Capital Southwest Venture Corporation, a wholly-owned subsidiary of Capital Southwest Corporation (Nasdaq:CSWC), sold its 9,317,310 shares of common stock of Heelys, Inc. to Sequential Brands Group, Inc. Sequential acquired all of the outstanding shares of common stock of Heelys for $2.25 per share in cash.

The sale of CSVC's 9,317,310 shares of Heelys' common stock generated cash proceeds of $20,963,948 and a capital gain of $20,861,458. In December 2006, CSVC recognized a gain of $31,070,149 when it sold 7,393,750 shares of Heelys during its initial public offering. This brings the total realized gain in Heelys to $51,931,607. Additionally, in December 2008, CSVC received a dividend from Heelys in the amount of $9,317,310.

As a regulated investment company, the Capital Southwest Corporation, has the option to retain capital gain proceeds, pay the related taxes and pass along a tax credit to its shareholders or distribute the capital gain proceeds to its shareholders, who will then pay the related taxes. The Company may make distributions anytime during the tax year ending December 31, 2013.