel may require us to take certain measures to ensure that we are able to attract and retain experienced personnel.  Such measures may include increasing the attractiveness of our overall compensation packages, altering the structure of our compensation packages through the use of additional forms of compensation or other steps.  The inability to attract and retain experienced personnel could potentially have an adverse effect on our business.

Our asset coverage requirement is 150%, which could increase the risk of investing in the Company.

The 1940 Act generally prohibits BDCs from incurring indebtedness unless immediately after such borrowing it has an asset coverage for total borrowings of at least 200% or 150%, if certain requirements are met. On April 25, 2018, the Board of Directors, including a “required majority” (as such term is defined in Section 57(o) of the 1940 Act) of the Board of Directors, approved the modified asset coverage requirements of 150%, which became effective April 25, 2019. Additionally, 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 such issuance, would not be less than 166%, at any time after the effective date. In addition, on August 11, 2021, we received an exemptive order from the SEC to permit us to exclude the senior securities issued by the SBIC Subsidiaries from the definition of senior securities in the asset coverage requirement applicable to the Company under the 1940 Act.

Leverage is generally considered a speculative investment technique and increases the risk of investing in our securities. Leverage magnifies the potential for loss on investments in our indebtedness and on invested equity capital. As we use leverage to partially finance our investments, you will experience increased risks of investing in our securities. If the value of our assets increases, then leveraging would cause the NAV attributable to our common stock to increase more sharply than it would have had we not leveraged. Conversely, if the value of our assets decreases, leveraging would cause NAV to decline more sharply than it otherwise would have had we not leveraged our business. Similarly, any increase in our income in excess of interest payable on the borrowed funds would cause our net investment income to increase more than it would without the leverage, while any decrease in our income would cause net investment income to decline more sharply than it would have had we not borrowed. Such a decline could negatively affect our ability to pay common stock dividends, scheduled debt payments or other payments related to our securities. If we incur additional leverage, you will experience increased risks of investing in our common stock.

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We expend significant financial and other resources to comply with the requirements of being a public company.

As a public entity, we are subject to the reporting requirements of the Exchange Act and requirements of the Sarbanes-Oxley Act and the related rules and regulations promulgated by the SEC. The Exchange Act requires that we file annual, quarterly and current reports with respect to our business and financial condition. The Sarbanes-Oxley Act requires that we maintain effective disclosure controls and procedures and internal controls over financial reporting, as well as requires that our independent registered public accounting firm attest to the effectiveness of our internal controls over financial reporting as a large accelerated filer. In order to maintain and improve the effectiveness of our disclosure controls and procedures and internal controls, significant resources and management oversight are required. We have implemented procedures, processes, policies and practices for the purpose of addressing the standards and requirements applicable to public companies. These activities may divert management’s time and attention from other business concerns, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.

Our ability to enter into transactions with our affiliates is restricted.

We are prohibited under the 1940 Act from participating in certain transactions with certain of our affiliates without the prior approval of our independent directors and, in some cases, the SEC. Any person that owns, directly or indirectly, 5% or more of our outstanding voting securities is our affiliate for purposes of the 1940 Act, and we generally are prohibited from buying or selling any security from or to an affiliate, absent the prior approval of our independent directors. The 1940 Act also prohibits certain “joint” transactions with certain of our affiliates, which could include investments in the same portfolio company (whether at the same or different times), without prior approval of our independent directors and, in some cases, the SEC. If a person acquires more than 25% of our voting securities, we are prohibited from buying or selling any security from or to that person or certain of that person’s affiliates, or entering into prohibited joint transactions with that person, absent the prior approval of the SEC. Similar restrictions limit our ability to transact business with our officers or directors or their affiliates.

Regulations governing our operation as a BDC will affect our ability to, and the way in which we, raise additional capital.

Our business requires capital to operate and grow. We may acquire such additional capital from the following sources:

Senior Securities . We may issue debt securities, preferred stock and/or borrow money from banks or other financial institutions, which we refer to collectively as senior securities. As a result of issuing senior securities, we will be exposed to additional risks, including the following:

• Under the 1940 Act and effective April 25, 2019, we are permitted, as a BDC, to issue senior securities only in amounts such that our asset coverage, as defined in the 1940 Act, equals at least 150% immediately after each issuance of senior securities. The Board also approved a resolution that limits the Company's issuance of senior securities such that the asset coverage ratio, taking into account such issuance, would not be less than 166%, at any time after the effective date. In addition, on August 11, 2021, we received an exemptive order from the SEC to permit us to exclude the senior securities issued by the SBIC Subsidiaries from the definition of senior securities in the asset coverage requirement applicable to the Company under the 1940 Act. If the value of our assets declines, we may be unable to satisfy this requirement. If that happens, we will be prohibited from issuing debt securities and/or borrowing money from banks or other financial institutions and may not be permitted to declare a dividend or make any distribution to shareholders or repurchase shares until such time as we satisfy the asset coverage requirement.

• Any amounts that we use to service our debt will not be available for dividends to our common shareholders.

• It is likely that any senior securities or other indebtedness we issue will be governed by an indenture or other instrument containing covenants restricting our operating flexibility. Additionally, some of these securities or other indebtedness may be rated by rating agencies, and in obtaining a rating for such securities and other indebtedness, we may be required to abide by operating and investment guidelines that further restrict operating and financial flexibility.

• We and, indirectly, our shareholders will bear the cost of issuing and servicing such securities and other indebtedness.

• Any unsecured debt issued by us would rank (1) pari passu with our future unsecured indebtedness and effectively subordinated to all of our existing and future secured indebtedness, to the extent of the value of the assets securing such indebtedness (such as the Corporate Credit Facility), and (2) structurally subordinated to all existing and future indebtedness and other obligations of any of our subsidiaries (such as our SBA-guaranteed debentures and the SPV Credit Facility).

• Upon a liquidation of the Company, holders of our debt securities and lenders with respect to other borrowings would receive a distribution of our available assets prior to the holders of our common stock. Future offerings of

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additional debt securities, which would be senior to our common stock upon liquidation, or equity securities, which could dilute our existing shareholders, may harm the value of our common stock.

Additional Common Stock . The 1940 Act prohibits us from selling shares of our common stock at a price below the current NAV per share of such stock, with certain exceptions. One such exception is prior shareholder approval of issuances below current NAV per share provided that our Board of Directors determines that such sale is in the best interests of the Company and its shareholders. We do not intend to seek shareholder authorization to sell shares of our common stock below the then current NAV per share of our common stock at our 2025 annual meeting of shareholders. However, in the event we change our position, we will seek requisite approval of our shareholders. See “- Shareholders may incur dilution if we sell shares of our common stock in one or more offerings at prices below the then current NAV per share of our common stock or issue securities that are convertible to shares of our common stock” for a discussion of the risks related to us issuing shares of our common stock below NAV. If we raise additional funds by issuing more common stock or senior securities convertible into, or exchangeable for, our common stock, the percentage ownership of our shareholders at that time would decrease, and they may experience dilution. Moreover, we can offer no assurance that we will be able to issue and sell additional equity securities in the future, on favorable terms or at all.

Each SBIC Subsidiary has an SBIC license and is subject to SBA regulations, and any failure to comply with SBA regulations could have an adverse effect on our operations.

On April 20, 2021 and April 17, 2025, SBIC I and SBIC II, respectively, received licenses from the SBA to operate as an SBIC under Section 301(c) of the Small Business Investment Act of 1958, as amended, and are regulated by the SBA.

The SBA places certain limitations on the financing terms of investments by SBICs in portfolio companies, regulates the types of financing, prohibits investing in small businesses with certain characteristics or in certain industries and requires capitalization thresholds that limit distributions to us. Accordingly, compliance with SBIC requirements may cause the SBIC Subsidiaries to forego attractive investment opportunities that are not permitted under SBA regulations and/or to invest at less competitive rates in order to find investments that qualify under the SBA regulations.

Further, SBA regulations require that an SBIC be periodically examined and audited by the SBA to determine its compliance with the relevant SBA regulations. If the SBIC Subsidiaries fail to comply with applicable regulations, the SBA could, depending on the severity of the violation, limit or prohibit the use of the debentures, declare outstanding debentures immediately due and payable, and/or limit the SBIC Subsidiaries from making new investments. In addition, the SBA could revoke or suspend the SBIC Subsidiaries' licenses for willful or repeated violation of, or willful or repeated failure to observe, any provision of the Small Business Investment Act of 1958, as amended, or any rule or regulation promulgated thereunder. These actions by the SBA would, in turn, negatively affect our operations because the SBIC Subsidiaries are our wholly owned subsidiaries.

Shareholders may incur dilution if we sell shares of our common stock in one or more offerings at prices below the then current NAV per share of our common stock or issue securities that are convertible to shares of our common stock.

The 1940 Act prohibits us from selling shares of our common stock at a price below the current NAV per share of such stock, with certain exceptions. One such exception is prior shareholder approval of issuances below NAV provided that our Board of Directors determines that such sale is in the best interests of the Company and its shareholders. We do not intend to seek shareholder authorization to sell shares of our common stock below the then current NAV per share of our common stock at our 2025 annual meeting of shareholders. However, in the event we change our position, we will seek the requisite approval of our shareholders.

If we were to sell shares of our common stock below NAV per share, such sales would result in an immediate dilution to the NAV per share. This dilution would occur as a result of the sale of shares at a price below the then current NAV per share of our common stock and a proportionately greater decrease in a shareholder’s interest in our earnings and assets and voting interest in us than the increase in our assets resulting from such issuance. Because the number of shares of common stock that could be so issued and the timing of any issuance is not currently known, the actual dilutive effect cannot be predicted. Notwithstanding the foregoing, the example below illustrates the effect of dilution to existing shareholders resulting from the sale of common stock at prices below the NAV of such shares.

In addition, if we issue securities that are convertible to shares of common stock, the exercise or conversion of such securities would increase the number of outstanding shares of our common stock. Any such exercise would be dilutive on the voting power of existing shareholders, and could be dilutive with regard to dividends and our NAV, and other economic aspects of the common stock.

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Illustration: Example of Dilutive Effect of the Issuance of Shares Below NAV. Assume that Company XYZ has 1,000,000 total shares outstanding, $15,000,000 in total assets and $5,000,000 in total liabilities. The NAV per share of the common stock of Company XYZ is $10.00. The following table illustrates the reduction NAV and the dilution experienced by shareholder A following the sale of 100,000 shares of the common stock of Company XYZ at $9.00 per share, a price below its NAV per share.

						Prior to Sale Below NAV						Following Sale Below NAV						Percentage Change
Reduction to NAV
Total Shares Outstanding						1,000,000						1,100,000						10.00		%
NAV per share						$	10.00					$	9.91					(0.91)		%
Dilution to Existing Shareholder
Shares held by Shareholder A						10,000						10,000			(1)			—		%
Percentage Held by Shareholder A						1.00		%				0.91		%				(9.09)		%
Total Interest of Shareholder A in NAV						$	100,000					$	99,091					(0.91)		%

(1) Assumes that Shareholder A does not purchase additional shares in the sale of shares below NAV.

Legislative or other actions relating to taxes could have a negative effect on us.

Legislative or other actions relating to taxes could have a negative effect on us. Matters pertaining to U.S. federal income tax are constantly under review by persons involved in the legislative process, the IRS and the U.S. Department of the Treasury. The Trump Administration has proposed significant changes to the Code and existing U.S. federal income tax regulations and there are a number of proposals in Congress that would similarly modify the Code. We cannot predict with certainty how any changes in the tax laws might affect us, our shareholders, or our portfolio investments. While the likelihood of any such legislation being enacted is uncertain, new legislation and any U.S. Treasury regulations, administrative interpretations or court decisions interpreting such legislation or regulations could affect our ability to qualify as a RIC or otherwise impact the U.S. federal income tax consequences to us and our shareholders of such qualification, or could have other adverse consequences. Shareholders are urged to consult with their tax advisor regarding tax legislative, regulatory, or administrative developments and proposals and their potential effect on an investment in our securities.

We are highly dependent on information systems and operational risks including systems failures could significantly disrupt our business, which may, in turn, have a material adverse effect on our operating results and negatively affect the market price of our common stock and our ability to pay distributions to our shareholders.

Our business is highly dependent on our and third parties’ communications and information systems. We face operational risk from transactions and key data not being properly recorded, evaluated or accounted for with respect to our portfolio companies. In addition, we face operational risk from errors made in the execution, confirmation or settlement of transactions. Any failure or interruption of those systems, including as a result of the termination of an agreement with any third-party service providers, could cause delays or other problems in our activities. Our financial, accounting, data processing, backup or other operating systems and facilities may fail to operate properly or become disabled or damaged as a result of a number of factors, including events that are wholly or partially beyond our control and adversely affect our business. There could be:

• sudden electrical or telecommunications outages;

• natural disasters such as wildfires, earthquakes, tornadoes and hurricanes;

• disease pandemics;

• events arising from local or larger scale political or social matters, including terrorist acts; and

• cyber-attacks.

These events, in turn, could have a material adverse effect on our operating results and negatively affect the market price of our common stock and our ability to pay dividends to our shareholders.

A failure of cybersecurity systems, as well as the occurrence of events unanticipated in our disaster recovery systems and management continuity planning, could impair our ability to conduct business effectively.

We, and others in our industry, are the targets of malicious cyber activity. A successful cyber-attack, whether perpetrated by criminal or state-sponsored actors, against us or our service providers, or an accidental disclosure of non-public

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information could have an adverse effect on our ability to communicate or conduct business, negatively impacting our operations and financial condition. This adverse effect can become particularly acute if those events affect our electronic data processing, transmission, storage, and retrieval systems, or impact the availability, integrity, or confidentiality of our data, especially personal and other confidential information. If a significant number of our employees were unavailable in the event of a disaster, our ability to effectively conduct our business could be severely compromised.

We, and the third-party service providers with which we do business, depend heavily upon computer systems to perform necessary business functions. Despite our implementation of a variety of security measures, our computer systems, networks, and data, like those of other companies, could be subject to unauthorized access, acquisition, use, alteration, disruption, or destruction, such as from the insertion of malware (including ransomware), physical and electronic break-ins or unauthorized tampering. We may experience threats to our data and systems, including malware and computer virus attacks, unauthorized access, or system failures and disruptions. Such an attack could cause interruptions or malfunctions in our operations, misstated or unreliable financial data, misappropriation of assets, loss of personal information, or liability for stolen information, any of which could result in financial losses, litigation, regulatory enforcement action and penalties, client dissatisfaction or loss, reputational damage, and increased costs associated with mitigation of damages and remediation. We may have to make a significant investment to fix or replace any inoperable or compromised systems or to modify or enhance its cybersecurity controls, procedures and measures. Similarly, the public perception that we or our affiliates may have been the target of a cybersecurity threat, whether successful or not, also could have a material adverse effect on our reputation and lead to financial losses from loss of business, depending on the nature and severity of the threat.

Third parties with which we do business are sources of cybersecurity or other technological risks. We outsource certain functions, and these relationships allow for the storage and processing of our information, as well as counterparty, employee and borrower information. Cybersecurity failures or breaches to service providers (including, but not limited to, transfer agents and custodians), and the issuers of securities in which we invest, also have the ability to cause disruptions and impact business operations, potentially resulting in financial losses, interference with our ability to calculate its NAV, impediments to trading, the inability of our stockholders to transact business, violations of applicable privacy and other laws, regulatory fines, penalties, reputation damages, reimbursement of other compensation costs, or additional compliance costs. While we engage in actions to reduce our exposure resulting from outsourcing, ongoing threats may result in unauthorized access, loss, exposure or destruction of data, or other cybersecurity incidents with increased costs and other consequences, including those as described above. In addition, substantial costs may be incurred to prevent any cyber-incidents in the future. The Company does not control the cybersecurity measures put in place by third parties, and such third parties could have limited indemnification obligations to the Company and its affiliates. If such a third party fails to adopt or adhere to adequate cybersecurity procedures, or if despite such procedures its networks or systems are breached, information relating to investor transactions and/or personal information of investors may be lost or improperly accessed, used or disclosed.

Our portfolio companies also rely on similar information systems and face similar risks. A disruption or compromise of these systems could have a material adverse effect on the value of these businesses.

Privacy and information security laws and regulatory changes, and compliance with those changes, may result in cost increases due to system changes and the development of new administrative processes. In addition, we may be required to expend significant additional resources to modify our protective measures and to investigate and remediate vulnerabilities or other exposures arising from operational and security risks.

Terrorist attacks, acts of war or natural disasters may affect any market for our common stock, impact the businesses in which we invest and harm our business, operating results and financial condition.

Terrorist attacks, acts of war or natural disasters may disrupt our operations, as well as the operations of the businesses in which we invest.  These events have created, and continue to create, economic and political uncertainties and have contributed to global economic instability.  Future terrorist activities, military or security operations, or natural disasters could further weaken the domestic or global economy.  These events could create additional uncertainties, which may negatively affect the businesses in which we invest directly or indirectly and, in turn, could have a material adverse impact on our business, operating results and financial condition.  Losses from terrorist attacks and natural disasters are generally uninsurable.

The continued threat of global terrorism and the impact of military and other action will likely continue to cause volatility in the economies of certain countries, contribute to increased market volatility and economic uncertainties or deterioration in the United States and worldwide and various aspects thereof, including in prices of commodities. Our portfolio investments may involve significant strategic assets having a national or regional profile. The nature of these assets could expose them to a greater risk of being the subject of a terrorist attack than other assets or businesses. In late February 2022, Russia launched a large scale military attack on Ukraine. The invasion significantly amplified already existing geopolitical

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tensions among Russia, Ukraine, Europe, NATO and the West, including the United States. In response to the ongoing military action by Russia, various countries, including the United States, the United Kingdom, and European Union issued broad-ranging economic sanctions against Russia. Additional sanctions may be imposed in the future. Such sanctions (and any future sanctions) and other actions against Russia may adversely impact, among other things, the Russian economy and various sectors of the economy, including but not limited to, financials, energy, metals and mining, engineering and defense and defense-related materials sectors; result in a decline in the value and liquidity of Russian securities; result in boycotts, tariffs, and purchasing and financing restrictions on Russia’s government, companies and certain individuals; weaken the value of the ruble; downgrade the country’s credit rating; freeze Russian securities and/or funds invested in prohibited assets and impair the ability to trade in Russian securities and/or other assets; and have other adverse consequences on the Russian government, economy, companies and region.

In addition, the recent outbreak of hostilities in the Middle East and escalating tensions in the region may create volatility and disruption of global markets.

The ramifications of the hostilities and sanctions, however, may not be limited to Russia and the Middle East and Russian and Middle Eastern companies, respectively, but may spill over to and negatively impact other regional and global economic markets (including Europe and the United States), companies in other countries (particularly those that have done business with Russia) and on various sectors, industries and markets for securities and commodities globally, such as oil and natural gas. Accordingly, the actions discussed above and the potential for a wider conflict could increase financial market volatility, cause severe negative effects on regional and global economic markets, industries, and companies and have a negative effect on the Company’s investments and performance, which may, in turn, impact the valuation of such portfolio companies. In addition, parties in such conflicts may take retaliatory actions and other countermeasures, including cyberattacks and espionage against other countries and companies around the world, which may negatively impact such countries and the companies in which the Company invests. The extent and duration of the military action or future escalation of such hostilities, the extent and impact of existing and future sanctions, market disruptions and volatility, and the result of any diplomatic negotiations cannot be predicted. These and any related events could have a significant impact on the Company’s performance and the value of an investment in the Company.

Our business and operations may be negatively affected if we become subject to securities litigation or shareholder activism, which could cause us to incur significant expense, hinder execution of our investment strategy and impact our stock price.

In the past, following periods of volatility in the market price of a company’s securities, securities class-action litigation has often been brought against that company. Shareholder activism, which could take many forms or arise in a variety of situations, has been increasing in the BDC space. While we are currently not subject to any securities litigation or shareholder activism, due to the potential volatility of our stock price and for a variety of other reasons, we may in the future become the target of securities litigation or shareholder activism. Securities litigation and shareholder activism, including potential proxy contests, could result in substantial costs and divert management’s and our Board of Directors’ attention and resources from our business. Additionally, such securities litigation and shareholder activism could give rise to perceived uncertainties as to our future, adversely affect our relationships with service providers and make it more difficult to attract and retain qualified personnel. Also, we may be required to incur significant legal fees and other expenses related to any securities litigation and activist shareholder matters. Further, our stock price could be subject to significant fluctuation or otherwise be adversely affected by the events, risks and uncertainties of any securities litigation and shareholder activism.

RISKS RELATED TO OUR INVESTMENTS

Our investments in portfolio companies involve a number of significant risks.

We primarily invest in privately held U.S. middle market companies. Investments in privately held middle market companies involve a number of significant risks, including the following:

• These companies are more likely to depend on the management talents and efforts of a small group of key employees.  Therefore, the death, disability, resignation, termination, or significant under-performance of one or more of these persons could have a material adverse impact on our portfolio company and, in turn, on the value of such portfolio company.

• These companies may have unpredictable operating results, could become parties to litigation, may be engaged in rapidly changing businesses with products subject to a substantial risk of obsolescence and may require

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substantial additional capital to support their operations, finance expansion or maintain their competitive position.

• Private companies generally have less publicly available information about their businesses, operations and financial condition. Consequently, we rely on the ability of our management team and investment professionals to obtain adequate information to evaluate the potential returns from making investments in these portfolio companies.  If we are unable to uncover all material information about the portfolio company, we may not make a fully informed investment decision and may lose all or part of our investment.

• These companies may have shorter operating histories, narrower product lines, smaller market shares and/or more significant customer concentration than larger businesses, which tend to render them more vulnerable to competitors’ actions and market conditions, as well as general economic downturns.

• These companies may have limited financial resources and may be unable to meet their obligations under their debt instruments that we hold, which may be accompanied by a deterioration in the value of any collateral and a reduction in the likelihood of us realizing any guarantees from subsidiaries or affiliates of our portfolio companies that we may have obtained in connection with our investment, as well as a corresponding decrease in the value of the equity components of our investments.

In addition, in the course of providing significant managerial assistance to certain of our portfolio companies, certain of our officers and directors may serve as directors on the boards of these companies. To the extent that litigation arises out of our investments in these companies, our officers and directors may be named as defendants in such litigation, which could result in an expenditure of funds for claims in excess of our directors’ and officers’ insurance coverage (through our indemnification of our officers and directors) and the diversion of management’s time and resources.

We are subject to risks associated with our investments in senior loans.

We invest in senior loans, which are usually rated below investment grade or also may be unrated. As a result, the risks associated with senior loans may be considered by credit rating agencies to be similar to the risks of below investment grade fixed-income instruments. Investment in senior loans rated below investment grade is considered speculative because of the credit risk of the company incurring the indebtedness. Such companies are more likely than investment grade issuers to default on their payments of interest and principal owed to us, and such defaults could have a material adverse effect on our performance. An economic downturn would generally lead to a higher non-payment rate, and a senior loan may lose significant market value before a default occurs. Moreover, any specific collateral used to secure a senior loans may decline in value or become illiquid, which would adversely affect the senior loan’s value.

There may be less readily available and reliable information about most senior loans than is the case for many other types of securities, including securities issued in transactions registered under the Securities Act or registered under the Exchange Act. As a result, we will rely primarily on our own evaluation of a borrower’s credit quality rather than on any available independent sources.

In general, the secondary trading market for senior secured loans is not well developed. No active trading market may exist for certain senior loans, which may make it difficult to value them. Illiquidity and adverse market conditions may mean that we may not be able to sell senior loans quickly or at a fair price. To the extent that a secondary market does exist for certain senior loans, the market for them may be subject to irregular trading activity, wide bid/ask spreads and extended trade settlement periods.

The lack of liquidity in our investments may adversely affect our business.

We invest, and will continue to invest, in portfolio companies whose securities are not publicly traded. These securities generally are subject to legal and other restrictions on resale or will otherwise be less liquid than publicly traded securities. As a result, we do not expect to achieve liquidity in our investments in the near-term. However, to comply with the requirements applicable to us as a BDC and maintain our qualification as a RIC, we may have to dispose of investments if we do not satisfy one or more of the applicable criteria under the respective regulatory frameworks.

Additionally, any disruption in economic activity has had, and may continue to have, a negative effect on the potential for liquidity events involving our investments. The illiquidity of our investments may make it difficult for us to sell such investments to access capital if required, and as a result, we could realize significantly less than the value at which we have recorded our investments if we were required to sell them for liquidity purposes. An inability to raise or access capital, and any required sale of all or a portion of our investments as a result, could have a material adverse effect on our business, financial condition or results of operations.

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We may be subject to risks associated with “covenant-lite” loans.

We may invest in “covenant-lite” loans, which generally refers to loans that do not have a complete set of financial maintenance covenants. Generally, “covenant-lite” loans provide borrower companies more freedom to negatively impact lenders because their covenants are incurrence-based, which means they are only tested and can only be breached following an affirmative action of the borrower, rather than by a deterioration in the borrower’s financial condition. Accordingly, to the extent we are exposed to “covenant-lite” loans, we may have a greater risk of loss on such investments as compared to investments in or exposure to loans with financial maintenance covenants.

Defaults by our portfolio companies could harm our operating results.

Our business is at risk if one of our borrowers defaults. Portfolio companies may fail to satisfy financial, operating or other covenants imposed by us or other lenders, which could lead to non-payment of interest and other defaults and, potentially, acceleration of its loans and foreclosure on its secured assets. These events could trigger cross-defaults under other agreements and jeopardize the portfolio company’s ability to meet its obligations, including under the debt or equity securities we hold. We also may incur expenses to the extent necessary to recover upon a default or to negotiate new terms, which may include the waiver of certain financial covenants, with the defaulting portfolio company.

We may not realize gains from our equity investments .

We may purchase common stock and other equity securities, including warrants, alongside our debt investments. Although equity securities have historically generated higher average total returns than fixed-income securities over the long term, equity securities have also experienced significantly more volatility in those returns. The equity securities we acquire may fail to appreciate and may decline in value or become worthless, and our ability to recover our investment depends on our portfolio company's success. Investments in equity securities involve a number of significant risks, including the risk of further dilution as a result of additional issuances, inability to access additional capital and failure to pay current distributions. Investments in preferred securities involve special risks, such as the risk of deferred distributions, credit risk, illiquidity and limited voting rights. In addition, we may from time to time make non-control, equity investments in portfolio companies. Our goal is ultimately to realize gains upon our disposition of these equity interests. However, the equity interests we receive may not appreciate in value and, in fact, may decline in value. Accordingly, we may not be able to realize gains from our equity interests, and any gains that we do realize on the disposition of any equity interests may not be sufficient to offset any other losses we experience. We also may be unable to realize any value if a portfolio company does not have a liquidity event, such as a sale of the business, recapitalization or public offering, which would allow us to sell the underlying equity interests. We often seek puts or similar rights to give us the right to sell our equity securities back to the portfolio company issuer; however, we may be unable to exercise these put rights for the consideration provided in our investment documents if the issuer is in financial distress.

Prepayments of our debt investments by our portfolio companies could adversely impact our results of operations and reduce our return on equity.

We are subject to the risk that the debt investments we make in our portfolio companies may be prepaid prior to maturity, the specific timing of which we do not control. When this occurs, we will generally reinvest these proceeds in temporary investments, pending their future investment in new portfolio companies. These temporary investments will typically have substantially lower yields than the debt being prepaid and we could experience significant delays in reinvesting these amounts. Any future investment in a new portfolio company may also be at lower yields than the debt that was repaid. As a result, our results of operations could be materially adversely affected if one or more of our portfolio companies elect to prepay amounts owed to us. Additionally, prepayments could negatively impact our return on equity, which could result in a decline in the market price of our securities.

The loans we make in portfolio companies may become non-performing .

A loan or debt obligation may become non-performing for a variety of reasons. Such non-performing loans may require substantial workout negotiations or restructuring that may entail, among other things, a substantial reduction in the interest rate, a substantial write-down of the principal amount of the loan and/or the deferral of payments. In addition, such negotiations or restructuring may be quite extensive and protracted over time, and therefore may result in substantial uncertainty with respect to the ultimate recovery. We also may incur additional expenses to the extent that it is required to seek recovery upon a default on a loan or participate in the restructuring of such obligation. The liquidity for defaulted loans may be limited, and, to the extent that defaulted loans are sold, it is highly unlikely that the proceeds from such sale will be equal to the

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amount of unpaid principal and interest thereon. In connection with any such defaults, workouts or restructuring, although we exercise voting rights with respect to an individual loan, we may not be able to exercise votes in respect of a sufficient percentage of voting rights with respect to such loan to determine the outcome of such vote.

We are exposed to risks associated with changes in interest rates.

Because we have borrowed and intend to continue to borrow money to make investments, our net investment income depends, in part, upon the difference between the rate at which we borrow funds and the rate at which we invest those funds. As a result, we can offer no assurance that a significant change in market interest rates will not have a material adverse effect on our net investment income. The Federal Reserve held interest rates steady in the first quarter of 2025 following three consecutive rate reductions in the third and fourth quarter of 2024. The Federal Reserve has indicated that there may be additional cuts in the future; however, future reductions to benchmark rates are not certain. It is possible that the Federal Reserve's tightening cycle could also result in a recession in the United States.

If interest rates decline and we are in a prolonged low interest rate environment, the difference between the total interest income earned on interest earning assets and the total interest expense incurred on interest bearing liabilities may be compressed, reducing our net income, due to the fixed interest rates on the October 2026 Notes, the August 2028 Notes, the 2029 Convertible Notes and the SBA Debentures. Conversely, in an elevated interest rate environment, such difference could potentially increase thereby increasing our net income. However, if interest rates remain elevated, there is a risk that portfolio companies in which we hold floating rate loans will be unable to pay interest amounts, which could increase the risk of payment defaults and cause the portfolio companies to defer or cancel needed investment. Any failure of one or more portfolio companies to repay or refinance its debt at or prior to maturity or the inability of one or more portfolio companies to make ongoing payments following an increase in contractual interest rates could have a material adverse effect on our business, financial condition, results of operations and cash flows. The value of our securities could also be reduced from an increase in market credit spreads as rates available to investors could make an investment in our securities less attractive than alternative investments.

Further, a continued period of elevated interest rates could also adversely affect our performance if such increases cause our borrowing costs to rise at a rate in excess of the rate that our investments yield. In the current and any future periods of elevated interest rates, to the extent we issue fixed rate debt at higher 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.

There may be circumstances in which our debt investments could be subordinated to claims of other creditors or we could be subject to lender liability claims.

Even though we may have structured our investments as secured debt, if one of our portfolio companies were to go bankrupt, depending on the facts and circumstances, and based upon principles of equitable subordination, a bankruptcy court could subordinate all or a portion of our claim to that of other creditors and transfer any lien securing our subordinated claim to the bankruptcy estate. The principles of equitable subordination based on case law generally provide that a claim may be subordinated only if its holder is guilty of misconduct or where the secured debt is re-characterized as an equity investment and the senior lender has actually provided significant managerial assistance to the bankrupt debtor. We also may be subject to lender liability claims for actions taken by us with respect to a borrower’s business or instances where we exercise control over the borrower. It is possible that we could become subject to a lender’s liability claim, including as a result of actions taken in rendering significant managerial assistance or actions to compel and collect payments from the borrower outside the ordinary course of business.

As a RIC, we may have certain regulatory restrictions that could preclude us from making additional investments in our portfolio companies.

We may not have the ability to make additional investments in our portfolio companies.  After our initial investment in a portfolio company, we may be called upon from time to time to provide additional funds to that company or have the opportunity to increase our investment or make follow-on investments.  Any decisions not to make a follow-on investment or any inability on our part to make such an investment may have a negative impact on a portfolio company in need of such an investment, may result in a missed opportunity for us to increase our participation in a successful operation, or may reduce the expected return on the investment.

We generally will not control our portfolio companies.

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We do not, and do not expect to, control most of our portfolio companies, even though we may have board representation or board observation rights, and our debt agreements may contain certain restrictive covenants. As a result, we are subject to the risk that a portfolio company in which we invest may make business decisions with which we disagree, and the management of such company, as representatives of the holders of their common equity, may take risks or otherwise act in ways that do not serve our interests as debt investors. Due to the lack of liquidity of our investments in private companies, we may not be able to dispose of our interests in our portfolio companies as readily as we would like or at an appropriate valuation. As a result, a portfolio company may make decisions that could decrease the value of our portfolio holdings.

Second priority liens on collateral securing loans that we make to our portfolio companies may be subject to control by senior creditors with first priority liens. Further, in cases where we invest in unsecured subordinated debt, we would not have any lien on the collateral. In each of these cases, if there is a default, the value of the collateral may not be sufficient to repay in full both the first priority creditors and us.

Certain loans that we make are either secured by a second priority security interest in the same collateral pledged by a portfolio company to secure senior debt owed by the portfolio company to commercial banks or other traditional lenders, or in the case of unsecured subordinated debt, we have no lien at all on the assets. Often the senior lender has procured covenants from the portfolio company prohibiting the incurrence of additional secured debt without the senior lender’s consent. Prior to and as a condition of permitting the portfolio company to borrow money from us secured by the same collateral pledged to the senior lender, or in the case where we invest in unsecured subordinated debt, the senior lender will require assurances that it will control the disposition of any collateral in the event of bankruptcy or other default. In many cases, the senior lender will require us to enter into an “intercreditor agreement” prior to permitting the portfolio company to borrow from us. Typically, the intercreditor agreements we are requested to execute expressly subordinate our debt instruments to those held by the senior lender and further provide that the senior lender will control: (1) the commencement of foreclosure or other proceedings to liquidate and collect on the collateral, subject to a negotiated “standstill period” after which we can initiate; (2) the nature, timing and conduct of foreclosure or other collection proceedings, subject to a negotiated “standstill period” after which we can initiate; (3) the amendment of any collateral document; (4) the release of the security interests in respect of any collateral; and (5) the waiver of defaults under any security agreement. Because of the control we may cede to senior lenders under intercreditor agreements we may enter, we may be unable to realize the proceeds of any collateral securing some of our loans.

Our portfolio companies may incur debt that ranks equally with, or senior to, our investments in those companies.

We invest primarily in the secured term debt of middle market companies and equity issued by middle market companies. Our portfolio companies may have, or may be permitted to incur, other debt that ranks equally with, or senior to, the debt in which we invest. By their terms, these debt instruments may entitle the holders to receive payment of interest or principal on or before the dates on which we are entitled to receive payments with respect to the debt instruments in which we invest. Also, in the event of insolvency, liquidation, dissolution, reorganization or bankruptcy of a portfolio company, holders of debt instruments ranking senior to our investment in that portfolio company would typically be entitled to receive payment in full before we receive any distribution. After repaying its senior creditors, the portfolio company may not have any remaining assets to use for repaying its obligation to us. In the case of debt ranking equally with debt instruments in which we invest, we would have to share on an equal basis any distributions with other creditors holding such debt in the event of an insolvency, liquidation, dissolution, reorganization or bankruptcy of the relevant portfolio company.

Changes in healthcare laws and other regulations, or the enforcement or interpretation of such laws or regulations, applicable to some of our portfolio companies’ businesses may constrain their ability to offer their products and services.

Our investments in the healthcare sector are subject to substantial risk. The laws and rules governing the business of healthcare companies and interpretations of those laws and rules are subject to frequent change. Broad latitude is given to the agencies administering those regulations. Existing or future laws and rules could force our portfolio companies engaged in healthcare to change how they do business, restrict revenue, increase costs, change reserve levels and change business practice, require significant systems enhancements, or render their products or services less profitable or obsolete, any of which could have a material adverse effect on their results of operations. Healthcare companies often must obtain and maintain regulatory approvals to market many of their products, change prices for certain regulated products and consummate some of their acquisitions and divestitures. Delays in obtaining or failing to obtain or maintain these approvals could reduce revenue or increase costs. There has also been an increased political and regulatory focus on healthcare laws in recent years, and policy changes on the local, state and federal level could have a material effect on the business and operations of some of our portfolio companies.

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Additionally, because of the possibility of additional changes to healthcare laws and regulations under the current U.S. presidential administration, we cannot quantify or predict with any certainty the likely impact on our portfolio companies, our business model, prospects, financial condition or results of operations. We also anticipate that Congress, state legislatures, and third-party payors may continue to review and assess alternative healthcare delivery and payment systems and may in the future propose and adopt legislation or policy changes or implementations effecting additional fundamental changes in the healthcare delivery system. We cannot assure you as to the ultimate content, timing, or effect of changes, nor is it possible at this time to estimate the impact of any such potential legislation on certain of our portfolio companies, our business model, prospects, financial condition or results of operations.

We may be subject to risks associated with our investments in the business services industry.

Portfolio companies in the business services sector are subject to many risks, including the negative impact of regulation, changing technology, a competitive marketplace and difficulty in obtaining financing. Portfolio companies in the business services industry must respond quickly to technological changes and understand the impact of these changes on customers’ preferences. Adverse economic, business, or regulatory developments affecting the business services sector could have a negative impact on the value of our investments in portfolio companies operating in this industry, and therefore could negatively impact our business and results of operations.

RISKS RELATED TO OUR SECURITIES

The market price of our common stock may fluctuate significantly .

The market price of our common stock will fluctuate with market conditions and other factors. Our common stock is intended for long-term investors and should not be treated as a trading vehicle. The market price and liquidity of the market for shares of our common stock may be significantly affected by numerous factors, some of which are beyond our control and may not be directly related to our operating performance. These factors include:

• significant volatility in the market price and trading volume of securities of BDCs or other companies in our sector, which is not necessarily related to the operating performance of these companies;

• exclusion of our common stock from certain market indices, such as the Russell 2000 Financial Services Index, which could reduce the ability of certain investment funds to own our common stock and put short-term selling pressure on our common stock;

• changes in regulatory policies, accounting pronouncements or tax guidelines, particularly with respect to BDCs or RICs;

• failure to qualify for RIC tax treatment;

• our origination activity, including the pace of, and competition for, new investment opportunities;

• changes or perceived changes in earnings or variations of operating results;

• changes or perceived changes in the value of our portfolio of investments;

• any shortfall in our investment income or net investment income or any increase in losses from levels expected by investors or securities analysts;

• proposed, or completed, offerings of our securities, including securities other than our common stock;

• departure of our key personnel;

• operating performance of companies comparable to us;

• credit market changes;

• general economic trends and other external factors; and

• loss of a major funding source.

Investing in shares of our common stock may involve an above average degree of risk.

The investments we make in accordance with our investment objective may result in a higher amount of risk, volatility or loss of principal than alternative investment options. Our investments in portfolio companies may be highly speculative, and therefore, an investment in our common stock may not be suitable for investors with lower risk tolerance.

Shares of closed-end investment companies, including BDCs, may trade at a discount to their NAV.

Our common stock is listed on the Nasdaq Global Select Market.  Shareholders desiring liquidity may sell their shares on the Nasdaq Global Select Market at current market value, which could be below NAV.  Shares of closed-end investment companies frequently trade at discounts from NAV, which is a risk separate and distinct from the risk that a fund’s performance will cause its NAV to decrease. We cannot predict whether our common stock will trade at, above or below NAV. In addition, if our common stock trades below our NAV per share, we will generally not be able to issue additional common stock at the

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market price unless our shareholders approve such a sale and our Board of Directors make certain determinations. See “Shareholders may incur dilution if we sell shares of our common stock in one or more offerings at prices below the then current NAV per share of our common stock or issue securities that are convertible to shares of our common stock” for a discussion of the risks related to us issuing shares of our common stock below NAV.

The Notes are unsecured and therefore are effectively subordinated to any existing and future secured indebtedness, including indebtedness under our Corporate Credit Facility.

Each of the October 2026 Notes, the August 2028 Notes and the 2029 Convertible Notes (collectively, the “Notes”) are not secured by any of our assets or any of the assets of any of our subsidiaries. As a result, the Notes are effectively subordinated to any secured indebtedness we or our subsidiaries have currently incurred (including our Corporate Credit Facility) or may incur in the future (or any indebtedness that is initially unsecured as to which we subsequently grant a security interest) to the extent of the value of the assets securing such indebtedness. In any liquidation, dissolution, bankruptcy or other similar proceeding, the holders of any of our secured indebtedness or secured indebtedness of our subsidiaries may assert rights against the assets pledged to secure that indebtedness in order to receive full payment of their indebtedness before the assets may be used to pay other creditors, including the holders of the Notes. As of March 31, 2025, we had $235.0 million in outstanding indebtedness under our Corporate Credit Facility, which is secured by (1) all of the present and future property and assets of the Company and the guarantors and (2) 100.0% of the equity interests in the Company’s wholly owned subsidiaries (except for the assets held by the SBIC Subsidiaries and SPV).

The Notes are structurally subordinated to the indebtedness and other liabilities of our subsidiaries, including the SBA-guaranteed debentures and the SPV Credit Facility.

The Notes are obligations exclusively of the Company, and not of any of our subsidiaries. None of our subsidiaries are a guarantor of the Notes, and the Notes are not required to be guaranteed by any subsidiary we may acquire or create in the future. Any assets of our subsidiaries will not be directly available to satisfy the claims of our creditors, including holders of the Notes. Except to the extent we are a creditor with recognized claims against our subsidiaries, all claims of creditors of our subsidiaries will have priority over our equity interests in such entities (and therefore the claims of our creditors, including holders of the Notes) with respect to the assets of such entities. Even if we are recognized as a creditor of one or more of these entities, our claims would still be effectively subordinated to any security interests in the assets of any such entity and to any indebtedness or other liabilities of any such entity senior to our claims. Consequently, the Notes will be structurally subordinated to all indebtedness and other liabilities, including trade payables, of any of our existing or future subsidiaries (including the SBA-guaranteed debentures and the SPV Credit Facility). As of March 31, 2025, SBIC I had $175.0 million in SBA-guaranteed debentures outstanding, and we had $108.0 million outstanding under our SPV Credit Facility, which is secured by all of SPV's assets.

The respective indentures under which the October 2026 Notes, the August 2028 Notes and the 2029 Convertible Notes were issued contain limited protection for holders of the October 2026 Notes, the August 2028 Notes and the 2029 Convertible Notes.

The respective indenture under which each of the Notes were issued offer limited protection to holders of the Notes. The terms of the respective indenture and the Notes do not restrict our or any of our subsidiaries’ ability to engage in, or otherwise be a party to, a variety of corporate transactions, circumstances or events that could have a material adverse impact on the investment of the holders of the Notes, respectively. In particular, the terms of the respective indenture and the Notes will not place any restrictions on our or our subsidiaries’ ability to:

• issue securities or otherwise incur additional indebtedness or other obligations, including (1) any indebtedness or other obligations that would be equal in right of payment to the Notes, (2) any indebtedness or other obligations that would be secured and therefore rank effectively senior in right of payment to the Notes to the extent of the values of the assets securing such debt, (3) indebtedness of ours that is guaranteed by one or more of our subsidiaries and which therefore is structurally senior to the Notes and (4) securities, indebtedness or obligations issued or incurred by our subsidiaries that would be senior to our equity interests in those entities and therefore rank structurally senior to the Notes with respect to the assets of our subsidiaries, in each case other than an incurrence of indebtedness or other obligation that would cause a violation of Section 18(a)(1)(A) as modified by Section 61(a)(2) of the 1940 Act or any successor provisions, whether or not we continue to be subject to such provisions of the 1940 Act, but giving effect, in each case, to any exemptive relief granted to us by the SEC. Currently, these provisions generally prohibit us from incurring additional borrowings, including through the issuance of additional debt securities, unless our asset coverage, as defined in the 1940 Act, equals at least 150% after such borrowings;

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• pay dividends on, or purchase or redeem or make any payments in respect of, capital stock or other securities ranking junior in right of payment to the Notes, including subordinated indebtedness, except that we have agreed that, for the period of time during which the Notes are outstanding, we will not violate Section 18(a)(1)(B) as modified by (i) Section 61(a)(2) of the 1940 Act or any successor provisions and after giving effect to any exemptive relief granted to us by the SEC and (ii) the following two exceptions: (A) we will be permitted to declare a cash dividend or distribution notwithstanding the prohibition contained in Section 18(a)(1)(B) as modified by Section 61(a)(2) of the 1940 Act or any successor provisions, but only up to such amount as is necessary for us to maintain our status as a RIC under subchapter M of the Code; and (B) this restriction will not be triggered unless and until such time as our asset coverage has not been in compliance with the minimum asset coverage required by 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 us by the SEC) for more than six consecutive months. If Section 18(a)(1)(B) as modified by Section 61(a)(2) of the 1940 Act were currently applicable to us in connection with this offering, these provisions would generally prohibit us from declaring any cash dividend or distribution upon any class of our capital stock, or purchasing any such capital stock if our asset coverage, as defined in the 1940 Act, were below 150% at the time of the declaration of the dividend or distribution or the purchase and after deducting the amount of such dividend, distribution or purchase;

• sell assets (other than certain limited restrictions on our ability to consolidate, merge or sell all or substantially all of our assets);

• enter into transactions with affiliates;

• create liens (including liens on the shares of our subsidiaries) or enter into sale and leaseback transactions;

• make investments; or

• create restrictions on the payment of dividends or other amounts to us from our subsidiaries.

The respective indenture governing the October 2026 Notes will require us to make an offer to purchase the October 2026 Notes in connection with a change of control or any other event, respectively. See "We may not be able to repurchase the October 2026 Notes upon a Change of Control Repurchase Event" for more information.

In addition, the respective indenture governing the 2029 Convertible Notes permits holders of the 2029 Convertible Notes to require us to repurchase all or any portion of their 2029 Convertible Notes upon the occurrence of a fundamental change at a fundamental change repurchase price equal to 100% of the principal amount of the 2029 Convertible Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date. See "We may not have the ability to raise the funds necessary to settle conversions of the 2029 Convertible Notes in cash or to repurchase the 2029 Convertible Notes upon a fundamental change, and our future debt may contain limitations on our ability to pay cash upon conversion or repurchase of the 2029 Convertible Notes" for more information.

Furthermore, the terms of the respective indenture and the Notes do not protect holders of the Notes, respectively, in the event that we experience changes (including significant adverse changes) in our financial condition, results of operations or credit ratings, if any, as they do not require that we or our subsidiaries adhere to any financial tests or ratios or specified levels of net worth, revenues, income, cash flow, or liquidity.

Our ability to recapitalize, incur additional debt (including additional debt that matures prior to the maturity of the Notes), and take a number of other actions that are not limited by the terms of each of the Notes may have important consequences for you as a holder of the Notes, including making it more difficult for us to satisfy our obligations with respect to the Notes or negatively affecting the market value of the Notes.

Other debt we issue or incur in the future could contain more protections for its holders than the respective indenture and the Notes, including additional covenants and events of default. The issuance or incurrence of any such debt with incremental protections could affect the market for, trading levels, and prices of the Notes.

We may not be able to repurchase the October 2026 Notes upon a Change of Control Repurchase Event.

Upon a Change of Control Repurchase Event (as defined in the indenture governing the October 2026 Notes), holders of the October 2026 Notes may require us to repurchase for cash some or all of the October 2026 Notes at a repurchase price equal to 100% of the aggregate principal amount of the October 2026 Notes being repurchased, plus their respective accrued and unpaid interest to, but not including, the repurchase date. We may not be able to repurchase the October 2026 Notes upon a Change of Control Repurchase Event because we may not have sufficient funds. Before making any such repurchase of the October 2026 Notes, we would also have to comply with certain requirements under our Corporate Credit Facility, to the extent such requirements remain in effect at such time, or otherwise obtain consent from the lenders under our Corporate Credit Facility. The terms of our Corporate Credit Facility and our SPV Credit Facility also provide that certain change of control events will constitute an event of default thereunder entitling the respective lenders to accelerate any indebtedness outstanding

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under such credit facilities at that time and to terminate such credit facilities. In addition, the occurrence of a Change of Control Repurchase Event enabling the holders of the October 2026 Notes to require the mandatory purchase of the October 2026 Notes, respectively, would likely constitute an event of default under our Corporate Credit Facility entitling the lenders under our Corporate Credit Facility to accelerate any indebtedness outstanding under the Corporate Credit Facility at that time and to terminate the Corporate Credit Facility. Our and our subsidiaries' future financing facilities may contain similar restrictions and provisions. Our failure to purchase such tendered October 2026 Notes upon the occurrence of such Change of Control Repurchase Event would cause an event of default under the indenture governing the October 2026 Notes, and a cross-default under the agreements governing certain of our other indebtedness, including under the agreements governing our Corporate Credit Facility and likely under the agreements governing our SPV Credit Facility, which may result in the acceleration of such indebtedness requiring us to repay such indebtedness immediately. If the holders of the October 2026 Notes exercise their respective right to require us to repurchase the October 2026 Notes, respectively, upon a Change of Control Repurchase Event, the financial effect of any such repurchase could cause a default under our current and future debt instruments, even if the Change of Control Repurchase Event itself would not cause a default. If a Change of Control Repurchase Event were to occur, we may not have sufficient funds to repay any such accelerated indebtedness.

We may not have the ability to raise the funds necessary to settle conversions of the 2029 Convertible Notes in cash or to repurchase the 2029 Convertible Notes upon a fundamental change, and our future debt may contain limitations on our ability to pay cash upon conversion or repurchase of the 2029 Convertible Notes.

Holders of the 2029 Convertible Notes will have the right to require us to repurchase all or any portion of their 2029 Convertible Notes upon the occurrence of a fundamental change at a fundamental change repurchase price equal to 100% of the principal amount of the 2029 Convertible Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date. In addition, upon conversion of the 2029 Convertible Notes, unless we elect to deliver solely shares of our common stock to settle such conversion (other than paying cash in lieu of delivering any fractional share), we will be required to make cash payments in respect of the 2029 Convertible Notes being converted. However, we may not have enough available cash or be able to obtain financing at the time we are required to make repurchases of 2029 Convertible Notes surrendered therefor or pay cash with respect to 2029 Convertible Notes being converted. In addition, our ability to repurchase the 2029 Convertible Notes or to pay cash upon conversions of the 2029 Convertible Notes may be limited by law, by regulatory authority or by agreements governing our future indebtedness. Our failure to repurchase 2029 Convertible Notes at a time when the repurchase is required by the indenture governing the 2029 Convertible Notes or to pay any cash payable on future conversions of the 2029 Convertible Notes as required by the indenture governing the 2029 Convertible Notes would constitute a default under the indenture governing the 2029 Convertible Notes. A default under the indenture governing the 2029 Convertible Notes or the fundamental change itself could also lead to a default under agreements governing our future indebtedness. If the repayment of the related indebtedness were to be accelerated after any applicable notice or grace periods, we may not have sufficient funds to repay the indebtedness and repurchase the 2029 Convertible Notes or make cash payments upon conversions thereof.

The Corporate Credit Facility may limit our ability to pay any cash amount upon the conversion or repayment of the 2029 Convertible Notes.

The Corporate Credit Facility may limit our ability to make cash payments on the conversion or repayment of the 2029 Convertible Notes if an event of default exists under the Corporate Credit Facility or if, after giving effect to such conversion or repayment (and any additional indebtedness incurred in connection with such conversion or a repayment), we would not be in pro forma compliance with our financial covenants under the Corporate Credit Facility. Any new credit facility that we may enter into may have similar restrictions. Our failure to make cash payments upon the conversion or repayment of the 2029 Convertible Notes as required under the terms of the 2029 Convertible Notes would permit holders of the 2029 Convertible Notes to accelerate our obligations under the 2029 Convertible Notes .

Conversion of the 2029 Convertible Notes may dilute the ownership interest of our stockholders or may otherwise depress the price of our common stock.

The conversion of some or all of the 2029 Convertible Notes may dilute the ownership interests of our stockholders. Upon conversion of the 2029 Convertible Notes, we have the option to pay or deliver, as the case may be, cash, shares of our common stock, or a combination of cash and shares of our common stock. If we elect to settle our conversion obligation in shares of our common stock or a combination of cash and shares of our common stock, any sales in the public market of our common stock issuable upon such conversion could adversely affect prevailing market prices of our common stock. In addition, the existence of the 2029 Convertible Notes may encourage short selling by market participants because the conversion of the 2029 Convertible Notes could be used to satisfy short positions, or anticipated conversion of the 2029 Convertible Notes into shares of our common stock could depress the price of our common stock.

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While a trading market developed after issuing the October 2026 Notes, August 2028 Notes and the 2029 Convertible Notes, we cannot assure you that an active trading market for the October 2026 Notes, the August 2028 Notes and the 2029 Convertible Notes will be maintained.

While a trading market developed after issuing the Notes, we cannot assure you that an active and liquid market for the Notes will be maintained. We do not intend to list the October 2026 Notes or the 2029 Convertible Notes on any securities exchange or for quotation of the October 2026 Notes or the 2029 Convertible Notes on any automated dealer quotation system. If the October 2026 Notes or the 2029 Convertible Notes are traded after their initial issuance, they may trade at a discount to their public offering price depending on prevailing interest rates, the market for similar securities, our credit ratings, our financial condition, performance and prospects, general economic conditions.

Although the August 2028 Notes are listed on the Nasdaq Global Select Market under the trading symbol "CSWCZ," we cannot assure you that an active and liquid trading market will be maintained for the August 2028 Notes or that holders will be able to sell their August 2028 Notes. In addition, the August 2028 Notes may trade at a discount from their initial offering price depending on prevailing interest rates, the market for similar securities, our credit rating, general economic conditions, our financial condition, performance and prospects and other factors.

The respective underwriters may discontinue market-making in the Notes at any time at their sole discretion. In addition, any market-making activity will be subject to limits imposed by law.

If we default on our obligations to pay our other indebtedness, we may not be able to make payments on the Notes.

Any default under the agreements governing our indebtedness, including a default under our Corporate Credit Facility, our SPV Credit Facility, the respective indenture governing the Notes, or other indebtedness to which we may be a party that is not waived by the required lenders or holders, and the remedies sought by lenders or the holders of such indebtedness could make us unable to pay principal, premium, if any, and interest on the Notes and substantially decrease the market value of the Notes. If we are unable to generate sufficient cash flow and are otherwise unable to obtain funds necessary to meet required payments of principal, premium, if any, and interest on our indebtedness, or if we otherwise fail to comply with the various covenants, including financial and operating covenants, in the instruments governing our indebtedness (including the Corporate Credit Facility, the SPV Credit Facility and the Notes), we could be in default under the terms of the agreements governing such indebtedness, including the Notes. In the event of such default, the holders of such indebtedness could elect to declare all the funds borrowed thereunder to be due and payable, together with accrued and unpaid interest, the lenders under the Corporate Credit Facility, the SPV Credit Facility or other debt we may incur in the future could elect to terminate their commitment, cease making further loans and institute foreclosure proceedings against our assets, and we could be forced into bankruptcy or liquidation.

Our ability to generate sufficient cash flow in the future is, to some extent, subject to general economic, financial, competitive, legislative and regulatory factors as well as other factors that are beyond our control. We cannot assure you that our business will generate cash flow from operations, or that future borrowings will be available to us under the Corporate Credit Facility, the SPV Credit Facility or otherwise, in an amount sufficient to enable us to meet our payment obligations under the Notes, our other debt, and to fund other liquidity needs.

If our operating performance declines and we are not able to generate sufficient cash flow to service our debt obligations, we may in the future need to refinance or restructure our debt, including the Notes, sell assets, reduce or delay capital investments, seek to raise additional capital or seek to obtain waivers from the lenders under the Corporate Credit Facility, the SPV Credit Facility, the holders of the Notes, or other debt that we may incur in the future to avoid being in default. If we are unable to implement one or more of these alternatives, we may not be able to meet our payment obligations under the Notes and our other debt. If we breach our covenants under the Corporate Credit Facility, the SPV Credit Facility, the respective indenture governing the Notes, or any of our other debt and seek a waiver, we may not be able to obtain a waiver from the required lenders or holders thereof. If this occurs, we would be in default under the Corporate Credit Facility, the SPV Credit Facility, the Notes, the respective indenture governing the Notes, or other debt, the lenders or holders could exercise rights as described above, and we could be forced into bankruptcy or liquidation. If we are unable to repay debt, lenders having secured obligations could proceed against the collateral securing the debt. Because each of the Corporate Credit Facility and the SPV Credit Facility has, and any future credit facilities will likely have, customary cross-default provisions, if the indebtedness under the Notes, the Corporate Credit Facility, the SPV Credit Facility or under any future credit facility is accelerated, we may be unable to repay or finance the amounts due.

Terms relating to redemption may materially adversely affect the return on our debt securities.

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The October 2026 Notes are redeemable, in whole or in part, at any time at our option prior to July 1, 2026 at par plus a "make-whole" premium, and thereafter at par. The August 2028 Notes are redeemable, in whole or in part, at any time at our option after August 1, 2025, at par plus accrued and unpaid interest. We may choose to redeem the Notes at times when prevailing interest rates are lower than the interest rate paid on the Notes.

We may not redeem the 2029 Convertible Notes prior to November 20, 2027. We may redeem for cash all or any portion of the 2029 Convertible Notes (subject to a partial redemption limitation), at our option, on a redemption date on or after November 20, 2027 and on or before the 45th scheduled trading day immediately prior to the maturity date if the last reported sale price of our common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which we provide notice of redemption at a redemption price equal to 100% of the principal amount of the 2029 Convertible Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date.

We currently intend to pay quarterly dividends. However, in the future we may not pay any dividends depending on a variety of factors.

While we intend to pay dividends to our shareholders out of taxable income available for distribution, there can be no assurance that we will do so. Any dividends that we do pay may be payable in cash, in our common stock, or in stock in any of our holdings or in a combination of all three. All dividends will be paid at the discretion of our Board of Directors and will depend upon our financial condition, maintenance of our RIC tax treatment, and compliance with applicable BDC regulations.

We currently pay dividends in cash. However, in the future we may choose to pay dividends in our own stock, in which case you may be required to pay tax in excess of the cash you receive.

We may distribute taxable dividends that are payable in part in our common stock.  Under certain applicable provisions of the Code and the Treasury regulations, distributions payable by us in cash or in shares of stock (at the shareholders election) would satisfy the annual distribution requirement for a RIC. The IRS has issued a revenue procedure providing that a dividend payable in stock or in cash at the election of the shareholders will be treated as a taxable dividend eligible for the dividends paid deduction provided that at least 20% of the total dividend is payable in cash and certain other requirements are satisfied. Taxable shareholders receiving such dividends will be required to include the full amount of the dividend as ordinary income (or as long-term capital gain to the extent such dividend is properly reported as a capital gain dividend) to the extent of our current and accumulated earnings and profits for U.S. federal income tax purposes. As a result, a U.S. shareholder may be required to pay tax with respect to such dividends in excess of any cash received.  If a U.S. shareholder sells the stock it receives as a dividend in order to pay this tax, the sales proceeds may be less than the amount included in income with respect to the dividend, depending on the market price of our common stock at the time of the sale.  Furthermore, with respect to non-U.S. shareholders, we may be required to withhold U.S. tax with respect to such dividends, including in respect of all or a portion of such dividends payable in stock. If a significant number of our shareholders determine to sell shares of our common stock in order to pay taxes owed on dividends, it may put downward pressure on the trading price of our common stock.

We may not be able to invest a significant portion of the net proceeds from future capital raises on acceptable terms, which could harm our financial condition and operating results.

Delays in investing the net proceeds raised in an offering may cause our performance to be worse than that of other fully invested BDCs or other lenders or investors pursuing comparable investment strategies. We cannot assure you that we will be able to identify any investments that meet our investment objective or that any investment that we make will produce a positive return. We may be unable to invest the net proceeds of any offering on acceptable terms within the time period that we anticipate or at all, which could harm our financial condition and operating results.

In the event that we cannot invest our net proceeds as desired we will invest the net proceeds from any offering primarily in cash, cash equivalents, U.S. Government securities and other high-quality debt investments that mature in one year or less from the time of investment. These securities may have lower yields than our other investments and accordingly may result in lower distributions, if any, during such period.

Provisions of Texas law and our charter could deter takeover attempts and have an adverse impact on the price of our common stock.

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The Company maintains and, at least annually, reviews its information technology ("IT") and cybersecurity policies and procedures (the "Cybersecurity Program"). The Cybersecurity Program is aligned to the National Institute of Standards of Technology Cybersecurity Framework. The Cybersecurity Program includes technical security controls, policy enforcement mechanisms, monitoring systems, tools and related services, which include tools and services from third-party providers, and management oversight to assess, identify and manage risks from cybersecurity threats. Management has implemented and continues to implement risk-based controls designed to prevent, detect and respond to information security threats.

As part of our overall cybersecurity risk management process, our management engages at least annually in the review and evaluation of our risks relating to our Cybersecurity Program. Additionally, as part of our Rule 38a-1 compliance program, we review at least annually the compliance policies and procedures of our key service providers, including documentation discussing each service providers' information security controls. Any failure in our key service providers' cybersecurity systems could have a material impact on our operating results. See "Risk Factors - Risks Related to our Business and Structure - A failure of cybersecurity systems, as well as the occurrence of events unanticipated in our disaster recovery systems and management continuity planning, could impair our ability to conduct business effectively."

Additionally, the Cybersecurity Program includes quarterly general cybersecurity awareness and data protection training for employees as well as regular phishing simulations. The Company also has annual certification requirements for employees with respect to certain policies supporting the cybersecurity program including the IT, Cybersecurity and Physical Security Policies and Procedures, the Disaster Recovery Business Continuity Plan, the Social Media and Electronic Communications Policy and the Privacy Policy.

Our Cybersecurity Program is administered by our Executive Vice President of Accounting and our Chief Compliance Officer . These individuals, along with our external legal counsel and third-party IT providers serve as the incident response handlers in connection with any material cybersecurity incident under our Incident Response Plan. The Incident Response Plan provides guidelines for responding to a cybersecurity incident and facilitates coordination between the necessary parties. This includes notification to our senior management, and if material, reported to Board of Directors. We also utilize the services of IT and cybersecurity consultants and experts in the evaluation and periodic testing of our IT and cybersecurity systems to recommend improvements to our Cybersecurity Program. The Company maintains a cybersecurity insurance policy, which includes services of additional third party experts in the event of a cyber incident. The Company has not experienced any material cybersecurity incident, and the Company is not aware of any cybersecurity risks that are reasonably likely to materially affect its business.

The Board has the primary responsibility for overseeing and reviewing the guidelines and policies with respect to risk management, including cybersecurity . The Board receives quarterly updates to the Cybersecurity Program from the Company's management. These updates include the results of the cybersecurity risk assessments, the planning and results of the periodic testing by our third-party IT and cybersecurity consultants, updates and enhancements to the Cybersecurity Program and the Incident Response Plan, and reporting of additional cybersecurity data metrics.

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SENIOR SECURITIES

Information about our senior securities is shown in the following table for the years ended March 31, 2025, 2024, 2023 2022, 2021, 2020, 2019, 2018 and 2017. The report of RSM US LLP, our independent registered public accountants for the fiscal years ended March 31, 2025, 2024, 2023 2022, 2021, 2020, 2019 and 2018, on the senior securities table as of March 31, 2025, 2024, 2023 2022, 2021, 2020, 2019 and 2018 is attached as an exhibit to this Annual Report on Form 10-K.

Class and Year						Total Amount Outstanding Exclusive of Treasury Securities (1)						Asset Coverage per Unit (2)						Involuntary Liquidating Preference per Unit (3)						Average Market Value per Unit (4)
						(dollars in thousands)
Corporate Credit Facility
2025						$	235,000					$	2,112					—						N/A
2024						265,000						2,205						—						N/A
2023						235,000						2,125						—						N/A
2022						205,000						1,850						—						N/A
2021						120,000						1,873						—						N/A
2020						154,000						1,889						—						N/A
2019						141,000						2,495						—						N/A
2018						40,000						4,162						—						N/A
2017						25,000						12,403						—						N/A
SPV Credit Facility
2025						$	108,000					$	2,112					—						N/A
2024						—						2,205						—						N/A
December 2022 Notes
2020						$	77,136					$	1,889					—						$	22.01
2019						77,136						2,495						—						25.50
2018						57,500						4,162						—						25.40
October 2024 Notes
2021						$	125,000					$	1,873					—						N/A
2020						75,000						1,889						—						N/A
January 2026 Notes
2024						$	140,000					$	2,205					—						N/A
2023						140,000						2,125						—						N/A
2022						140,000						1,850						—						N/A
2021						140,000						1,873						—						N/A
October 2026 Notes
2025						$	150,000					$	2,112					—						N/A
2024						150,000						2,205						—						N/A
2023						150,000						2,125						—						N/A
2022						150,000						1,850						—						N/A
August 2028 Notes
2025						$	71,875					$	2,112					—						$	25.59
2024						71,875						2,205						—						25.83

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2029 Convertible Notes
2025						$	230,000					$	2,112					—						N/A

(1) Total amount of each class of senior securities outstanding at the end of the period presented.

(2) Asset coverage per unit is expressed in terms of dollar amounts per $1,000 of indebtedness. On August 11, 2021, we received an exemptive order from the SEC to permit us to exclude the senior securities issued by the SBIC Subsidiaries from the definition of senior securities in the asset coverage requirement applicable to CSWC under the 1940 Act. The asset coverage ratio for a class of senior securities representing indebtedness is calculated as our consolidated total assets, less all liabilities and indebtedness not represented by senior securities (including the SBA Debentures, which represents indebtedness not represented by senior securities pursuant to our exemptive order), divided by senior securities representing indebtedness. Starting from the year ended March 31, 2024, the Company updated prior year asset coverage per unit values based on this calculation by subtracting SBA Debentures from consolidated total assets.

(3) The amount to which such class of senior security would be entitled upon the involuntary liquidation of the issuer in preference to any security junior to it. The “-” indicates information which the SEC expressly does not require to be disclosed for certain types of senior securities.

(4) Average market value per unit for our Corporate Credit Facility, SPV Credit Facility, October 2024 Notes, January 2026 Notes, October 2026 Notes and 2029 Convertible Notes is not applicable because these are not registered for public trading.

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Our common stock is traded on the Nasdaq Global Select Market under the symbol “CSWC.”

The following table sets forth, for each fiscal quarter within the two most recent fiscal years and the current fiscal year to date, the range of high and low selling prices of our common stock as reported on the Nasdaq Global Select Market, as applicable, and the sales price as a percentage of the NAV per share of our common stock.

									Price Range
			NAV (1)						High						Low						Premium (Discount) of High Sales Price to NAV (2)						Premium (Discount) of Low Sales Price to NAV (2)
Year ending March 31, 2026
First Quarter (through May 16, 2025)			*						$	22.49					$	17.46					*						*
Year ended March 31, 2025
Fourth Quarter			$	16.70					$	23.86					$	21.23					42.87		%				27.13		%
Third Quarter			16.59						25.90						20.68						56.12						24.65
Second Quarter			16.59						27.23						22.70						64.14						36.83
First Quarter			16.60						27.22						24.08						63.98						45.06
Year ended March 31, 2024
Fourth Quarter			$	16.77					$	26.17					$	23.06					56.05		%				37.51		%
Third Quarter			16.77						24.29						20.72						44.84						23.55
Second Quarter			16.46						23.35						19.59						41.86						19.02
First Quarter			16.38						20.25						17.22						23.63						5.13

(1) NAV per share, is determined as of the last day in the relevant quarter and therefore may not reflect the NAV per share on the date of the high and low sales prices. The NAVs shown are based on outstanding shares at the end of each period.

(2) Calculated as the respective high or low share price divided by NAV and subtracting 1.

* Not determinable at the time of filing.

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Shareholder Transaction Expenses:
Sales load (as a percentage of offering price)						—		%	(1)
Offering expenses (as a percentage of offering price)						—		%	(2)
Dividend reinvestment plan expenses						—		%	(3)
Total shareholder transaction expenses (as a percentage of offering price)						—		%
Annual Expenses (as a percentage of net assets attributable to common stock for the fiscal year ended March 31, 2025):
Operating expenses						3.29		%	(4)
Interest payments on borrowed funds						7.21		%	(5)
Income tax provision						0.26		%	(6)
Total annual expenses						10.76		%

(1) In the event that our securities are sold to or through underwriters, a corresponding prospectus supplement will disclose the applicable sales load.

(2) In the event that we conduct an offering of our securities, a corresponding prospectus supplement will disclose the estimated offering expenses.

(3) The expenses of administering our dividend reinvestment plan (“DRIP”) are included in operating expenses. The DRIP does not allow shareholders to sell shares through the DRIP. If a shareholder wishes to sell shares they would be required to select a broker of their choice and pay any fees or other costs associated with the sale.

(4) Operating expenses in this table represent the estimated annual operating expenses of CSWC and its consolidated subsidiaries based on actual operating expenses for the year ended March 31, 2025. We do not have an investment adviser and are internally managed by our executive officers under the supervision of our Board of Directors. As a result, we do not pay investment advisory fees, but instead we pay the operating costs associated with employing investment management professionals including, without limitation, compensation expenses related to salaries, discretionary bonuses and restricted stock grants.

(5) Interest payments on borrowed funds represents (a) our estimated annual interest payments based on actual interest rate terms under our credit facilities, with available commitments of $510 million under the Company's senior secured revolving credit facility (the "Corporate Credit Facility") and available commitments of $200 million under the Company's special purpose vehicle financing credit facility (the "SPV Credit Facility"), and our anticipated drawdowns from our credit facilities, (b) our actual interest rate terms under the SBA Debentures and our anticipated drawdowns of the SBA Debentures, and (c) our estimated annual interest payments, based on actual interest rate terms, on the 3.375% notes due 2026 (the "October 2026 Notes"), the 7.75% notes due 2028 (the "August 2028 Notes"), and the 5.125% convertible notes due 2029 (the "2029 Convertible Notes"). As of March 31, 2025, we had $235.0 million outstanding under our Corporate Credit Facility, $108.0 million outstanding under our SPV Credit Facility, $175.0 million outstanding under the SBA Debentures, $150.0 million in aggregate principal of the October 2026 Notes outstanding $71.9 million in aggregate principal of the August 2028 Notes outstanding, and $230.0 million in aggregate principal of the 2029 Convertible Notes outstanding. Any future issuances of debt securities will be made at the discretion of management and our board of directors after evaluating the investment opportunities and economic situation of the Company and the market as a whole.

The following example demonstrates the projected dollar amount of total cumulative expenses that would be incurred over various periods with respect to a hypothetical investment in our common stock. In calculating the following expense amounts, we have assumed we would have no additional leverage and that our annual operating expenses would remain at the levels set forth in the table above.

						1 Year						3 Years						5 Years						10 Years
You would pay the following expenses on a $1,000 investment, assuming 5.0% annual return						$	108					$	305					$	480					$	836

The example and the expenses in the table above should not be considered a representation of our future expenses, and actual expenses may be greater or less than those shown. While the example assumes, as required by the SEC, a 5.0% annual return, our performance will vary and may result in a return greater or less than 5.0%. In addition, while the example assumes reinvestment of all dividends at NAV, participants in our DRIP will receive a number of shares of our

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common stock, determined by dividing the total dollar amount of the dividend payable to a participant by the average purchase price of all shares of common stock purchased by the administrator of the DRIP in the event that shares are purchased in the open market to satisfy the share requirements of the DRIP, which may be at, above or below NAV. See "Business - Dividend Reinvestment Plan” included in Item I of Part I of this Annual Report on Form 10-K for additional information regarding our DRIP.

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We are an internally managed closed-end, non-diversified management investment company that has elected to be regulated as a BDC under the 1940 Act. We specialize in providing customized debt and equity financing to LMM companies in a broad range of investment segments located primarily in the United States. Our investment objective is to produce attractive risk-adjusted returns by generating current income from our debt investments and capital appreciation from our equity and equity related investments. Our investment strategy is to partner with business owners, management teams and financial sponsors to provide flexible financing solutions to fund growth, changes of control, or other corporate events. We invest primarily in first lien debt securities, secured by security interests in portfolio company assets. We also may invest in equity interests in our portfolio companies alongside our debt securities.

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. We primarily target senior debt and equity investments in LMM companies. Our target companies typically have annual EBITDA between $3.0 million and $25.0 million, and our investments generally range in size from $5.0 million to $50.0 million.

We seek to fill the financing gap for LMM companies, which, historically, have had more limited access to financing from commercial banks and other traditional sources. The underserved nature of the LMM creates the opportunity for us to meet the financing needs of LMM companies while also negotiating favorable transaction terms and equity participations. Our ability to invest across a LMM company’s capital structure, from secured loans to equity securities, allows us to offer portfolio companies a comprehensive suite of financing options. Providing customized financing solutions is important to LMM companies. We generally seek to partner directly with financial sponsors, entrepreneurs, management teams and business owners in making our investments. Our LMM debt investments typically include senior loans with a first lien on the assets of the portfolio company. Our LMM debt investments typically have a term of up to five years from the original investment date. We also often seek to invest in the equity securities of our LMM portfolio companies.

Because we are internally managed, we do not pay any external investment advisory fees, but instead directly incur the operating costs associated with employing investment and portfolio management professionals. We believe that our internally managed structure provides us with a beneficial operating expense structure when compared to other publicly traded and privately held investment firms that are externally managed, and our internally managed structure allows us the opportunity to leverage our non-interest operating expenses as we grow our investment portfolio. For the years ended March 31, 2025, 2024 and 2023, the ratio of our last twelve months ("LTM") operating expenses, excluding interest expense, as a percentage of our LTM average total assets was 1.73%, 1.72% and 1.91%, respectively.

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Credit Facilities

As of March 31, 2025, we had $235.0 million outstanding and $249.2 million of undrawn commitments under the Corporate Credit Facility, and $108.0 million outstanding and $92.0 million of undrawn commitments under the SPV Credit

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Facility. Availability under the Credit Facilities is subject to certain leverage and borrowing base limitations, various covenants, reporting requirements and other customary requirements for similar credit facilities. For more information on our Credit Facilities, including material terms and financial covenants, refer to Note 5 - Borrowings in the Notes to the Consolidated Financial Statements.

Unsecured Notes

In December 2020, the Company issued $75.0 million in aggregate principal amount of 4.50% notes due 2026 (the "January 2026 Notes"). In February 2021, the Company issued an additional $65.0 million in aggregate principal amount of the January 2026 Notes. The outstanding aggregate principal amount of January 2026 Notes was $140.0 million as of March 31, 2024. On December 9, 2024, the Company redeemed $140.0 million in aggregate principal amount of the issued and outstanding January 2026 Notes in full. The January 2026 Notes were redeemed at 100 % of their principal amount, plus the accrued and unpaid interest thereon, through, but excluding the redemption date. Accordingly, the Company recognized a realized loss on extinguishment of debt, equal to the write-off of the related unamortized debt issuance costs, of $0.4 million during the year ended March 31, 2025.

In August 2021, the Company issued $ 100.0 million in aggregate principal amount of 3.375 % notes due 2026 (the "October 2026 Notes"). In November 2021, the Company issued an additional $ 50.0 million in aggregate principal amount of the October 2026 Notes. The outstanding aggregate principal amount of the October 2026 Notes was $ 150.0 million as of both March 31, 2025 and March 31, 2024.

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 outstanding aggregate principal amount of the August 2028 Notes was $71.9 million as of both March 31, 2025 and March 31, 2024.

In November 2024, the Company issued $ 230.0 million in aggregate principal amount of 5.125 % convertible notes due 2029 (the "2029 Convertible Notes"), including the underwriters' full exercise of their option to purchase an additional $ 30.0 million in aggregate principal amount to cover over-allotments. The outstanding aggregate principal amount of the 2029 Convertible Notes as of March 31, 2025 was $230.0 million.

For more information on each of the January 2026 Notes, the October 2026 Notes, the August 2028 Notes, and the 2029 Convertible Notes, including material terms, refer to Note 5 - Borrowings in the Notes to the Consolidated Financial Statements.

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. Current SBA 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). As of March 31, 2025, SBIC I had a total leverage commitment from the SBA in the amount of $ 175.0 million, all of which was drawn. SBA Debentures 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 1. The first maturity date related to the SBA Debentures occurs in September 2031.

For more information on the SBA Debentures, refer to Note 5 - Borrowings in the Notes to the Consolidated Financial Statements. Subsequent to the year ended March 31, 2025, we received our second SBIC license. See "Recent Developments" for more information.

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23. Maturity date is under on-going negotiations with the portfolio company and other lenders, if applicable.

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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 $ 50.0 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”), Capital Southwest SBIC I, LP (“SBIC I”) and Capital Southwest SBIC II, LP ("SBIC II" and together with SBIC I, the "SBIC Subsidiaries") 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. Subsequent to the year ended March 31, 2025, the Company received its second SBIC license. See Note 16 - Subsequent Events for more information.

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

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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, SBIC I and SBIC II.

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 or have greater than 50% representation on its board; “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, 2025, the Company had 90.0 % 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 (the "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 non-qualified acquisition may be subject to excess taxes unless the non-qualified 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.

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For the quarter ended March 31, 2025, the Company satisfied all RIC requirements and had 13.9 % of its total assets in nonqualified assets according to measurement criteria established in Section 851(d) of the Code.

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 - Fair Value Measurements 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, Note 3 - Investments and Note 4 - Fair Value Measurements 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, 2025 and March 31, 2024, cash held in money market funds amounted to $ 28.1 million and $ 18.8 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, 2025 and March 31, 2024, cash balances totaling $ 43.1 million and $ 30.7 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. Restricted cash includes cash that may be restricted due to legal or contractual obligations and is not readily available for general business operations.

Escrow Receivable Escrow receivables are collected in accordance with the terms and conditions of the escrow agreement. Escrow balances are typically distributed over a period greater than one year. Escrow balances are measured for collectability on at least a quarterly basis.

Segment Reporting The Company has determined that it has a single operating segment in accordance with ASC Topic 280, Segment Reporting ("ASC 280"), which derives income from its portfolio investments. Our Chief Executive Officer and Chief Financial Officer together allocate resources and assesses performance and thus together serve as the Company's Chief Operating Decision Maker ("CODM"). As an investment company, we derive income primarily from debt investments in portfolio companies as discussed in Note 3 - Investments. While the Company lends to and separately evaluates the performance of each portfolio company in which it invests, the CODM evaluates and monitors performance of the business on a consolidated basis. Further, each investment is evaluated and managed using similar processes and shared operations support functions such as deal origination, underwriting, loan servicing in addition to the administrative functions of human resources, legal, finance and information technology. The accounting policies of the segment align with those outlined in Note 2 - Summary of Significant Accounting Policies.

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The CODM uses net investment income and net increase (decrease) in net assets resulting from operations as reported in the Consolidated Statements of Operations to assess the Company's performance and when allocating resources. These performance metrics are considered the key segment measure of profit or loss received by the CODM. As the Company’s operations comprise of a single reporting segment, the segment assets are reflected on the accompanying Consolidated Statements of Assets and Liabilities as total assets and investments held on the Consolidated Schedules of Investments. The significant segment expenses are listed on the accompanying Consolidated Statements of Operations.

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, SBIC I and SBIC II. 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 restored to accrual basis. As of March 31, 2025, investments on non-accrual status represented approximately 1.7 % of our total investment portfolio at fair value and approximately 3.5 % at cost. 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.

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. For the year ended March 31, 2025, we had five investments for which we stopped accruing PIK interest. For the year ended March 31, 2024, we had five investments for which we stopped accruing PIK interest. For the years ended March 31, 2025, 2024 and 2023, approximately 6.2 %, 5.7 % and 4.6 %, respectively, of CSWC’s total investment income was attributable to non-cash PIK interest income.

Fee Income Recurring 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, arranger 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

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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 - Borrowings) and the debentures guaranteed by the SBA (the "SBA Debentures"). The costs in connection with the Credit Facilities (as defined below) 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), the 2029 Convertible Notes (as defined below) and the SBA Debentures.

Equity Offering Costs Offering costs include SEC registration fees, legal fees and accounting fees incurred. The Company’s offering costs are charged against the proceeds from equity offerings when proceeds are received.

Earnings Per Share The Company's earnings per share ("EPS") amounts have been computed based on the weighted-average number of shares of common stock outstanding for the period under the two-class method. Basic EPS is computed by dividing net increase (decrease) in net assets resulting from operations applicable to common shareholders by the weighted average number of shares of common stock outstanding during the period of computation. Diluted EPS is computed using the if-converted method for convertible debt, which reflects the potential dilution that would occur if all of the notes were converted as of the beginning of the reporting period (or the date of issuance, if later). The if-converted method is computed by dividing the net increase (decrease) in net assets resulting from operations (adjusted to reverse any recognized interest expense), by the weighted average number of shares of common stock assuming all potential shares had been converted, and the additional shares of common stock were dilutive. In accordance with ASC 260-10-45-60A, the Company uses the two-class method in the computation of basic EPS and diluted EPS. The unvested shares of restricted stock awarded pursuant to CSWC’s equity compensation plans are considered participating securities for the purpose of calculating basic and diluted earnings per share.

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 is recognized as a loss (i.e., the unamortized debt issuance costs and any "make-whole" premium payment) 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 10.5 years. The operating lease is included as an operating lease right-of-use ("ROU") asset, included in other assets, and operating lease liability, included in other liabilities, 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

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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 - Income Taxes for further discussion.

The Taxable Subsidiary, a wholly-owned subsidiary of CSWC, is not a RIC and is subject to U.S. federal income tax 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, 2025, 2024 and 2023.

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 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 - Income Taxes 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 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

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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 and notes to the consolidated financial statements for the prior year comparative consolidated financial statements and notes to the consolidated financial statements are updated to conform to the current period presentation.

Recently Issued or Adopted Accounting Standards 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 has evaluated 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 disclosures.

In November 2024, the FASB issued ASU 2024-03, "Disaggregation of Income Statement Expenses," which requires additional disclosure of the nature of expenses included in the income statement in response to requests from investors for more information about an entity's expenses. The new standard requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. The new guidance is effective for annual periods beginning after December 15, 2027. 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 disclosures.

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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, 2025 and March 31, 2024:

			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, 2025:
First lien loans 1,2			$	1,586,622					88.9		%				179.6		%				$	1,627,746					91.5		%
Second lien loans 2			18,066						1.0						2.0						23,955						1.3
Subordinated debt 3			1,218						0.1						0.1						1,417						0.1
Preferred equity			102,918						5.7						11.6						77,451						4.4
Common equity & warrants			76,475						4.3						8.7						48,791						2.7
			$	1,785,299					100.0		%				202.0		%				$	1,779,360					100.0		%
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		%

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, 2025 and March 31, 2024, the fair value of the first lien last out loans are $ 23.4 million and $ 35.3 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, 2025 and March 31, 2024, the fair value of the split lien term loans included in first lien loans was $ 59.9 million and $ 43.7 million, respectively. As of March 31, 2025 and March 31, 2024, the fair value of the split lien term loans included in second lien loans was $ 15.9 million and $ 20.7 million, respectively.

3 Included in subordinated debt are unsecured convertible notes with a fair value of $ 0.2 million and $ 0.4 million as of March 31, 2025 and March 31, 2024, respectively.

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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, 2025 and March 31, 2024:

			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, 2025:
Healthcare Services			$	212,640					11.9		%				24.1		%				$	228,935					12.9		%
Consumer Products			152,385						8.5						17.3						152,385						8.6
Media & Marketing			138,768						7.8						15.7						138,291						7.8
Food, Agriculture & Beverage			125,740						7.1						14.2						131,815						7.4
Financial Services			123,280						6.9						14.0						95,060						5.3
Consumer Services			117,117						6.6						13.3						123,084						6.9
Business Services			94,008						5.3						10.6						96,685						5.4
Transportation & Logistics			88,871						5.0						10.1						63,155						3.5
Industrial Machinery			76,874						4.3						8.7						75,647						4.3
Industrial Products			75,548						4.2						8.5						66,050						3.7
Healthcare Equipment & Supplies			66,144						3.7						7.5						65,057						3.7
Commercial Services & Supplies			58,340						3.3						6.6						57,633						3.2
Aerospace & Defense			55,051						3.1						6.2						54,097						3.0
Software & IT Services			52,422						2.9						5.9						52,553						3.0
Environmental Services			52,295						2.9						5.9						56,191						3.2
Specialty Retail			38,272						2.1						4.3						36,647						2.1
Research & Consulting Services			36,045						2.0						4.1						35,309						2.0
Healthcare Products			34,474						1.9						3.9						35,087						2.0
Education			29,495						1.7						3.3						41,443						2.3
Restaurants			25,656						1.4						2.9						25,329						1.4
Energy Services			25,022						1.4						2.8						25,362						1.4
Pharmaceuticals, Biotechnology & Life Sciences			24,877						1.4						2.8						34,199						1.9
Industrial Services			21,599						1.2						2.4						21,634						1.2
Telecommunications			19,920						1.1						2.3						23,504						1.3
Distribution			11,773						0.7						1.3						11,873						0.7
Technology Products & Components			10,378						0.6						1.2						13,031						0.7
Movies & Entertainment			8,690						0.5						1.0						8,403						0.5
Building & Infrastructure Products			7,522						0.4						0.9						8,830						0.5
Data Processing & Outsourced Services			2,093						0.1						0.2						2,071						0.1
			$	1,785,299					100.0		%				202.0		%				$	1,779,360					100.0		%

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			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			$	188,373					12.8		%				24.9		%				$	190,674					12.9		%
Media & Marketing			153,302						10.4						20.3						147,859						10.0
Consumer Products			113,634						7.7						15.0						114,347						7.7
Business Services			86,098						5.8						11.4						87,196						5.8
Consumer Services			96,116						6.5						12.7						94,046						6.4
Food, Agriculture & Beverage			93,384						6.3						12.4						103,371						7.0
Financial Services			82,727						5.6						10.9						73,945						5.0
Transportation & Logistics			65,571						4.4						8.7						58,090						3.9
Industrial Products			61,324						4.2						8.1						50,276						3.4
Software & IT Services			59,409						4.0						7.9						57,702						3.9
Environmental Services			56,807						3.8						7.5						55,572						3.8
Specialty Retail			44,557						3.0						5.9						42,855						2.9
Healthcare Equipment & Supplies			41,377						2.8						5.5						40,928						2.8
Healthcare Products			31,942						2.2						4.2						32,978						2.2
Pharmaceuticals, Biotechnology & Life Sciences			29,308						2.0						3.9						34,304						2.3
Energy Services			27,488						1.9						3.6						27,131						1.8
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 Machinery			23,356						1.6						3.1						23,174						1.6
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
Research & Consulting Services			18,838						1.3						2.5						18,658						1.3
Distribution			16,490						1.1						2.2						18,620						1.3
Data Processing & Outsourced Services			16,176						1.1						2.1						25,426						1.7
Movies & Entertainment			15,778						1.1						2.1						16,576						1.1
Education			14,627						1.0						1.9						25,481						1.7
Specialty Chemicals			14,269						1.0						1.9						14,222						1.0
Building & Infrastructure Products			7,727						0.5						1.0						7,643						0.5
			$	1,476,561					100.0		%				195.4		%				$	1,476,703					100.0		%

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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, 2025 and March 31, 2024:

			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, 2025:
Northeast			$	469,271					26.3		%				53.1		%				$	474,642					26.7		%
West			388,772						21.8						44.0						359,986						20.2
Southwest			323,966						18.2						36.7						317,428						17.8
Southeast			315,033						17.6						35.6						338,866						19.1
Midwest			241,814						13.5						27.4						246,198						13.8
International			46,443						2.6						5.2						42,240						2.4
			$	1,785,299					100.0		%				202.0		%				$	1,779,360					100.0		%
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		%

Investment Valuation Process

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.

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.

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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, 2025 and March 31, 2024, 100 % of CSWC's 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 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;

• 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;

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• 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, and the Enterprise Value Waterfall Approach.

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.

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

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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.

The following fair value hierarchy tables set forth our investment portfolio by level as of March 31, 2025 and March 31, 2024 (in thousands):

									Fair Value Measurements
									at March 31, 2025 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			$	1,586,622					$	—					$	—					$	1,586,622
Second lien loans			18,066						—						—						18,066
Subordinated debt			1,218						—						—						1,218
Preferred equity			102,918						—						—						102,918
Common equity & warrants			76,475						—						—						76,475
Total Investments			$	1,785,299					$	—					$	—					$	1,785,299

									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

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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, 2025 and March 31, 2024. 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, 2025						Unobservable												Weighted
Type			Technique						(in thousands)						Inputs						Range						Average
First lien loans			Income Approach						$	1,448,656					Discount Rate						5.2 % - 64.7 %						12.8 %
									6,923						Third Party Broker Quote						40.0 - 100.0						79.8
			Market Approach						125,500						Cost						89.8 - 100.0						97.9
			Enterprise Value Waterfall Approach						5,543						EBITDA Multiple						3.0 x - 9.0 x						3.0 x
															Discount Rate						21.0 % - 49.2 %						21.0 %
Second lien loans			Income Approach						18,066						Discount Rate						9.5 % - 41.2 %						13.3 %
			Enterprise Value Waterfall Approach						—						EBITDA Multiple						3.0 x - 3.0 x						0.0 x
															Discount Rate						21.0 % - 21.0 %						0.0 %
Subordinated debt			Income Approach						538						Discount Rate						14.4 % - 14.4 %						14.4 %
									58						Third Party Broker Quote						25.0 - 25.0						25.0
			Market Approach						65						Cost						100.0 - 100.0						100.0
			Enterprise Value Waterfall Approach						557						EBITDA Multiple						6.1 x - 7.6 x						6.6 x
															Discount Rate						13.3 % - 17.6 %						14.7 %
Preferred equity			Enterprise Value Waterfall Approach						100,018						EBITDA Multiple						3.0 x - 16.9 x						8.8 x
															Discount Rate						11.1 % - 49.2 %						15.9 %
			Market Approach						2,900						Cost						100.0 - 100.0						100.0
Common equity & warrants			Enterprise Value Waterfall Approach						74,878						EBITDA Multiple						3.0 x - 16.0 x						8.4 x
															Discount Rate						11.9 % - 23.3 %						14.4 %
			Market Approach						1,597						Cost						100.0 - 100.0						100.0
Total Level 3 Investments									$	1,785,299

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									Fair Value at						Significant
			Valuation						March 31, 2024						Unobservable												Weighted
Type			Technique						(in thousands)						Inputs						Range						Average
First lien loans			Income Approach						$	1,156,705					Discount Rate						5.5 % - 43.8 %						13.4 %
									54,742						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						30,834						Discount Rate						13.4 % - 33.3 %						15.6 %
									2,940						Third Party Broker Quote						28.0 - 28.0						28.0
Subordinated debt			Income Approach						514						Discount Rate						18.7 % - 18.7 %						18.7 %
									54						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 %
			Market Approach						500						Cost						100.0 - 100.0						100.0
Total Level 3 Investments									$	1,476,561

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, 2025 and 2024, we had no transfers between fair value levels.

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The following tables provide a summary of changes in the fair value of investments measured using Level 3 inputs during the year ended March 31, 2025 and 2024 (in thousands):

			Fair Value March 31, 2024						Realized & Unrealized Gains (Losses)						Purchases of Investments 1,2						Repayments						PIK Interest Capitalized						Divestitures						Conversion/Exchange of Security						Fair Value March 31, 2025						YTD Unrealized Appreciation (Depreciation) on Investments held at period end
First lien loans			$	1,309,449					$	( 61,142 )					$	616,629					$	( 244,854 )					$	12,843					$	( 31,584 )					$	( 14,719 )					$	1,586,622					$	( 21,908 )
Second lien loans			33,774						( 6,960 )						37						( 3,840 )						70						—						( 5,015 )						18,066						( 5,062 )
Subordinated debt			1,336						36						57						( 75 )						17						—						( 153 )						1,218						28
Preferred equity			71,127						25,094						9,767						—						—						( 16,920 )						13,850						102,918						18,671
Common equity & warrants			60,875						3,593						7,036						—						—						( 1,066 )						6,037						76,475						4,388
Total Investments			$	1,476,561					$	( 39,379 )					$	633,526					$	( 248,769 )					$	12,930					$	( 49,570 )					$	—					$	1,785,299					$	( 3,883 )
			Fair Value March 31, 2023						Realized & Unrealized Gains (Losses)						Purchases of Investments 1						Repayments						PIK Interest Capitalized						Divestitures						Conversion/Exchange of Security 3						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 )

1 Includes purchases of new investments, as well as discount accretion on existing investments.

2 Included are distributions-in-kind of investments received in connection with the dissolution and liquidation of I-45 SLF LLC ("I-45 SLF"). See Note 14 - Related Party Transactions for more information.

3 Includes $ 3.8 million of cost basis allocated from first lien debt to warrants.

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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 the SBIC Subsidiaries from the definition of senior securities in the asset coverage requirement applicable to the Company under the 1940 Act. As of March 31, 2025, the Company’s asset coverage was 211 %.

The Company had the following borrowings outstanding as of March 31, 2025 and March 31, 2024 (amounts in thousands):

			Outstanding Balance						Unamortized Debt Issuance Costs and Debt Discount/Premium (1)						Recorded Value						Estimated Fair Value (2)
March 31, 2025
SBA Debentures			$	175,000					$	( 4,082 )					$	170,918					$	166,460
Corporate Credit Facility			235,000						—						235,000						235,000
SPV Credit Facility			108,000						—						108,000						108,000
October 2026 Notes			150,000						( 1,154 )						148,846						130,899
August 2028 Notes			71,875						( 1,681 )						70,194						73,571
2029 Convertible Notes			230,000						( 6,893 )						223,107						225,780
			$	969,875					$	( 13,810 )					$	956,065					$	939,710
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

(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, the January 2026 Notes, the October 2026 Notes and the 2029 Convertible 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 and the SPV Credit Facility approximates its recorded value due to its variable interest rate.

Credit Facilities

As of March 31, 2025, 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, 2025, the weighted average interest rate on the Credit Facilities was 7.33 %, and the average debt outstanding under the Credit Facilities was $ 269.8 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.

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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 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.

On September 12, 2024, 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 $ 460 million to $ 485 million. The $ 25 million increase was provided by one new lender, bringing the total bank syndicate to 11 participants.

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 by the SBIC Subsidiaries and SPV). As of March 31, 2025, all of the Company’s assets were pledged as collateral for the Corporate Credit Facility, except for assets held by the SBIC Subsidiaries and SPV. As of March 31, 2025 and 2024, 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,
															2025						2024						2023
Interest expense															$	13,655					$	16,661					$	11,156
Unused commitment fees															1,710						1,152						852
Amortization of deferred financing costs															2,262						1,813						1,144
Total interest and amortization of deferred financing costs															$	17,627					$	19,626					$	13,152
Weighted average interest rate															7.33		%				7.66		%				5.22		%
Average borrowings															$	186,274					$	217,500					$	213,658

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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 included an initial commitment of $ 150.0 million. Pursuant to the terms of the Loan Agreement, on June 20, 2024, total commitments automatically increased from $ 150.0 million to $ 200.0 million. The SPV Credit Facility also includes 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 (i) paid unused commitment fees of 0.10 % through April 20, 2024 and (ii) pays unused commitment fees of 0.35 % thereafter, on the unused lender commitments under the SPV Credit Facility, in addition to other customary fees. Under the SPV Credit Facility, SPV also pays a utilization fee based on the amount of borrowings utilized. The SPV Credit Facility matures on March 20, 2029.

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, 2025, SPV was in compliance with all financial covenants under the Loan Agreement.

The summary information regarding the SPV Credit Facility is as follows (dollars in thousands):

									Years Ended March 31,
															2025						2024						2023
Interest expense															$	6,118					$	—					$	—
Unused commitment and other fees															1,165						45						—
Amortization of deferred financing costs															432						—						—
Total interest and amortization of deferred financing costs															$	7,715					$	45					$	—
Weighted average interest rate															7.32		%				—		%				—		%
Average borrowings															$	83,534					$	—					$	—

Unsecured Notes

The unsecured notes described below 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.

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 were treated as a single series with the Existing January 2026 Notes under the indenture and had the same terms as the Existing January 2026 Notes. The maturity date of the January 2026 Notes was January 31, 2026, and the January 2026 Notes bore interest at a rate of 4.50 % per year, payable semi-annually on January 31 and July 31 of each year.

On December 9, 2024, the Company redeemed $ 140.0 million in aggregate principal amount of the issued and outstanding January 2026 Notes in full. The January 2026 Notes were redeemed at 100 % of their principal amount, plus the accrued and unpaid interest thereon, through, but excluding the redemption date. Accordingly, the Company recognized a

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realized loss on extinguishment of debt, equal to the write-off of the related unamortized debt issuance costs, of $ 0.4 million during the quarter ended December 31, 2024. There was no "make-whole" premium required to be paid in connection with the redemption.

The summary information regarding the January 2026 Notes is as follows (dollars in thousands):

									Years Ended March 31,
															2025						2024						2023
Interest expense															$	4,358					$	6,300					$	6,300
Amortization of deferred financing costs															224						337						344
Total interest and amortization of deferred financing costs															$	4,582					$	6,637					$	6,644
Weighted average interest rate															4.46		%				4.46		%				4.46		%
Average borrowings 1															$	140,000					$	140,000					$	140,000

1 Average borrowings for the year ended March 31, 2025 was calculated from April 1, 2024 through December 9, 2024 (the redemption date of 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 summary information regarding the October 2026 Notes is as follows (dollars in thousands):

									Years Ended March 31,
															2025						2024						2023
Interest expense															$	5,062					$	5,062					$	5,062
Amortization of deferred financing costs															770						814						734
Total interest and amortization of deferred financing costs															$	5,832					$	5,876					$	5,796
Weighted average interest rate															3.50		%				3.50		%				3.50		%
Average borrowings															$	150,000					$	150,000					$	150,000

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

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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 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,
															2025						2024						2022
Interest expense															$	5,570					$	4,425					$	—
Amortization of deferred financing costs															501						423						—
Total interest and amortization of deferred financing costs															$	6,071					$	4,848					$	—
Weighted average interest rate															7.75		%				7.75		%				—		%
Average borrowings 1															$	71,875					$	71,875					$	—

1 Average borrowings for the year ended March 31, 2024 was 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.

2029 Convertible Notes

On November 4, 2024, the Company issued $ 230.0 million in aggregate principal amount of 5.125 % convertible notes due 2029 (the "2029 Convertible Notes"), including the underwriters' full exercise of their option to purchase an additional $ 30.0 million in aggregate principal amount to cover over-allotments. The 2029 Convertible Notes bear interest at a rate of 5.125 % per year, payable quarterly on February 15, May 15, August 15 and November 15 of each year. The 2029 Convertible Notes will mature on November 15, 2029, unless earlier converted, redeemed or repurchased.

At any time prior to the close of business on the business day immediately preceding November 15, 2029, holders may convert all or any portion of their 2029 Convertible Notes. Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of its common stock, or a combination of cash and shares of its common stock, at the Company's election. The conversion rate was initially 40.0000 shares of common stock per $1,000 principal amount of 2029 Convertible Notes (equivalent to an initial conversion price of $ 25.00 per share of common stock). The conversion rate is subject to adjustment upon certain events, such as share splits and combinations, mergers, tender or exchange offers, increases in dividends in excess of $ 0.58 per share per quarter for the 2029 Convertible Notes and certain changes in control. In no event will the total number of shares of common stock issuable upon conversion exceed 44.7828 per $1,000 principal amount of the 2029 Convertible Notes. The Company has determined that the embedded conversion option in the 2029 Convertible Notes is not required to be separately accounted for as a derivative under GAAP.

In addition, following certain corporate events that occur prior to the maturity date of the 2029 Convertible Notes or if the Company delivers a notice of redemption, the Company will, in certain circumstances, increase the conversion rate for a

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holder who elects to convert its 2029 Convertible Notes in connection with such a corporate event or notice of redemption, as the case may be.

Certain key terms related to the convertible features of the 2029 Convertible Notes as of March 31, 2025 are as follows:

			2029 Convertible Notes
Conversion premium			12.0		%
Closing stock price at issuance			$	22.33
Closing stock price date			November 4, 2024
Conversion price (1)			$	24.87
Conversion rate (shares per $1,000 principal amount) (1)			40.20
Last conversion price calculation date			March 14, 2025

(1) Represents conversion price and conversion rate, as applicable, as of March 31, 2025, taking into account any applicable de minimis adjustments that will be made on the conversion date.

The Company may redeem for cash all or any portion of the 2029 Convertible Notes (subject to the partial redemption limitation), at its option, on a redemption date on or after November 20, 2027 and on or before the 45th scheduled trading day immediately prior to the maturity date of the 2029 Convertible Notes if the last reported sale price of its common stock has been at least 130 % of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which it provides notice of redemption at a redemption price equal to 100 % of the principal amount of the notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date.

As reflected in Note 8 - Earnings Per Share, the issuance of the 2029 Convertible Notes is considered part of the if-converted method for calculation of diluted earnings per share.

The summary information regarding the 2029 Convertible Notes is as follows (dollars in thousands):

									Years Ended March 31,
															2025						2024						2023
Interest expense															$	4,650					$	—					$	—
Amortization of deferred financing costs															613						—						—
Total interest and amortization of deferred financing costs															$	5,263					$	—					$	—
Weighted average interest rate															5.13		%				—		%				—		%
Average borrowings 1															$	230,000					$	—					$	—

1 Average borrowings for the year ended March 31, 2025 was calculated from November 4, 2024 (the issuance date of the 2029 Convertible Notes) through March 31, 2025.

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 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

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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, 2025, SBIC I had regulatory capital of $ 87.5 million and leverageable capital of $ 87.5 million. As of March 31, 2025, SBIC I had a total leverage commitment from the SBA in the amount of $ 175.0 million, all of which was drawn.

The summary information regarding the SBA Debentures is as follows (dollars in thousands):

									Years Ended March 31,
															2025						2024						2023
Interest expense and fees															$	7,085					$	5,418					$	2,792
Amortization of deferred financing costs															758						619						426
Total interest and amortization of deferred financing costs															$	7,843					$	6,037					$	3,218
Weighted average interest rate															4.40		%				4.18		%				3.38		%
Average borrowings															$	161,019					$	129,708					$	82,641

As of March 31, 2025, SBIC I'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
9/25/2024						9/1/2034						4.509 %						8,000
3/26/2025						3/1/2035						5.092 %						22,000
																		$	175,000

(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.

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Contractual Payment Obligations

A summary of the Company's contractual payment obligations for the repayment of outstanding indebtedness at March 31, 2025 is as follows:

			Years Ending March 31,
			2026						2027						2028						2029						2030						Thereafter						Total
SBA Debentures			$	—					$	—					$	—					$	—					$	—					$	175,000					$	175,000
Corporate Credit Facility			—						—						—						235,000						—						—						235,000
SPV Credit Facility			—						—						—						108,000						—						—						108,000
October 2026 Notes			—						150,000						—						—						—						—						150,000
August 2028 Notes			—						—						—						71,875						—						—						71,875
2029 Convertible Notes			—						—						—						—						230,000						—						230,000
Total			$	—					$	150,000					$	—					$	414,875					$	230,000					$	175,000					$	969,875

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, 2024, 2023 and 2022, 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, 2025, CSWC declared and paid a quarterly dividend in the amount of $ 33.7 million, or $ 0.64 per share ($ 0.58 per share in regular dividends and $ 0.06 per share in supplemental dividends). Our distributions for the tax years ended December 31, 2024, 2023 and 2022 were as follows:

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Payment Date			Cash Dividend
Tax Year Ended December 31, 2024
March 31, 2024 1			$	0.63
June 30, 2024 1			0.63
September 30, 2024 1			0.64
December 31, 2024 2			0.63
			$	2.53
Tax Year Ended December 31, 2023
March 31, 2023 2			$	0.58
June 30, 2023 2			0.59
September 30, 2023 1			0.62
December 31, 2023 1			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 2			0.57
			$	2.18

1. On each of these dates, the dividend paid included a supplemental dividend of $ 0.06 per share.

2. On each of these dates, the dividend paid included a supplemental dividend of $ 0.05 per share.

3. On June 30, 2022, the dividend paid included a special dividend of $ 0.15 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, 2025 and 2024, 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,
			2025						2024
Additional capital			$	( 18,532 )					$	( 8,849 )
Total distributable earnings			18,532						8,849

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 2024 dividends totaled $ 2.53 per share and were comprised entirely of ordinary income. In addition, 92.89 % of each of the ordinary distributions represent interest-related dividends. 92.89 % 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 2023 dividends totaled $ 2.42 per share and were comprised entirely of ordinary income. In addition, 94.17 % represent interest-related dividends.

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.

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The tax character of distributions paid for the tax years ended December 31, 2024 and 2023 was as follows (amounts in thousands):

			Twelve Months Ended December 31,
			2024						2023
Ordinary income			$	118,216					$	94,139
Distributions of long term capital gains			—						—
Distributions on tax basis 1			$	118,216					$	94,139

1 Includes only those distributions which reduce estimated taxable income.

As of March 31, 2025, CSWC estimates that it has cumulative undistributed taxable income of approximately $ 41.6 million, or $ 0.79 per share, that will be carried forward toward distributions to be paid in future periods. We intend 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 year ended March 31, 2025 and 2024:

			Years Ended March 31,
Reconciliation of RIC Distributable Income 1			2025						2024						2023
Net increase in net assets from operations			$	70,548					$	83,389					$	33,093
Net unrealized (appreciation) depreciation on investments			( 2,423 )						( 13,640 )						18,589
(Expense/loss) income/gain recognized for tax on pass-through entities			( 80 )						( 6,383 )						962
Realized loss (gain) book/tax differences			( 10,876 )						18,962						( 389 )
Capital loss carryover 2			70,883						26,449						12,796
Net operating income - wholly-owned subsidiary			( 14,568 )						( 5,194 )						809
Dividend income from wholly-owned subsidiary			9,038						2,000						1,068
Non-deductible tax expense			1,424						921						628
Loss on extinguishment of debt			( 2,726 )						( 2,726 )						( 2,726 )
Non-deductible compensation			6,693						3,665						3,243
Compensation related book/tax differences			( 2,741 )						1,116						812
Interest on non-accrual loans			11,999						5,636						3,343
Other book/tax differences			( 187 )						1,515						107
Estimated distributable income before deductions for distributions			$	136,984					$	115,710					$	72,335
Distributions 3 :
Ordinary			$	123,569					$	101,517					$	70,034
Estimated annual RIC undistributed taxable income			$	13,415					$	14,193					$	2,301

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, 2025, the Company had long-term capital loss carryforwards of $ 131.0 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.

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As of March 31, 2025, 2024 and 2023, 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						2025						2024						2023
Undistributed ordinary income - tax basis						$	41,594					$	28,845					$	16,070
Undistributed net realized (loss) gain						( 130,951 )						( 60,056 )						( 30,201 )
Unrealized (depreciation) appreciation on investments						( 80,308 )						( 68,529 )						( 61,710 )
Other temporary differences						( 4,201 )						( 9,584 )						( 13,639 )
Components of distributable earnings at year-end						$	( 173,866 )					$	( 109,324 )					$	( 89,480 )

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.

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, 2025, the cost of investments held by the RIC for U.S. federal income tax purposes was $ 1,718.8 million, with such investments having gross unrealized appreciation of $ 15.3 million and gross unrealized depreciation of $ 95.6 million, resulting in net unrealized depreciation of $ 80.3 million. As of March 31, 2025, the cost of investments held by the Taxable Subsidiary for U.S. federal income tax purposes was $ 57.3 million, with such investments having gross unrealized appreciation of $ 102.1 million and gross unrealized depreciation of $ 12.6 million, resulting in net unrealized appreciation of $ 89.5 million. On a consolidated basis, the total investment portfolio has net unrealized appreciation of $ 9.2 million for U.S. federal income tax purposes.

The Taxable Subsidiary is not a RIC and is subject to U.S. federal income tax 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, 2025 and March 31, 2024, the Taxable Subsidiary had a deferred tax liability of $ 16.8 million and $ 12.0 million, respectively.

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.

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The following table sets forth the significant components of the deferred tax assets and liabilities as of March 31, 2025 and March 31, 2024 (amounts in thousands):

			March 31, 2025						March 31, 2024
Deferred tax asset:
Net operating loss carryforwards			$	253					$	159
Interest			1,811						965
Total deferred tax asset			2,064						1,124
Deferred tax liabilities:
Net unrealized appreciation on investments			( 15,054 )						( 11,395 )
Net basis differences in portfolio investments			( 3,790 )						( 1,726 )
Total deferred tax liabilities			( 18,844 )						( 13,121 )
Total net deferred tax (liabilities) assets			$	( 16,780 )					$	( 11,997 )

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, 2025 and 2024 (amounts in thousands):

									Years Ended March 31,
Components of Income Tax Provision															2025						2024						2023
Excise tax															$	1,351					$	872					$	630
Tax provision related to Taxable Subsidiary															841						22						( 301 )
Other															73						50						—
Total income tax provision															$	2,265					$	944					$	329

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, 2021 through December 31, 2023.

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. On May 21, 2024, the Company (i) increased the maximum amount of shares of its common stock to be sold through the Equity ATM Program to $ 1.0 billion from $ 650.0 million and (ii) amended the term "Settlement Date" to reflect that, on or after May 28, 2024, the settlement of shares will occur on the first trading day following the date on which such sales were made.

The following table summarizes certain information relating to shares sold under the Equity ATM Program:

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			Years Ended March 31,
			2025						2024
Number of shares sold			7,694,740						8,733,315
Gross proceeds received (in thousands)			$	181,112					$	184,217
Net proceeds received (in thousands) 1			$	178,493					$	181,453
Weighted average price per share			$	23.54					$	21.09

1 Net proceeds reflects proceeds after deducting commissions to the sales agents on shares sold. As of both March 31, 2025 and March 31, 2024, no proceeds remained receivable.

Cumulative to date, the Company has sold 33,041,177 shares of its common stock under the Equity ATM Program at a weighted-average price of $ 21.49 , raising $ 710.0 million of gross proceeds. Net proceeds were $ 699.0 million after commissions to the sales agents on shares sold. As of March 31, 2025, the Company has $ 290.0 million available under the Equity ATM Program.

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Share Repurchases

Restricted Stock Awards

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,
			2025						2024
Number of shares repurchased			107,278						52,797
Aggregate cost of shares repurchased (in thousands)			$	2,708					$	1,063
Weighted average price per share			$	25.23					$	20.13

Share Repurchase Program

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 price for all shares purchased under the share repurchase program 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, 2025 and 2024, the Company did not repurchase any shares under the share repurchase program.

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The following information sets forth the computation of the Company's basic and diluted net increase in net assets per share resulting from operations for the years ended March 31, 2025 and 2024 (dollars and shares in thousands):

									Years Ended March 31,
															2025						2024						2023
Earnings per share - basic
Numerator for basic earnings per share															$	70,548					$	83,389					$	33,093
Adjustment for income allocated to participating securities															( 689 )						—						—
Numerator for basic earnings per common share															69,859						83,389						33,093
Denominator for basic earnings per common share															47,448						40,727						30,016
Basic earnings per common share															$	1.47					$	2.05					$	1.10
Earnings per share - diluted (1)
Numerator for increase in net assets per share															$	69,859					$	83,389					$	33,093
Adjustment for interest and amortization on 2029 Convertible Notes															5,263						—						—
Numerator for diluted earnings per common share															$	75,122					$	83,389					$	33,093
Denominator for basic weighted average common share															47,448						40,727						30,016
Adjustment for dilutive effect of 2029 Convertible Notes															3,740						—						—
Denominator for diluted weighted average common shares															51,188						40,727						30,016
Diluted earnings per common share															$	1.47					$	2.05					$	1.10

(1) In applying the if-converted method, conversion is not assumed for purposes of computing diluted earnings per share if the effect would be anti-dilutive. For the years ended March 31, 2025, 2024 and 2023, there was no anti-dilution.

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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, 2025, there are 458,142 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, 2025, there were 86,245 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 years ended March 31, 2025, 2024 and 2023, we recognized total share based compensation expense of $ 7.0 million (of which $ 0.3 million was related to restricted stock issued to non-employee directors), $ 4.5 million (of which $ 0.3 million was related to restricted stock issued to non-employee directors), and $ 3.7 million (of which $ 0.2 million was related to restricted stock issued to non-employee directors), respectively, related to the restricted stock issued.

During the three months ended March 31, 2025, the Company modified restricted stock awards to accelerate vesting of the unvested awards as of the separation date for one employee. The Company accounted for this as a modification of awards and recognized incremental compensation cost of $ 1.9 million. The incremental compensation cost is measured as the excess of the fair value of the modified award over the fair value of the original award immediately before its terms were modified and recognized as compensation cost on the date of modification for vested awards.

As of March 31, 2025, the total remaining unrecognized compensation expense related to non-vested restricted stock awards was $ 8.7 million, which will be amortized over the weighted-average vesting period of approximately 2.4 years.

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The following table summarizes the restricted stock outstanding under the 2010 Plan and the 2021 Employee Plan as of March 31, 2025:

									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, 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
Granted			359,500						26.20						—
Vested			( 316,345 )						20.73						—
Forfeited			( 95,375 )						26.18						—
Unvested at March 31, 2025			506,352						$	23.78					2.5

The following table summarizes the restricted stock outstanding under the Non-Employee Director Plan as of March 31, 2025:

									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, 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
Granted			10,450						23.93						—
Vested			( 11,200 )						22.33						—
Forfeited			—						—						—
Unvested at March 31, 2025			10,450						$	23.93					0.4

We established a 401(k) plan (the “401K Plan”) effective October 1, 2015. All full-time employees of CSWC 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 the years ended March 31, 2025, 2024 and 2023, we made matching contributions of approximately $ 0.3 million, $ 0.2 million and $ 0.2 million, respectively.

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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, 2025, 2024 and 2023, as well as amounts recognized in our Consolidated Statements of Assets and Liabilities at March 31, 2025 and 2024 (amounts in thousands):

			Years ended March 31,
			2025						2024						2023
Net pension cost
Interest cost on projected benefit obligation			$	28					$	28					$	90
Net amortization			( 47 )						( 47 )						33
Net pension cost from restoration plan			$	( 19 )					$	( 19 )					$	123

			Years ended March 31,
			2025						2024						2023
Change in benefit obligation
Benefit obligation at beginning of year			$	570					$	598					$	2,707
Interest cost			28						28						90
Actuarial gain			4						( 9 )						( 2,052 )
Benefits paid			( 47 )						( 47 )						( 147 )
Benefit obligation at end of year			$	555					$	570					$	598

			Years ended March 31,
			2025						2024
Amounts recognized in our Consolidated Statements of Assets and Liabilities
Projected benefit obligation			$	( 555 )					$	( 570 )
Net actuarial gain recognized as a component of equity			( 1,038 )						( 1,090 )
Total			$	( 1,593 )					$	( 1,660 )
Accumulated benefit obligation			$	( 555 )					$	( 570 )

The corridor approach is used to amortize the actuarial gains or losses based on 10% of the projected benefit obligation.

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The following assumptions were used in estimating the actuarial present value of the projected benefit obligations:

			Years ended March 31,
			2025						2024						2023
Discount rate			5.25		%				5.25		%				5.00		%

The following assumptions were used in estimating the net periodic (income)/expense:

			Years ended March 31,
			2025						2024						2023
Discount rate			5.25		%				5.00		%				3.50		%

Following are the expected benefit payments for the next five years and in the aggregate for the years 2031-2035 (amounts in thousands):

			2026						2027						2028						2029						2030						2031-2035
Restoration Plan			$	47					$	47					$	46					$	46					$	46					$	217

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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, 2025 and March 31, 2024 were as follows (amounts in thousands):

						March 31,						March 31,
Portfolio Company						2025						2024
Revolving Loans
Acacia BuyerCo V LLC						$	—					$	2,000
Acceleration, LLC						—						5,000
Air Conditioning Specialist, Inc.						1,910						1,675
Apple Roofing Administrative Services, LLC (fka Roof OpCo, LLC)						3,056						3,056
ArborWorks, LLC						1,116						432
ATS Operating, LLC						890						1,640
Bond Brand Loyalty ULC						1,200						2,000
BP Loenbro Holdings Inc.						1,321						1,101
Brandner Design, LLC						900						—
Burning Glass Intermediate Holding Company, Inc.						296						296
Campany Roof Maintenance, LLC						1,064						—
Catbird NYC, LLC						4,000						4,000
Cavalier Buyer, Inc.						2,000						2,000
CDC Dental Management Co., LLC						1,500						2,000
Central Medical Supply LLC						1,050						800
Cumbria Capital MSO, LLC						1,100						—
Damotech Inc.						3,000						3,000
Drive Line Service of Portland, LLC						2,000						—
Edge Autonomy Holdings, LLC						4,000						4,000
Exact Borrower, LLC						2,500						2,500
FS Vector LLC						4,000						2,000
Gains Intermediate, LLC						—						2,500
GPT Industries, LLC						3,000						3,000
GrammaTech, Inc.						1,000						2,500
Gravitiq LLC						5,000						—
Gulf Pacific Acquisition, LLC						303						555
HH-Inspire Acquisition, Inc.						—						46
Ignite Visibility LLC						1,500						2,000
Institutes of Health, LLC						1,000						1,000
ISI Enterprises, LLC						2,000						2,000
Island Pump and Tank, LLC						3,479						1,500
ITA Holdings Group, LLC						—						1,058
iVueit, LLC						1,000						—
LEHR Upfitters, LLC						2,623						—

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						March 31,						March 31,
Portfolio Company						2025						2024
LGM Pharma LLC						1,500						1,500
Lighting Retrofit International, LLC						1,354						1,354
Lightning Intermediate II, LLC						1,852						1,852
LKC Technologies, Inc.						2,000						2,000
Mako Steel LP						—						1,887
Mammoth BorrowCo, Inc.						200						1,950
Microbe Formulas LLC						1,627						1,627
Mid-Florida Endodontics Management Company, LLC						3,000						—
Musiker Discovery Programs, Inc.						2,000						—
NeuroPsychiatric Hospitals, LLC						2,000						—
New Skinny Mixes, LLC						3,000						3,500
NinjaTrader, Inc.						2,500						2,500
Opco Borrower, LLC						—						833
Outerbox, LLC						—						2,000
Pipeline Technique Ltd.						944						2,278
Pool Service Partners, Inc.						2,000						—
Red Dog Operations Holding Company LLC						2,000						—
Revo Brands, Inc.						4,300						7,000
Roseland Management, LLC						2,000						2,000
RTIC Subsidiary Holdings LLC						—						301
ServerLIFT, LLC						4,000						—
SocialSEO, LLC						2,200						—
South Coast Terminals LLC						—						1,935
Spotlight AR, LLC						2,000						2,000
Superior Health Parent LLC						2,000						—
Swensons Drive-In Restaurants, LLC						1,500						1,500
The Gobel Group, LLC						1,000						—
TMT BHC Buyer, Inc.						4,717						4,717
Tru Fragrance & Beauty LLC						4,000						3,900
Versicare Management LLC						—						2,500
VP Move Purchaser, Inc.						3,900						—
Wall Street Prep, Inc.						—						1,000
Well-Foam, Inc.						4,500						4,500
Winter Services Operations, LLC						1,333						3,111
Zenfolio Inc.						1,500						1,000
Total Revolving Loans						122,735						112,404
Delayed Draw Term Loans
Air Conditioning Specialist Inc.						3,229						750
BP Loenbro Holdings Inc.						1,101						1,101
Central Medical Supply LLC						1,400						1,400
CityVet, Inc.						—						5,000
Crafty Apes. LLC						924						—
Cumbria Capital MSO, LLC						950						—
Exact Borrower, LLC						2,200						—

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						March 31,						March 31,
Portfolio Company						2025						2024
Gulf Pacific Acquisition, LLC						—						1,212
Ignite Visibility LLC						—						2,000
ITA Holdings Group, LLC						—						854
iVueit, LLC						10,000						—
KMS, LLC						2,286						—
LEHR Upfitters, LLC						5,247						—
Mammoth BorrowCo, Inc.						—						1,325
Mid-Florida Endodontics Management Company, LLC						10,000						—
Musiker Discovery Programs, Inc.						7,500						—
New Skinny Mixes, LLC						—						3,000
One Group, LLC						545						545
Pool Service Partners, Inc.						6,100						5,000
Superior Health Parent LLC						10,000						—
SureKap, LLC						7,222						—
TMT BHC Buyer, Inc.						5,000						5,000
Total Delayed Draw Term Loans						73,704						27,187
Other
Broad Sky Networks, LLC						57						—
Spectrum of Hope, LLC						411						—
Total Other						468						—
Total Unfunded Debt Commitments						$	196,907					$	139,591

The following table provides additional information regarding the expiration year of the Company’s unfunded debt commitments (amounts in thousands):

						March 31, 2025						March 31, 2024
Unfunded Debt Commitments
Expiring during:
2025						$	—					$	26,462
2026						31,354						8,242
2027						70,235						31,417
2028						16,420						31,021
2029						42,986						42,449
2030						33,912						—
2031						2,000						—
Total Unfunded Debt Commitments						$	196,907					$	139,591

The balances of unfunded equity commitments as of March 31, 2025 and March 31, 2024 were as follows (amounts in thousands):

						March 31, 2025						March 31, 2024
Unfunded Equity Commitments
Catbird NYC, LLC						$	125					$	125
Infolinks Media Buyco, LLC						411						412
Total Unfunded Equity Commitments						$	536					$	537

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As of March 31, 2025, 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, 2025, 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 2026, $ 0.3 million expire in March 2026, and $ 0.2 million expire in April 2026. As of March 31, 2025, none of the letters of credit were drawn and as such, were not recorded as a liability on the Company's balance sheet.

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 " 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.

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, 2025, 2024 and 2023 was $ 0.5 million, $ 0.3 million and $ 0.3 million, respectively. As of March 31, 2025 and March 31, 2024, the asset related to the operating lease was $ 3.9 million and $ 2.4 million, respectively, and as of March 31, 2025 and March 31, 2024, the lease liability was $ 5.4 million and $ 3.2 million, respectively. As of March 31, 2025, the remaining lease term was 10.5 years and the discount rate was 6.59 %.

The following table shows future minimum payments under the Company's operating leases as of March 31, 2025 (in thousands):

Year ending March 31,			Rent Commitment
2026			$	697
2027			715
2028			733
2029			752
2030			771
Thereafter			4,988
Total			$	8,656

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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The following presents a summary of the unaudited quarterly consolidated financial information for the years ended March 31, 2025 and 2024 (in thousands except per share amounts):

			First						Second						Third						Fourth
2025			Quarter						Quarter						Quarter						Quarter						Total
Net investment income			$	28,859					$	31,165					$	30,316					$	27,842					$	118,182
Net realized (loss) gain on investments, net of tax			711						( 10,289 )						( 12,805 )						( 27,267 )						( 49,650 )
Net change in unrealized appreciation (depreciation) on investments, net of tax			( 15,535 )						1,808						( 847 )						16,997						2,423
Realized loss on extinguishment of debt			—						—						( 387 )						—						( 387 )
Realized loss on disposal of fixed assets			—						—						( 9 )						( 11 )						( 20 )
Net increase in net assets from operations			14,035						22,684						16,268						17,561						70,548
Pre-tax net investment income per share - basic			0.69						0.64						0.64						0.56						2.50
Net investment income per share - basic			0.63						0.66						0.63						0.54						2.46
Net increase in net assets from operations per share - basic			0.31						0.48						0.34						0.34						1.47
Net increase in net assets from operations per share - diluted			0.31						0.48						0.34						0.35						1.47
			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 gain (loss) on investments			( 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 - basic			0.67						0.67						0.72						0.68						2.72
Net investment income per share - basic			0.65						0.69						0.70						0.67						2.70
Net increase in net assets from operations per share - basic			0.63						0.57						0.57						0.31						2.05
Net increase in net assets from operations per share - diluted			0.63						0.57						0.57						0.31						2.05

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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, 2025, 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.

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The following presents a summary of per share data for the years ended March 31, 2025, 2024, 2023, 2022, 2021, 2020, 2019, 2018 and 2017 (share amounts presented in thousands).

			Years Ended
			March 31,
Per Share Data:			2025						2024						2023						2022						2021						2020						2019						2018						2017
Investment income 1			$	4.25					$	4.37					$	3.97					$	3.60					$	3.57					$	3.45					$	3.10					$	2.18					$	1.48
Operating expenses 1			( 1.74 )						( 1.65 )						( 1.67 )						( 1.70 )						( 1.78 )						( 1.76 )						( 1.62 )						( 1.16 )						( 0.87 )
Income taxes 1			( 0.05 )						( 0.02 )						( 0.01 )						( 0.03 )						( 0.13 )						( 0.12 )						( 0.06 )						( 0.01 )						( 0.11 )
Net investment income 1			2.46						2.70						2.29						1.87						1.66						1.57						1.42						1.01						0.50
Net realized (loss) gain, net of tax 1			( 1.03 )						( 0.98 )						( 0.57 )						0.26						( 0.45 )						2.35						1.24						0.10						0.50
Net unrealized appreciation (depreciation) on investments, net of tax 1			0.05						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 )						( 0.01 )						—						( 0.75 )						( 0.05 )						—						—						—						—
Total increase (decrease) from investment operations			1.47						2.05						1.10						1.88						2.67						( 1.24 )						1.98						2.45						1.49
Accretive effect of share issuances and repurchases			0.94						0.86						0.50						1.45						0.30						0.45						0.06						( 0.04 )						—
Dividends to shareholders			( 2.54 )						( 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			( 0.10 )						( 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			( 0.10 )						( 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			0.13						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			0.13						0.04						0.18						0.02						( 0.02 )						( 0.19 )						0.01						0.01						—
(Decrease) increase in net asset value			( 0.07 )						0.40						( 0.49 )						0.85						0.88						( 3.49 )						( 0.46 )						1.28						0.46
Net asset value
Beginning of period			16.77						16.37						16.86						16.01						15.13						18.62						19.08						17.80						17.34
End of period			$	16.70					$	16.77					$	16.37					$	16.86					$	16.01					$	15.13					$	18.62					$	19.08					$	17.80

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Ratios and Supplemental Data
Ratio of operating expenses to average net assets			10.32		%				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			3.57		%				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			14.52		%				16.07		%				13.75		%				11.31		%				10.74		%				8.77		%				7.53		%				5.51		%				2.83		%
Portfolio turnover			18.84		%				15.65		%				13.68		%				33.91		%				18.81		%				22.76		%				23.38		%				25.42		%				23.57		%
Total investment return 5			( 1.01 )		%				55.66		%				( 15.36 )		%				18.10		%				118.56		%				( 37.52 )		%				38.34		%				6.61		%				27.88		%
Total return based on change in NAV 6			14.73		%				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			$	22.32					$	24.96					$	17.78					$	23.73					$	22.16					$	11.42					$	21.04					$	17.02					$	16.91
Weighted-average basic common shares outstanding			47,448						40,727						30,016						22,840						19,060						18,000						16,074						16,074						15,825
Weighted-average diluted common shares outstanding			51,188						40,727						30,016						22,840						19,060						18,000						16,139						16,139						15,877
Common shares outstanding at end of period			52,913						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.

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On April 9, 2025, the Company entered into Incremental Commitment and Assumption Agreements that increased the total commitments under the accordion feature of the Corporate Credit Facility by $ 25 million, which increased total commitments from $ 485 million to $ 510 million. The $ 25 million increase was provided by two existing lenders.

On April 17, 2025, SBIC II 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 will allow SBIC II to obtain leverage by issuing SBA Debentures, subject to the issuance of a leverage commitment by the SBA. Current SBA regulations permit SBIC II to borrow up to $ 175 million in SBA Debentures with at least $ 87.5 million in regulatory capital.

On April 25, 2025, the Board of Directors declared a total dividend of $ 0.64 per share, comprised of a regular dividend of $ 0.58 and a supplemental dividend of $ 0.06 , for the quarter ending June 30, 2025. The record date for the dividend is June 13, 2025. The payment date for the dividend is June 30, 2025.

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SCHEDULE 12-14

Schedule of Investments in and Advances to Affiliates

(In thousands)

Portfolio Company			Type of Investment (1)			Industry			March 31, 2025 Principal Amount - Debt Investments						Amount of Interest or Dividends Credited in Income (2)						Fair Value at March 31, 2024						Gross Additions (3)						Gross Reductions (4)						Amount of Realized Gain/(Loss) (5)						Amount of Unrealized Gain/(Loss)						Fair Value at March 31, 2025
Control Investments
Brandner Design, LLC			Revolving Loan			Building & Infrastructure Products			$	100					$	11					$	—					$	88					$	—					$	—					$	( 3 )					$	85
			First Lien						8,750						1,287						—						8,636						—						—						( 1,199 )						7,437
			27,000 Class A Units						—						—						—						105						—						—						( 105 )						—
KMS, LLC			First Lien			Distribution			2,407						41						—						2,407						—						—						—						2,407
			Delayed Draw Term Loan						2,328						45						—						2,261						—						—						—						2,261
			19,395.96 Series A Preferred Units						—						—						—						6,305						—						—						—						6,305
National Credit Care, LLC			First lien - Term Loan A			Financial Services			11,875						210						—						11,790						—						—						( 508 )						11,282
			First lien - Term Loan B						11,875						227						—						9,414						—						—						86						9,500
			191,049.33 Class A-3 Preferred Units						—						—						—						539						—						—						1,468						2,007
			Warrants						—						—						—						92						—						—						—						92
Spectrum of Hope, LLC			First Lien - Superpriority Term Loan			Healthcare Services			2,284						49						—						2,284						—						—						—						2,284
			First Lien - Tranche A Term Loan						11,120						—						—						2,239						—						—						7,079						9,318
			First Lien - Tranche B Term Loan						11,120						—						—						11,120						—						—						( 8,006 )						3,114
			402,350 Common Units						—						—						—						—						—						—						—						—
Total Control Investments									$	61,859					$	1,870					$	—					$	57,280					$	—					$	—					$	( 1,188 )					$	56,092

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Portfolio Company			Type of Investment (1)			Industry			March 31, 2025 Principal Amount - Debt Investments						Amount of Interest or Dividends Credited in Income (2)						Fair Value at March 31, 2024						Gross Additions (3)						Gross Reductions (4)						Amount of Realized Gain/(Loss) (5)						Amount of Unrealized Gain/(Loss)						Fair Value at March 31, 2025
Affiliate Investments
AAC New Holdco Inc.			First Lien			Healthcare Services			$	181					$	—					$	—					$	181					$	—					$	—					$	—					$	181
			First Lien - Term Loan A						2,933						1						—						2,933						—						—						—						2,933
			First Lien - Term Loan B						2,933						1						—						2,933						—						—						—						2,933
			6,257,941 shares of preferred stock						—						—						—						5,702						—						—						—						5,702
			617,803 shares of common stock						—						—						—						—						—						—						—						—
			Warrants						—						—						—						—						—						—						—						—
Air Conditioning Specialist, Inc.			Revolving Loan			Consumer Services			695						83						825						695						( 825 )						—						( 10 )						685
			First Lien						21,077						2,924						24,407						8,238						( 11,590 )						84						( 378 )						20,761
			Delayed Draw Term Loan						2,937						133						—						3,702						( 765 )						—						( 44 )						2,893
			1,006,045.85 Preferred Units						—						—						3,319						—						—						—						( 378 )						2,941
American Nuts Operations LLC			First Lien - Term Loan A			Food, Agriculture & Beverage			5,851						8						—						5,851						—						—						—						5,851
			First Lien - Term Loan B						5,851						8						—						5,851						—						—						( 878 )						4,973
			21,062.03 Class A Preferred Units						—						—						—						1,843						—						—						—						1,843
			28.16 Class C Common Units						—						—						—						—						—						—						—						—
ArborWorks, LLC			Revolving Loan			Environmental Services			886						220						1,569						211						( 894 )						—						—						886
			First Lien						3,515						388						3,123						392						—						—						( 42 )						3,473
			100 Class A Units						—						—						5						—						—						—						—						5
			13,898.32 Class A-1 Preferred Units						—						—						3,170						—						—						—						( 138 )						3,032
			13,898.32 Class B-1 Preferred Units						—						—						—						—						—						—						—						—
			1,666.67 Class A-1 Common Units						—						—						—						—						—						—						—						—

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Portfolio Company			Type of Investment (1)			Industry			March 31, 2025 Principal Amount - Debt Investments						Amount of Interest or Dividends Credited in Income (2)						Fair Value at March 31, 2024						Gross Additions (3)						Gross Reductions (4)						Amount of Realized Gain/(Loss) (5)						Amount of Unrealized Gain/(Loss)						Fair Value at March 31, 2025
Catbird NYC, LLC			Revolving Loan			Specialty Retail			—						101						—						2,016						( 2,000 )						—						( 16 )						—
			First Lien						14,700						1,878						15,100						65						( 400 )						—						( 65 )						14,700
			1,000,000 Class A Units						—						26						1,781						—						—						—						24						1,805
			500,000 Class B Units						—						13						757						—						—						—						40						797
Central Medical Supply LLC			Revolving Loan			Healthcare Equipment & Supplies			1,450						171						700						752						—						—						( 2 )						1,450
			First Lien						18,540						1,628						7,540						11,007						—						—						( 22 )						18,525
			Delayed Draw Term Loan						101						26						101						6						—						—						( 6 )						101
			2,620,670 Preferred Units						—						—						1,360						—						—						—						1,803						3,163
Command Group Acquisition, LLC			First Lien			Healthcare Equipment & Supplies			6,000						802						5,882						18						—						—						( 20 )						5,880
			1,250,000 Preferred Units						—						—						1,250						—						—						—						( 212 )						1,038
Crafty Apes, LLC			First Lien			Movies & Entertainment			3,833						174						—						3,673						—						—						( 20 )						3,653
			Delayed Draw Term Loan						—						—						—						—						—						—						—						—
			1,519.07 Class A Common Units						—						—						—						4,730						—						—						307						5,037
Dynamic Communities, LLC			First Lien - Term Loan A			Business Services			4,766						511						4,249						520						—						—						( 3 )						4,766
			First Lien - Term Loan B						4,985						618						4,359						626						—						—						—						4,985
			250,000 Class A Preferred units						—						—						317						—						—						—						—						317
			5,435,211.03 Class B Preferred units						—						—						—						—						—						—						—						—
			255,984.22 Class C Preferred units						—						—						—						—						—						—						—						—
			2,500,000 Common units						—						—						—						—						—						—						—						—
GPT Industries, LLC			Revolving Loan			Industrial Products			—						27						—						11						—						—						( 11 )						—
			First lien						5,866						772						6,004						21						( 138 )						—						( 21 )						5,866
			1,000,000 Class A Preferred Units						—						—						2,064						—						—						—						683						2,747

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Portfolio Company			Type of Investment (1)			Industry			March 31, 2025 Principal Amount - Debt Investments						Amount of Interest or Dividends Credited in Income (2)						Fair Value at March 31, 2024						Gross Additions (3)						Gross Reductions (4)						Amount of Realized Gain/(Loss) (5)						Amount of Unrealized Gain/(Loss)						Fair Value at March 31, 2025
GrammaTech, Inc.			Revolving Loan			Software & IT Services			—						—						—						( 2 )						—						—						2						—
			First Lien						563						135						1,000						2						( 437 )						—						( 2 )						563
			1,000 Class A units						—						—						—						—						—						—						336						336
			360.06 Class A-1 units						—						—						—						—						—						—						121						121
Gravitiq LLC			Revolving Loan			Consumer Products			—						7						—						( 48 )						—						—						48						—
			First Lien - Term Loan A						15,000						349						—						14,082						—						—						—						14,082
			First Lien - Term Loan B						15,000						409						—						14,082						—						—						—						14,082
			Warrants						—						—						—						1,597						—						—						—						1,597
ITA Holdings Group, LLC			Revolving Loan			Transportation & Logistics			3,525						573						2,468						1,767						( 705 )						—						( 5 )						3,525
			First Lien - Term Loan						13,356						2,342						13,038						776						—						—						( 458 )						13,356
			First Lien - Term Loan B						13,356						2,601						13,038						766						—						—						( 448 )						13,356
			Delayed Draw Term Loan - A						1,484						191						1,058						426						—						—						—						1,484
			Delayed Draw Term Loan - B						1,484						218						1,058						426						—						—						—						1,484
			Warrants						—						—						4,005						—						—						—						5,750						9,755
			Warrants						—						—						3,869						—						—						—						7,500						11,369
			9.25 % Class A membership interest						—						383						2,374						—						—						—						6,402						8,776
iVueit, LLC			Revolving Loan			Business Services			—						1						—						( 10 )						—						—						10						—
			First lien						10,000						165						—						9,902						—						—						—						9,902
			Delayed Draw Term Loan						—						8						—						—						—						—						—						—
			2,000 Preferred Units						—						—						—						2,000						—						—						—						2,000

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Portfolio Company			Type of Investment (1)			Industry			March 31, 2025 Principal Amount - Debt Investments						Amount of Interest or Dividends Credited in Income (2)						Fair Value at March 31, 2024						Gross Additions (3)						Gross Reductions (4)						Amount of Realized Gain/(Loss) (5)						Amount of Unrealized Gain/(Loss)						Fair Value at March 31, 2025
Lighting Retrofit International, LLC (DBA Envocore)			Revolving Loan			Environmental Services			729						63						714						469						( 469 )						—						( 13 )						701
			First Lien						5,039						386						4,984						—						( 52 )						—						( 90 )						4,842
			Second Lien						5,208						—						4,917						—						—						—						( 4,917 )						—
			208,333.3333 Series A Preferred units						—						—						—						—						—						—						—						—
			203,124.9999 Common units						—						—						—						—						—						—						—						—
Outerbox, LLC			Revolving Loan			Media & Marketing			—						2						—						1						—						18						( 19 )						—
			First Lien						—						350						14,522						8						( 14,625 )						149						( 54 )						—
			11,008.6744 Class A common units						—						—						581						—						( 581 )						—						—						—
Pool Service Partners, Inc.			Revolving Loan			Consumer Services			—						52						980						1,995						( 3,000 )						—						25						—
			First Lien						5,000						603						4,900						16						—						—						( 151 )						4,765
			Delayed Draw Term Loan						5,400						411						588						5,782						( 1,000 )						22						( 246 )						5,146
			10,667 Common units						—						—						1,384						150						—						—						( 924 )						610
Red Dog Operations Holding Company LLC			Revolving Loan			Consumer Services			—						5						—						( 18 )						—						—						18						—
			First Lien						7,500						315						—						7,429						—						—						( 4 )						7,425
			1,000 Class A Preferred Units						—						—						—						1,000						—						—						—						1,000
Roseland Management, LLC			Revolving Loan			Healthcare Services			—						7						—						( 3 )						—						—						3						—
			First Lien						14,598						1,826						14,906						18						( 308 )						—						( 18 )						14,598
			3,364 Class A-2 Units						—						—						762						—						—						—						40						802
			1,100 Class A-1 units						—						—						183						—						—						—						13						196
			16,084 Class A units						—						—						747						—						—						—						194						941
Sonobi, Inc.			500,000 Class A Common units			Media & Marketing			—						—						1,958						—						—						—						( 1,958 )						—

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Portfolio Company			Type of Investment (1)			Industry			March 31, 2025 Principal Amount - Debt Investments						Amount of Interest or Dividends Credited in Income (2)						Fair Value at March 31, 2024						Gross Additions (3)						Gross Reductions (4)						Amount of Realized Gain/(Loss) (5)						Amount of Unrealized Gain/(Loss)						Fair Value at March 31, 2025
STATinMED, LLC			First Lien			Pharmaceuticals, Biotechnology & Life Sciences			7,560						—						4,914						—						—						—						( 4,914 )						—
			4,718.62 Class A Preferred Units						—						—						—						—						—						—						—						—
			39,097.96 Class B Preferred Units						—						—						—						—						—						—						—						—
Student Resource Center LLC			First Lien			Education			9,644						—						3,376						—						—						—						385						3,761
			355,555.56 Senior Preferred units						—						—						—						356						—						—						( 356 )						—
			10,502,487.46 Preferred units						—						—						—						—						—						—						—						—
			2,000,000 Preferred units						—						—						—						—						—						—						—						—
TalkNY Management Holdings, LLC			First Lien			Healthcare Services			7,500						735						—						7,401						—						—						( 89 )						7,312
			1,500,000 Class A-1 Preferred Units						—						—						—						1,500						—						—						( 418 )						1,082
Total Affiliate Investments									$	249,046					$	22,650					$	190,206					$	133,847					$	( 37,789 )					$	273					$	6,354					$	292,891
Total Control & Affiliate Investments									$	310,905					$	24,520					$	190,206					$	191,127					$	( 37,789 )					$	273					$	5,166					$	348,983

(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.

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