COMMITMENTS AND CONTINGENCIES

12 Months Ended

Mar. 31, 2023

Commitments and Contingencies Disclosure [Abstract]

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, 2023 and March 31, 2022 were as follows (amounts in thousands):


	March 31,		March 31,
Portfolio Company	2023		2022
Revolving Loans

Acacia BuyerCo V LLC	$	2,000	$	—
Acceleration, LLC	1,300		—
Air Conditioning Specialist, Inc.	1,200		1,000
American Teleconferencing Services, Ltd. (DBA Premiere Global Services, Inc.)	154		117
ArborWorks, LLC	1,000		3,000
ATS Operating, LLC	2,000		1,500
Cadmium, LLC	—		308
Catbird NYC, LLC	4,000		4,000
Cavalier Buyer, Inc.	2,000		—
Central Medical Supply LLC	1,200		1,200
Dynamic Communities, LLC	—		500
Exact Borrower, LLC	2,500		—
Fast Sandwich, LLC	—		3,100
FM Sylvan, Inc.	8,000		—
Gains Intermediate, LLC	2,500		—
GPT Industries, LLC	3,000		—
GrammaTech, Inc.	2,500		2,500
GS Operating, LLC	—		1,540
Gulf Pacific Acquisition, LLC	657		—
ISI Enterprises, LLC	2,000		1,200
Island Pump and Tank, LLC	1,000		—
ITA Holdings Group, LLC	—		1,250
Klein Hersh, LLC	—		938
Lash OpCo, LLC	138		481
Lighting Retrofit International, LLC (DBA Envocore)	2,083		2,083
Lightning Intermediate II, LLC	1,852		—
Mako Steel LP	943		943
Microbe Formulas LLC	1,627		—
Muenster Milling Company, LLC	7,000		5,000
NeuroPsychiatric Hospitals, LLC	—		600
New Skinny Mixes, LLC	4,000		—
NinjaTrader, Inc.	2,500		2,500
NWN Parent Holdings, LLC	480		1,380


	March 31,	March 31,
Portfolio Company	2023	2022
Opco Borrower, LLC (DBA Giving Home Health Care)	833	—
Outerbox, LLC	2,000	—
Pipeline Technique Ltd.	2,833	—
Roof OpCo, LLC	3,056	3,056
Roseland Management, LLC	1,425	1,425
RTIC Subsidiary Holdings LLC	548	—
Shearwater Research, Inc.	2,446	2,446
SIB Holdings, LLC	—	655
South Coast Terminals LLC	1,935	1,935
Spotlight AR, LLC	2,000	2,000
Student Resource Center, LLC	—	1,333
Systec Corporation (DBA Inspire Automation)	400	1,150
Versicare Management LLC	2,500	—
Wall Street Prep, Inc.	1,000	1,000
Well-Foam, Inc.	4,500	4,500
Winter Services Operations, LLC	4,444	2,000
Zenfolio Inc.	—	1,000
Total Revolving Loans	87,554	57,640
Delayed Draw Term Loans
AAC New Holdco Inc.	199	—
Acacia BuyerCo V LLC	2,500	—
Acceleration, LLC	5,000	—
Central Medical Supply LLC	1,400	1,400
CityVet Inc.	—	7,000
Exact Borrower, LLC	2,500	—
Flip Electronics, LLC	—	2,818
FoodPharma Subsidiary Holdings, LLC	—	5,470
Gains Intermediate, LLC	5,000	—
GS Operating, LLC	—	3,205
Gulf Pacific Acquisition, LLC	1,212	—
Infolinks Media Buyco, LLC	2,250	2,250
KMS, LLC	2,286	4,571
Lash OpCo, LLC	—	2,846
Muenster Milling Company, LLC	—	6,000
NeuroPsychiatric Hospitals, LLC	—	10,000
New Skinny Mixes, LLC	3,000	—
NinjaTrader, Inc.	4,692	4,692
Roof OpCo, LLC	—	4,644
Shearwater Research, Inc.	—	3,262
SIB Holdings, LLC	—	1,871
Systec Corporation (DBA Inspire Automation)	—	3,000
US CourtScript Holdings, Inc.	—	—
Versicare Management LLC	2,600	—
Winter Services Operations, LLC	4,444	4,444
Zips Car Wash, LLC - B	—	3,801


	March 31,		March 31,
Portfolio Company	2023		2022
Total Delayed Draw Term Loans	37,083		71,274
Total Unfunded Debt Commitments	$	124,637	$	128,914

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


	March 31,		March 31,
	2023		2022
Unfunded Debt Commitments
Expiring during:
2023	$	—	$	39,946
2024	31,625		37,321
2025	10,637		5,000
2026	6,712		8,194
2027	38,062		38,453
2028	35,318		—
2029	2,283		—
Total Unfunded Debt Commitments	$	124,637	$	128,914

The balances of unfunded equity commitments as of March 31, 2023 and March 31, 2022 were as follows (amounts in thousands):


	March 31,		March 31,
	2023		2022
Unfunded Equity Commitments
Catbird NYC, LLC	$	125	$	125
Infolinks Media Buyco, LLC	412		412
I-45 SLF LLC	—		4,800
Total Unfunded Equity Commitments	$	537	$	5,337

As of March 31, 2023, 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, 2023, 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, $0.3 million expire in August 2023, $0.4 million expire in February 2024, and $0.2 million expire in April 2024. As of March 31, 2023, none of the letters of credit issued and outstanding were recorded as a liability on the Company's balance sheet as such letters of credit are considered in the valuation of the investments in the portfolio company.

Effective April 1, 2019, ASC 842 required that a lessee evaluate its leases to determine whether they should be classified as operating or financing leases. The Company previously had an operating lease for its office space that commenced October 1, 2014 and expired February 28, 2022. In March 2021, the Company executed an agreement to lease new office space that commenced on February 1, 2022 and expires September 30, 2032. The Company identified the foregoing as an operating lease.

ASC 842 indicates that an ROU asset and lease liability should be recorded based on the effective date. As such, CSWC recorded an ROU asset, which is included in other assets on the Consolidated Statements of Assets and Liabilities, and a lease liability, which is included in other liabilities on the Consolidated Statements of Assets and Liabilities, as of February 1, 2022. The Company has recorded lease expense on a straight-line basis.

Total lease expense incurred for the three years ended March 31, 2023, 2022 and 2021 was $0.3 million, $0.3 million and $0.2 million, respectively. As of both March 31, 2023 and 2022, the asset related to the operating lease was $1.8 million

and the lease liability was $2.8 million and $2.7 million, respectively. As of March 31, 2023, the remaining lease term was 9.5 years and the discount rate was 7.21%.

The following table shows future minimum payments under the Company's operating leases as of March 31, 2023 (in thousands):


Year ending March 31,	Rent Commitment
2024	$	406
2025	416
2026	426
2027	436
2028	446
Thereafter	2,132
Total	$	4,262

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.