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| Texas                                                                |   | 75-1072796                           |
|----------------------------------------------------------------------|--------|--------------------------------------|
| (State or other jurisdiction of  incorporation or organization) |   | (I.R.S. Identification No.) Employer |

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

| Large accelerated filer  o | Accelerated filer x | Non-accelerated filer o | Smaller reporting company o |
|---------------------------------|--------------------------|------------------------------|-----------------------------|

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| PART I     |  | FINANCIAL INFORMATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | Page   |
|------------|--|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
| Item 1.    |  | Consolidated Financial Statements                                                                                                                                | 3      |
|       |  | Consolidated Statements of Assets and Liabilities December 31, 2013 (Unaudited) and March 31, 2013                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 3      |
|       |  | Consolidated Statements of Operations (Unaudited) For the three and nine months ended December 31, 2013 and December 31, 2012                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 4      |
|       |  | Consolidated Statements of Changes in Net Assets (Unaudited) For the nine months ended December 31, 2013 and December 31, 2012                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 5      |
|       |  | Consolidated Statements of Cash Flows (Unaudited) For the three and nine months ended December 31, 2013 and December 31, 2012                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 6      |
|       |  | Consolidated Schedule of Investments December 31, 2013 (Unaudited) and March 31, 2013                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 7      |
|       |  | Notes to Consolidated Financial Statements                                                                                                             | 19     |
| Item 2.    |  | Management's Discussion and Analysis of Financial Condition and Results of Operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 33     |
| Item 3.    |  | Quantitative and Qualitative Disclosures About Market Risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | 37     |
| Item 4.    |  | Controls and Procedures                                                                                                                                                                             | 38     |
|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
| PART II    |  | OTHER INFORMATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |
|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
| Item 1.    |  | Legal Proceedings                                                                                                                                                                                                                           | 38     |
| Item 1A.   |  | Risk Factors                                                                                                                                                                                                                                | 38     |
| Item 6.    |  | Exhibits                                                                                                                                                                        | 38     |
|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
| Signatures |  |                                                                                                                                                   | 39     |

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Table of Contents

| Item 1. | Consolidated Financial Statements |
|---------|-----------------------------------|

|                                                                                                                                         |   | December 31,2013 |    |   | March 31, 2013 |   |
|----------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------|---------|--------|---------------------|--------|
| Assets                                                                                                                                       |   | (Unaudited)      |    |   |                     |   |
| Investments at market or fair value                                                                                                          |   |                  |    |   |                     |   |
| Companies more than 25% owned (Cost: December 31, 2013 - $13,711; March 31, 2013 - $13,711)                                                  |   | $                | 370,879 |   |                | $      | 344,790 |   |
| Companies 5% to 25% owned (Cost: December 31, 2013 - $15,594; March 31, 2013 - $15,594)                                                      |   |             | 245,896 |   |                |   | 157,394 |   |
| Companies less than 5% owned (Cost: December 31, 2013 - $69,461; March 31, 2013 - $58,961)                                                   |   |             | 77,227  |   |                |   | 72,003 |   |
| Total investments (Cost: December 31, 2013 - $98,766, March 31, 2013 - $88,266)                                                              |   |             | 694,002 |   |                |   | 574,187 |   |
| Cash and cash equivalents                                                                                                                    |   |             | 65,717  |   |                |   | 81,767 |   |
| Receivables                                                                                                                                  |   |             |    |   |                |   |   |   |
| Dividends and interest                                                                                                                       |   |             | 10,366  |   |                |   | 2,465 |   |
| Affiliates                                                                                                                                   |   |             | 656     |   |                |   | 291 |   |
| Pension assets                                                                                                                               |   |             | 8,981   |   |                |   | 8,762 |   |
| Other assets                                                                                                                                 |   |             | 154     |   |                |   | 200 |   |
| Total assets                                                                                                                                 |   | $                | 779,876 |   |                | $      | 667,672 |   |
| Liabilities                                                                                                                                  |   |             |    |   |                |   |   |   |
| Accounts payable and accrued expenses                                                                                                        |   | $                | 3,826   |   |                | $      | 3,102 |   |
| Income taxes payable                                                                                                                         |   |             | 4,110   |   |                |   | - |   |
| Accrued pension cost                                                                                                                         |   |             | 3,001   |   |                |   | 2,650 |   |
| Deferred income taxes                                                                                                                        |   |             | 1,088   |   |                |   | 2,143 |   |
| Total liabilities                                                                                                                            |   |             | 12,025  |   |                |   | 7,895 |   |
| Net Assets                                                                                                                                   |   |             |    |   |                |   |   |   |
| Common stock, $.25 par value: authorized, 25,000,000 shares; issued, 17,620,256 shares at December 31, 2013 and 17,576,776 at March 31, 2013 |   |             | 4,405   |   |                |   | 4,394 |   |
| Additional capital                                                                                                                           |   |             | 192,035 |   |                |   | 183,668 |   |
| Accumulated net investment income(loss)                                                                                                      |   |             | 112     |   |                |   | (706 | ) |
| Accumulated net realized gain                                                                                                                |   |             | -       |   |                |   | 10,437 |   |
| Unrealized appreciation of investments                                                                                                       |   |             | 595,236 |   |                |   | 485,921 |   |
| Treasury stock - 2,339,512 shares, at cost                                                                                                   |   |             | (23,937 | )      |                |   | (23,937 | ) |
| Total net assets                                                                                                                             |   |             | 767,851 |   |                |   | 659,777 |   |
| Total liabilities and net assets                                                                                                             |   | $                | 779,876 |   |                | $      | 667,672 |   |
| Net asset value per share (on 15,280,744 shares outstanding at December 31, 2013 and 15,237,264 at March 31, 2013)                           |   | $                | 50.25   |   |                | $      | 43.30 |   |

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Table of Contents

|                                                              |   | Three Months Ended December 31 |   |   | Nine Months Ended December 31 |   |
|-------------------------------------------------------------------|--------|-------------------------------------|--------|--------|------------------------------------|--------|
|                                                              |   | 2013                                |   |   | 2012                               |   |   | 2013 |   |   | 2012 |   |
| Investment income:                                                |   |                                     |   |   |                                    |   |   |  |   |   |  |   |
| Interest                                                          |   | $                                   | 147    |   |                               | $      | 518 |   |   | $ | 766 |   |   | $ | 1,696 |   |
| Dividends                                                         |   |                                | 8,072  |   |                               |   | 6,308 |   |   |   | 9,162 |   |   |   | 7,548 |   |
| Management and other income                                       |   |                                | 144    |   |                               |   | 146 |   |   |   | 467 |   |   |   | 523 |   |
|                                                              |   |                                | 8,363  |   |                               |   | 6,972 |   |   |   | 10,395 |   |   |   | 9,767 |   |
| Operating expenses:                                               |   |                                |   |   |                               |   |   |   |   |   |   |   |   |   |   |   |
| Salaries                                                          |   |                                | 2,236  |   |                               |   | 2,357 |   |   |   | 5,103 |   |   |   | 3,720 |   |
| Stock option expense                                              |   |                                | (2     | )      |                               |   | 62 |   |   |   | 347 |   |   |   | 334 |   |
| Net pension expense(benefit)                                      |   |                                | 45     |   |                               |   | (9 | ) |   |   | 132 |   |   |   | (26 | ) |
| Professional fees                                                 |   |                                | 251    |   |                               |   | 191 |   |   |   | 664 |   |   |   | 767 |   |
| Other operating expenses                                          |   |                                | 273    |   |                               |   | 272 |   |   |   | 1,064 |   |   |   | 935 |   |
|                                                              |   |                                | 2,803  |   |                               |   | 2,873 |   |   |   | 7,310 |   |   |   | 5,730 |   |
| Income before income taxes                                        |   |                                | 5,560  |   |                               |   | 4,099 |   |   |   | 3,085 |   |   |   | 4,037 |   |
| Income tax benefit                                                |   |                                | (700   | )      |                               |   | (43 | ) |   |   | (782 | ) |   |   | (3 | ) |
|                                                              |   |                                |   |   |                               |   |   |   |   |   |   |   |   |   |   |   |
| Net investment income                                             |   | $                                   | 6,260  |   |                               | $      | 4,142 |   |   | $ | 3,867 |   |   | $ | 4,040 |   |
|                                                              |   |                                |   |   |                               |   |   |   |   |   |   |   |   |   |   |   |
| Proceeds from disposition of investments                          |   | $                                   | -      |   |                               | $      | 11,023 |   |   | $ | 55 |   |   | $ | 78,528 |   |
| Cost of investments sold                                          |   |                                | -      |   |                               |   | 9,258 |   |   |   | - |   |   |   | 9,882 |   |
| Realized gain on investments before income tax                    |   |                                | -      |   |                               |   | 1,765 |   |   |   | 55 |   |   |   | 68,646 |   |
| Net increase (decrease) in unrealized appreciation of investments |   |                                | 53,308 |   |                               |   | 22,296 |   |   |   | 109,315 |   |   |   | (5,904 | ) |
|                                                              |   |                                |   |   |                               |   |   |   |   |   |   |   |   |   |   |   |
| Net realized and unrealized gain on investments                   |   | $                                   | 53,308 |   |                               | $      | 24,061 |   |   | $ | 109,370 |   |   | $ | 62,742 |   |
|                                                              |   |                                |   |   |                               |   |   |   |   |   |   |   |   |   |   |   |
| Increase in net assets from operations                            |   | $                                   | 59,568 |   |                               | $      | 28,203 |   |   | $ | 113,237 |   |   | $ | 66,782 |   |

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Table of Contents

|                                                              |   | Nine MonthsEnded  |    |   | Nine MonthsEnded  |   |
|-------------------------------------------------------------------|--------|-------------------|---------|--------|-------------------|--------|
|                                                              |   | December 31, 2013 |    |   | December 31, 2012 |   |
| Operations:                                                       |   |                   |    |   |                   |   |
| Net investment income                                             |   | $                 | 3,867   |   |              | $      | 4,040 |   |
| Net realized gain on investments                                  |   |              | 55      |   |              |   | 68,646 |   |
| Net increase (decrease) in unrealized appreciation of investments |   |              | 109,315 |   |              |   | (5,904 | ) |
| Increase in net assets from operations                            |   |              | 113,237 |   |              |   | 66,782 |   |
| Distributions from:                                               |   |              |    |   |              |   |   |   |
| Undistributed net investment income                               |   |              | (3,050  | )      |              |   | (3,025 | ) |
| Net realized gain distribution                                    |   |              | -       |   |              |   | (66,826 | ) |
| Taxes incurred in deemed capital gain distributions               |   |              | (3,787  | )      |              |   | (1,125 | ) |
| Capital share transactions:                                       |   |              |    |   |              |   |   |   |
| Exercise of employee stock options                                |   |              | 1,327   |   |              |   | 3,243 |   |
| Stock option expense                                              |   |              | 347     |   |              |   | 334 |   |
| Increase(decrease) in net assets                                  |   |              | 108,074 |   |              |   | (617 | ) |
| Net assets, beginning of period                                   |   |              | 659,777 |   |              |   | 628,706 |   |
| Net assets, end of period                                         |   | $                 | 767,851 |   |              | $      | 628,089 |   |

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Table of Contents

|                                                                                                                    |   | Three Months Ended December 31 |    |   | Nine Months Ended December 31 |   |
|-------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------|---------|--------|------------------------------------|--------|
|                                                                                                                    |   | 2013                                |    |   | 2012                               |   |   | 2013 |   |   | 2012 |   |
| Cash flows from operating activities                                                                                    |   |                                     |    |   |                                    |   |   |  |   |   |  |   |
| Increase in net assets from operations                                                                                  |   | $                                   | 59,568  |   |                               | $      | 28,203 |   |   | $ | 113,237 |   |   | $ | 66,782 |   |
| Adjustments to reconcile increase in net assets from operations to net cash (used in) provided by operating activities: |   |                                |    |   |                               |   |   |   |   |   |   |   |   |   |   |   |
| Net proceeds from disposition of investments                                                                            |   |                                | – |   |                               |   | 11,023 |   |   |   | 55 |   |   |   | 78,521 |   |
| Return of Capital on Investment                                                                                         |   |                                | – |   |                               |   | 511 |   |   |   | – |   |   |   | 768 |   |
| Purchases of securities                                                                                                 |   |                                | (679    | )      |                               |   | (2,482 | ) |   |   | (10,501 | ) |   |   | (9,278 | ) |
| Depreciation and amortization                                                                                           |   |                                | 5       |   |                               |   | 7 |   |   |   | 16 |   |   |   | 25 |   |
| Net pension expense (benefit)                                                                                           |   |                                | 44      |   |                               |   | (9 | ) |   |   | 132 |   |   |   | (26 | ) |
| Realized gain on investments before income tax                                                                          |   |                                | – |   |                               |   | (1,765 | ) |   |   | (55 | ) |   |   | (68,646 | ) |
| Taxes incurred on deemed capital gain distribution                                                                      |   |                                | (3,787  | )      |                               |   | (1,125 | ) |   |   | (3,787 | ) |   |   | (1,125 | ) |
| Net (increase) decrease in unrealized appreciation of investments                                                       |   |                                | (53,308 | )      |                               |   | (22,296 | ) |   |   | (109,315 | ) |   |   | 5,904 |   |
| Stock option expense                                                                                                    |   |                                | (2      | )      |                               |   | 62 |   |   |   | 347 |   |   |   | 334 |   |
| Increase in dividend and interest receivable                                                                            |   |                                | (7,881  | )      |                               |   | (5,586 | ) |   |   | (7,901 | ) |   |   | (6,462 | ) |
| Increase in receivables from affiliates                                                                                 |   |                                | (136    | )      |                               |   | (104 | ) |   |   | (365 | ) |   |   | (218 | ) |
| Decrease (Increase) in other assets                                                                                     |   |                                | (13     | )      |                               |   | 22 |   |   |   | 31 |   |   |   | 32 |   |
| Increase in taxes payable                                                                                               |   |                                | 4,110   |   |                               |   | 1,125 |   |   |   | 4,110 |   |   |   | 1,125 |   |
| Increase in other liabilities                                                                                           |   |                                | 1,295   |   |                               |   | 1,687 |   |   |   | 724 |   |   |   | 1,591 |   |
| (Decrease) Increase in deferred income taxes                                                                            |   |                                | (1,024  | )      |                               |   | (43 | ) |   |   | (1,055 | ) |   |   | 9 |   |
| Net cash (used in) provided by operating activities                                                                     |   |                                | (1,808  | )      |                               |   | 9,230 |   |   |   | (14,327 | ) |   |   | 69,336 |   |
| Cash flows from financing activities                                                                                    |   |                                |    |   |                               |   |   |   |   |   |   |   |   |   |   |   |
| Distributions from undistributed net investment income                                                                  |   |                                | (1,525  | )      |                               |   | (1,520 | ) |   |   | (3,050 | ) |   |   | (3,025 | ) |
| Dividends paid from net realized capital gain                                                                           |   |                                | – |   |                               |   | – |   |   |   | – |   |   |   | (66,826 | ) |
| Proceeds from exercise of employee stock options                                                                        |   |                                | 868     |   |                               |   | 226 |   |   |   | 1,327 |   |   |   | 3,243 |   |
| Net cash used in financing activities                                                                                   |   |                                | (657    | )      |                               |   | (1,294 | ) |   |   | (1,723 | ) |   |   | (66,608 | ) |
| Net (decrease) increase in cash and cash equivalents                                                                    |   |                                | (2,465  | )      |                               |   | 7,936 |   |   |   | (16,050 | ) |   |   | 2,728 |   |
| Cash and cash equivalents at beginning of period                                                                        |   |                                | 68,182  |   |                               |   | 59,687 |   |   |   | 81,767 |   |   |   | 64,895 |   |
| Cash and cash equivalents at end of period                                                                              |   | $                                   | 65,717  |   |                               | $      | 67,623 |   |   | $ | 65,717 |   |   | $ | 67,623 |   |

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Table of Contents

| Company                                                                                                                                                                                                           |   | Equity (a) |   |   | Investment (b)                                                                                                                                                  |                                                                                                                                                          | Cost   |      |       | Value (c) |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------|------------|-----------|--------|
| *†ALAMO GROUP INC.Seguin, TexasTractor-mounted mowing and mobile excavation equipment for governmental, industrial and agricultural markets; street-sweeping and snow removal equipment for municipalities. |   |       | 22.0   | %      |                                                                                                                                                                 | ‡2,832,300 shares of common stock (acquired 4-1-73 thru 5-09-13)                                                                                        |   | $         | 2,190,937  |      |   | $ | 171,831,597 |   |
| ATLANTIC CAPITAL BANCSHARES, INCAtlanta, GeorgiaHolding company of Atlantic Capital Bank, a full service commercial bank.                                                                                         |   |       | 1.9    | %      |                                                                                                                                                                 | 300,000 shares of common stock (acquired 4-10-07)                                                                                                             |   |      | 3,000,000  |      |   |   | 3,656,000 |   |
| ¥BALCO, INC.Wichita, KansasSpecialty architectural products used in the construction and remodeling of commercial and institutional buildings.                                                               |   |       | 95.7   | %      |                                                                                                                                                                 | 445,000 shares of common stock and 60,920 shares Class B non-voting common stock (acquired 10-25-83 and 5-30-02)                                              |   |      | 624,920    |      |   |   | 4,600,000 |   |
| *BOXX TECHNOLOGIES, INC.Austin, TexasWorkstations for computer graphic imaging and design.                                                                                                                        |   |       | 14.9   | %      |                                                                                                                                                                 | 3,125,354 shares of Series B Convertible Preferred Stock, convertible into 3,125,354 shares of common stock at $0.50 per share (acquired 8-20-99 thru 8-8-01) |   |      | 1,500,000  |      |   |   | 1,020,000 |   |
| ¥ CAPSTAR HOLDINGS CORPORATIONDallas, TexasAcquires holds and manages real estate for potential development and sale.                                                                                        |   |       | 100    | %      |                                                                                                                                                                 | 500 shares of common stock (acquired 6-10-10) and 1,000,000 shares of preferred stock (acquired 12-17-12)                                                     |   |      | 4,703,619  |      |   |   | 7,572,000 |   |
| CINATRA CLEAN TECHNOLOGIES, INC.Houston, TexasCleans above ground oil storage tanks with a patented, automated system.                                                                        |   |       | 76.2   | %      |                                                                                                                                                                 | 12% subordinated secured promissory note, due 5-9-16 (acquired 5-19-10 thru 10-20-10)                                                                         |   |      | 779,278    |      |   |   | 1 |   |
|                                                                                                                                                                                                              |   |       |   |        | 12% subordinated secured promissory note, due 5-9-17 (acquired 5-9-11 thru 10-26-11)                                                                            |                                                                                                                                                          |   | 2,285,700 |       |      |   | 1 |   |
|                                                                                                                                                                                                              |   |       |   |        | 12% subordinated secured promissory note, due 3-31-17 (acquired 9-9-11 and 10-26-11)                                                                            |                                                                                                                                                          |   | 1,523,800 |       |      |   | 1 |   |
|                                                                                                                                                                                                              |   |       |   |        | 10% subordinated secured promissory note, due 5-9-17 (acquired 7-14-08 thru 4-28-10)                                                                            |                                                                                                                                                          |   | 6,200,700 |       |      |   | 1 |   |
|                                                                                                                                                                                                              |   |       |   |        | 12% subordinated secured promissory note, due 10-31-17 (acquired 10-19-12)                                                                                      |                                                                                                                                                          |   | 499,997   |       |      |   | 1 |   |
|                                                                                                                                                                                                              |   |       |   |        | 12% subordinated secured promissory note, due 9-30-14 (acquired 7-25-13)                                                                                        |                                                                                                                                                          |   | 1,157,850 |       |      |   | 1 |   |
|                                                                                                                                                                                                              |   |       |   |        | 3,033,410 shares of Series A Convertible Preferred Stock, convertible into 3,033,410 shares of common stock at $1.00 per share (acquired 7-14-08 thru 11-18-10) |                                                                                                                                                          |   | 3,033,410 |       |      |   | 1 |   |
|                                                                                                                                                                                                              |   |       |   |        | Warrants to purchase 1,436,499 shares of common stock at $1.00 per share, expiring 10-31-2027 (acquired 5-9-11 thru 10-19-12)                                   |                                                                                                                                                          |   | –   |       |      |   | – |   |
|                                                                                                                                                                                                              |   |       |   |   |                                                                                                                                                                 |                                                                                                                                                          |   |      | 15,480,735 |      |   |   | 7 |   |

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Table of Contents

| Company                                                                                                                                                                                                     |   |   | Equity (a) |    |                                                                                                                                              | Investment (b)                                                                                                                                      |   |      | Cost      |   |   |      | Value (c)  |        |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|------------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------|-----------|--------|--------|-----------|------------|--------|
| DEEPWATER CORROSION SERVICES, INC.Houston, TexasFull-service corrosion control   company providing the oil and gas industry with expertise in cathodic protection and asset integrity management. |   |   | 31.3       | %       |                                                                                                                                                   | 127,004 shares of Series A convertible preferred stock, convertible into 127,004 shares of common stock at $1.00 per shares (acquired 4-9-13)       |   |      | 8,000,000 |   |   |      | 8,000,000  |   |
| ¥DISCOVERY ALLIANCE, LLCDallas, TexasProvides services related to intellectual property protection and development.                                                                                    |   |   | 90         | %       |                                                                                                                                                   | 90.0% limited liability company interest (acquired  9-12-08 thru 10-15-12)                                                                |   |      | 1,315,000 |   |   |      | 404,000    |   |
| *†ENCORE WIRECORPORATIONMcKinney, TexasElectric wire and cable for residential, commercial and industrial construction use.                                                                           |   |   | 6.2        | %       |                                                                                                                                                   | ‡1,312,500 shares of common stock (acquired 9-10-92 thru 10-15-98)                                                                            |   |      | 5,200,000 |   |   |      | 71,019,375 |   |
| †HOLOGIC, INC.Bedford, MassachusettsMedical diagnostic products, imaging systems and surgical products serving the healthcare needs of women.                                                         |   |        | < 1     | %  |                                                                                                                                                   | ‡582,820 shares of common stock (acquired 8-27-99)                                                                                            |   |      | 202,529   |   |   |      | 13,020,199 |   |
| iMEMORIES, INC.Scottsdale, ArizonaEnables online video and photo sharing and DVD creation for home movies and photos recorded in analog and digital formats.                                      |   |   | 23.3       | %       |                                                                                                                                                   | 17,391,304 shares of Series B Convertible Preferred Stock, convertible into 19,891,304 shares of common stock at $0.23 per share (acquired 7-10-09) |   |      | 4,000,000 |   |   |      | 4,000,000  |   |
|                                                                                                                                                                                                        |   |   |       |         | 4,684,967 shares of Series C Convertible Preferred Stock, convertible into 4,684,967 shares of common stock at $0.23 per share (acquired 7-20-11) |                                                                                                                                                |   | 1,078,479 |      |   |   | 1,078,479 |       |
|                                                                                                                                                                                                        |   |   |       |         | Warrants to purchase 2,500,000  shares of common stock at $0.12 per share, expiring 1-21-21(acquired 9-13-10 thru 1-21-11)                   |                                                                                                                                                |   | –   |      |   |   | –   |       |
|                                                                                                                                                                                                        |   |   |       |         | 10% convertible notes, $308,000 principal due 7-31-14 (acquired  9-7-12)                                                                     |                                                                                                                                                |   | 308,000   |      |   |   | 308,000   |       |
|                                                                                                                                                                                                        |   |   |       |    |                                                                                                                                                   | 10% convertible notes, $880,000 principal due 7-31-14 (acquired  from 3-15-13 to 9-26-13)                                                      |   |      | 880,000   |   |   |      | 880,000    |   |
|                                                                                                                                                                                                        |   |   |       |    |                                                                                                                                                   |                                                                                                                                                |   |      | 6,266,479 |   |   |      | 6,266,479  |   |
| INSTAWARES HOLDING COMPANY, LLCAtlanta, GeorgiaProvides services and distributes equipment and supplies to the restaurant industry via its five subsidiary companies.                                       |   |   | 4.3        | %       |                                                                                                                                                   | 3,846,154 Class D Convertible Preferred Stock (acquired 5-20-11)                                                                                    |   |      | 5,000,000 |   |   |      | 3,652,000  |   |

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Table of Contents

| Company                                                                                                                                                                                                                                                           |   |   | Equity (a) |   |                                                                                                   | Investment (b)                                                                                                                                            |   |      | Cost      |   |   |       | Value (c)   |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|------------|--------|--------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------|-----------|--------|--------|------------|-------------|--------|
| KBI BIOPHARMA, INC.Durham, North CarolinaProvides fully-integrated, outsourced drug development and bio-manufacturing services.                                                                                                                         |   |   | 17.1       | %      |                                                                                                        | 10,204,082 shares of Series B-2 Convertible Preferred Stock, convertible into 10,204,802 shares of common stock at $0.49 per share (acquired 9-08-09)     |   |      | 5,000,000 |   |   |       | 6,900,000   |   |
|                                                                                                                                                                                                                                                              |   |   |       |        | Warrants to purchase 94,510 shares of Series B preferred stock at $ 0.70 per share, acquired 1-26-12   |                                                                                                                                                      |   | -         |      |   |   | -          |        |
|                                                                                                                                                                                                                                                              |   |   |       |        |                                                                                                   |                                                                                                                                                      |   | 5,000,000 |      |   |   | 6,900,000  |        |
| ¥MEDIA RECOVERY, INC.Dallas, TexasDistributor of computer datacenter and office automation supplies and accessories; manufactures and distributes devices used to monitor and manage intransit inventory and dunnage products for protecting shipments.      |   |   | 97.9       | %      |                                                                                                        | 800,000 shares of Series A Convertible Preferred Stock, convertible into 800,000 shares of common stock at $1.00 per share (acquired 11-4-97)             |   |      | 800,000   |   |   |       | 2,900,000   |   |
|                                                                                                                                                                                                                                                              |   |   |       |        | 4,000,002 shares of common stock (acquired 11-4-97)                                                    |                                                                                                                                                      |   | 4,615,000 |      |   |   | 14,300,000 |        |
|                                                                                                                                                                                                                                                              |   |   |       |        |                                                                                                   |                                                                                                                                                      |   | 5,415,000 |      |   |   | 17,200,000 |        |
| *PALLETONE, INC.Bartow, FloridaManufacturer of wooden pallets and pressure-treated lumber.                                                                                                                                                                        |   |   | 7.7        | %      |                                                                                                        | 12.3% senior subordinated notes, $2,000,000 principal due 12-18-15 (acquired  9-25-06)                                                               |   |      | 1,553,150 |   |   |       | 2,000,000   |   |
|                                                                                                                                                                                                                                                              |   |   |       |        | 150,000 shares of common stock (acquired 10-18-01)                                                     |                                                                                                                                                      |   | 150,000   |      |   |   | 2          |        |
|                                                                                                                                                                                                                                                              |   |   |       |        |                                                                                                   |                                                                                                                                                      |   | 1,703,150 |      |   |   | 2,000,002  |        |
| ¥THE RECTORSEAL CORPORATIONHouston, TexasSpecialty chemicals, tools and products for plumbing, HVAC, electrical, construction, industrial, and oil field; smoke containment systems for building fires; also owns 20% of The Whitmore Manufacturing Company. |   |   | 100.0      | %      |                                                                                                        | 27,907 shares of common stock (acquired 1-5-73 and 3-31-73)                                                                                               |   |      | 52,600    |   |   |       | 257,900,000 |   |
| TITANLINER, INC.Midland, TexasManufactures, installs and rents spill containment system for oilfield applications.                                                                                                                                                |   |   | 31.2       | %      |                                                                                                        | 217,038 shares of Series A Convertible Preferred Stock convertible into 217,038 shares of Series A Preferred Stock at $14.76 per share (acquired 6-29-12) |   |      | 3,203,000 |   |   |       | -           |   |
|                                                                                                                                                                                                                                                              |   |   |       |        | 7%  senior subordinated secured promissory note, due 6-30-17 (acquired 6-29-12)                   |                                                                                                                                                      |   | 2,747,000 |      |   |   | 2,536,000  |        |
|                                                                                                                                                                                                                                                              |   |   |       |        | Warrants to purchase 122,239 shares of Series A Preferred Stock at $ 0.01 per share, expiring 12-31-22 |                                                                                                                                                      |   | -         |      |   |   | -          |        |
|                                                                                                                                                                                                                                                              |   |   |       |        |                                                                                                   |                                                                                                                                                      |   | 5,950,000 |      |   |   | 2,536,000  |        |

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Table of Contents

| Company                                                                                                                                                                                                  |   |   | Equity (a) |   |                                                                                                                                                               | Investment (b)                                                                                                                                                                       |   |      | Cost      |   |   |       | Value (c)  |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------|-----------|--------|--------|------------|------------|--------|
| TRAX HOLDINGS, INC.Scottsdale, ArizonaProvides a comprehensive set of solutions to improve the  validation, accounting and payment of transportation-related invoices.                              |   |   | 28.4       | %      |                                                                                                                                                                    | 475,430 shares of Series B convertible Preferred Stock convertible into 475,430 shares of  common stock at $8.41 per share(acquired 12-5-12)                                    |   |      | 4,000,000 |   |   |       | 7,800,000  |   |
|                                                                                                                                                                                                     |   |   |       |        | 1,061,279 shares of Series A Convertible Preferred Stock, convertible into 1,061,279 shares of common stock at $4.71 per share (acquired 12-8-08 and 2-17-09) |                                                                                                                                                                                 |   | 5,000,000 |      |   |   | 13,500,000 |       |
|                                                                                                                                                                                                     |   |   |       |        |                                                                                                                                                               |                                                                                                                                                                                 |   | 9,000,000 |      |   |   | 21,300,000 |       |
| *WELLOGIX, INC.Houston, TexasFormerly a developer and supporter of business process software used by the oil and gas industry.                                                                           |   |   | 19.0       | %      |                                                                                                                                                                    | 4,788,371 shares of Series A-1 Convertible Participating Preferred Stock, convertible into 4,788,371 shares of common stock at $1.04 per share (acquired 8-19-05 thru 6-15-08)  |   |      | 5,000,000 |   |   |       | 25,000     |   |
| ¥THE WHITMORE MANUFACTURING COMPANYRockwall, TexasSpecialized surface mining, railroad and industrial lubricants; coatings for automobiles and primary metals; fluid contamination control devices. |   |   | 80.0       | %      |                                                                                                                                                                    | 80 shares of common stock (acquired 8-31-79)                                                                                                                                         |   |      | 1,600,000 |   |   |       | 83,000,000 |   |
| MISCELLANEOUS                                                                                                                                                                                            |   |   | –    |   |                                                                                                                                                                    | Ballast Point Ventures II, L.P.2.2% limited partnership interest (acquired 8-4-08 thru 2-15-13)                                                                                      |   |      | 1,959,790 |   |   |       | 2,757,000  |   |
|                                                                                                                                                                                                     |   |   | –    |   |                                                                                                                                                                    | BankCap Partners Fund I, L.P.5.5% limited partnership interest (acquired 7-14-06 thru 11-16-12)                                                                                      |   |      | 6,000,000 |   |   |       | 5,249,000  |   |
|                                                                                                                                                                                                     |   |   | –    |   |                                                                                                                                                                    | †Capitala Finance Corporation108,105 shares of common stock (acquired 9-25-13)                                                                                                 |   |      | 1,363,799 |   |   |       | 2,151,290  |   |
|                                                                                                                                                                                                     |   |   | –    |   |                                                                                                                                                                    | CapitalSouth Partners Fund III, L.P.1.9% limited partnership interest (acquired 1-22-08 and 11-16-11)                                                                                |   |      | 467,457   |   |   |       | 237,000    |   |
|                                                                                                                                                                                                     |   |   | –    |   |                                                                                                                                                                    | Diamond State Ventures, L.P.1.4% limited partnership interest (acquired 10-12-99 thru 8-26-05)                                                                                       |   |      | -         |   |   |       | 16,000     |   |
|                                                                                                                                                                                                     |   |   | –    |   |                                                                                                                                                                    | First Capital Group of Texas III, L.P.3.0% limited partnership interest (acquired 12-26-00 thru 8-12-05)                                                                             |   |      | 778,895   |   |   |       | 169,000    |   |
|                                                                                                                                                                                                     |   |   | 100        | %      |                                                                                                                                                                    | ¥Humac Company1,041,000 shares of common stock (acquired 1-31-75 and 12-31-75)                                                                                                  |   |      | –   |   |   |       | 203,000    |   |

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Table of Contents

| Company                         |   |   | Equity (a)   |   |   | Investment (b)                                                                                        |   |   | Cost       |   |   |   | Value (c)   |        |
|---------------------------------|--------|--------|--------------|--------|--------|-------------------------------------------------------------------------------------------------------|--------|--------|------------|--------|--------|--------|-------------|--------|
| Miscellaneous (continued)  |   |   | –      |   |        | †North American Energy Partners, Inc.77,194 shares of common stock (acquired 8-20-12)           |   |   | 236,986    |   |   |   | 448,498     |   |
|                            |   |   | –      |   |        | STARTech Seed Fund II3.2% limited partnership interest (acquired 4-28-00 thru 2-23-05)                |   |   | 754,327    |   |   |   | 161,000     |   |
|                            |   |   | –      |   |        | TCI Holdings, Inc.21 shares of 12% Series C Cumulative Compounding Preferred Stock (acquired 1-30-90) |   |   | –    |   |   |   | 708,000     |   |
| TOTAL INVESTMENTS               |   |   |    |   |   |                                                                                             |   | $      | 98,766,223 |   |   | $      | 694,002,447 |   |

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Table of Contents

| Company                                                                                                                                                                                          |   | Equity (a) |   |   | Investment (b)                                                                       |                                                                                                                                                          | Cost   |      |       | Value (c) |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------|--------|--------|--------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------|------------|-----------|--------|
| *†ALAMO GROUP INC.Seguin, TexasTractor-mounted mowing and mobile excavation equipment for governmental, industrial and agricultural markets; street-sweeping equipment for municipalities. |   |       | 22.0   | %      |                                                                                      | ‡2,832,300 shares of common stock (acquired 4-1-73 thru 5-09-11)                                                                                        |   | $         | 2,190,937  |      |   | $ | 108,278,100 |   |
| ATLANTIC CAPITAL BANCSHARES, INCAtlanta, GeorgiaHolding company of Atlantic Capital Bank, a full service commercial bank.                                                                        |   |       | 1.9    | %      |                                                                                      | 300,000 shares of common stock (acquired 4-10-07)                                                                                                             |   |      | 3,000,000  |      |   |   | 2,950,000 |   |
| ¥BALCO, INC.Wichita, KansasSpecialty architectural products used in the construction and remodeling of commercial and institutional buildings.                                              |   |       | 95.7   | %      |                                                                                      | 445,000 shares of common stock and 60,920 shares Class B non-voting common stock (acquired 10-25-83 and 5-30-02)                                              |   |      | 624,920    |      |   |   | 4,500,000 |   |
| *BOXX TECHNOLOGIES, INC.Austin, TexasWorkstations for computer graphic imaging and design.                                                                                                       |   |       | 14.9   | %      |                                                                                      | 3,125,354 shares of Series B Convertible Preferred Stock, convertible into 3,125,354 shares of common stock at $0.50 per share (acquired 8-20-99 thru 8-8-01) |   |      | 1,500,000  |      |   |   | 1,240,000 |   |
| CINATRA CLEAN TECHNOLOGIES, INC.Houston, TexasCleans above ground oil storage tanks with a patented, automated system.                                                                           |   |       | 73.4   | %      |                                                                                      | 12% subordinated secured promissory note, due 5-9-16 (acquired 5-19-10 thru 10-20-10)                                                                         |   |      | 779,278    |      |   |   | 81,000 |   |
|                                                                                                                                                                                             |   |       |   |        | 12% subordinated secured promissory note, due 5-9-17 (acquired 5-9-11 thru 10-26-11) |                                                                                                                                                          |   | 2,285,700 |       |      |   | 237,000 |   |
|                                                                                                                                                                                             |   |       |   |        | 12% subordinated secured promissory note, due 3-31-17 (acquired 9-9-11 and 10-26-11) |                                                                                                                                                          |   | 1,523,800 |       |      |   | 158,000 |   |
|                                                                                                                                                                                             |   |       |   |        | 10% subordinated secured promissory note, due 5-9-17 (acquired 7-14-08 thru 4-28-10) |                                                                                                                                                          |   | 6,200,700 |       |      |   | 643,000 |   |
|                                                                                                                                                                                             |   |       |   |   |                                                                                      | 12% subordinated secured promissory note, due 10-31-17 (acquired 10-19-12)                                                                                    |   |      | 499,997    |      |   |   | 52,000 |   |
|                                                                                                                                                                                             |   |       |   |   |                                                                                      | 3,033,410 shares Series A Convertible Preferred Stock, convertible into 3,033,410 shares common stock at $1.00 per share (acquired 7-14-08 thru 11-18-10)     |   |      | 3,033,410  |      |   |   | 1 |   |
|                                                                                                                                                                                             |   |       |   |   |                                                                                      | Warrants to purchase 1,436,499 shares of common stock at $1.00 per share, expiring 10-31-2027 (acquired 5-9-11 thru 10-19-12)                                 |   |      | –    |      |   |   | – |   |
|                                                                                                                                                                                             |   |       |   |   |                                                                                      |                                                                                                                                                          |   |      | 14,322,885 |      |   |   | 1,171,001 |   |

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Table of Contents

| Company                                                                                                                                                                |   |   | Equity (a) |   |                                                                                                                                              | Investment (b)                                                                                                                                              |   |      | Cost      |   |   |      | Value (c)  |        |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------|-----------|--------|--------|-----------|------------|--------|
| *†ENCORE WIRE   CORPORATIONMcKinney, TexasElectric wire and cable for residential, commercial and industrial construction use.                    |   |   | 6.2        | %      |                                                                                                                                                   | ‡1,312,500 shares of common stock (acquired 9-10-92 thru 10-15-98)                                                                                    |   |      | 5,200,000 |   |   |      | 45,950,625 |   |
| †HOLOGIC, INC.Bedford, MassachusettsMedical instruments including bone densitometers, mammography devices and digital radiography systems.                       |   |   | < 1     | %      |                                                                                                                                                   | ‡582,820 shares of common stock (acquired 8-27-99)                                                                                                    |   |      | 202,529   |   |   |      | 13,165,904 |   |
| iMEMORIES, INC.Scottsdale, ArizonaEnables online video and photo sharing and DVD creation for home movies recorded in analog and new digital format.    |   |   | 23         | %      |                                                                                                                                                   | 17,391,304 shares of Series B Convertible Preferred Stock, convertible into 19,891,304 shares of common stock at $0.23 per share (acquired 7-10-09)         |   |      | 4,000,000 |   |   |      | 4,000,000  |   |
|                                                                                                                                                                   |   |   |       |        | 4,684,967 shares of Series C Convertible Preferred Stock, convertible into 4,684,967 shares of common stock at $0.23 per share (acquired 7-20-11) |                                                                                                                                                        |   | 1,078,479 |      |   |   | 1,078,479 |       |
|                                                                                                                                                                   |   |   |       |        | Warrants to purchase 2,500,000  shares of common stock at $0.12 per share, expiring 1-21-21(acquired 9-13-10 thru 1-21-11)                   |                                                                                                                                                        |   | –   |      |   |   | –   |       |
|                                                                                                                                                                   |   |   |       |        | 10% convertible notes, $308,000 principal due 7-31-14 (acquired  9-7-12)                                                                     |                                                                                                                                                        |   | 308,000   |      |   |   | 308,000   |       |
|                                                                                                                                                                   |   |   |       |        | 10% convertible notes, $400,000 principal due 7-31-14 (acquired  3-15-13                                                                     |                                                                                                                                                        |   | 440,000   |      |   |   | 440,000   |       |
|                                                                                                                                                                   |   |   |       |   |                                                                                                                                                   |                                                                                                                                                        |   |      | 5,826,479 |   |   |      | 5,826,479  |   |
| INSTAWARES HOLDING COMPANY, LLCAtlanta, GeorgiaProvides services to the    restaurant industry via its five subsidiary companies.                            |   |   | 4.5        | %      |                                                                                                                                                   | 3,846,154 shares of Class D Convertible Preferred Stock (acquired 5-20-11)                                                                                  |   |      | 5,000,000 |   |   |      | 5,975,000  |   |
| KBI BIOPHARMA, INC.Durham, North CarolinaProvides fully-integrated, outsourced drug development and bio-manufacturing services.                                   |   |   | 17.1       | %      |                                                                                                                                                   | 10,204,082 shares of Series B-2 Convertible Preferred Stock, convertible into 10,204,802 shares of common stock at $0.49 per share (acquired 9-08-09)  |   |      | 5,000,000 |   |   |      | 5,200,000  |   |
|                                                                                                                                                                   |   |   |       |        | Warrants to purchase 94,510 shares of Series B Preferred stock at $ 0.70 per share, acquired 1-26-12                                              |                                                                                                                                                        |   | -         |      |   |   | -         |       |
|                                                                                                                                                                   |   |   |       |   |                                                                                                                                                   |                                                                                                                                                        |   |      | 5,000,000 |   |   |      | 5,200,000  |   |

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| **Company**                                                                                                                                                                                                                                                           |   |   | Equity (a) |   |                                                                                                   | Investment (b)                                                                                                                                            |   |      | Cost      |   |   |      | Value (c)   |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|------------|--------|--------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------|-----------|--------|--------|-----------|-------------|--------|
| ¥MEDIA RECOVERY, INC.Dallas, TexasComputer datacenter and office automation supplies and accessories; impact, tilt monitoring and temperature sensing devices to detect mishandling shipments; dunnage for protecting shipments.                                 |   |   | 97.9       | %      |                                                                                                        | 800,000 shares of Series A Convertible Preferred Stock, convertible into 800,000 shares of common stock at $1.00 per share (acquired 11-4-97)        |   |      | 800,000   |   |   |      | 2,000,000   |   |
|                                                                                                                                                                                                                                                                  |   |   |       |        | 4,000,002 shares of common stock (acquired 11-4-97)                                                    |                                                                                                                                                      |   | 4,615,000 |      |   |   | 9,900,000 |        |
|                                                                                                                                                                                                                                                                  |   |   |       |   |                                                                                                        |                                                                                                                                                      |   |      | 5,415,000 |   |   |      | 11,900,000  |   |
| *PALLETONE, INC.Bartow, FloridaManufacturer of wooden pallets and pressure-treated lumber.                                                                                                                                                                            |   |   | 7.7        | %      |                                                                                                        | 12.3% senior subordinated notes, $2,000,000 principal due 12-18-15 (acquired  9-25-06)                                                               |   |      | 1,553,150 |   |   |      | 1,900,000   |   |
|                                                                                                                                                                                                                                                                  |   |   |       |        | 150,000 shares of common stock (acquired 10-18-01)                                                     |                                                                                                                                                      |   | 150,000   |      |   |   | 2         |        |
|                                                                                                                                                                                                                                                                  |   |   |       |   |                                                                                                        |                                                                                                                                                      |   |      | 1,703,150 |   |   |      | 1,900,002   |   |
| ¥THE RECTORSEAL CORPORATIONHouston, TexasSpecialty chemicals for plumbing, HVAC, electrical, construction, industrial, oil field and automotive applications; smoke containment systems for building fires; also owns 20% of The Whitmore Manufacturing Company. |   |   | 100.0      | %      |                                                                                                        | 27,907 shares of common stock (acquired 1-5-73 and 3-31-73)                                                                                               |   |      | 52,600    |   |   |      | 238,900,000 |   |
| TCI HOLDINGS, INC.Denver, ColoradoCable television systems and microwave relay systems.                                                                                                                                                                               |   |   | –    |   |                                                                                                        | 21 shares of 12% Series C Cumulative Compounding Preferred Stock (acquired 1-30-90)                                                                       |   |      | –   |   |   |      | 763,000     |   |
| TITANLINER, INC.Midland, TexasManufactures, installs and rents spill containment system for oilfield applications.                                                                                                                                          |   |   | 29.9       | %      |                                                                                                        | 217,038 shares of Series A Convertible Preferred Stock convertible into 217,038 shares of Series A Preferred Stock at $14.76 per share (acquired 6-29-12) |   |      | 3,203,000 |   |   |      | 3,203,000   |   |
|                                                                                                                                                                                                                                                                  |   |   |       |        | 7%  senior subordinated secured promissory note, due 6-30-17 (acquired 6-29-12)                   |                                                                                                                                                      |   | 2,747,000 |      |   |   | 2,747,000 |        |
|                                                                                                                                                                                                                                                                  |   |   |       |        | Warrants to purchase 122,239 shares of Series A preferred stock at $ 0.01 per share, expiring 12-31-22 |                                                                                                                                                      |   | -         |      |   |   | -         |        |
|                                                                                                                                                                                                                                                                  |   |   |       |   |                                                                                                        |                                                                                                                                                      |   |      | 5,950,000 |   |   |      | 5,950,000   |   |

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Table of Contents

| **Company**                                                                                                                                                                                              |   |   | Equity (a) |   |                                                                                                                                                               | Investment (b)                                                                                                                                                                       |   |      | Cost      |   |   |       | Value (c)  |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------|-----------|--------|--------|------------|------------|--------|
| TRAX HOLDINGS, INC.Scottsdale, ArizonaProvides a comprehensive set of solutions to improve the transportation validation, accounting, payment and information management process.                   |   |   | 25.4       | %      |                                                                                                                                                                    | 475,430 shares of Series B convertible Preferred Stock convertible into 475,430 shares of  common stock at $8.41 per share(acquired 12-5-12)                                    |   |      | 4,000,000 |   |   |       | 7,000,000  |   |
|                                                                                                                                                                                                     |   |   |       |        | 1,061,279 shares of Series A Convertible Preferred Stock, convertible into 1,061,279 shares of common stock at $4.71 per share (acquired 12-8-08 and 2-17-09) |                                                                                                                                                                                 |   | 5,000,000 |      |   |   | 12,400,000 |       |
|                                                                                                                                                                                                     |   |   |       |   |                                                                                                                                                                    |                                                                                                                                                                                 |   |      | 9,000,000 |   |   |       | 19,400,000 |   |
| *WELLOGIX, INC.Houston, TexasDeveloper and supporter of software used by the oil and gas industry.                                                                                                       |   |   | 19.1       | %      |                                                                                                                                                                    | 4,788,371 shares of Series A-1 Convertible Participating Preferred Stock, convertible into 4,788,371 shares of common stock at $1.04 per share (acquired 8-19-05 thru 6-15-08)  |   |      | 5,000,000 |   |   |       | 25,000     |   |
| ¥THE WHITMORE MANUFACTURING COMPANYRockwall, TexasSpecialized surface mining, railroad and industrial lubricants; coatings for automobiles and primary metals; fluid contamination control devices. |   |   | 80.0       | %      |                                                                                                                                                                    | 80 shares of common stock (acquired 8-31-79)                                                                                                                                         |   |      | 1,600,000 |   |   |       | 80,500,000 |   |
| MISCELLANEOUS                                                                                                                                                                                            |   |   | –    |   |                                                                                                                                                                    | Ballast Point Ventures II, L.P.2.2% limited partnership interest (acquired 8-4-08 thru 2-15-13)                                                                                      |   |      | 1,659,790 |   |   |       | 1,843,000  |   |
|                                                                                                                                                                                                     |   |   | –    |   |                                                                                                                                                                    | BankCap Partners Fund I, L.P.5.5% limited partnership interest (acquired 7-14-06 thru 11-16-12)                                                                                      |   |      | 5,897,276 |   |   |       | 5,013,000  |   |
|                                                                                                                                                                                                     |   |   | –    |   |                                                                                                                                                                    | CapitalSouth Partners Fund III, L.P.1.9% limited partnership interest (acquired 1-22-08 and 11-16-11)                                                                                |   |      | 1,331,256 |   |   |       | 3,934,000  |   |
|                                                                                                                                                                                                     |   |   | 100.0      | %      |                                                                                                                                                                    | ¥CapStar Holdings   Corporation500 shares common stock (acquired 6-10-10); 1,000,000 shares of preferred stock (acquired 12-17-12)                                    |   |      | 4,703,619 |   |   |       | 7,846,000  |   |

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Table of Contents

| **Company**                     |   |   | Equity (a) |    |   | Investment (b)                                                                                               |   |   | Cost       |    |   |   | Value (c)   |   |
|---------------------------------|--------|--------|------------|--------------|--------|--------------------------------------------------------------------------------------------------------------|--------|--------|------------|--------------|--------|--------|-------------|--------|
| Miscellaneous (continued)  |   |   | –    |         |        | Diamond State Ventures, L.P.1.4% limited partnership interest (acquired 10-12-99 thru 8-26-05)               |   |   | -          |         |   |   | 120,000     |   |
|                            |   |   | –    |         |        | ¥Discovery Alliance, LLC90.0% limited liability company interest (acquired  9-12-08 thru 10-15-12) |   |   | 1,315,000  |         |   |   | 956,000     |   |
|                            |   |   | –    |         |        | First Capital Group of Texas III, L.P.3.0% limited partnership interest (acquired 12-26-00 thru 8-12-05)     |   |   | 778,895    |         |   |   | 190,000     |   |
|                            |   |   | 100        | %            |        | ¥Humac Company1,041,000 shares common stock (acquired 1-31-75 and 12-31-75)                             |   |   | –    |         |   |   | 188,000     |   |
|                            |   |   | –    |         |        | †North American Energy Partners, Inc.77,194 shares of common stock (acquired 8-20-12)                  |   |   | 236,986    |         |   |   | 350,461     |   |
|                            |   |   | –    |         |   | STARTech Seed Fund II3.2% limited partnership interest (acquired 4-28-00 thru 2-23-05)                       |   |   | 754,327    |         |   |   | 151,000     |   |
| TOTAL INVESTMENTS               |   |   |       |         |   |                                                                                                    |   | $      | 88,265,649 |         |   | $      | 574,186,572 |   |

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Table of Contents

| a) | Equity |
|----|--------|

| (b) | Investments |
|-----|-------------|

| (c) | Value |
|-----|-------|

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| (d) | Agreements between Certain Issuers and the Company |
|-----|----------------------------------------------------|

| (e) | Descriptions and Ownership Percentages |
|-----|----------------------------------------|

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| 1. | ORGANIZATION AND BASIS OF PRESENTATION |
|----|----------------------------------------|

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| 2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
|----|--------------------------------------------|

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| 3. | INVESTMENTS |
|----|-------------|

|  | · | Level 1:  Investments whose values are based on unadjusted quoted prices in active markets for identical assets or liabilities that we have the ability to access.  We use Level 1 inputs for publicly traded unrestricted securities.  Such investments are valued at the closing price for listed securities and at the lower of the closing bid price or the closing sale price for NASDAQ securities on the valuation date. |
|--|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | Level 2: Investments whose values are based on observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly.  These inputs may include quoted prices for the identical instrument in non-active markets, quoted prices for similar instruments in active markets and similar data. |
|--|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | Level 3: Investments whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement.  These inputs reflect management’s own assumptions about the assumptions a market participant would use in pricing the investment.  We used Level 3 inputs for measuring the fair value of approximately 62.8% of our investments as of December 31, 2013. |
|--|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|  | · | Financial information obtained from each portfolio company, including audited and 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; |
|--|--------|-----------------------------------------------------------------------------------------|

|  | · | Projected operating results of the portfolio company; |
|--|--------|-------------------------------------------------------|

|  | · | Current information regarding any offers to purchase the investment or recent private sales transactions; |
|--|--------|-----------------------------------------------------------------------------------------------------------|

|  | · | Current ability of the portfolio company to raise any additional financing as needed; |
|--|--------|---------------------------------------------------------------------------------------|

|  | · | Change in the economic environment which may have a material impact on the operating results of the portfolio company; |
|--|--------|------------------------------------------------------------------------------------------------------------------------|

|  | · | Qualitative assessment of key management; |
|--|--------|-------------------------------------------|

|  | · | Contractual rights, obligations or restrictions associated with the investment; and |
|--|--------|-------------------------------------------------------------------------------------|

|  | · | Other factors deemed relevant. |
|--|--------|--------------------------------|

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Table of Contents

| Type                          | Valuation Technique |   | Fair Value at 12/31/2013 (in millions) |   | Unobservable Input |                            | Range  |   |               | Weighted Average |   |
|-------------------------------|--------------------------|--------|--------------------------------------------------|--------|-------------------------|---------------------------------|--------|--------|--------------------|------------------|--------|
| Preferred & Common Equity | Market Approach          |   | $                                                | 374.2  |                    | EBITDA Multiple                 |   |   | 3.50x – 7.78 | x                |   |   | 6.92 | x |
|                          | Market Approach          |        | $                                                | 26.3   |                         | Revenue Multiple                |        |        | 2.50x – 2.98 | x                |        |  | 2.59 | x |
|                          | Market Approach          |        | $                                                | 7.6    |                         | Cash and Asset Value            |        |        | NA                 |                  |        |  | NA |  |
|                          | Income Approach          |        | $                                                | 0.7    |                         | Discount Rate                   |        |        | 2.86               | %                |        |  | 2.86 | % |
|                          | Market Approach          |        | $                                                | 3.7    |                         | Multiple of Tangible Book Value |        |        | 1.47               | x                |        |  | 1.47 | x |
|                          | Market Approach          |        | $                                                | 8.0    |                         | Recent Transaction Price        |        |        | NA                 |                  |        |  | NA |  |
|                          | Market Approach          |        | $                                                | 0.2    |                         | Market Value of Held Securities |        |        | NA                 |                  |        |  | NA |  |
|                          |                |   | $                                                | 420.7  |                    |                            |   |   |               |             |   |   |   |   |
| Debt                          | Income Approach          |   | $                                                | 4.6    |                    | Discount Rate                   |   |   | 11.69% -13.02      | %                |   |   | 12.28 | % |
|                          | Recent Transaction Price |        | $                                                | 1.2    |                         | Recent Transaction Price        |        |        | NA                 |                  |        |  | NA |  |
|                          |                |   | $                                                | 5.8    |                    |                            |   |   |               |             |   |   |   |   |
| Partnership Interests         | Net Asset Value*         |   | $                                                | 9.0    |                    | Fund Value                      |   | NA     |               |             | NA     |   |
|                          | Total                    |        | $                                                | 435.5  |                         |                                 |        |        |                    |                  |        |  |

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| Type                          | ValuationTechnique       |   | Fair Value at 3/31/2013 (in millions) |   | Unobservable Input |                            | Range  |   |               | Weighted Average |   |
|-------------------------------|--------------------------|--------|--------------------------------------------|--------|-------------------------|---------------------------------|--------|--------|--------------------|------------------|--------|
| Preferred & Common Equity | Market Approach          |   | $                                          | 342.2  |                    | EBITDA Multiple                 |   |   | 3.25x – 7.00 | x                |   |   | 6.45 | x |
|                          | Market Approach          |        | $                                          | 11.1   |                         | Revenue Multiple                |        |        | 0.25x – 1.82 | x                |        |  | 0.97 | x |
|                          | Market Approach          |        | $                                          | 7.9    |                         | Cash and Asset Value            |        |        | NA                 |                  |        |  | NA |  |
|                          | Income Approach          |        | $                                          | 0.7    |                         | Discount Rate                   |        |        | 1.75               | %                |        |  | 1.75 | % |
|                          | Market Approach          |        | $                                          | 3.0    |                         | Multiple of Tangible Book Value |        |        | 1.22               | x                |        |  | 1.22 | x |
|                          | Market Approach          |        | $                                          | 22.6   |                         | Recent Transaction Price        |        |        | NA                 |                  |        |  | NA |  |
|                          | Market Approach          |        | $                                          | 0.2    |                         | Market Value of Held Securities |        |        | NA                 |                  |        |  | NA |  |
|                          |                |   | $                                          | 387.7  |                    |                            |   |   |               |             |   |   |   |   |
| Debt                          | Income Approach          |   | $                                          | 3.1    |                    | Discount Rate                   |   |   | 10.02% -12.00      | %                |   |   | 10.77 | % |
|                          | Recent Transaction Price |        | $                                          | 3.5    |                         | Recent Transaction Price        |        |        | NA                 |                  |        |  | NA |  |
|                          |                |   | $                                          | 6.6    |                    |                            |   |   |               |             |   |   |   |   |
| Partnership Interests         | Net Asset Value*         |   | $                                          | 12.2   |                    | Fund Value                      |   | NA     |               |             | NA     |   |
|                          | Total                    |        | $                                          | 406.5  |                         |                                 |        |        |                    |                  |        |  |

|                  |   |        |   |   | Fair Value Measurementsat 12/31/13 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) |   |
| Debt                  |   | $      | 5.8    |   |                                                                         | $      | − |   |   | $ | − |   |   | $ | 5.8 |   |
| Partnership Interests |   |   | 9.0    |   |                                                                         |   | − |   |   |   | − |   |   |   | 9.0 |   |
| Preferred Equity      |   |   | 51.2   |   |                                                                         |   | − |   |   |   | − |   |   |   | 51.2 |   |
| Common Equity         |   |   | 628.0  |   |                                                                         |   | 256.3 |   |   |   | 2.2 |   |   |   | 369.5 |   |
| Total Investments     |   | $      | 694.0  |   |                                                                         | $      | 256.3 |   |   | $ | 2.2 |   |   | $ | 435.5 |   |

|                  |   |        |   |   | Fair Value Measurementsat 3/31/13 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) |   |
| Debt                  |   | $      | 6.6    |   |                                                                              | $      | − |   |   | $ | − |   |   | $ | 6.6 |   |
| Partnership Interests |   |   | 12.2   |   |                                                                              |   | − |   |   |   | − |   |   |   | 12.2 |   |
| Preferred Equity      |   |   | 44.6   |   |                                                                              |   | − |   |   |   | − |   |   |   | 44.6 |   |
| Common Equity         |   |   | 510.8  |   |                                                                              |   | 167.7 |   |   |   | − |   |   |   | 343.1 |   |
| Total Investments     |   | $      | 574.2  |   |                                                                              | $      | 167.7 |   |   | $ | − |   |   | $ | 406.5 |   |

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|                  |   | Fair Value 3/31/13 |   |   | Net Unrealized Appreciation (Depreciation) |   |   | New Investments |   |   | Distribution |   |   | Net Changes from Unrealized to Realized |    |   | Conversion of Security from Debt to Equity |   |    | Fair Value at 12/31/13 |   |
|-----------------------|--------|------------------------------|--------|--------|-------------------------------------------------|--------|--------|----------------------|--------|--------|--------------|--------|--------|-------------------------------------------------------------|---------|--------|------------------------------------------------------|--------|---------|-----------------------------|--------|
| Debt                  |   | $                            | 6.6    |   |                                            | $      | (2.4   | )                    |   | $      | 1.6          |   |   | $                                                           | − |   |                                                 | $      | − |                        |   | $ | − |   |   | $ | 5.8 |   |
| Partnership Interests |   |                         | 12.2   |   |                                            |   | (2.7   | )                    |   |   | 0.9          |   |   |                                                        | (1.4    | )      |                                                 |   | − |                        |   |   | − |   |   |   | 9.0 |   |
| Preferred Equity      |   |                         | 44.6   |   |                                            |   | (1.4   | )                    |   |   | 8.0          |   |   |                                                        | − |   |                                                 |   | − |                        |   |   | − |   |   |   | 51.2 |   |
| Common Equity         |   |                         | 343.1  |   |                                            |   | 26.4   |                 |   |   | −      |   |   |                                                        | − |   |                                                 |   | − |                        |   |   | − |   |   |   | 369.5 |   |
| Total Investments     |   | $                            | 406.5  |   |                                            | $      | 19.9   |                 |   | $      | 10.5         |   |   | $                                                           | (1.4    | )      |                                                 | $      | − |                        |   | $ | − |   |   | $ | 435.5 |   |

| 4. | INCOME TAXES |
|----|--------------|

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| 5. | ACCUMULATED NET REALIZED GAINS (LOSSES) ON INVESTMENTS |
|----|--------------------------------------------------------|

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| 6. | EMPLOYEE STOCK BASED COMPENSATION PLANS |
|----|-----------------------------------------|

----

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|             |   |                                       |   |   | Black-Scholes Pricing Model Assumptions |   |   |                              |   |
|------------------|--------|---------------------------------------|--------|--------|-----------------------------------------|--------|--------|------------------------------|--------|
| Date of Issuance |   | Weighted Average Fair Value |   |   | Expected Dividend Yield       |   |   | Risk-Free Interest Rate |   |   | Expected Volatility |   |   | Expected Life (in years) |   |
| 2009 Plan        |   |                                       |   |   |                                         |   |   |                              |   |   |  |   |   |  |   |
| July 18, 2011    |   | $                                     | 8.27   |   |                                    |   | 0.83   | %                            |   |   | 1.45 | % |   |   | 40.0 | % |   |   | 5 |   |
| July 19, 2010    |   | $                                     | 7.15   |   |                                    |   | 0.91   | %                            |   |   | 1.73 | % |   |   | 37.5 | % |   |   | 5 |   |
| March 22, 2010   |   | $                                     | 8.14   |   |                                    |   | 0.84   | %                            |   |   | 2.43 | % |   |   | 37.8 | % |   |   | 5 |   |
| October 19, 2009 |   | $                                     | 6.34   |   |                                    |   | 1.04   | %                            |   |   | 2.36 | % |   |   | 37.6 | % |   |   | 5 |   |
| July 15, 2013    |   | $                                     | 14.80  |   |                                    |   | 0.54   | %                            |   |   | 1.40 | % |   |   | 46.6 | % |   |   | 5 |   |
| 1999 Plan        |   |                                  |   |   |                                    |   |   |                         |   |   |   |   |   |   |   |   |   |   |   |   |
| July 30, 2008    |   | $                                     | 7.48   |   |                                    |   | 0.62   | %                            |   |   | 3.36 | % |   |   | 20.2 | % |   |   | 5 |   |
| July 21, 2008    |   | $                                     | 6.84   |   |                                    |   | 0.67   | %                            |   |   | 3.41 | % |   |   | 20.2 | % |   |   | 5 |   |
| July 16, 2007    |   | $                                     | 10.44  |   |                                    |   | 0.39   | %                            |   |   | 4.95 | % |   |   | 19.9 | % |   |   | 5 |   |
| July 17, 2006    |   | $                                     | 8.26   |   |                                    |   | 0.61   | %                            |   |   | 5.04 | % |   |   | 21.2 | % |   |   | 7 |   |
| May 15, 2006     |   | $                                     | 7.82   |   |                                    |   | 0.64   | %                            |   |   | 5.08 | % |   |   | 21.1 | % |   |   | 7 |   |

|                         |   | Number of Shares |     |   | Weighted Average Exercise Price |   |
|------------------------------|--------|------------------|----------|--------|-------------------------------------------|--------|
| 2009 Plan                    |   |                  |     |   |                                           |   |
| Balance at March 31, 2011    |   |             | 295,000  |   |                                      | $      | 21.06 |   |
| Granted                      |   |             | 40,000   |   |                                      |   | 24.23 |   |
| Exercised                    |   |             | –  |   |                                      |   | – |   |
| Canceled/Forfeited           |   |             | –  |   |                                      |   | – |   |
| Balance at March 31, 2012    |   |             | 335,000  |   |                                      |   | 21.44 |   |
| Granted                      |   |             | –  |   |                                      |   | – |   |
| Exercised                    |   |             | (108,092 | )      |                                      |   | 19.96 |   |
| Canceled/Forfeited           |   |             | (56,000  | )      |                                      |   | 21.44 |   |
| Balance at March 31, 2013    |   |             | 170,908  |   |                                      |   | 22.37 |   |
| Granted                      |   |             | 30,000   |   |                                      |   | 37.02 |   |
| Exercised                    |   |             | (13,720  | )      |                                      |   | 22.71 |   |
| Canceled/Forfeited           |   |             | (47,000  | )      |                                      |   | 22.10 |   |
| Balance at December 31, 2013 |   |             | 140,188  |   |                                      | $      | 25.55 |   |

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| 1999 Plan                             |   |   |    |   |   |   |    |   |
|---------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|
| Balance at March 31, 2011             |   |   | 386,000 |   |   | $      | 28.70   |   |
| Granted                               |   |   | – |   |   |   | – |   |
| Exercised                             |   |   | (6,000  | )      |   |   | 16.43   |   |
| Canceled/Forfeited                    |   |   | – |   |   |   | – |   |
| Balance at March 31, 2012             |   |   | 380,000 |   |   |   | 28.41   |   |
| Granted                               |   |   | – |   |   |   | – |   |
| Exercised                             |   |   | (76,420 | )      |   |   | 23.83   |   |
| Canceled/Forfeited                    |   |   | (57,580 | )      |   |   | 27.79   |   |
| Balance at March 31, 2013             |   |   | 246,000 |   |   |   | 33.00   |   |
| Granted                               |   |   | – |   |   |   | – |   |
| Exercised                             |   |   | (38,000 | )      |   |   | 26.69   |   |
| Canceled/Forfeited                    |   |   | – |   |   |   | – |   |
| Balance at December 31, 2013          |   |   | 208,000 |   |   | $      | 34.16   |   |
| Combined Balance at December 31, 2013 |   |   | 348,188 |   |   | $      | 30.69   |   |

| December 31, 2013 | Weighted AverageAggregate IntrinsicRemaining Contractual Term |   | Value |      |
|-------------------|---------------------------------------------------------------|--------|-------|-----------|
| Outstanding       | 0.9 years                                                     |   | $     | 3,068,087 |   |
| Exercisable       | 0.3 years                                                     |   | $     | 2,260,194 |   |

| Restricted stock available for issuance as of March 31, 2013              |   |   | 153,400 |   |
|---------------------------------------------------------------------------|--------|--------|---------|--------|
| Restricted stock granted during the nine Months ended December 31, 2013   |   |   | (5,000  | )      |
| Restricted stock forfeited during the nine Months ended December 31, 2013 |   |   | 13,240  |   |
| Restricted stock available for issuance as of December 31, 2013           |   |   | 161,640 |   |

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| Restricted Stock Awards       |   | Number of Shares |    |   | Weighted Average Fair Value Per Share |   |    | Weighted Average Remaining Vesting Term (in Years) |   |
|-------------------------------|--------|-----------------------|---------|--------|------------------------------------------------------|--------|---------|--------------------------------------------------------------|--------|
| Unvested at March 31, 2013    |   |                  | 29,280  |   |                                                 | $      | 22.32   |                                                         |   |   | 4.1 |   |
| Granted                       |   |                  | 5,000   |   |                                                 |   | 37.02   |                                                         |   |   | 4.5 |   |
| Vested                        |   |                  | − |   |                                                 |   | − |                                                         |   |   | − |   |
| Forfeited                     |   |                  | (13,240 | )      |                                                 |   | 22.08   |                                                         |   |   | − |   |
| Unvested at December 31, 2013 |   |                  | 21,040  |   |                                                 | $      | 25.96   |                                                         |   |   | 3.6 |   |

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| Phantom Stock Awards          |   | Number of Shares |    |   | Weighted AverageGrantPrice Per Share |   |    | Weighted Average Remaining Vesting Term (in Years) |   |
|-------------------------------|--------|-----------------------|---------|--------|-------------------------------------------|--------|---------|--------------------------------------------------------------|--------|
| Unvested at March 31, 2013    |   |                  | 90,200  |   |                                      | $      | 37.26   |                                                         |   |   | 4.0 |   |
| Granted                       |   |                  | 24,000  |   |                                      |   | 43.80   |                                                         |   |   | 4.5 |   |
| Vested                        |   |                  | − |   |                                      |   | − |                                                         |   |   | − |   |
| Forfeited or expired          |   |                  | (19,200 | )      |                                      |   | 41.34   |                                                         |   |   | − |   |
| Unvested at December 31, 2013 |   |                  | 95,000  |   |                                      | $      | 39.00   |                                                         |   |   | 3.5 |   |

| 7. | COMMITMENTS |
|----|-------------|

| 8. | SUMMARY OF PER SHARE INFORMATION |
|----|----------------------------------|

|                                                              |   | Three Months Ended December 31 |    |   | Nine Months EndedDecember 31 |   |
|-------------------------------------------------------------------|--------|--------------------------------|---------|--------|------------------------------|--------|
| Per Share Data                                                    |   | 2013                           |    |   | 2012                         |   |   | 2013 |   |   | 2012 |   |
| Investment income                                                 |   | $                              | .55     |   |                         | $      | .46 |   |   | $ | .68 |   |   | $ | .64 |   |
| Operating expenses                                                |   |                           | (.18    | )      |                         |   | (.18 | ) |   |   | (.48 | ) |   |   | (.37 | ) |
| Income taxes                                                      |   |                           | .04     |   |                         |   | (.01 | ) |   |   | .05 |   |   |   | (.01 | ) |
| Net investment income                                             |   |                           | .41     |   |                         |   | .27 |   |   |   | .25 |   |   |   | .26 |   |
| Distributions from undistributed net investment income            |   |                           | (.10    | )      |                         |   | (.10 | ) |   |   | (.20 | ) |   |   | (.20 | ) |
| Net realized gain/(loss) net of tax                               |   |                           | (.25    | )      |                         |   | .04 |   |   |   | (.25 | ) |   |   | 4.45 |   |
| Net increase (decrease) in unrealized appreciation of investments |   |                           | 3.49    |   |                         |   | 1.47 |   |   |   | 7.16 |   |   |   | (.39 | ) |
| Dividends from capital gains                                      |   |                           | – |   |                         |   | – |   |   |   | – |   |   |   | (4.40 | ) |
| Exercise of employee stock options                                |   |                           | (.04    | )      |                         |   | (.01 | ) |   |   | (.07 | ) |   |   | (.19 | ) |
| Stock option expense                                              |   |                           | – |   |                         |   | .01 |   |   |   | .02 |   |   |   | .02 |   |
| Forfeiture (Issuance) of restricted stock                         |   |                           | .03     |   |                         |   | – |   |   |   | .04 |   |   |   | (.07 | ) |
| Increase (decrease) in net asset value                            |   |                           | 3.54    |   |                         |   | 1.68 |   |   |   | 6.95 |   |   |   | (.52 | ) |
| Net asset value                                                   |   |                           |    |   |                         |   |   |   |   |   |   |   |   |   |   |   |
| Beginning of period                                               |   |                           | 46.71   |   |                         |   | 39.66 |   |   |   | 43.30 |   |   |   | 41.86 |   |
| End of period                                                     |   | $                              | 50.25   |   |                         | $      | 41.34 |   |   | $ | 50.25 |   |   | $ | 41.34 |   |

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|                               |   | Three Months EndedDecember 31, |      |   | Nine Months EndedDecember 31, |   |
|------------------------------------|--------|--------------------------------|-----------|--------|-------------------------------|--------|
|                               |   | 2013                           |      |   | 2012                          |   |   | 2013 |   |   | 2012 |   |
| Alamo Group, Inc.                  |   | $                              | 198,311   |   |                          | $      | 169,938 |   |   | $ | 594,882 |   |   | $ | 509,814 |   |
| CapitalSouth Partners Fund III     |   |                           | –   |   |                          |   | 47,297 |   |   |   | – |   |   |   | 198,647 |   |
| Capitala Finance Corporation       |   |                           | 50,809    |   |                          |   |   |   |   |   | 50,809 |   |   |   | – |   |
| Capstar Holdings Corporation       |   |                           | 350,000   |   |                          |   |   |   |   |   | 350,000 |   |   |   | – |   |
| Encore Wire Corporation            |   |                           | 52,500    |   |                          |   | 26,250 |   |   |   | 105,000 |   |   |   | 134,235 |   |
| The RectorSeal Corporation         |   |                           | 6,200,000 |   |                          |   | 4,835,372 |   |   |   | 6,680,000 |   |   |   | 5,315,372 |   |
| TCI Holdings, Inc.                 |   |                           | 20,318    |   |                          |   | 20,318 |   |   |   | 60,953 |   |   |   | 60,953 |   |
| The Whitmore Manufacturing Company |   |                           | 1,200,000 |   |                          |   | 1,208,842 |   |   |   | 1,320,000 |   |   |   | 1,328,842 |   |
|                               |   | $                              | 8,071,938 |   |                          | $      | 6,308,017 |   |   | $ | 9,161,644 |   |   | $ | 7,547,863 |   |

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Table of Contents

|                                  |   | Nine Months EndedDecember 31, |       |
|---------------------------------------|--------|-------------------------------|------------|
|                                  |   | 2013                          |       |   | 2012 |   |
| Alamo Group, Inc.                     |   | $                             | 63,553,497 |   |   | $ | 7,258,374 |   |
| Capital South Partners Fund III, L.P. |   |                          | (2,833,201 | ) |   |   | 378,000 |   |
| Cinatra Clean Technologies, Inc.      |   |                          | (2,328,844 | ) |   |   | (4,107,390 | ) |
| Encore Wire Corporation               |   |                          | 25,068,750 |   |   |   | (81,089,460 | )* |
| Instawares Holding Company LLC.       |   |                          | (2,323,000 | ) |   |   | 829,000 |   |
| Media Recovery, Inc.                  |   |                          | 5,300,000  |   |   |   | (5,400,000 | ) |
| The RectorSeal Corporation            |   |                          | 19,000,000 |   |   |   | 63,300,000 |   |
| The Whitmore Manufacturing Company    |   |                          | 2,500,000  |   |   |   | 4,200,000 |   |
| TitanLiner, Inc.                      |   |                          | (3,414,000 | ) |   |   | - |   |
| Trax Holdings, Inc.                   |   |                          | 1,900,000  |   |   |   | 8,800,000 |   |

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| Item 3. | Quantitative and Qualitative Disclosures about Market Risk |
|---------|------------------------------------------------------------|

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Table of Contents

| Item 4. | Controls and Procedures |
|---------|-------------------------|

| Item 1. | Legal Proceedings |
|---------|-------------------|

| Item 1A. | Risk Factors |
|----------|--------------|

| Item 6. | Exhibits |
|---------|----------|

| Exhibit No. |  | Description                                                                                                                                                                                     |
|-------------|--|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 31.1        |  | Certification of President and Chief Executive Officer required by Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), filed herewith.          |
| 31.2        |  | Certification of Chief Financial Officer required by Rule 13a-14(a) of the Exchange Act, filed herewith.                                                                                        |
| 32.1        |  | Certification of President and Chief Executive Officer required by Rule 13a-14(b) of the Exchange Act and Section 1350 of Chapter 63 of Title 18 of the United States Code, furnished herewith. |
| 32.2        |  | Certification of Chief Financial Officer required by Rule 13a-14(b) of the Exchange Act and Section 1350 of Chapter 63 of Title 18 of the United States Code, furnished herewith.               |

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|             |  | CAPITAL SOUTHWEST CORPORATION |
|------------------|--|-------------------------------|
|             |  |                          |   |
| February 6, 2014 |  | By:                           | /s/ Joseph B. Armes |
| Date             |  |                          | Joseph B. Armes |
|             |  |                               | Chairman of the Board |
|             |  |                               | President and Chief Executive Officer |
|             |  |                          |   |
| February 6, 2014 |  | By:                           | /s/ Kelly Tacke |
| Date             |  |                          | Kelly Tacke |
|             |  |                               | Chief Financial Officer |

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