|   | [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|--------|---------------------------------------------------------------------------------------------|

|   | [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|--------|----------------------------------------------------------------------------------------------|

| Texas                                                                    | 75-1072796                          |
|--------------------------------------------------------------------------|-------------------------------------|
| (State or other jurisdiction of  incorporationor organization) | (I.R.S. EmployerIdentification No.) |
|                                                                     |                                |
| 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    |                           |

----

|                                                                                                                                                           |  Page No. |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------|
| PART I.        FINANCIAL INFORMATION                                                                              |           |
|                                                                                                                                                           |           |
| ITEM 1.                Consolidated Financial Statements                       |           |
|                                                                                                                                                           |           |
| Consolidated Statements of Assets and Liabilities                                                                                                              |           |
| June 30, 2010 (Unaudited) and March 31, 2010                                                                                                                   | 3              |
|                                                                                                                                                           |           |
| Consolidated Statements of Operations (Unaudited)                                                                                                              |           |
| For the three months ended June 30, 2010 and                                                                                                                   |           |
| June 30, 2009                                                                                                                                                  | 4              |
|                                                                                                                                                           |           |
| Consolidated Statements of Changes in Net Assets (Unaudited)                                                                                                   |           |
| For the three months ended June 30, 2010 and                                                                                                                   |           |
| June 30, 2009                                                                                                                                                  | 5              |
|                                                                                                                                                           |           |
| Consolidated Statements of Cash Flows (Unaudited)                                                                                                              |           |
| For the three months ended June 30, 2010 and                                                                                                                   |           |
| June 30, 2009                                                                                                                                                  | 6              |
|                                                                                                                                                           |           |
| Consolidated Schedules of Investments (Unaudited)                                                                                                              |           |
| June 30, 2010 and June 30, 2009                                                                                                                                | 7              |
|                                                                                                                                                           |           |
| Notes to Consolidated Financial Statements                                                                                                                     | 17             |
|                                                                                                                                                           |           |
| ITEM 2.                Management’s Discussion and Analysis of Financial |           |
| Condition and Results of Operations                                                                                                                            | 26             |
|                                                                                                                                                           |           |
| ITEM 3.                Quantitative and Qualitative Disclosure About           |           |
| Market Risk                                                                                                                                                    | 29             |
|                                                                                                                                                           |           |
| ITEM 4.                Controls and Procedures                                 | 30             |
|                                                                                                                                                           |           |
| PART II.      OTHER INFORMATION                                                                                                       |           |
|                                                                                                                                                           |           |
| ITEM 1                 Legal Proceedings                                       | 30             |
|                                                                                                                                                           |           |
| ITEM 1A.            Risk Factors                                                                        | 30             |
|                                                                                                                                                           |           |
| ITEM 6.               Exhibits                                                      | 31             |
|                                                                                                                                                           |           |
| Signatures                                                                                                                                                     | 32             |

----

| Assets                                                                               |   | June 30, 2010 |                                                     |   | March 31, 2010 |   |
|--------------------------------------------------------------------------------------|--------|---------------|----------------------------------------------------------|--------|----------------|--------|
|                                                                                 |   | (Unaudited)   |                                                     |   |           |   |
| Investments at market or fair value                                                  |   |          |                                                     |   |           |   |
|           Companies more than 25% owned |   |          |                                                     |   |           |   |
| (Cost: June 30, 2010 - $21,817,902,                                                  |   |          |                                                     |   |           |   |
|    March 31, 2010 - $26,178,302)                                      |   |          | $272,708,720                                             |   |           |   | $330,147,325 |   |
| Companies 5% to 25% owned                                                            |   |          |                                                     |   |           |   |   |   |
| (Cost: June 30, 2010 - $22,162,243,                                                  |   |          |                                                     |   |           |   |   |   |
| March 31, 2010 - $21,562,243)                                                        |   |          | 63,926,259                                               |   |           |   | 73,589,142 |   |
| Companies less than 5% owned                                                         |   |          |                                                     |   |           |   |   |   |
| (Cost: June 30, 2010 - $57,630,792,                                                  |   |          |                                                     |   |           |   |   |   |
| March 31, 2010 - $52,282,449)                                                        |   |          | 77,153,407                                               |   |           |   | 74,206,590 |   |
| Total investments                                                                    |   |          |                                                     |   |           |   |   |   |
| (Cost: June 30, 2010 - $101,610,937,                                                 |   |          |                                                     |   |           |   |   |   |
| March 31, 2010 - $100,022,994)                                                       |   |          | 413,788,386                                              |   |           |   | 477,943,057 |   |
| Cash and cash equivalents                                                            |   |          | 77,995,617                                               |   |           |   | 4,093,508 |   |
| Receivables                                                                          |   |          |                                                     |   |           |   |   |   |
| Dividends and interest                                                               |   |          | 338,017                                                  |   |           |   | 1,012,782 |   |
| Affiliates                                                                           |   |          | 648,104                                                  |   |           |   | 864,943 |   |
| Pension assets                                                                       |   |          | 7,173,378                                                |   |           |   | 7,068,957 |   |
| Other assets                                                                         |   |          | 187,472                                                  |   |           |   | 191,338 |   |
| Total assets                                                                         |   |          | $500,130,974                                             |   |           |   | $491,174,585 |   |
|                                                                                 |   |          |                                                     |   |           |   |   |   |
| Liabilities                                                                          |   |          |                                                     |   |           |   |   |   |
|                                                                                 |   |          |                                                     |   |           |   |   |   |
| Other liabilities                                                                    |   |          | $    1,020,726                            |   |           |   | $    1,070,540 |   |
| Pension liability                                                                    |   |          | 1,095,085                                                |   |           |   | 1,082,941 |   |
| Deferred income taxes                                                                |   |          | 2,127,918                                                |   |           |   | 2,095,518 |   |
| Total liabilities                                                                    |   |          | 4,243,729                                                |   |           |   | 4,248,999 |   |
|                                                                                 |   |          |                                                     |   |           |   |   |   |
| Net Assets                                                                           |   |          |                                                     |   |           |   |   |   |
|                                                                                 |   |          |                                                     |   |           |   |   |   |
| Common stock, $1 par value: authorized,                                              |   |          |                                                     |   |           |   |   |   |
|   5,000,000 shares; issued, 4,326,516 shares                               |   |          |                                                     |   |           |   |   |   |
|   at June 30, 2010 and March 31, 2010                                      |   |          | 4,326,516                                                |   |           |   | 4,326,516 |   |
| Additional capital                                                                   |   |          | 126,777,762                                              |   |           |   | 126,554,546 |   |
| Undistributed net investment income                                                  |   |          | 2,526,802                                                |   |           |   | 2,061,109 |   |
| Undistributed net realized gain on investments                                       |   |          | 74,015,364                                               |   |           |   | – |   |
| Unrealized appreciation of investments                                               |   |          | 312,177,449                                              |   |           |   | 377,920,063 |   |
| Treasury stock - at cost 584,878 shares at                                           |   |          |                                                     |   |           |   |   |   |
|   June 30, 2010 and March 31, 2010                                         |   |          | (23,936,648                                              | )      |           |   | (23,936,648 | ) |
| Total net assets                                                                     |   |          | 495,887,245                                              |   |           |   | 486,925,586 |   |
| Total liabilities and net assets                                                     |   |          | $500,130,974                                             |   |           |   | $491,174,585 |   |
| Net asset value per share                                                            |   |          |                                                     |   |           |   |   |   |
|   (on the 3,741,638 shares outstanding)                                    |   |          | $         132.53 |   |           |   |  $         130.14 |   |

----

|                                                                      |   | Three Months Ended |                              |
|---------------------------------------------------------------------------|--------|--------------------|-----------------------------------|
|                                                                      |   | June 30            |                              |
|                                                                      |   | 2010               |                              |   | 2009 |   |
| Investment income:                                                        |   |               |                              |   |   |   |
| Interest                                                                  |   |               | $     300,551 |   |   |   | $     322,808 |   |
| Dividends                                                                 |   |               | 2,389,373                         |   |   |   | 584,370 |   |
| Management and directors' fees                                            |   |               | 276,650                           |   |   |   | 282,750 |   |
|                                                                      |   |               | 2,966,574                         |   |   |   | 1,189,928 |   |
| Operating expenses:                                                       |   |               |                              |   |   |   |   |   |
| Salaries                                                                  |   |               | 398,474                           |   |   |   | 314,531 |   |
| Net pension benefit                                                       |   |               | (92,277                           | ) |   |   | (63,306 | ) |
| Stock option expense                                                      |   |               | 223,217                           |   |   |   | 141,525 |   |
| Professional fees                                                         |   |               | 237,456                           |   |   |   | 155,563 |   |
|         Other operating expenses  |   |               | 207,569                           |   |   |   | 175,137 |   |
|                                                                      |   |               | 974,439                           |   |   |   | 723,450 |   |
|                                                                      |   |               |                              |   |   |   |   |   |
| Income before income taxes                                                |   |               | 1,992,135                         |   |   |   | 466,478 |   |
| Income tax expense                                                        |   |               | 29,788                            |   |   |   | 22,200 |   |
|                                                                      |   |               |                              |   |   |   |   |   |
| Net investment income                                                     |   |               | $  1,962,347                 |   |   |   | $     444,278 |   |
|                                                                      |   |               |                              |   |   |   |   |   |
| Proceeds from disposition of investments                                  |   |               | $78,525,764                       |   |   |   | $                – |   |
| Cost of investments sold                                                  |   |               | 4,510,400                         |   |   |   | – |   |
|                                                                      |   |               |                              |   |   |   |   |   |
| Net realized gain on investments, (net of $1,218,855 of                   |   |               |                              |   |   |   |   |   |
|   estimated transfer taxes on sale of Lifemark Group, see       |   |               |                              |   |   |   |   |   |
|   Note 3 - "Income Taxes" for discussion of income taxes        |   |               |                              |   |   |   |   |   |
|   related to gain on sale of Lifemark Group.)                   |   |               |  74,015,364                  |   |   |   |  – |   |
|                                                                      |   |               |                              |   |   |   |   |   |
| Net increase (decrease) in unrealized appreciation                        |   |               |                              |   |   |   |   |   |
|   of investments                                                |   |               | (65,742,614                       | ) |   |   | 10,249,270 |   |
| Net realized and unrealized gain on investments                           |   |               | $  8,272,750                 |   |   |   | $10,249,270 |   |
|                                                                      |   |               |                              |   |   |   |   |   |
| Increase in net assets from operations                                    |   |               | $10,235,097                       |   |   |   | $10,693,548 |   |

----

|                                               |   | Three Months  |                          |   | Three Months  |   |
|----------------------------------------------------|--------|---------------|-------------------------------|--------|---------------|--------|
|                                               |   | Ended         |                          |   | Ended         |   |
|                                               |   | June 30, 2010 |                          |   | June 30, 2009 |   |
| Operations:                                        |   |          |                          |   |          |   |
| Net investment income                              |   |          | $    1,962,347 |   |          |   | $       444,278 |   |
| Net realized gain on investments                   |   |          | 74,015,364                    |   |          |   | – |   |
| Net increase (decrease) in unrealized appreciation |   |          |                          |   |          |   |   |   |
|   of investments                         |   |          | (65,742,614                   | )      |          |   | 10,249,270 |   |
| Increase in net assets from operations             |   |          | 10,235,097                    |   |          |   | 10,693,548 |   |
|                                               |   |          |                          |   |          |   |   |   |
| Distributions from:                                |   |          |                          |   |          |   |   |   |
| Undistributed net investment income                |   |          | (1,496,655                    | )      |          |   | (1,496,655 | ) |
|                                               |   |          |                          |   |          |   |   |   |
| Capital share transactions:                        |   |          |                          |   |          |   |   |   |
| Change in pension plan funded status               |   |          | –                       |   |          |   | (263,416 | ) |
| Stock option expense                               |   |          | 223,217                       |   |          |   | 141,525 |   |
| Increase in net assets                             |   |          | 8,961,659                     |   |          |   | 9,075,002 |   |
|                                               |   |          |                          |   |          |   |   |   |
| Net assets, beginning of period                    |   |          | 486,925,586                   |   |          |   | 415,262,991 |   |
|                                               |   |          |                          |   |          |   |   |   |
| Net assets, end of period                          |   |          | $495,887,245                  |   |          |   | $424,337,993 |   |

----

|                                                                                                |   | Three Months Ended |                                                                                           |
|-----------------------------------------------------------------------------------------------------|--------|--------------------|------------------------------------------------------------------------------------------------|
|                                                                                                |   | June 30            |                                                                                           |
|                                                                                                |   | 2010               |                                                                                           |   | 2009 |   |
| Cash flows from operating activities                                                           |   |               |                                                                                           |   |   |   |   |   |
| Increase in net assets from   operations                                             |   |               | $10,235,097                                                                                    |   |   |   | $10,693,548 |   |
| Adjustments to reconcile increase in net                                                            |   |               |                                                                                           |   |   |   |   |   |
|   assets from operations to net cash                                                      |   |               |                                                                                           |   |   |   |   |   |
|   provided (used in) by operating activities:                                                  |   |               |                                                                                           |   |   |   |   |   |
|   Netproceeds from disposition of investments                                             |   |               | 74,822,144                                                                                     |   |   |   | – |   |
|   Proceeds from repayment of debt securities                                              |   |               | –                                                                                        |   |   |   | 3,000,000 |   |
|   Purchases of securities                                                                 |   |               | (2,394,724                                                                                     | ) |   |   | (5,963,588 | ) |
|   Depreciation and amortization                                                           |   |               | 6,328                                                                                          |   |   |   | 7,653 |   |
|   Net pension benefit                                                                     |   |               | (92,277                                                                                        | ) |   |   | (63,306 | ) |
|   Realized gain on investments before income taxes                                        |   |               | (74,015,364                                                                                    | ) |   |   | – |   |
|   Net (increase) decrease in unrealized                                                   |   |               |                                                                                           |   |   |   |   |   |
|     appreciation of investments                                                 |   |               | 65,742,614                                                                                     |   |   |   | (10,249,270 | ) |
|   Stock option expense                                                                    |   |               | 223,217                                                                                        |   |   |   | 141,525 |   |
|   (Increase) decrease in dividend and interest receivable                                 |   |               | 674,765                                                                                        |   |   |   | (295,866 | ) |
|   (Increase) decrease in receivables from                                                 |   |               |                                                                                           |   |   |   |   |   |
|   affiliates                                                                              |   |               | 216,839                                                                                        |   |   |   | (37,405 | ) |
|   (Increase) decrease in other assets                                           |   |               | (2,461                                                                                         | ) |   |   | 6,876 |   |
|  Increase (decrease) in other liabilities                                                      |   |               | (49,814                                                                                        | ) |   |   | 32,253 |   |
|   Increase in deferred income taxes                                                       |   |               | 32,400                                                                                         |   |   |   | 22,200 |   |
| Net cash provided by (used in) operating activities                                                 |   |               | 75,398,764                                                                                     |   |   |   | (2,705,380 | ) |
|                                                                                                |   |               |                                                                                           |   |   |   |   |   |
| Cash flows from financing activities                                                                |   |               |                                                                                           |   |   |   |   |   |
| Distributions from undistributed net                                                                |   |               |                                                                                           |   |   |   |   |   |
|   investment income                                                                       |   |               | (1,496,655                                                                                     | ) |   |   | (1,496,655 | ) |
| Purchase of treasury stock                                                                          |   |               | –                                                                                        |   |   |   | – |   |
| Net cash used in financing activities                                                               |   |               | (1,496,655                                                                                     | ) |   |   | (1,496,655 | ) |
|                                                                                                |   |               |                                                                                           |   |   |   |   |   |
| Net increase (decrease) in cash and cash                                                            |   |               |                                                                                           |   |   |   |   |   |
|   equivalents                                                                             |   |               | 73,902,109                                                                                     |   |   |   | (4,202,035 | ) |
| Cash and cash equivalents at beginning                                                              |   |               |                                                                                           |   |   |   |   |   |
|   of period                                                                               |   |               | 4,093,508                                                                                      |   |   |   | 14,721,730 |   |
| Cash and cash equivalents at end of period                                                          |   |               | $77,995,617                                                                                    |   |   |   | $10,519,695 |   |
|                                                                                                |   |               |                                                                                           |   |   |   |   |   |
| Supplemental disclosure of cash flow information:                                                   |   |               |                                                                                           |   |   |   |   |   |
| Cash paid during the period for:                                                                    |   |               |                                                                                           |   |   |   |   |   |
|   Interest                                                                                |   |               | $                –      |   |   |   | $                – |   |
|   Income taxes                                                                            |   |               | $                – |   |   |   | $                – |   |
|                                                                                                |   |               |                                                                                           |   |   |   |   |   |
| Non-Cash transaction:                                                                          |   |               |                                                                                           |   |   |   |   |   |
|   In June 2010, the Company contributed certain tracts of Real Estate to their newly formed    |   |               |                                                                                           |   |   |
|   CapStar Holdings Corporation, wholly-owned by the Company.  This transaction had the    |   |               |                                                                                           |   |   |   |   |   |
|   following non-cash effect on the Company's Consolidated Statement of Assets and Liabilities: |   |               |                                                                                           |   |   |   |   |   |
|                                                                                                |   |               |                                                                                           |   |   |   |   |   |
|   Total Investments                                                                            |   |               |  $  3,703,619                                                                        |   |   |   |  $                 - |   |

----

| Company                                                                                     |  Equity (a)             |   |  Investment (b)                                                                                                                                                                                                                                                                            |                   | Cost   |                    | Value (c) |
|---------------------------------------------------------------------------------------------|------------------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------|--------|-------------------------|-----------|
|                                                                                        |                         |   |                                                                                                                                                                                                                                                                                            |                   |   |                    |
| ¥†ALAMO GROUP INC.                                                               | 22.0%                        |   | 2,830,300 shares common stock (acquired 4-1-73                                                                                                                                                                                                                                                  |                   |   |                    |
| Seguin, Texas                                                                               |                         |   | thru 5-25-07)                                                                                                                                                                                                                                                                                   | $  2,190,937 |   | $  45,992.375 |
| Tractor-mounted mowing and mobile excavation                                                |                         |   |                                                                                                                                                                                                                                                                                            |                   |   |                    |
| equipment for governmental, industrial and agricultural                                     |                         |   |                                                                                                                                                                                                                                                                                            |                   |   |                    |
| markets; street-sweeping equipment for municipalities.                                      |                         |   |                                                                                                                                                                                                                                                                                            |                   |   |                    |
|                                                                                        |                         |   |                                                                                                                                                                                                                                                                                            |                   |   |                    |
| ALL COMPONENTS, INC.                                                                        | 80.4%                        |   | 8.25%  subordinated note, $6,000,000 principal due                                                                                                                                                                                                                                    |                   |   |                    |
| Pflugerville, Texas                                                                         |                         |   | 2012 (acquired 6-27-07)                                             | 6,000,000              |   | 6,000,000               |
| Electronics contract manufacturing; distribution and production                             |                         |   | 150,000 shares Series A Convertible Preferred Stock, con-                                                                                                                                                                                                                                       |                   |   |                    |
| of memory and other components for computer manufacturers,                                  |                         |   | vertible into 600,000 shares of common stock at $0.25                                                                                                                                                                                                                                           |                   |   |                    |
| retailers and value-added resellers.                                                        |                         |   | per share (acquired 9-16-94)                                                                                                                                                                                                                                                                    | 150,000                |   | 5,821,725               |
|                                                                                        |                         |   | Warrants to purchase 350,000 shares of common stock at                                                                                                                                                                                                                                          |                   |   |                    |
|                                                                                        |                         |   | $11.00 per share, expiring 2017 (acquired 6-27-07)                                                                                                                                                                                                                                              | –                |   | –                 |
|                                                                                        |                         |   |                                                                                                                                                                                                                                                                                            | 6,150,000              |   | 11,821,725              |
|                                                                                        |                         |   |                                                                                                                                                                                                                                                                                            |                   |   |                    |
| ATLANTIC CAPITAL BANCSHARES, INC.                                                           |     1.9% |   | 300,000 shares common stock (acquired 4-10-07)                                                                                                                                                                                                                                                  | 3,000,000              |   | 1,575,000               |
| Atlanta, Georgia                                                                            |                         |   |                                                                                                                                                                                                                                                                                            |                   |   |                    |
| Holding company of Atlantic Capital Bank,    a full service commercial bank. |                         |   |                                                                                                                                                                                                                                                                                            |                   |   |                    |
|                                                                                        |                         |   |                                                                                                                                                                                                                                                                                            |                   |   |                    |
| ¥ BALCO, INC.                                                                          | 90.9%                        |   | 445,000 shares common stock and 60,920 shares Class B                                                                                                                                                                                                                                           |                   |   |                    |
| Wichita, Kansas                                                                             |                         |   | non-voting common stock (acquired 10-25-83 and 5-30-02)                                                                                                                                                                                                                                         | 624,920                |   | 6,600,000               |
| Specialty architectural products used in the construction and                               |                         |   |                                                                                                                                                                                                                                                                                            |                   |   |                    |
| remodeling of commercial and institutional buildings.                                       |                         |   |                                                                                                                                                                                                                                                                                            |                   |   |                    |
|                                                                                        |                         |   |                                                                                                                                                                                                                                                                                            |                   |   |                    |
| *BOXX TECHNOLOGIES, INC.                                                                    |   15.2%                 |   | 3,125,354 shares Series B Convertible Preferred Stock,                                                                                                                                                                                                                                          |                   |   |                    |
| Austin, Texas                                                                               |                         |   | convertible into 3,125,354 shares of common stock at                                                                                                                                                                                                                                            |                   |   |                    |
| Workstations for computer graphic imaging and design.                                       |                         |   | $0.50 per share (acquired 8-20-99 thru 8-8-01)                                                                                                                                                                                                                                                  | 1,500,000              |   | 2                       |
|                                                                                        |                         |   |                                                                                                                                                                                                                                                                                            |                   |   |                    |
| *CMI HOLDING COMPANY, INC.                                                                  | 21.7%                        |   | 10% convertible promissory note, due 2013 (acquired 5-19-10)                                                                                                                                                                                                                                    |  600,000          |   |  300,000           |
| Richardson, Texas                                                                           |                         |   | 10% convertible promissory note, due 2013 (acquired 2-23-10)                                                                                                                                                                                                                                    | 650,000                |   | 325,000                 |
| Owns Chase Medical, which develops and sells devices used                                   |                         |   | 1,631,516 shares Series C-1 Convertible Preferred                                                                                                                                                                                                                                               |                   |   |                    |
| in cardiac surgery to relieve congestive heart failure; develops                            |                         |   | Stock, convertible into 1,631,516 shares of common                                                                                                                                                                                                                                              |                   |   |                    |
| and supports cardiac imaging systems.                                                       |                         |   | stock at $2.15 per share (acquired 7-10-09)                                                                                                                                                                                                                                                     | 2,863,347              |   | 1                       |
|                                                                                        |                         |   | 2,327,658 shares Series A Convertible Preferred Stock,                                                                                                                                                                                                                                          |                   |   |                    |
|                                                                                        |                         |   | convertible into 2,327,658 shares of common stock at                                                                                                                                                                                                                                            |                   |   |                    |
|                                                                                        |                         |   | $1.72 per share (acquired 8-21-02 and 6-4-03)                                                                                                                                                                                                                                                   | 4,000,000              |   | 2                       |
|                                                                                        |                         |   | Warrants to purchase 109,012 shares of common stock at                                                                                                                                                                                                                                          |                   |   |                    |
|                                                                                        |                         |   | $1.72 per share, expiring 2012 (acquired 4-7-04)                                                                                                                                                                          |  –          |   |  –           |
|                                                                                        |                         |   | Warrants to purchase 636,151 shares of Series A-1 Convertible                                                                                                                                                                                                                                   |                   |   |                    |
|                                                                                        |                         |   | Preferred Stock at $1.72 per share expiring 2017 and                                                                                                                                                                                                                                            |                   |   |                    |
|                                                                                        |                         |   | 2019 (acquired 7-2-07 and 6-9-09)                                                                                     |  –          |   |  –           |
|                                                                                        |                         |   | Warrant to purchase 90,698 shares of Series D or D-1                                                                                                                                                                                                                                            |                   |   |                    |
|                                                                                        |                         |   | Convertible Preferred Stock at $1.72 per share expiring                                                                                                                                                                                                                                         |                   |   |                    |
|                                                                                        |                         |   | 2017 (acquired 2-23-10)                                                  |  –          |   |  –           |
|                                                                                        |                         |   |                                                                                                                                                                                                                                                                                            | 8,113,347              |   | 625,003                 |

----

| Company                                                                                                        |  Equity (a) |   |  Investment (b)                                                                                                                                                                                                                                                                                                                                                                     |                        |  Cost |                              |  Value (c) |
|--------------------------------------------------------------------------------------------------------------------------|------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------|------------|-----------------------------------|-----------------|
|                                                                                                                     |             |   |                                                                                                                                                                                                                                                                                                                                                                                     |                        |       |                              |
| CINATRA CLEAN TECHNOLOGIES, INC.                                                                                         | 59.2%            |   | 10% subordinated secured promissory note, due 2012                                                                                                                                                                                                                                                                                                                                  | $ 1,074,691            |       | $ 1,074,691                  |
| Houston, Texas                                                                                                           |             |   |     (acquired 5-19-10)                                                                                                                                                                                                                                                                                                                                               |                        |       |                              |
| Cleans above ground oil storage tanks with a patented,                                                                   |             |   | 10% subordinated secured promissory note, due 2013                                                                                                                                                                                                                                                                                                                                       |                        |       |                              |
| automated system.                                                                                                        |             |   | (acquired 7-14-08 thru 4-28-10)                                                                                                                                                                                                                                                                                                                                                          |   6,200,700       |       |     6,200,700 |
|                                                                                                                     |             |   | 1,128,649 shares Series A Convertible Preferred Stock,                                                                                                                                                                                                                                                                                                                                   |                        |       |                              |
|                                                                                                                     |             |   | convertible into 1,128,649 shares of common stock at $1.00                                                                                                                                                                                                                                                                                                                               |                        |       |                              |
|                                                                                                                     |             |   | per share (acquired 7-14-08 and 11-19-08)                                                                                                                                                                                                                                                                                                                                                |    1,128,649 |       |    1,023,738       |
|                                                                                                                     |             |   |                                                                                                                                                                                                                                                                                                                                                                                     | 8,404,040                   |       | 8,299,129                         |
|                                                                                                                     |             |   |                                                                                                                                                                                                                                                                                                                                                                                     |                        |       |                              |
| *†ENCORE WIRE CORPORATION                                                                                          | 16.9%            |   | 4,086,750 shares common stock (acquired 7-16-92 thru                                                                                                                                                                                                                                                                                                                                     |                        |       |                              |
| McKinney, Texas                                                                                                          |             |   | 10-7-98)                                                                                                                                                                                                                                                                                                                                                                                 | 5,800,000                   |       | 61,301,250                        |
| Electric wire and cable for residential, commercial and                                                                  |             |   |                                                                                                                                                                                                                                                                                                                                                                                     |                        |       |                              |
| industrial construction use.                                                                                             |             |   |                                                                                                                                                                                                                                                                                                                                                                                     |                        |       |                              |
|                                                                                                                     |             |   |                                                                                                                                                                                                                                                                                                                                                                                     |                        |       |                              |
| EXTREME INTERNATIONAL, INC.                                                                                              | 53.6%            |   | 13,035 shares Series A common stock (acquired 9-26-08                                                                                                                                                                                                                                                                                                                                    |                        |       |                              |
| Sugar Land, Texas                                                                                                        |             |   | and 12-18-08)                                                                                                                                                                                                                                                                                                                                                                            | 325,875                     |       | 677,000                           |
| Owns  Bill  Young  Productions, Texas  Video  and  Post, and |             |   | 39,359.18 shares Series C Convertible Preferred Stock,                                                                                                                                                                                                                                                                                                                                   |                        |       |                              |
| Extreme Communications, which produce radio and television                                                               |             |   | convertible into 157,437.72 shares of common stock at                                                                                                                                                                                                                                                                                                                                    |                        |       |                              |
| commercials and corporate communications videos.                                                                         |             |   | $25.00 per share (acquired 9-30-03)                                                                                                                                                                                                                                                                                                                                                      | 2,625,000                   |       | 8,165,000                         |
|                                                                                                                     |             |   | 3,750 shares 8% Series A Convertible Preferred Stock,                                                                                                                                                                                                                                                                                                                                    |                        |       |                              |
|                                                                                                                     |             |   | convertible into 15,000 shares of common stock at $25.00                                                                                                                                                                                                                                                                                                                                 |                        |       |                              |
|                                                                                                                     |             |   | per share (acquired 9-30-03)                                                           | 375,000                     |       | 778,000                           |
|                                                                                                                     |             |   |                                                                                                                                                                                                                                                                                                                                                                                     | 3,325,875                   |       | 9,620,000                         |
|                                                                                                                     |             |   |                                                                                                                                                                                                                                                                                                                                                                                     |                        |       |                              |
| ¥†HEELYS, INC.                                                                                                | 31.1%            |   | 9,317,310 shares common stock (acquired 5-26-00)                                                                                                                                                                                                                                                                                                                                         | 102,490                     |       | 20,125,390                        |
| Carrollton, Texas                                                                                                        |             |   |                                                                                                                                                                                                                                                                                                                                                                                     |                        |       |                              |
| Heelys stealth skate shoes, equipment and apparel sold                                                                   |             |   |                                                                                                                                                                                                                                                                                                                                                                                     |                        |       |                              |
| through sporting goods chains,  department stores and                                                          |             |   |                                                                                                                                                                                                                                                                                                                                                                                     |                        |       |                              |
|     footware retailers.                                                                              |             |   |                                                                                                                                                                                                                                                                                                                                                                                     |                        |       |                              |
|                                                                                                                     |             |   |                                                                                                                                                                                                                                                                                                                                                                                     |                        |       |                              |
| †HOLOGIC, INC.                                                                                                     | <1%           |   | ‡632,820 shares common stock (acquired 8-27-99)                                                                                                                                                                                                                                                                                                                                    | 220,000                     |       | 8,808,854                         |
| Bedford, Massachusetts                                                                                                   |             |   |                                                                                                                                                                                                                                                                                                                                                                                     |                        |       |                              |
| Medical instruments including bone densitometers,                                                                        |             |   |                                                                                                                                                                                                                                                                                                                                                                                     |                        |       |                              |
| mammography devices and digital radiography systems.                                                                     |             |   |                                                                                                                                                                                                                                                                                                                                                                                     |                        |       |                              |
|                                                                                                                     |             |   |                                                                                                                                                                                                                                                                                                                                                                                     |                        |       |                              |
| iMEMORIES, INC.                                                                                                          | 26.2%            |   | 17,391,304 shares Series B Convertible Preferred Stock,                                                                                                                                                                                                                                                                                                                                  |                        |       |                              |
| Scottsdale, AZ                                                                                                           |             |   | convertible into 17,391,304 shares of common stock at                                                                                                                                                                                                                                                                                                                                    |                        |       |                              |
| Enables online video and photo sharing and DVD creation                                                                  |             |   | $0.23 per share (acquired 7-10-09)                                                                                                                                                                                                                                                                                                                                                       | 4,000,000                   |       | 4,000,000                         |
| for home movies recorded in analog and new digital format.                                                               |             |   |                                                                                                                                                                                                                                                                                                                                                                                     |                        |       |                              |
|                                                                                                                     |             |   |                                                                                                                                                                                                                                                                                                                                                                                     |                        |       |                              |
|                                                                                                                     |             |   |                                                                                                                                                                                                                                                                                                                                                                                     |                        |       |                              |
| KBI BIOPHARMA, INC.                                                                                                      | 14.8%            |   | 7,142,857 shares Series B-2 Convertible Preferred Stock,                                                                                                                                                                                                                                                                                                                                 |                        |       |                              |
| Durham, NC                                                                                                               |             |   | convertible into 7,142,857 shares of common stock at                                                                                                                                                                                                                                                                                                                                     |                        |       |                              |
| Provides fully-integrated, outsourced drug development                                                                   |             |   | $0.70 per share (acquired 9-08-09)                                                                                                                                                                                                                                                                                                                                                       | 5,000,000                   |       | 5,000,000                         |
| and bio-manufacturing services.                                                                                          |             |   |                                                                                                                                                                                                                                                                                                                                                                                     |                        |       |                              |

----

| Company                                                |  Equity (a) |   |  Investment (b)                                 |                                   | Cost   |                   | Value (c)   |
|------------------------------------------------------------------|------------------|--------|------------------------------------------------------|----------------------------------------|------------------|------------------------|-----------------------|
|                                                             |             |   |                                                 |                                   |             |                   |
| ¥ MEDIA RECOVERY, INC.                                      | 97.5%            |   | 800,000 shares Series A Convertible Preferred Stock, |                                   |             |                   |
| Dallas, Texas                                                    |             |   | convertible into 800,000 shares of common stock at   |                                   |             |                   |
| Computer datacenter and office automation supplies and           |             |   | $1.00 per share (acquired 11-4-97)                   | $     800,000 |             | $  2,400,000 |
| accessories; impact, tilt monitoring and temperature sensing     |             |   | 4,000,002 shares common stock (acquired 11-4-97)     | 4,615,000                              |             | 12,200,000             |
| devices to detect mishandled shipments; dunnage for              |             |   |                                                 | 5,415,000                              |             | 14,600,000             |
|     protecting shipments.                         |             |   |                                                 |                                   |             |                   |
|                                                             |             |   |                                                 |                                   |             |                   |
| *PALLETONE, INC.                                                 | 8.4%             |   | 12.3% senior subordinated notes, $2,000,000          |                                   |             |                   |
| Bartow, Florida                                                  |             |   | principal due 2012 (acquired 9-25-06)           | 1,553,150                              |             | 2,000,000              |
| Manufacturer of wooden pallets and pressure-treated              |             |   | 150,000 shares common stock (acquired 10-18-01)      | 150,000                                |             | 2                      |
| lumber.                                                          |             |   | Warrant to purchase 15,294 shares of common stock    |                                   |             |                   |
|                                                             |             |   | at $1.00 per share, expiring 2011 (acquired 2-17-06) | 45,746                                 |             | –                |
|                                                             |             |   |                                                 | 1,748,896                              |             | 2,000,002              |
|                                                             |             |   |                                                 |                                   |             |                   |
| ¥†PALM HARBOR HOMES, INC.                             | 30.4%            |   | 7,855,121 shares common stock (acquired 1-3-85       |                                   |             |                   |
| Dallas, Texas                                                    |             |   | thru 7-31-95)                                        | 10,931,955                             |             | 6,833,955              |
| Integrated manufacturing, retailing, financing and insuring      |             |   | Warrant to purchase 286,625 shares of common         |                                   |             |                   |
| of manufactured housing and modular homes.                       |             |   | stock at $3.14 per share, expiring 2019 (acquired    |                                   |             |                   |
|                                                             |             |   | 4-24-09)                                             | –                                |             | –                |
|                                                             |             |   |                                                 | 10,931,955                             |             | 6,833,955              |
|                                                             |             |   |                                                 |                                   |             |                   |
| ¥ THE RECTORSEAL CORPORATION                           |   100.0%    |   | 27,907 shares common stock (acquired 1-5-73 and      |                                   |             |                   |
| Houston, Texas                                                   |             |   | 3-31-73)                                             | 52,600                                 |             | 130,000,000            |
| Specialty 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.                       |             |   |                                                 |                                   |             |                   |
|                                                             |             |   |                                                 |                                   |             |                   |
| TCI  HOLDINGS, INC.                                    | –          |   | 21 shares 12% Series C Cumulative Compounding        |                                   |             |                   |
| Denver, Colorado                                                 |             |   | Preferred stock (acquired 1-30-90)                   | –                                |             | 677,250                |
| Cable television systems and microwave relay systems.            |             |   |                                                 |                                   |             |                   |
|                                                             |             |   |                                                 |                                   |             |                   |
| †TEXAS CAPITAL BANCSHARES, INC.                            | 1.6%             |   | ‡489,656 shares common stock (acquired 5-1-00) | 3,550,006                              |             | 8,020,565              |
| Dallas, Texas                                                    |             |   |                                                 |                                   |             |                   |
| Regional bank holding company with banking operations            |             |   |                                                 |                                   |             |                   |
| in six Texas cities.                                             |             |   |                                                 |

| TRAX HOLDINGS, INC.                                                   | 31.1%  |   | 1,061,279 shares Series A Convertible Preferred Stock, |      |   |      |
|-----------------------------------------------------------------------|--------|--------|--------------------------------------------------------|-----------|--------|-----------|
| Scottsdale, Arizona                                                   |   |   | convertible into 1,061,279 common stock at $4.71  |      |   |      |
| Provides a comprehensive set of solutions to improve                  |   |   | per share (acquired 12-8-08 and 2-17-09)               | 5,000,000 |   | 6,218,157 |
|     the transportation validation, accounting, payment |   |   |                                                   |      |   |      |
| and information management process.                              |   |   |                                                   |      |   |      |

----

| Company                                                                                                                                                                       |  Equity (a) |   |  Investment (b)                                                          |         |  Cost |                                   |  Value (c) |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------|--------|-------------------------------------------------------------------------------|--------------|------------|----------------------------------------|-----------------|
|                                                                                                                                                                               |             |   |                                                                          |         |       |                                   |
| VIA HOLDINGS, INC.                                                                                                                                                                 | 28.1%            |   | 9,118 shares Series B Preferred Stock (acquired 9-19-05)                      | $4,559,000   |       | $      2 |
| Sparks, Nevada                                                                                                                                                                     |             |   | 1,118 shares Series C Preferred Stock (acquired 11-1-07)                      | 281,523      |       | 2                                      |
| Designer, manufacturer and distributor of high-quality                                                                                                                             |             |   |                                                                          | 4,840,523    |       | 4                                      |
| office  seating.                                                                                                                                                         |             |   |                                                                          |         |       |                                   |
|                                                                                                                                                                               |             |   |                                                                          |         |       |                                   |
| *WELLOGIX, INC.                                                                                                                                                                    | 19.3%            |   | 4,788,371 shares Series A-1 Convertible Participating                         |         |       |                                   |
|    Houston, Texas                                                                                                                                                   |             |   | Preferred Stock, convertible into 4,788,371 shares                            |         |       |                                   |
| Developer and supporter of software used by the oil and gas                                                                                                                        |             |   | of common stock at $1.0441 per share (acquired                                |         |       |                                   |
| industry.                                                                                                                                                                          |             |   | 8-19-05 thru 6-15-08)                                                         | 5,000,000    |       | 2                                      |
|                                                                                                                                                                               |             |   |                                                                          |         |       |                                   |
| ¥ THE WHITMORE MANUFACTURING COMPANY                                                                                                                                          | 80.0%            |   | 80 shares common stock (acquired 8-31-79)                                     | 1,600,000    |       | 47,500,000                             |
| Rockwall, Texas                                                                                                                                                                    |             |   |                                                                          |         |       |                                   |
| Specialized surface mining, railroad and industrial                                                                                                                                |             |   |                                                                          |         |       |                                   |
|     lubricants;coatings for automobiles and primary metals;                                                                                                         |             |   |                                                                          |         |       |                                   |
|     fluid contamination control devices.                                                                                                                            |             |   |                                                                          |         |       |                                   |
|                                                                                                                                                                               |             |   |                                                                          |         |       |                                   |
| MISCELLANEOUS                                                                                                                                                                      |             |   | – Ballast Point Ventures II, L.P. – 2.6% limited partnership      |         |       |                                   |
|                                                                                                                                                                               |             |   | interest (acquired 8-4-08 thru 6-18-10)                                       | 975,000      |       | 975,000                                |
|                                                                                                                                                                               |             |   | – BankCap Partners Fund I, L.P. – 6.0% limited partnership        |         |       |                                   |
|                                                                                                                                                                               |             |   | interest (acquired 7-14-06  thru 6-18-09)                           | 5,583,470    |       | 5,191,008                              |
|                                                                                                                                                                               | 100.0%      |   | – CapitalSouth Partners Fund III, L.P. – 2.8% limited             |         |       |                                   |
|                                                                                                                                                                               |             |   | partnership interest (acquired 1-22-08 and 2-12-09)                           | 831,256      |       | 831,256                                |
|                                                                                                                                                                               |             |   | – ¥CapStar Holdings Corporation, – 500 shares common         |         |       |                                   |
|                                                                                                                                                                               |             |   |     stock (acquired 6-10-10)                                   | 3,703,619    |       |  3,703,619                        |
|                                                                                                                                                                               |             |   | – Diamond State Ventures, L.P. – 1.9% limited partnership         |         |       |                                   |
|                                                                                                                                                                               |             |   | interest (acquired 10-12-99 thru 8-26-05)                                     | 76,000       |       | 187,369                                |
|                                                                                                                                                                               |             |   | – ¥Discovery Alliance, LLC – 90.0% limited liability company |         |       |                                   |
|                                                                                                                                                                               |             |   | (acquired 9-12-08 thru 5-14-10)                                               | 900,000      |       | 900,000                                |
|                                                                                                                                                                               |             |   | – Essex Capital Corporation – 10% unsecured promissory            |         |       |                                   |
|                                                                                                                                                                               |             |   | note due 8-19-10 (acquired 8-16-09)                                           | –      |       | 1,000,000                              |
|                                                                                                                                                                               |             |   | – First Capital Group of Texas III, L.P. – 3.0% limited           |         |       |                                   |
|                                                                                                                                                                               |             |   | partnership interest (acquired 12-26-00 thru 8-12-05)                         | 778,895      |       | 473,934                                |
|                                                                                                                                                                               |   100.0%    |   | – ¥Humac Company – 1,041,000 shares common stock             |         |       |                                   |
|                                                                                                                                                                               |             |   | (acquired 1-31-75 and 12-31-75)                                               | –      |       | 157,000                                |
|                                                                                                                                                                               |             |   | – STARTech Seed Fund I – 12.1% limited partnership                |         |       |                                   |
|                                                                                                                                                                               |             |   |   interest (acquired 4-17-98 thru 1-5-00)                           | 178,066      |       | 1                                      |
|                                                                                                                                                                               |             |   | – STARTech Seed Fund II – 3.2% limited partnership                |         |       |                                   |
|                                                                                                                                                                               |             |   | interest (acquired 4-28-00 thru 2-23-05)                                      | 950,000      |       | 1                                      |
|                                                                                                                                                                               |             |   | – Sterling Group Partners I, L.P. – 1.7% limited partnership      |         |       |                                   |
|                                                                                                                                                                               |             |   | interest (acquired 4-20-01 thru 1-24-05)                                      | 1,064,042    |       | 750,535                                |
| TOTAL INVESTMENTS                                                                                                                                                                  |             |   |                                                                          | $101,610,937 |       | $413,788,386                           |
|                                                                                                                                                                               |             |   |                                                                          |         |       |                                   |
| †Publicly-owned company   ¥ Control investment   * Affiliated investment  ‡Unrestricted securities as defined in Note (a) |             |   |                                                                          |

----

| Company                                                          |  Equity (a)             |   |  Investment (b)                                                           |                   | Cost   |              | Value (c) |
|------------------------------------------------------------------|------------------------------|--------|--------------------------------------------------------------------------------|------------------------|--------|-------------------|-----------|
|                                                             |                         |   |                                                                           |                   |   |              |
| ¥†ALAMO GROUP INC.                                    | 26.3%                        |   | 2,830,300 shares common stock (acquired 4-1-73                                 |                   |   |              |
| Seguin, Texas                                                    |                         |   | thru 5-25-07)                                                                  | $  2,190,937 |   | $ 22,642,400 |
| Tractor-mounted mowing and mobile excavation                     |                         |   |                                                                           |                   |   |              |
| equipment for governmental, industrial and agricultural          |                         |   |                                                                           |                   |   |              |
| markets; street-sweeping equipment for municipalities.           |                         |   |                                                                           |                   |   |              |
|                                                             |                         |   |                                                                           |                   |   |              |
| ALL COMPONENTS, INC.                                             | 80.0%                        |   | 8.25%  subordinated note, due 2012 (acquired 6-27-07)      | 6,000,000              |   | 6,000,000         |
| Austin, Texas                                                    |                         |   | 150,000 shares Series A Convertible Preferred                             |                   |   |              |
| Electronics contract manufacturing; distribution and production  |                         |   | Stock,  convertible into 600,000 shares of common                         |                   |   |              |
| of memory and other components for computer manufacturers,       |                         |   | stock at $0.25 per share (acquired 9-16-94)                                    | 150,000                |   | 1                 |
| retailers and value-added resellers.                             |                         |   | Warrants to purchase 350,000 shares of common stock at                    |                   |   |              |
|                                                             |                         |   | $11.00 per share, expiring 2017 (acquired 6-27-07)                             | –                |   | –           |
|                                                             |                         |   |                                                                           | 6,150,000              |   | 6,000,001         |
|                                                             |                         |   |                                                                           |                   |   |              |
| ATLANTIC CAPITAL BANCSHARES, INC.                                |     2.0% |   | 300,000 shares common stock (acquired 4-10-07)                                 | 3,000,000              |   | 3,000,000         |
| Atlanta, Georgia                                                 |                         |   |                                                                           |                   |   |              |
| Holding company of Atlantic Capital Bank          |                         |   |                                                                           |                   |   |              |
|     a full service commercial bank.          |                         |   |                                                                           |                   |   |              |
|                                                             |                         |   |                                                                           |                   |   |              |
| ¥BALCO, INC.                                                | 90.9%                        |   | 445,000 shares common stock and 60,920 shares Class B                          |                   |   |              |
| Wichita, Kansas                                                  |                         |   | non-voting common stock (acquired 10-25-83 and 5-30-02)                        | 624,920                |   | 8,000,000         |
| Specialty architectural products used in the construction and    |                         |   |                                                                           |                   |   |              |
| remodeling of commercial and institutional buildings.            |                         |   |                                                                           |                   |   |              |
|                                                             |                         |   |                                                                           |                   |   |              |
| *BOXX TECHNOLOGIES, INC.                                         |   15.2%                 |   | 3,125,354 shares Series B Convertible Preferred Stock,                         |                   |   |              |
| Austin, Texas                                                    |                         |   | convertible into 3,125,354 shares of common stock at                           |                   |   |              |
| Workstations for computer graphic imaging and design.            |                         |   | $0.50 per share (acquired 8-20-99 thru 8-8-01)                                 | 1,500,000              |   | 2                 |
|                                                             |                         |   |                                                                           |                   |   |              |
| *CMI HOLDING COMPANY, INC.                                       | 17.2%                        |   | 10% convertible subordinated note, due 2009                                    |                   |   |              |
| Richardson, Texas                                                |                         |   |      (acquired 7-2-07 thru 10-9-07)                   | 2,708,347              |   | 1,345,000         |
| Owns Chase Medical, which develops and sells devices used        |                         |   | 2,327,658 shares Series A Convertible Preferred Stock,                         |                   |   |              |
| in cardiac surgery to relieve congestive heart failure; develops |                         |   | convertible into 2,327,658 shares of common stock at                           |                   |   |              |
| and supports cardiac imaging systems.                            |                         |   | $1.72 per share (acquired 8-21-02 and 6-4-03)                                  | 4,000,000              |   | 2                 |
|                                                             |                         |   | Warrants to purchase 109,012 shares of common stock at                         |                   |   |              |
|                                                             |                         |   | $1.72 per share, expiring 2012 (acquired 4-7-04)                               |  –          |   |  –     |
|                                                             |                         |   | Warrant to purchase 575,975 shares of Series A-1 Convertible                   |                   |   |              |
|                                                             |                         |   |     Preferred Stock at $1.72 per share, expiring 2017           |                   |   |              |
|                                                             |                         |   |     (acquired 7-2-07)                                           |  –          |   |  –     |
|                                                             |                         |   | Warrant to purchase 60,174 shares of Series A-1 Convertible                    |                   |   |              |
|                                                             |                         |   |     Preferred Stock at $1.72 per share, expiring 2019 (acquired |                   |   |              |
|                                                             |                         |   |     6/9/09)                                                     |  –          |   |  –     |
|                                                             |                         |   |                                                                           | 6,708,347              |   | 1,345,002         |

----

| Company                                                                                                        |  Equity (a) |   |  Investment (b)                                                                                                                                                                                                                                                                                                                                                                     |                        |  Cost |                              |  Value (c) |
|--------------------------------------------------------------------------------------------------------------------------|------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------|------------|-----------------------------------|-----------------|
|                                                                                                                     |             |   |                                                                                                                                                                                                                                                                                                                                                                                     |                        |       |                              |
| CINATRA CLEAN TECHNOLOGIES, INC.                                                                                         | 59.2%            |   | 10% subordinated secured promissory note, (acquired 7-14-08                                                                                                                                                                                                                                                                                                                              |                        |       |                              |
| Houston, Texas                                                                                                           |             |   | thru 6-16-09)                                                                                                                                                                                                                                                                                                                                                                            | $  4,834,432      |       | $   4,834,432      |
| Cleans above ground oil storage tanks with a patented,                                                                   |             |   | 1,128,649 shares Series A Convertible Preferred Stock,                                                                                                                                                                                                                                                                                                                                   |                        |       |                              |
| automated system.                                                                                                        |             |   | convertible into 1,128,649 shares of common stock at $1.00                                                                                                                                                                                                                                                                                                                               |                        |       |                              |
|                                                                                                                     |             |   | per share (acquired 7-14-08 and 11-19-08)                                                                                                                                                                                                                                                                                                                                                |    1,128,649 |       |     1,128,649 |
|                                                                                                                     |             |   |                                                                                                                                                                                                                                                                                                                                                                                     | 5,963,081                   |       | 5,963,081                         |
|                                                                                                                     |             |   |                                                                                                                                                                                                                                                                                                                                                                                     |                        |       |                              |
| DENNIS TOOL COMPANY                                                                                                      | 64.3%            |   | 20,725 shares 5% Convertible Preferred Stock, convertible                                                                                                                                                                                                                                                                                                                                |                        |       |                              |
|    Houston, Texas                                                                                              |             |   | into 20,725 shares of common stock at $48.25 per                                                                                                                                                                                                                                                                                                                                         |                        |       |                              |
|    Polycrystalline diamond compacts (PDCs) used in oil field drill                                             |             |   | share (acquired 8-10-98)                                                                                                                                                                                                                                                                                                                                                                 |  999,981               |       |  999,981                     |
|    bits and in mining and industrial applications.                                                             |             |   | 140,137 shares common stock (acquired 3-7-94 and 8-10-98)                                                                                                                                                                                                                                                                                                                                |  2,329,963             |       | 2,868,000                         |
|                                                                                                                     |             |   |                                                                                                                                                                                                                                                                                                                                                                                     |  3,329,944             |       |  3,867,981                   |
|                                                                                                                     |             |   |                                                                                                                                                                                                                                                                                                                                                                                     |                        |       |                              |
| †ENCORE WIRE CORPORATION                                                                                           | 17.2%            |   | 4,086,750 shares common stock (acquired 7-16-92 thru                                                                                                                                                                                                                                                                                                                                     |                        |       |                              |
| McKinney, Texas                                                                                                          |             |   | 10-7-98)                                                                                                                                                                                                                                                                                                                                                                                 | 5,800,000                   |       | 65,388,000                        |
| Electric wire and cable for residential, commercial and                                                                  |             |   |                                                                                                                                                                                                                                                                                                                                                                                     |                        |       |                              |
| industrial construction use.                                                                                             |             |   |                                                                                                                                                                                                                                                                                                                                                                                     |                        |       |                              |
|                                                                                                                     |             |   |                                                                                                                                                                                                                                                                                                                                                                                     |                        |       |                              |
| EXTREME INTERNATIONAL, INC.                                                                                              | 53.6%            |   | 13,035 shares Series A common stock (acquired 9-26-08                                                                                                                                                                                                                                                                                                                                    |                        |       |                              |
| Sugar Land, Texas                                                                                                        |             |   | and 12-18-08)                                                                                                                                                                                                                                                                                                                                                                            | 325,875                     |       | 527,102                           |
| Owns  Bill  Young  Productions, Texas  Video  and  Post, and |             |   | 39,359.18 shares Series C Convertible Preferred Stock,                                                                                                                                                                                                                                                                                                                                   |                        |       |                              |
| Extreme Communications, which produce radio and television                                                               |             |   | convertible into 157,437.72 shares of common stock at                                                                                                                                                                                                                                                                                                                                    |                        |       |                              |
| commercials and corporate communications videos.                                                                         |             |   | $25.00 per share (acquired 9-30-03)                                                                                                                                                                                                                                                                                                                                                      | 2,625,000                   |       | 6,366,336                         |
|                                                                                                                     |             |   | 3,750 shares 8% Series A Convertible Preferred Stock,                                                                                                                                                                                                                                                                                                                                    |                        |       |                              |
|                                                                                                                     |             |   | convertible into 15,000 shares of common stock at $25.00                                                                                                                                                                                                                                                                                                                                 |                        |       |                              |
|                                                                                                                     |             |   | per share (acquired 9-30-03)                                                           | 375,000                     |       | 606,562                           |
|                                                                                                                     |             |   |                                                                                                                                                                                                                                                                                                                                                                                     | 3,325,875                   |       | 7,500,000                         |
|                                                                                                                     |             |   |                                                                                                                                                                                                                                                                                                                                                                                     |                        |       |                              |
| ¥† HEELYS, INC.                                                                                               | 31.1%            |   | 9,317,310 shares common stock (acquired 5-26-00)                                                                                                                                                                                                                                                                                                                                         | 102,490                     |       | 16,305,293                        |
| Carrollton, Texas                                                                                                        |             |   |                                                                                                                                                                                                                                                                                                                                                                                     |                        |       |                              |
| Heelys stealth skate shoes, equipment and apparel sold                                                                   |             |   |                                                                                                                                                                                                                                                                                                                                                                                     |                        |       |                              |
| through sporting goods chains,  department stores and                                                          |             |   |                                                                                                                                                                                                                                                                                                                                                                                     |                        |       |                              |
|     footware retailers.                                                                                   |             |   |                                                                                                                                                                                                                                                                                                                                                                                     |                        |       |                              |
|                                                                                                                     |             |   |                                                                                                                                                                                                                                                                                                                                                                                     |                        |       |                              |
| †HOLOGIC, INC.                                                                                                     | <1%           |   | ‡632,820 shares common stock (acquired 8-27-99)                                                                                                                                                                                                                                                                                                                                    | 220,000                     |       | 9,011,357                         |
| Bedford, Massachusetts                                                                                                   |             |   |                                                                                                                                                                                                                                                                                                                                                                                     |                        |       |                              |
| Medical instruments including bone densitometers,                                                                        |             |   |                                                                                                                                                                                                                                                                                                                                                                                     |                        |       |                              |
| mammography devices and digital radiography systems.                                                                     |             |   |                                                                                                                                                                                                                                                                                                                                                                                     |                        |       |                              |
|                                                                                                                     |             |   |                                                                                                                                                                                                                                                                                                                                                                                     |                        |       |                              |
| ¥ LIFEMARK GROUP                                                                                               | 100.0%           |   | 1,449,026 shares common stock (acquired 7-16-69)                                                                                                                                                                                                                                                                                                                                         |   4,510,400            |       |   71,000,000                 |
|     Hayward, California                                                                              |             |   |                                                                                                                                                                                                                                                                                                                                                                                     |                        |       |                              |
|     Cemeteries, mausoleums and mortuaries located in                                                      |             |   |                                                                                                                                                                                                                                                                                                                                                                                     |                        |       |                              |
|     northern California.                                                                                  |             |   |                                                                                                                                                                                                                                                                                                                                                                                     |                        |       |                              |
|                                                                                                                     |             |   |                                                                                                                                                                                                                                                                                                                                                                                     |                        |       |                              |

----

| Company                                                            |  Equity (a) |   |  Investment (b)                                     |                  | Cost   |                    | Value (c)   |
|------------------------------------------------------------------------------|------------------|--------|----------------------------------------------------------|-----------------------|------------------|-------------------------|-----------------------|
|                                                                         |             |   |                                                     |                  |             |                    |
| ¥ MEDIA RECOVERY, INC.                                                  | 97.5%            |   | 800,000 shares Series A Convertible Preferred Stock,     |                  |             |                    |
| Dallas, Texas                                                                |             |   | convertible into 800,000 shares of common stock at       |                  |             |                    |
| Computer datacenter and office automation supplies and                       |             |   | $1.00 per share (acquired 11-4-97)                       | $   800,000 |             | $   2,500,000 |
| accessories; impact, tilt monitoring and temperature sensing                 |             |   | 4,000,002 shares common stock (acquired 11-4-97)         | 4,615,000             |             | 12,300,000              |
| devicesto detect mishandled shipments; dunnage for                           |             |   |                                                     | 5,415,000             |             | 14,800,000              |
|     protecting shipments.                                     |             |   |                                                     |                  |             |                    |
|                                                                         |             |   |                                                     |                  |             |                    |
| *PALLETONE, INC.                                                             | 8.5%             |   | 12.3% senior subordinated notes due 2012                 |                  |             |                    |
| Bartow, Florida                                                              |             |   | (acquired 9-25-06)                                  | 1,553,150             |             | 2                       |
| Manufacturer of wooden pallets and pressure-treated                          |             |   | 150,000 shares common stock (acquired 10-18-01)          | 150,000               |             | 2                       |
| lumber.                                                                      |             |   | Warrant to purchase 15,294 shares of common stock        |                  |             |                    |
|                                                                         |             |   | at $1.00 per share, expiring 2011 (acquired 2-17-06)     | 45,746                |             | –                 |
|                                                                         |             |   |                                                     | 1,748,896             |             | 4                       |
| ¥† PALM HARBOR HOMES, INC.                                        | 32.1%            |   | 7,855,121 shares common stock (acquired 1-3-85           |                  |             |                    |
| Dallas, Texas                                                                |             |   | thru 7-31-95)                                            | 10,931,955            |             | 9,818,902               |
| Integrated manufacturing, retailing, financing and insuring                  |             |   | Warrant to purchase 286,625 shares of common stock       |                  |             |                    |
| of manufactured housing and modular homes.                                   |             |   | at $3.14 per share, expiring 2019 (acquired 4-24-09)     | –               |             | –                 |
|                                                                         |             |   |                                                     | 10,931,955       |             |  9,818,902         |
|                                                                         |             |   |                                                     |                  |             |                    |
| ¥ THE RECTORSEAL CORPORATION                                       |   100.0%    |   | 27,907 shares common stock (acquired 1-5-73 and          |                  |             |                    |
| Houston, Texas                                                               |             |   | 3-31-73)                                                 | 52,600                |             | 107,200,000             |
| Specialty 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.                                   |             |   |                                                     |                  |             |                    |
|                                                                         |             |   |                                                     |                  |             |                    |
| TCI  HOLDINGS, INC.                                                | –          |   | 21 shares 12% Series C Cumulative Compounding            |                  |             |                    |
| Denver, Colorado                                                             |             |   | Preferred stock (acquired 1-30-90)                       | –               |             | 677,250                 |
| Cable television systems and microwave relay systems.                        |             |   |                                                     |                  |             |                    |
|                                                                         |             |   |                                                     |                  |             |                    |
| †TEXAS CAPITAL BANCSHARES, INC.                                        | 1.6%             |   | ‡489,656 shares common stock (acquired 5-1-00)     | 3,550,006             |             | 7,574,978               |
| Dallas, Texas                                                                |             |   |                                                     |                  |             |                    |
| Regional bank holding company with banking operations                        |             |   |                                                     |                  |             |                    |
| in six Texas cities.                                                         |             |   |                                                     |                  |             |                    |
|                                                                         |             |   |                                                     |                  |             |                    |
| TRAX HOLDINGS, INC.                                                          | 32.5%            |   | 1,061,279 shares Series A Convertible Preferred Stock,   |                  |             |                    |
|    Scottsdale, Arizona                                             |             |   | convertible into 1,061,279 common stock at $4.71 per     |                  |             |                    |
|    Provides a comprehensive set of solutions to improve the trans- |             |   | share (acquired 12-8-08 and 2-17-09)                     | 5,000,000        |             | 5,000,000          |
|    portation validation, accounting, payment and information       |             |   |                                                     |                  |             |                    |
|    management process.                                             |             |   |                                                     |                  |             |                    |
|                                                                         |             |   |                                                     |                  |             |                    |
| VIA HOLDINGS, INC.                                                           | 28.1%            |   | 9,118 shares Series B Preferred Stock (acquired 9-19-05) | 4,559,000        |             |  2                 |
|    Sparks, Nevada                                                  |             |   | 1,118 shares Series C Preferred Stock (acquired 11-1-07) | 281,523          |             |  2                 |
|    Designer, manufacturer and distributor of high-quality office   |             |   |                                                     | 4,840,523        |             |  4                 |
|    seating.                                                        |             |   |                                                     |                  |             |                    |

----

| Company                                                                                                                                                                       |  Equity (a) |   |  Investment (b)                                                     |                    |  Cost |                                                                                                |  Value (c) |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------|--------|--------------------------------------------------------------------------|-------------------------|------------|-----------------------------------------------------------------------------------------------------|-----------------|
|                                                                                                                                                                               |             |   |                                                                     |                    |       |                                                                                                |
| *WELLOGIX, INC.                                                                                                                                                                    | 19.7%            |   | 4,788,371 shares Series A-1 Convertible Participating                    |                    |       |                                                                                                |
|    Houston, Texas                                                                                                                                                   |             |   | Preferred Stock, convertible into 4,788,371 shares                       |                    |       |                                                                                                |
| Developer and supporter of software used by the oil and gas                                                                                                                        |             |   | of common stock at $1.0441 per share (acquired                           |                    |       |                                                                                                |
| industry.                                                                                                                                                                          |             |   | 8-19-05 thru 6-15-08)                                                    | $   5,000,000 |       | $                 2 |
|                                                                                                                                                                               |             |   |                                                                     |                    |       |                                                                                                |
| ¥ THE WHITMORE MANUFACTURING COMPANY                                                                                                                                          | 80.0%            |   | 80 shares common stock (acquired 8-31-79)                                | 1,600,000               |       | 36,000,000                                                                                          |
| Rockwall, Texas                                                                                                                                                                    |             |   |                                                                     |                    |       |                                                                                                |
| Specialized surface mining, railroad and industrial                                                                                                                                |             |   |                                                                     |                    |       |                                                                                                |
|     lubricants;coatings for automobiles and primary metals;                                                                                                         |             |   |                                                                     |                    |       |                                                                                                |
|     fluid contamination control devices.                                                                                                                            |             |   |                                                                     |                    |       |                                                                                                |
|                                                                                                                                                                               |             |   |                                                                     |                    |       |                                                                                                |
| MISCELLANEOUS                                                                                                                                                                      |             |   | – Ballast Point Ventures II, L.P. – 2.6% limited partnership |                    |       |                                                                                                |
|                                                                                                                                                                               |             |   | interest (acquired 8-4-08 thru 4-23-09)                                  | 525,000                 |       | 525,000                                                                                             |
|                                                                                                                                                                               |             |   | – BankCap Partners Fund I, L.P. – 6.0% limited partnership   |                    |       |                                                                                                |
|                                                                                                                                                                               |             |   | interest (acquired 7-14-06  thru 6-19-09)                      | 5,513,837               |       | 5,513,837                                                                                           |
|                                                                                                                                                                               |             |   | – CapitalSouth Partners Fund III, L.P. – 2.8% limited        |                    |       |                                                                                                |
|                                                                                                                                                                               |             |   | partnership interest (acquired 1-22-08 and 2-12-09)                      | 831,256                 |       | 831,256                                                                                             |
|                                                                                                                                                                               |             |   | – Diamond State Ventures, L.P. – 1.9% limited partnership    |                    |       |                                                                                                |
|                                                                                                                                                                               |             |   | interest (acquired 10-12-99 thru 8-26-05)                                | 111,000                 |       | 111,000                                                                                             |
|                                                                                                                                                                               |             |   | – ¥ Discovery Alliance, LLC – 90.0% limited liability   |                    |       |                                                                                                |
|                                                                                                                                                                               |             |   | company (acquired 9-12-08 thru 6-1-09)                                   | 600,000                 |       | 600,000                                                                                             |
|                                                                                                                                                                               |             |   | – First Capital Group of Texas III, L.P. – 3.0% limited      |                    |       |                                                                                                |
|                                                                                                                                                                               |             |   | partnership interest (acquired 12-26-00 thru 8-12-05)                    | 964,604                 |       | 684,748                                                                                             |
|                                                                                                                                                                               |   100.0%    |   | – ¥ Humac Company – 1,041,000 shares common stock       |                    |       |                                                                                                |
|                                                                                                                                                                               |             |   | (acquired 1-31-75 and 12-31-75)                                          | –                 |       | 139,000                                                                                             |
|                                                                                                                                                                               |             |   | – STARTech Seed Fund I – 12.1% limited partnership           |                    |       |                                                                                                |
|                                                                                                                                                                               |             |   |   interest (acquired 4-17-98 thru 1-5-00)                      | 178,066                 |       | 1                                                                                                   |
|                                                                                                                                                                               |             |   | – STARTech Seed Fund II – 3.2% limited partnership           |                    |       |                                                                                                |
|                                                                                                                                                                               |             |   | interest (acquired 4-28-00 thru 2-23-05)                                 | 950,000                 |       | 1                                                                                                   |
|                                                                                                                                                                               |             |   | – Sterling Group Partners I, L.P. – 1.7% limited partnership |                    |       |                                                                                                |
|                                                                                                                                                                               |             |   | interest (acquired 4-20-01 thru 1-24-05)                                 | 1,064,042               |       | 348,780                                                                                             |
| TOTAL INVESTMENTS                                                                                                                                                                  |             |   |                                                                     | $92,302,778             |       | $409,847,880                                                                                        |
|                                                                                                                                                                               |             |   |                                                                     |
| †Publicly-owned company   ¥ Control investment   * Affiliated investment  ‡Unrestricted securities as defined in Note (a) |             |   |                                                                     |

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| ·   | Level 1:  Investments whose values are based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has 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 over-the-counter (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.  We did not value any of our investments using Level 2 inputs as of June 30, 2010. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | 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 use Level 3 inputs for measuring the fair value of substantially all of our investments.  See “Notes to Consolidated Schedule of Investments” (c) on page 15 for the investment policy used to determine the fair value of these investments. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                  |              |   | Fair Value Measurementsat 6/30/2010 Using                     |
|-----------------------|-------------------|--------|---------------------------------------------------------------|
|                  | Total             |   | Quoted Prices in Active Markets for Identical Assets(Level 1) |   | Significant Other Observable Inputs(Level 2) |   | Significant Unobservable Inputs(Level 3) |
| Debt                  | $  16.9 |   |                                                          | $     - |   |   | $    - |   |   | $16.9 |   |
| Partnership Interests | 9.2               |   |                                                          | - |   |   | - |   |   | $9.2 |   |
| Preferred Equity      | 34.1              |   |                                                          | - |   |   | - |   |   | $34.1 |   |
| Common Equity         | 353.6             |   |                                                          | 16.9 |   |   | - |   |   | $336.7 |   |
| Total Investments     | $413.8            |   |                                                          | $16.9 |   |   | $    - |     |   | $396.9 |   |

|                  |              |   | Fair Value Measurementsat 6/30/2009 Using                     |
|-----------------------|-------------------|--------|---------------------------------------------------------------|
|                  | Total             |   | Quoted Prices in Active Markets for Identical Assets(Level 1) |   | Significant Other Observable Inputs(Level 2) |   | Significant Unobservable Inputs(Level 3) |
| Debt                  | $  12.2 |   |                                                          | $     - |   |   | $    - |   |   | $  12.2 |   |
| Partnership Interests | 8.6               |   |                                                          | - |   |   | - |   |   | 8.6 |   |
| Preferred Equity      | 16.6              |   |                                                          | - |   |   | - |   |   | 16.6 |   |
| Common Equity         | 372.5             |   |                                                          | 16.6 |   |   | - |   |   | 355.9 |   |
| Total Investments     | $409.9            |   |                                                          | $16.6 |   |   | $    - |   |   | $393.3 |   |

|                 |   | Fair Value 3/31/2010    |   | Net Unrealized Appreciation (Depreciation) |   | NetChangesfrom Unrealizedto Realized |   | New Investments                   |   | Divestitures |                  | Fair Value 6/30/2010 |
|----------------------|--------|-------------------------|--------|------------------------------------------------------|--------|--------------------------------------|--------|-----------------------------------|--------|--------------|-----------------------|----------------------|
| Debt                 |   | $  14.6            |   |                                                 | $0.4   |                                 |   | $      - |   |         | $1.9                  |                 |   | $    - |   |   | $  16.9 |   |
| Partnership Interest |   | $    8.6 |   |                                                 | $0.1   |                                 |   | $      - |   |         | $0.5                  |                 |   | $    - |   |   | $    9.2 |   |
| Preferred Equity     |   | $  35.3            |   |                                                 | -$1.2  |                                 |   | $      - |   |         | $    - |                 |   | $    - |   |   | $  34.1 |   |
| Common Equity        |   | $398.4                  |   |                                                 | $5.6   |                                 |   | -$66.5                            |   |         | $3.7                  |                 |   | -$4.5 |   |   | $336.7 |   |
| Total Investments    |   | $456.9                  |   |                                                 | $4.9   |                                 |   | -$66.5                            |   |         | $6.1                  |                 |   | -$4.5 |   |   | $396.9 |   |

----

----

|             |   |                        |   | 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        |   |                        |   |                                    |   |   |   |   |
| March 22, 2010   |   |  $  32.56    |   | 0.84%                                   |   | 2.43% |   | 37.8% |   | 5 |
| October 19, 2009 |   |  $  25.36    |   | 1.04%                                   |   | 2.36% |   | 37.6% |   | 5 |
|             |   |                        |   |                                    |   |   |   |   |   |   |
| 1999 Plan        |   |                        |   |                                    |   |   |   |   |
| July 30, 2008    |   |  $  29.93    |   | 0.62%                                   |   | 3.36% |   | 20.2% |   | 5 |
| July 21, 2008    |   |  $  27.35    |   | 0.67%                                   |   | 3.41% |   | 20.2% |   | 5 |
| July 16, 2007    |   |  $  41.78    |   | 0.39%                                   |   | 4.95% |   | 19.9% |   | 5 |
| July 17, 2006    |   |  $  33.05    |   | 0.61%                                   |   | 5.04% |   | 21.2% |   | 7 |
| May 15, 2006     |   |  $  31.28    |   | 0.64%                                   |   | 5.08% |   | 21.1% |   | 7 |

----

|                              |   | Number    |    | Weighted-Average |
|-----------------------------------|--------|-----------|---------|------------------|
|                              |   | of shares |    | Exercise Price   |
| 2009 Plan                         |   |      |    |             |   |   |
| Balance at March 31, 2010         |   |      | 58,750  |             |   |   | $  83.23 |   |
|    Granted         |   |      | – |             |   |   | – |   |
| Exercised                         |   |      | – |             |   |   | – |   |
| Canceled                          |   |      | – |             |   |   | – |   |
| Balance at June 30, 2010          |   |      | 58,750  |             |   |   | $  83.23 |   |
|                              |   |      |    |             |   |   |   |   |
| 1999 Plan                         |   |      |    |             |   |   |   |   |
| Balance at March 31, 2010         |   |      | 107,900 |             |   |   | $114.78 |   |
|    Granted         |   |      | – |             |   |   | – |   |
| Exercised                         |   |      | – |             |   |   | – |   |
| Canceled                          |   |      | – |             |   |   | – |   |
| Balance at June 30, 2010          |   |      | 107,900 |             |   |   | $114.78 |   |
| Combined Balance at June 30, 2010 |   |      | 166,650 |             |   |   | $103.65 |   |

|                                         |   | Three Months Ended |
|----------------------------------------------|--------|--------------------|
|                                         |   | June 30            |
|                                         |   | 2010               |   | 2009 |
| Investment income                            |   |               | $      .79 |   |   |   | $       .32 |   |
| Operating expenses                           |   |               | (.26 | ) |   |   | (.19 | ) |
| Income taxes                                 |   |               | (.01 | ) |   |   | (.01 | ) |
| Net investment income                        |   |               | .52 |   |   |   | .12 |   |
| Distributions from undistributed             |   |               |   |   |   |   |   |   |
|   net investment income            |   |               | (.40 | ) |   |   | ( .40 | ) |
| Net realized gain (loss) net of tax          |   |               | 19.78 |   |   |   | – |   |
| Net increase (decrease) in unrealized        |   |               |   |   |   |   |   |   |
|   appreciation of investments      |   |               | (17.57 | ) |   |   | 2.74 |   |
| Change in pension plan funded status         |   |               | – |   |   |   | (.07 | ) |
| Stock option expense                         |   |               | .06 |   |   |   | .04 |   |
| Increase (decrease) in net asset value       |   |               | 2.39 |   |   |   | 2.43 |   |
|                                         |   |               |   |   |   |   |   |   |
| Net asset value:                             |   |               |   |   |   |   |   |   |
|  Beginning of period                    |   |               | 130.14 |   |   |   | 110.98 |   |
|  End of period                          |   |               | $132.53 |   |   |   | $113.41 |   |
| Shares outstanding at end of period          |   |               |   |   |   |   |   |   |
|      (000s omitted) |   |               | 3,742 |   |   |   | 3,742 |   |

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| 7. | Subsequent Events |
|----|-------------------|

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|                 |   | June 30, |        |   | March 31, |   |        | June 30, |   |
|----------------------|--------|----------|-------------|--------|-----------|--------|-------------|----------|--------|
|                 |   | 2010     |        |   | 2010      |   |        | 2009     |   |
| Net assets           |   | $        | 495,887,245 |   |      | $      | 486,925,586 |     |   | $ | 424,377,993 |   |
| Shares outstanding   |   |     | 3,741,638   |   |      |   | 3,741,638   |     |   |   | 3,741,638 |   |
| Net assets per share |   | $        | 132.53      |   |      | $      | 130.14      |     |   | $ | 113.41 |   |

|                               |   |      Three Months Ended        |
|------------------------------------|--------|----------------------------------------------------|
|                               |   |        June 30, |
|                               |   | 2010                                               |   |   | 2009 |   |
| Alamo Group Inc.                   |   | $                                                  | 169,818 |   |   | $ | 169,818 |   |
| Balco, Inc.                        |   |                                               | 1,817,502 |   |   |   | - |   |
| Encore Wire Corporation            |   |                                               | 81,735 |   |   |   | 81,735 |   |
| The RectorSeal Corporation         |   |                                               | 240,000 |   |   |   | 240,000 |   |
| TCI Holdings, Inc                  |   |                                               | 20,318 |   |   |   | 20,318 |   |
| The Whitmore Manufacturing Company |   |                                               | 60,000 |   |   |   | 60,000 |   |
| Dennis Tool Company                |   |                                               | - |   |   |   | 12,499 |   |
|                               |   | $                                                  | 2,389,373 |   |   | $ | 584,370 |   |

----

|                               |   |           Three Months Ended                           |        |
|------------------------------------|--------|-----------------------------------------------------------------------------------------------------|-------------|
|                               |   |                 June 30, |        |
|                               |   | 2010                                                                                                |        |   | 2009 |   |
| Alamo Group Inc.                   |   | $                                                                                                   | 3,537,875   |   |   | $ | - |   |
| All Components, Inc.               |   |                                                                                                | (454,925    | ) |   |   | 3,000,000 |   |
| Atlantic Capital Bancshares, Inc.. |   |                                                                                                | (1,575,000  | ) |   |   | – |   |
| Balco, Inc.                        |   |                                                                                                | (1,400,000  | ) |   |   | 1,400,000 |   |
| CMI Holding Company, Inc.          |   |                                                                                                | (4,132,758  | ) |   |   | – |   |
| Encore Wire Corporation            |   |                                                                                                | (6,130,125  | ) |   |   | – |   |
| Extreme International, Inc.        |   |                                                                                                | 1,095,000   |   |   |   | 900,000 |   |
| Lifemark Group                     |   |                                                                                                | (66,489,600 | ) |   |   | – |   |
| The RectorSeal Corporation         |   |                                                                                                | 9,800,000   |   |   |   | – |   |

----

----

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| (a)   | Exhibits |
|-----------------|----------|

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|                            | CAPITAL SOUTHWEST CORPORATION |                                                      |
|---------------------------------|-------------------------------|-----------------------------------------------------------|
|                            |                          |                                                      |   |
| Date:  August 5, 2010 | By:                           |  /s/ Gary L. Martin                                  |   |
|                            |                          | Gary L. Martin, Chairman of the Board and President  |   |
|                            |                          |                                                      |   |

|                            |   |                                     |   |
|---------------------------------|--------|------------------------------------------|--------|
| Date:  August 5, 2010 | By:    |  /s/ Tracy L. Morris                |   |
|                            |   | Tracy L. Morris, Chief Financial Officer |   |
|                            |   |                                     |   |
|                            |   |                                     |   |

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