Capital Southwest Urges Shareholders to Support Authorized Shares Proposal

Rhea-AI Summary

Capital Southwest (Nasdaq: CSWC) is urging shareholders to vote in favor of a proposal to increase authorized common shares from 75.0 million to 135.0 million. As of August 3, 2026, about 89% of votes cast support the measure, but Texas law requires approval by at least two-thirds of all outstanding shares, making additional participation crucial.

According to Capital Southwest, the proposal is intended to preserve flexibility to raise equity capital when attractive opportunities arise, without authorizing any immediate issuance. Since 2015, the company has raised approximately $993 million of equity at a weighted average premium of about 131% to NAV. The board unanimously recommends a FOR vote, and proxy advisors ISS and Glass Lewis have also recommended support.

Positive

• Authorized shares increase proposed from 75.0 million to 135.0 million
• $993 million equity raised since 2015 at ~131% premium to NAV
• 89% of votes cast as of August 3, 2026 support proposal
• Proxy advisors ISS and Glass Lewis recommend voting FOR the proposal

Negative

• If proposal is not approved, ability to raise additional equity may become constrained
• Company warns failure could limit funding of new investments and balance sheet flexibility over time

News Explained

Approval would expand Capital Southwest’s authorized share capacity, not issue shares or dilute current holders by itself; dilution would require a later issuance, which would increase total shares and reduce existing holders’ percentage ownership.

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Proposal is intended to preserve the Company’s ability to grow and maintain financial flexibility and continue creating long-term shareholder value

DALLAS, Aug. 04, 2026 (GLOBE NEWSWIRE) -- Capital Southwest Corporation (“Capital Southwest” or the “Company”) (Nasdaq: CSWC) today encourages shareholders who have not yet voted to support the Company’s proposal to increase the number of authorized shares of common stock.

The Company has received substantial shareholder support for the proposal to date. As of August 3, 2026, approximately 89% of votes cast have been cast in favor of the proposal. However, because approval under Texas law requires the affirmative vote of holders of at least two-thirds of all outstanding shares, shareholder participation remains critical to the proposal’s approval. A failure to vote has the same practical effect as a vote AGAINST the proposal.

“We understand that shareholders may be frustrated with the continued solicitation of proxy votes. However, the passage of this proposal is vital to preserve the tools that have supported Capital Southwest’s growth and long-term shareholder returns. We are not seeking authority for a specific transaction, nor do we have an immediate need for capital. Rather, we are seeking to preserve the flexibility to execute our investment strategy when attractive opportunities arise, and we believe doing so is in shareholders’ best interests. We’d strongly encourage all those who have not voted, or those who have voted against, to vote FOR the charter amendment so we can end the proxy campaign by the reconvened annual meeting of shareholders on September 1st,” said Michael S. Sarner, President and Chief Executive Officer.

The proposal would provide Capital Southwest with the flexibility to continue executing the strategy that has supported the Company’s growth and long-term performance. Approval would not, by itself, result in the issuance of any shares. Rather, it would ensure that the Company has sufficient authorized shares available when attractive investment opportunities arise and when the Board of Directors determines that raising equity capital is in the best interests of shareholders.

Access to equity capital has supported substantial growth in the Company’s investment portfolio, earnings capacity and dividend-paying ability over time. Since 2015, Capital Southwest has raised approximately $993 million of equity capital at a weighted average premium of approximately 131% to prevailing NAV per share, reflecting the Company’s longstanding commitment to prudent capital allocation and shareholder value creation.

If the proposal is not approved, Capital Southwest’s ability to raise additional equity may become constrained. Over time, this could limit the Company’s ability to fund new investments, maintain balance sheet flexibility and capitalize on opportunities that could benefit shareholders. The Company would continue operating its business, but with reduced flexibility to support future growth and manage leverage.

The Board of Directors unanimously recommends that shareholders vote FOR the amendment to the Company’s articles of incorporation to increase the number of authorized shares of common stock from 75.0 million to 135.0 million. Institutional Shareholder Services Inc. and Glass Lewis & Co. also have recommended that shareholders vote FOR the proposal.

Shareholders who have voted against the proposal may change their vote by following the instructions on your voting instruction form before the voting deadline. Shareholders who have not yet voted are encouraged to follow the voting instruction form or contact Georgeson LLC, our proxy solicitor, toll-free at: 877-576-4833 or outside the US and Canada at: 570-218-9186 for assistance.

About Capital Southwest

Capital Southwest Corporation (Nasdaq: CSWC) is a Dallas, Texas-based, internally managed business development company with approximately $2.2 billion in investments at fair value as of June 30, 2026. Capital Southwest is a middle market lending firm focused on supporting the acquisition and growth of middle market businesses with $5 million to $50 million investments across the capital structure, including first lien, second lien and non-control equity co-investments. As a public company with a permanent capital base, Capital Southwest has the flexibility to be creative in its financing solutions and to invest to support the growth of its portfolio companies over long periods of time.

Forward-Looking Statements

This press release contains certain forward-looking statements with respect to the Company’s business and investments. Forward-looking statements are statements that are not historical statements and can often be identified by words such as "will," "believe," "expect" and similar expressions and variations or negatives of these words. These statements are based on management's current expectations, assumptions and beliefs. They are not guarantees of future results and are subject to numerous risks, uncertainties and assumptions that could cause actual results to differ materially from those expressed in any forward-looking statement. These risks include risks related to: changes in the markets in which the Company invests; changes in the financial, capital, and lending markets; changes in the interest rate environment and its impact on the Company’s business and portfolio companies; regulatory changes; tax treatment; the uncertainty associated with the imposition of tariffs and trade barriers and changes in trade policy and its impact on the Company’s portfolio companies and its financial condition; the impact of geopolitical conditions on the Company’s portfolio companies and opportunities available to the Company; an economic downturn and its impact on the ability of the Company’s portfolio companies to operate and the investment opportunities available to the Company; the impact of supply chain constraints on the Company’s portfolio companies; and the elevated levels of inflation and its impact on the Company’s portfolio companies and the industries in which the Company invests.

Readers should not place undue reliance on any forward-looking statements and are encouraged to review Capital Southwest's Annual Report on Form 10-K for the year ended March 31, 2026 and any subsequent filings with the SEC, including the "Risk Factors" sections therein, for a more complete discussion of the risks and other factors that could affect any forward-looking statements. Except as required by the federal securities laws, Capital Southwest does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changing circumstances or any other reason after the date of this press release.

Investor Relations Contact:

Michael S. Sarner, President and Chief Executive Officer
214-884-3829

A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/876af7ed-bd20-4ad2-a392-d6994b7f6e00

FAQ

What is Capital Southwest (NASDAQ: CSWC) asking shareholders to approve on authorized shares in August 2026?

Capital Southwest is asking shareholders to approve an increase in authorized common shares from 75.0 million to 135.0 million. According to Capital Southwest, this charter amendment would expand capacity to issue equity when the board believes raising capital is in shareholders’ best interests.

Does approving Capital Southwest’s 2026 CSWC authorized share increase immediately issue new stock or dilute shareholders?

Approval of the proposal would not by itself result in any share issuance or immediate dilution. According to Capital Southwest, the increase only preserves flexibility, with any future equity raises occurring when the board determines opportunities and capital needs justify issuing additional shares.

How much shareholder support does Capital Southwest’s CSWC authorized share proposal currently have?

As of August 3, 2026, approximately 89% of votes cast have been in favor of the proposal. According to Capital Southwest, Texas law requires the affirmative vote of at least two-thirds of all outstanding shares, so additional shareholder participation remains critical for final approval.

Why does Capital Southwest say the CSWC authorized share increase is important for shareholders?

Capital Southwest says the increase is vital to preserve flexibility to fund growth and manage leverage. According to Capital Southwest, access to equity capital has supported portfolio growth, earnings capacity and dividend-paying ability, and the added authorization helps seize attractive future investment opportunities when they arise.

What happens if Capital Southwest shareholders do not approve the 2026 CSWC authorized shares proposal?

If the proposal is not approved, Capital Southwest says its ability to raise additional equity may become constrained. According to Capital Southwest, this could limit funding for new investments, reduce balance sheet flexibility, and restrict the company’s capacity to capitalize on opportunities benefiting shareholders.

How has Capital Southwest historically used equity capital, and what figures are disclosed for CSWC?

Since 2015, Capital Southwest has raised approximately $993 million of equity capital. According to Capital Southwest, this equity was issued at a weighted average premium of about 131% to prevailing NAV per share, which the company cites as evidence of its focus on prudent capital allocation.

Who is recommending that investors vote FOR Capital Southwest’s 2026 CSWC authorized share increase?

Capital Southwest’s board of directors unanimously recommends voting FOR the authorized share increase. According to Capital Southwest, leading proxy advisory firms Institutional Shareholder Services (ISS) and Glass Lewis have also recommended that shareholders support the proposal at the reconvened annual meeting on September 1.