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<SEC-DOCUMENT>0001010549-07-000989.txt : 20071120
<SEC-HEADER>0001010549-07-000989.hdr.sgml : 20071120
<ACCEPTANCE-DATETIME>20071120163446
ACCESSION NUMBER:		0001010549-07-000989
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20071120
ITEM INFORMATION:		Results of Operations and Financial Condition
ITEM INFORMATION:		Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing
ITEM INFORMATION:		Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20071120
DATE AS OF CHANGE:		20071120

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			CAPITAL SOUTHWEST CORP
		CENTRAL INDEX KEY:			0000017313
		IRS NUMBER:				751072796
		STATE OF INCORPORATION:			TX
		FISCAL YEAR END:			0331

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	333-118681
		FILM NUMBER:		071260101

	BUSINESS ADDRESS:	
		STREET 1:		12900 PRESTON RD STE 700
		CITY:			DALLAS
		STATE:			TX
		ZIP:			75230
		BUSINESS PHONE:		9722338242

	MAIL ADDRESS:	
		STREET 1:		12900 PRESTON RD
		STREET 2:		SUITE 700
		CITY:			DALLAS
		STATE:			TX
		ZIP:			75230
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>cswc8k112007.txt
<TEXT>
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 8-K
                                 CURRENT REPORT

     Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934



       Date of Report (Date of earliest event reported) November 20, 2007

                          Capital Southwest Corporation
- --------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

              Texas                811-1056                    75-1072796
- --------------------------------------------------------------------------------
 (State or other jurisdiction    (Commission                  (IRS Employer
      of incorporation)          File Number)               Identification No.)

  12900 Preston Road, Suite 700, Dallas,Texas                    75230
- --------------------------------------------------------------------------------
  (Address of principal executive offices)                     (Zip Code)

Registrant's telephone number, including area code          972-233-8242
- --------------------------------------------------------------------------------



Check  the  appropriate  box  below  if the  Form  8-K  filing  is  intended  to
simultaneously  satisfy the filing obligation of the registrant under any of the
following provisions:

[ ]  Written  communications  pursuant to Rule 425 under the  Securities Act (17
     CFR 230.425)

[ ]  Soliciting  material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
     240.14a-12)

[ ]  Pre-commencement   communications  pursuant  to  Rule  14d-2(b)  under  the
     Exchange Act (17 CFR 240.14d-2(b))

[ ]  Pre-commencement   communications  pursuant  to  Rule  13e-4(c)  under  the
     Exchange Act (17 CFR 240.13e-4(c))



<PAGE>


Item 2.02 Results of Operations and Financial Condition.

As more fully  discussed  below in Item  4.02,  on  November  19,  2007  Capital
Southwest  Corporation (the "Company")  concluded its previously  issued audited
financial  statements for the fiscal year ended March 31, 2007 and its unaudited
interim  financial  statements for the quarter ended June 30, 2007 should not be
relied upon and that those financial statements would be restated as to make the
necessary accounting adjustments.

Item 3.01. Notice of Delisting or Failure to Satisfy a Continued Listing Rule or
           Standard; Transfer of Listing.

On November 15, 2007, Capital Southwest  Corporation (the "Company")  received a
NASDAQ Staff Determination  letter stating that the Company is not in compliance
with  the  filing  requirements  for  continued  listing  set  forth  in  NASDAQ
Marketplace  Rule  4310(c)(14) and that its common stock is subject to delisting
from The NASDAQ Stock Market. The notice, which the Company expected, was issued
as a result of the Company's failure to file its semi-annual report on Form 10-Q
for the quarter  ended  September  30,  2007 with the  Securities  and  Exchange
Commission by the required  deadline.  The Company had  previously  filed a Form
12b-25 with the SEC indicating that the Company would be unable to file its Form
10-Q by the original  filing  deadline of November 9, 2007 due to the  Company's
ongoing review of its deferred taxes on unrealized appreciation of investments.

The Company  will  request a hearing  before the NASDAQ  Listing  Qualifications
Panel to review the Staff  Determination  letter and request continued  listing.
The Company can make no assurances that the NASDAQ Listing  Qualifications Panel
will grant the Company's request for continued listing. Under NASDAQ Marketplace
rules, the Company's request for a hearing will automatically stay the delisting
of the Company's common stock pending the issuance of a written determination by
the NASDAQ Listing Qualifications Panel.

The Company plans to file its Form 10-Q for the quarter ended September 30, 2007
as soon as reasonably  practicable.

A copy of the press  release  announcing  the receipt of this letter is attached
hereto as Exhibit 99.1 and is incorporated herein by reference.

Item 4.02  Non-Reliance  on Previously  Issued  Financial  Statements or Related
           Audit Report or Complete Interim Review.

On November 19, 2007,  Management and the Audit  Committee (the  "Committee") of
the  Board  of  Directors  of  Capital  Southwest  Corporation  (the  "Company")
concluded  that  its  long-standing  practice  of  recording  deferred  taxes on
unrealized  appreciation  of investments was not in conformity with GAAP and its
previously issued financial  statements related to accounting for deferred taxes
on unrealized  appreciation of investments requires  restatement.  Specifically,
the AICPA Audit and Accounting  Guide for Investment  Companies'  paragraph 6.04
requires that Regulated  Investment  Companies  record a deferred tax when it is
probable that the investment company subject to Subchapter M of the IRC will not
qualify under that subchapter for a period longer than one year.  Management has
determined  that while it was possible  that the Company  would not maintain its
qualifying status, as a Regulated  Investment  Company,  it was probable that it
would  maintain  such  qualifying  status.   Thus  the  deferred  tax  liability
consistently  recorded  and  disclosed  since  inception  should  not have  been
recognized.  As a result the Company's  reported net asset value, as well as its
increase in net assets from  operations  will  increase  for each  corresponding
period.

As a  result  of  its  review,  Management  and  the  Committee  concluded  that
previously issued  consolidated  financial  statements included in the Company's
Annual  Report on Form 10-K for the fiscal year ended March 31, 2007, as well as
the Company's  quarterly  report on Form 10-Q for the period ended June 30, 2007
can no longer be relied  upon,  as these  statements  include the balance  sheet
presentation of deferred taxes on unrealized appreciation of investments and the
statement of operations presentation of deferred income taxes on appreciation of
investments.  In connection with the Company's  refiling of its Annual Report on
Form 10-K for the  fiscal  year ended  March 31,  2007 and its Form 10-Q for the
quarter  ended June 30, 2007,  the Company will be amending  and  restating  its
financial statements.  The Company's management and the Committee have discussed
this matter with the Company's current and prior  independent  registered public
accounting firm.


<PAGE>


Item 9.01. Financial Statements and Exhibits.

(d)   Exhibits

         Exhibit
         Number          Description
- --------------------------------------------------------------------------------
          99.1      Press Release,  dated  November 20, 2007,  issued by Capital
                    Southwest Corporation.

























                                   SIGNATURES


     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned hereunto duly authorized.


Dated: November 20, 2007
                                By: /s/  Gary L. Martin
                                    --------------------------------------------
                                    Name: Gary L. Martin
                                    Title: President and Chief Executive Officer

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>2
<FILENAME>cswc8kex991112007.txt
<DESCRIPTION>PRESS RELEASE
<TEXT>



CAPITAL  SOUTHWEST  Receives  Notice  From NASDAQ Due to Delay in Filing of Form
10-Q and Announces Restatement of Previously Issued Audited Financial Statements

Dallas, TX, November 20, 2007 - Capital Southwest Corporation (NASDAQ - CSWC)

On November 15, 2007, Capital Southwest  Corporation (the "Company")  received a
NASDAQ Staff Determination  letter stating that the Company is not in compliance
with  the  filing  requirements  for  continued  listing  set  forth  in  NASDAQ
Marketplace  Rule  4310(c)(14) and that its common stock is subject to delisting
from The NASDAQ Stock Market. The notice, which the Company expected, was issued
as a result of the Company's failure to file its semi-annual report on Form 10-Q
for the quarter  ended  September  30,  2007 with the  Securities  and  Exchange
Commission by the required  deadline.  The Company had  previously  filed a Form
12b-25 with the SEC indicating that the Company would be unable to file its Form
10-Q by the original  filing  deadline of November 9, 2007 due to the  Company's
ongoing review of its deferred taxes on unrealized appreciation of investments.

The Company  will  request a hearing  before the NASDAQ  Listing  Qualifications
Panel to review the Staff  Determination  letter and request continued  listing.
The Company can make no assurances that the NASDAQ Listing  Qualifications Panel
will grant the Company's request for continued listing. Under NASDAQ Marketplace
rules, the Company's request for a hearing will automatically stay the delisting
of the Company's common stock pending the issuance of a written determination by
the NASDAQ Listing Qualifications Panel.

After  reviewing  the  accounting  treatment  for deferred  taxes on  unrealized
appreciation of investments, the company has determined its long-standing policy
of recording deferred taxes on unrealized appreciation of investments was not in
conformity  with  AICPA  Audit  and  Accounting  Guide  for  Investment  Company
standards. Management has determined that while it was possible that the Company
would not maintain its qualifying status, as a Regulated  Investment Company, it
was probable that it would maintain such status. Thus the deferred tax liability
consistently  recorded  and  disclosed  since  inception  should  not have  been
recognized.  As a result,  the Company will be restating  its audited  financial
statements  for the fiscal year ended March 31, 2007,  as well as its  unaudited
interim  financial   statements  for  the  quarter  ended  June  30,  2007.  The
restatement  will  eliminate  the  accrual  for  deferred  taxes  on  unrealized
appreciation of  investments,  thus increasing the net asset value per share for
the periods to be  restated.  The Company  plans to file its Form 10-K/A for the
fiscal year ended  March 31,  2007,  Form 10-Q/A for the quarter  ended June 30,
2007,  and  Form  10-Q  for the  quarter  ended  September  30,  2007 as soon as
reasonably  practicable.  Our delay in filing has been a result of our reviewing
the accounting treatment related to deferred taxes.

On October 23, 2007 the Company  released its net asset value at  September  30,
2007 of  $437,546,529,  equivalent  to  $112.50  per share  after  deducting  an
allowance of  $169,785,000,  equivalent to $43.66 per share for deferred  taxes.
The  Company  now plans to restate its  previously  reported  net asset value at
September 30, 2007 to reflect the following:

  o    An increase in net assets from operations                    $169,785,000
  o    An increase in net asset value per share                           $43.66

  Net Asset Value at September 30, 2007, as previously reported     $437,546,529
     Add back allowance for deferred taxes                           169,785,000
  Net asset value at September 30, 2007, as restated                $607,331,529
  Net asset value per share at September 30, 2007, as restated           $156.16


<PAGE>

Capital  Southwest  Corporation,  founded in 1961, is a venture capital business
development investment company headquartered in Dallas, Texas.

This press release contains  forward-looking  statements regarding the Company's
plans to request a hearing with NASDAQ.  These  forward-looking  statements  are
subject to risks and  uncertainties,  and actual results could differ materially
from those projected. These risks and uncertainties include, but are not limited
to, the timing and  outcome  of the NASDAQ  hearing;  the impact of any  actions
required  or taken as a result of such  review or the NASDAQ  hearing and review
process.

Contact: Gary L. Martin or Tracy L. Morris
         972-233-8242


                                      # # #

</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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