----

|  | ☒ | 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  incorporation or organization) |   | (I.R.S. Employer Identification No.) |

| 5400 Lyndon B. Johnson Freeway, Suite 1300 |  | 75240      |
|--------------------------------------------|--|------------|
| (Address of principal executive offices)   |  | (Zip Code) |

| Large accelerated filer ☐ | Accelerated filer ☒ | Non-accelerated filer  ☐ | Smaller reporting company  ☐ |
|---------------------------------|---------------------------|-------------------------------------|-----------------------------------------|

----

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| PART I     | FINANCIAL INFORMATION                                                                                                                | Page   |
|------------|--------------------------------------------------------------------------------------------------------------------------------------|--------|
|       |                                                                                                                                 |   |
| Item 1.    | Consolidated Financial Statements                                                                                                    | 3      |
|       | Consolidated Statements of Assets and Liabilities December 31, 2014 (Unaudited) and March 31, 2014                                   | 3      |
|       | Consolidated Statements of Operations (Unaudited) For the three and nine months ended December 31, 2014 and December 31, 2013        | 4      |
|       | Consolidated Statements of Changes in Net Assets (Unaudited) For the nine months ended December 31, 2014 and December 31, 2013       | 5      |
|       | Consolidated Statements of Cash Flows (Unaudited) For the three months and nine months ended December 31, 2014 and December 31, 2013 | 6      |
|       | Consolidated Schedule of Investments December 31, 2014 (Unaudited) and March 31, 2014                                                | 7      |
|       |                                                                                                                                 |   |
|       | Notes to Consolidated Financial Statements                                                                                           | 17     |
| Item 2.    | Management's Discussion and Analysis of Financial Condition and Results of Operations                                                | 32     |
| Item 3.    | Quantitative and Qualitative Disclosures About Market Risk                                                                           | 37     |
| Item 4.    | Controls and Procedures                                                                                                              | 37     |
|       |                                                                                                                                 |   |
| PART II    | OTHER INFORMATION                                                                                                                    |   |
|       |                                                                                                                                 |   |
| Item 1.    | Legal Proceedings                                                                                                                    | 38     |
| Item 1A.   | Risk Factors                                                                                                                         | 38     |
| Item 6.    | Exhibits                                                                                                                             | 38     |
|       |                                                                                                                                 |   |
| Signatures |                                                                                                                                 | 39     |

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Table of Contents

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

|                                                                                                                                         |   | December 31,2014 |    |   | March 31,2014 |   |
|----------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------|---------|--------|---------------|--------|
| Assets                                                                                                                                       |   | (Unaudited)      |    |   |               |   |
| Investments at market or fair value:                                                                                                         |   |                  |    |   |               |   |
| Companies more than 25% owned: (Cost: December 31, 2014 - $12,396, March 31, 2014 - $13,711)                                                 |   | $                | 459,076 |   |          | $      | 400,824 |   |
| Companies 5% to 25% owned: (Cost: December 31, 2014 - $6,500, March 31, 2014 - $13,891)                                                      |   |             | 6,952   |   |          |   | 218,480 |   |
| Companies less than 5% owned: (Cost: December 31, 2014 - $51,907, March 31, 2014 - $71,365)                                                  |   |             | 59,937  |   |          |   | 58,616 |   |
| Total investments: (Cost: December 31, 2014 - $70,803, March 31, 2014 - $98,967)                                                             |   |             | 525,965 |   |          |   | 677,920 |   |
| Cash and cash equivalents                                                                                                                    |   |             | 249,436 |   |          |   | 88,163 |   |
| Receivables:                                                                                                                                 |   |             |    |   |          |   |   |   |
| Dividends and interest                                                                                                                       |   |             | 7,369   |   |          |   | 782 |   |
| Affiliates                                                                                                                                   |   |             | 725     |   |          |   | 422 |   |
| Income tax receivable                                                                                                                        |   |             | 264     |   |          |   | 167 |   |
| Pension assets                                                                                                                               |   |             | 11,316  |   |          |   | 10,962 |   |
| Other assets                                                                                                                                 |   |             | 838     |   |          |   | 278 |   |
| Total assets                                                                                                                                 |   | $                | 795,913 |   |          | $      | 778,694 |   |
| Liabilities                                                                                                                                  |   |             |    |   |          |   |   |   |
| Other liabilities                                                                                                                            |   | $                | 3,276   |   |          | $      | 3,263 |   |
| Accrued restoration plan liability                                                                                                           |   |             | 3,047   |   |          |   | 3,103 |   |
| Income taxes payable                                                                                                                         |   |             | 54,370  |   |          |   | - |   |
| Deferred income taxes                                                                                                                        |   |             | 2,010   |   |          |   | 1,940 |   |
| Total liabilities                                                                                                                            |   |             | 62,703  |   |          |   | 8,306 |   |
| Net Assets                                                                                                                                   |   |             |    |   |          |   |   |   |
| Common stock, $0.25 par value: authorized, 25,000,000 shares; issued 17,882,844 shares at December 31, 2014 and 17,753,044 at March 31, 2014 |   |             | 4,471   |   |          |   | 4,438 |   |
| Additional capital                                                                                                                           |   |             | 297,752 |   |          |   | 195,767 |   |
| Accumulated net investment (loss) gain                                                                                                       |   |             | (238    | )      |          |   | 1,138 |   |
| Accumulated net realized gain                                                                                                                |   |             | -       |   |          |   | 14,029 |   |
| Unrealized appreciation of investments                                                                                                       |   |             | 455,162 |   |          |   | 578,953 |   |
| Treasury stock - at cost, 2,339,512 shares                                                                                                   |   |             | (23,937 | )      |          |   | (23,937 | ) |
| Total net assets                                                                                                                             |   |             | 733,210 |   |          |   | 770,388 |   |
| Total liabilities and net assets                                                                                                             |   | $                | 795,913 |   |          | $      | 778,694 |   |
| Net asset value per share (15,543,332 shares outstanding at December 31, 2014 and 15,413,532 shares outstanding at March 31, 2014)           |   | $                | 47.17   |   |          | $      | 49.98 |   |

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Table of Contents

|                                                              |   | Three Months EndedDecember 31, |    |   | Nine Months EndedDecember 31, |   |
|-------------------------------------------------------------------|--------|--------------------------------|---------|--------|-------------------------------|--------|
|                                                              |   | 2014                           |    |   | 2013                          |   |   | 2014 |   |   | 2013 |   |
| Investment income:                                                |   |                                |    |   |                               |   |   |  |   |   |  |   |
| Interest                                                          |   | $                              | 93      |   |                          | $      | 147 |   |   | $ | 312 |   |   | $ | 766 |   |
| Dividends                                                         |   |                           | 7,473   |   |                          |   | 8,072 |   |   |   | 8,548 |   |   |   | 9,162 |   |
| Management and other income                                       |   |                           | 147     |   |                          |   | 144 |   |   |   | 428 |   |   |   | 467 |   |
| Total Investment income                                           |   |                           | 7,713   |   |                          |   | 8,363 |   |   |   | 9,288 |   |   |   | 10,395 |   |
|                                                              |        |                                |         |        |                               |        |  |  |  |  |  |  |  |  |  |  |
| Operating expenses:                                               |   |                           |    |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Salaries                                                          |   |                           | 1,120   |   |                          |   | 2,236 |   |   |   | 3,516 |   |   |   | 5,103 |   |
| Stock option expense                                              |   |                           | 95      |   |                          |   | (2 | ) |   |   | 287 |   |   |   | 347 |   |
| Net pension (benefit) expense                                     |   |                           | (70     | )      |                          |   | 45 |   |   |   | (210 | ) |   |   | 132 |   |
| Professional fees                                                 |   |                           | 1,413   |   |                          |   | 251 |   |   |   | 2,054 |   |   |   | 664 |   |
| Other operating expenses                                          |   |                           | 675     |   |                          |   | 273 |   |   |   | 1,661 |   |   |   | 1,064 |   |
|                                                              |   |                           | 3,233   |   |                          |   | 2,803 |   |   |   | 7,308 |   |   |   | 7,310 |   |
| Income before income taxes                                        |   |                           | 4,480   |   |                          |   | 5,560 |   |   |   | 1,980 |   |   |   | 3,085 |   |
| Income tax expense (benefit)                                      |   |                           | 51      |   |                          |   | (700 | ) |   |   | 273 |   |   |   | (782 | ) |
|                                                              |   |                           |    |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Net investment income                                             |   | $                              | 4,429   |   |                          | $      | 6,260 |   |   | $ | 1,707 |   |   | $ | 3,867 |   |
|                                                              |   |                           |    |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Proceeds from disposition of investments                          |   | $                              | 117,117 |   |                          | $      | - |   |   | $ | 170,598 |   |   | $ | 55 |   |
| Cost of investments sold                                          |   |                           | (5,888  | )      |                          |   | - |   |   |   | (28,689 | ) |   |   | - |   |
| Net realized gain on investments before income tax                |   |                           | 111,229 |   |                          |   | - |   |   |   | 141,909 |   |   |   | 55 |   |
|                                                              |   |                           |    |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Net (decrease) increase in unrealized appreciation of investments |   |                           | (84,964 | )      |                          |   | 53,308 |   |   |   | (123,791 | ) |   |   | 109,315 |   |
|                                                              |   |                           |    |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Net realized and unrealized gain on investments                   |   |                           | 26,265  |   |                          |   | 53,308 |   |   |   | 18,118 |   |   |   | 109,370 |   |
|                                                              |   |                           |    |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Increase in net assets from operations                            |   | $                              | 30,694  |   |                          | $      | 59,568 |   |   | $ | 19,825 |   |   | $ | 113,237 |   |

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Table of Contents

|                                                             |   | Nine MonthsEnded  |     |   | Nine MonthsEnded  |   |
|------------------------------------------------------------------|--------|------------------------|----------|--------|------------------------|--------|
|                                                             |   | December 31, 2014      |     |   | December 31, 2013      |   |
| Operations:                                                      |   |                        |     |   |                        |   |
| Net investment income                                            |   | $                      | 1,707    |   |                   | $      | 3,867 |   |
| Net realized gain on investments                                 |   |                   | 141,909  |   |                   |   | 55 |   |
| Net (decrease)increase in unrealized appreciation of investments |   |                   | (123,791 | )      |                   |   | 109,315 |   |
| Increase in net assets from operations                           |   |                   | 19,825   |   |                   |   | 113,237 |   |
| Distributions from:                                              |   |                   |     |   |                   |   |   |   |
| Net investment income                                            |   |                   | (3,083   | )      |                   |   | (3,050 | ) |
| Taxes incurred on deemed capital gain distributions              |   |                   | (54,370  | )      |                   |   | (3,787 | ) |
| Capital share transactions:                                      |   |                   |     |   |                   |   |   |   |
| Exercise of employee stock options                               |   |                   | 163      |   |                   |   | 1,327 |   |
| Stock option expense                                             |   |                   | 287      |   |                   |   | 347 |   |
| (Decrease) increase in net assets                                |   |                   | (37,178  | )      |                   |   | 108,074 |   |
| Net assets, beginning of period                                  |   |                   | 770,388  |   |                   |   | 659,777 |   |
| Net assets, end of period                                        |   | $                      | 733,210  |   |                   | $      | 767,851 |   |

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Table of Contents

|                                                                                                                                     |   | Three Months EndedDecember 31, |     |   | Nine Months EndedDecember 31, |   |
|------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------|----------|--------|-------------------------------|--------|
|                                                                                                                                     |   | 2014                           |     |   | 2013                          |   |   | 2014 |   |   | 2013 |   |
| Cash flows from operating activities                                                                                                     |   |                                |     |   |                               |   |   |  |   |   |  |   |
| Increase in net assets from operations                                                                                                   |   | $                              | 30,694   |   |                          | $      | 59,568 |   |   | $ | 19,825 |   |   | $ | 113,237 |   |
| Adjustments to reconcile increase (decrease)  in net assets from operations to net cash provided by (used in) operating activities: |   |                           |     |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Net proceeds from disposition of investments                                                                                             |   |                           | 117,028  |   |                          |   | – |   |   |   | 170,433 |   |   |   | 55 |   |
| Return of capital on investments                                                                                                         |   |                           | 89       |   |                          |   | – |   |   |   | 165 |   |   |   | – |   |
| Purchases of securities                                                                                                                  |   |                           | (449     | )      |                          |   | (679 | ) |   |   | (525 | ) |   |   | (10,501 | ) |
| Depreciation and amortization                                                                                                            |   |                           | 21       |   |                          |   | 5 |   |   |   | 29 |   |   |   | 16 |   |
| Net pension (benefit) expense                                                                                                            |   |                           | (120     | )      |                          |   | 44 |   |   |   | (410 | ) |   |   | 132 |   |
| Realized gain on investments before income tax                                                                                           |   |                           | (111,229 | )      |                          |   | – |   |   |   | (141,909 | ) |   |   | (55 | ) |
| Taxes incurred on deemed capital gain distribution                                                                                       |   |                           | (54,370  | )      |                          |   | (3,787 | ) |   |   | (54,370 | ) |   |   | (3,787 | ) |
| Net decrease (increase)in unrealized appreciation of investments                                                                         |   |                           | 84,964   |   |                          |   | (53,308 | ) |   |   | 123,791 |   |   |   | (109,315 | ) |
| Stock option expense                                                                                                                     |   |                           | 95       |   |                          |   | (2 | ) |   |   | 287 |   |   |   | 347 |   |
| Increase in dividend and interest receivable                                                                                             |   |                           | (7,096   | )      |                          |   | (7,881 | ) |   |   | (6,587 | ) |   |   | (7,901 | ) |
| (Increase) decrease in receivables from affiliates                                                                                       |   |                           | 14,024   |   |                          |   | (136 | ) |   |   | (303 | ) |   |   | (365 | ) |
| (Increase) decrease in income tax receivable                                                                                             |   |                           | 231      |   |                          |   | – |   |   |   | (97 | ) |   |   | – |   |
| (Increase) decrease in other assets                                                                                                      |   |                           | (386     | )      |                          |   | (13 | ) |   |   | (589 | ) |   |   | 31 |   |
| Increase in taxes payable                                                                                                                |   |                           | 54,370   |   |                          |   | 4,110 |   |   |   | 54,370 |   |   |   | 4,110 |   |
| Increase in other liabilities                                                                                                            |   |                           | 279      |   |                          |   | 1,295 |   |   |   | 13 |   |   |   | 724 |   |
| Increase (decrease) in deferred income taxes                                                                                             |   |                           | (180     | )      |                          |   | (1,024 | ) |   |   | 70 |   |   |   | (1,055 | ) |
| Net cash provided by (used in) operating activities                                                                                      |   |                           | 127,965  |   |                          |   | (1,808 | ) |   |   | 164,193 |   |   |   | (14,327 | ) |
| Cash flows from financing activities                                                                                                     |   |                           |     |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Distributions from undistributed net investment income                                                                                   |   |                           | (1,541   | )      |                          |   | (1,525 | ) |   |   | (3,083 | ) |   |   | (3,050 | ) |
| Proceeds from exercise of employee stock options                                                                                         |   |                           | 62       |   |                          |   | 868 |   |   |   | 163 |   |   |   | 1,327 |   |
| Net cash used in financing activities                                                                                                    |   |                           | (1,479   | )      |                          |   | (657 | ) |   |   | (2,920 | ) |   |   | (1,723 | ) |
| Net increase (decrease) in cash and cash equivalents                                                                                     |   |                           | 126,486  |   |                          |   | (2,465 | ) |   |   | 161,273 |   |   |   | (16,050 | ) |
| Cash and cash equivalents at beginning of period                                                                                         |   |                           | 122,950  |   |                          |   | 68,182 |   |   |   | 88,163 |   |   |   | 81,767 |   |
| Cash and cash equivalents at end of period                                                                                               |   | $                              | 249,436  |   |                          | $      | 65,717 |   |   | $ | 249,436 |   |   | $ | 65,717 |   |

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Table of Contents

| Company                                                                                                                                                                                                     | Equity (a)                                                                                                                                        | Investment (b)                                                                                                                                                | Cost                                                    | Value (c)   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------|-------------|
| ATLANTIC CAPITAL BANCSHARES, INCAtlanta, GeorgiaHolding company of Atlantic Capital Bank, a full service commercial bank.                                                                                   | 1.9%                                                                                                                                              | 300,000 shares of common stock (acquired 4-10-07)                                                                                                             | $ 3,000,000                                             | $ 4,388,000 |
| ¥BALCO, INC.Wichita, KansasSpecialty architectural products used in the construction and remodeling of commercial and institutional buildings.                                                         | 95.7%                                                                                                                                             | 445,000 shares of common stock and 60,920 shares Class B non-voting common stock (acquired 10-25-83 and 5-30-02)                                              | 624,920                                                 | 4,500,000   |
| *BOXX TECHNOLOGIES, INC.Austin, TexasWorkstations for computer graphic imaging and design.                                                                                                                  | 14.9%                                                                                                                                             | 3,125,354 shares of Series B Convertible Preferred Stock, convertible into 3,125,354 shares of common stock at $0.50 per share (acquired 8-20-99 thru 8-8-01) | 1,500,000                                               | 2,366,000   |
| ¥ CAPSTAR HOLDINGS CORPORATIONDallas, TexasAcquire, hold and manage real estate for potential development and sale.                                                                                    | 100%                                                                                                                                              | 500 shares of common stock (acquired 6-10-10) and 1,000,000 shares of preferred stock (acquired 12-17-12)                                                     | 4,703,619                                               | 7,426,000   |
| DEEPWATER CORROSION SERVICES, INC.Houston, Texasfull-service corrosion control   company providing the oil and gas industry with expertise in cathodic protection and asset integrity management. | 31.1%                                                                                                                                             | 127,004 shares of Series A convertible preferred stock, convertible into 127,004 shares of common stock at $1.00 per shares (acquired 4-9-13)                 | 8,000,000                                               | 6,856,000   |
| iMEMORIES, INC.Scottsdale, ArizonaEnables online video and photo sharing and DVD creation for home movies recorded in analog and new digital format.                                                        | 23.3%                                                                                                                                             | 17,391,304 shares of Series B Convertible Preferred Stock, convertible into 19,891,304 shares of common stock at $0.23 per share (acquired 7-10-09)           | 4,000,000                                               | –     |
|                                                                                                                                                                                                        | 4,684,967 shares of Series C Convertible Preferred Stock, convertible into 4,684,967 shares of common stock at $0.23 per share (acquired 7-20-11) | 1,078,479                                                                                                                                                     | –                                                 |
|                                                                                                                                                                                                        |                                                                                                                                              | Warrants to purchase 2,500,000  shares of common stock at $0.12 per share, expiring 1-21-21(acquired 9-13-10 thru 1-21-11)                               | –                                                 | –     |
|                                                                                                                                                                                                        |                                                                                                                                              | 10% convertible notes, $308,000 principal due 7-31-14 (acquired  9-7-12)                                                                                 | 308,000                                                 | 18,000      |
|                                                                                                                                                                                                        |                                                                                                                                              | 10% convertible notes, $880,000 principal due 7-31-14 (acquired  3-15-13)                                                                                |         880,000 | 52,000      |
|                                                                                                                                                                                                        |                                                                                                                                              | 18% notes, $148,507 principal due 7-31-15 (acquired 11-3-14)                                                                                                  |         148,507 | 148,507     |
|                                                                                                                                                                                                        |                                                                                                                                              |                                                                                                                                                          | 6,414,986                                               | 218,507     |

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Table of Contents

| Company                                                                                                                                                                                                                                                               | Equity (a)                                          | Investment (b)                                                                                                                                              | Cost                                                    | Value (c)                                           |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------|-----------------------------------------------------|
| INSTAWARES HOLDING COMPANY, LLCAtlanta, GeorgiaProvides services to the    restaurant industry via its five subsidiary companies.                                                                                                                           | 4.2%                                                | 3,846,154 Class D Convertible Preferred Stock (acquired 5-20-11)                                                                                            | 5,000,000                                               | 475,000                                             |
| KBI BIOPHARMA, INC.Durham, North CarolinaProvides fully-integrated, outsourced drug development and bio-manufacturing services.                                                                                                                                       | 15.7%                                               | 10,298,592 shares of Series B-2 Convertible Preferred Stock, convertible into 10,298,592 shares of common stock at $0.49 per share (acquired 9-08-09)  | 5,000,000                                               | 11,500,000                                          |
|                                                                                                                                                                                                                                                                  |                                                | Warrants to purchase 94,510 shares of Series B preferred stock at $ 0.70 per share, acquired 1-26-12                                                        | -                                                       | -                                                   |
|                                                                                                                                                                                                                                                                  |                                                |                                                                                                                                                        | 5,000,000                                               | 11,500,000                                          |
| ¥MEDIA RECOVERY, INC.Dallas, TexasComputer datacenter and office automation supplies and accessories; impact, tilt monitoring and temperature sensing devices to detect mishandling shipments; dunnage for protecting shipments.                                 |    97.9%                             | 800,000 shares of Series A Convertible Preferred Stock, convertible into 800,000 shares of common stock at $1.00 per share (acquired 11-4-97)               |         800,000 |        4,000,000 |
|                                                                                                                                                                                                                                                                  | 4,000,002 shares of common stock (acquired 11-4-97) | 4,615,000                                                                                                                                                   |      20,000,000                |
|                                                                                                                                                                                                                                                                  |                                                |                                                                                                                                                        | 5,415,000                                               | 24,000,000                                          |
| ¥THE RECTORSEAL CORPORATIONHouston, TexasSpecialty chemicals for plumbing, HVAC, electrical, construction, industrial, oil field and automotive applications; smoke containment systems for building fires; also owns 20% of The Whitmore Manufacturing Company. | 100.0%                                              | 27,907 shares of common stock (acquired 1-5-73 and 3-31-73)                                                                                                 | 52,600                                                  | 335,300,000                                         |
| TITANLINER, INC.Midland, TexasManufactures, installs and rents spill containment system for oilfield applications.                                                                                                                                                    | 31.2%                                               | 217,038 shares of Series A Convertible Preferred Stock convertible into 217,038 shares of Series A Preferred Stock at $14.76 per share (acquired 6-29-12)   | 3,203,000                                               | 3,799,000                                           |
|                                                                                                                                                                                                                                                                  |                                                | 7%  senior subordinated secured promissory note, due 6-30-17 (acquired 6-29-12)                                                                        | 2,747,000                                               | 2,747,000                                           |
|                                                                                                                                                                                                                                                                  |                                                | Warrants to purchase 122,239 shares of Series A Preferred Stock at $ 0.01 per share, expiring 12-31-22                                                      | -                                                       | 2,140,000                                           |
|                                                                                                                                                                                                                                                                  |                                                |                                                                                                                                                        | 5,950,000                                               | 8,686,000                                           |

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Table of Contents

| Company                                                                                                                                                                                                  | Equity (a) | Investment (b)                                                                                                                                                                 | Cost                                                    | Value (c)                                              |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------|--------------------------------------------------------|
| TRAX HOLDINGS, INC.Scottsdale, ArizonaProvides a comprehensive set of solutions to improve the transportation validation, accounting, payment and information management process.                        | 28.7%      | 475,430 shares of Series B convertible Preferred Stock convertible into 475,430 shares of  common stock at $8.41 per share(acquired 12-5-12)                              | 4,000,000                                               | 7,200,000                                              |
|                                                                                                                                                                                                     |       | 1,061,279 shares of Series A Convertible Preferred Stock, convertible into 1,061,279 shares of common stock at $4.71 per share (acquired 12-8-08 and 2-17-09)             | 5,000,000                                               | 12,300,000                                             |
|                                                                                                                                                                                                     |       |                                                                                                                                                                           | 9,000,000                                               | 19,500,000                                             |
| *WELLOGIX, INC.Houston, TexasDeveloper and supporter of software used by the oil and gas industry.                                                                                                       | 18.9%      | 4,788,371 shares of Series A-1 Convertible Participating Preferred Stock, convertible into 4,788,371 shares of common stock at $1.04 per share (acquired 8-19-05 thru 6-15-08) | 5,000,000                                               | 4,505,000                                              |
| ¥THE WHITMORE MANUFACTURING COMPANYRockwall, TexasSpecialized surface mining, railroad and industrial lubricants; coatings for automobiles and primary metals; fluid contamination control devices. | 80.0%      | 80 shares of common stock (acquired 8-31-79)                                                                                                                                   | 1,600,000                                               | 87,600,000                                             |
| MISCELLANEOUS                                                                                                                                                                                            | –    | Alamo Group Inc.‡1,676 shares of common stock                                                                                                                            | -                                                       | 81,185                                                 |
|                                                                                                                                                                                                     | –    | Ballast Point Ventures II, L.P.2.2% limited partnership interest (acquired 8-4-08 thru 11-6-14)                                                                                | 2,634,790                                               | 3,564,000                                              |
|                                                                                                                                                                                                     | –    | BankCap Partners Fund I, L.P.5.5% limited partnership interest (acquired 7-14-06 thru 11-16-12)                                                                                | 5,071,514                                               | 4,375,000                                              |
|                                                                                                                                                                                                     | –    | CapitalSouth Partners Fund III, L.P.1.9% limited partnership interest (acquired 1-22-08 and 11-16-11)                                                                          | 433,403                                                 | 231,999                                                |
|                                                                                                                                                                                                     | –    | Diamond State Ventures, L.P.1.4% limited partnership interest (acquired 10-12-99 thru 8-26-05)                                                                                 | -                                                       | 16,000                                                 |
|                                                                                                                                                                                                     | –    | First Capital Group of Texas III, L.P.3.0% limited partnership interest (acquired 12-26-00 thru 8-12-05)                                                                       | 778,895                                                 | 108,000                                                |
|                                                                                                                                                                                                     | 100%       | ¥ Humac Company1,041,000 shares of common stock (acquired 1-31-75 and 12-31-75)                                                                                           | –                                                 | 250,000                                                |
|                                                                                                                                                                                                     | –    | STARTech Seed Fund II3.2% limited partnership interest (acquired 4-28-00 thru 2-23-05)                                                                                         |         622,783 |         18,000 |
| TOTAL INVESTMENTS                                                                                                                                                                                        |       |                                                                                                                                                                           | $ 70,802,510                                            | $  525,964,691                                    |

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| Company                                                                                                                                                                                                           | Equity (a)                                                                           | Investment (b)                                                                                                                                                 | Cost              | Value (c)           |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------|---------------------|
| *†ALAMO GROUP INC.Seguin, TexasTractor-mounted mowing and mobile excavation equipment for governmental, industrial and agricultural markets; street-sweeping and snow removal equipment for municipalities. | 22.0%                                                                                | ‡2,831,300 shares of common stock (acquired 4-1-73 thru 5-09-13)                                                                                         | $  2,190,937 | $  153,824,529 |
| ATLANTIC CAPITAL BANCSHARES, INCAtlanta, GeorgiaHolding company of Atlantic Capital Bank, a full service commercial bank.                                                                                         | 1.9%                                                                                 | 300,000 shares of common stock (acquired 4-10-07)                                                                                                              | 3,000,000         | 3,817,000           |
| ¥BALCO, INC.Wichita, KansasSpecialty architectural products used in the construction and remodeling of commercial and institutional buildings.                                                               | 95.7%                                                                                | 445,000 shares of common stock and 60,920 shares Class B non-voting common stock (acquired 10-25-83 and 5-30-02)                                               | 624,920           | 4,500,000           |
| *BOXX TECHNOLOGIES, INC.Austin, TexasWorkstations for computer graphic imaging and design.                                                                                                                        | 14.9%                                                                                | 3,125,354 shares of Series B Convertible Preferred Stock, convertible into 3,125,354 shares of common stock at $0.50 per share (acquired 8-20-99 thru 8-8-01)  | 1,500,000         | 1,040,000           |
| ¥ CAPSTAR HOLDINGS CORPORATIONDallas, Texas  Acquires holds and manages real estate for potential development and sale.                                                                            | 100%                                                                                 | 500 shares of common stock (acquired 6-10-10) and 1,000,000 shares of preferred stock (acquired 12-17-12)                                                      | 4,703,619         | 7,514,000           |
| CINATRA CLEAN TECHNOLOGIES, INC.Houston, TexasCleans above ground oil storage tanks with a patented, automated system.                                                                                            | 76.2%                                                                                | 12% subordinated secured promissory note, due 5-9-16 (acquired 5-19-10 thru 10-20-10)                                                                          | 779,278           | 1                   |
|                                                                                                                                                                                                              | 12% subordinated secured promissory note, due 5-9-17 (acquired 5-9-11 thru 10-26-11) | 2,285,700                                                                                                                                                      | 1                 |
|                                                                                                                                                                                                              | 12% subordinated secured promissory note, due 3-31-17 (acquired 9-9-11 and 10-26-11) | 1,523,800                                                                                                                                                      | 1                 |
|                                                                                                                                                                                                              | 10% subordinated secured promissory note, due 5-9-17 (acquired 7-14-08 thru 4-28-10) | 921,588                                                                                                                                                        | 1                 |
|                                                                                                                                                                                                              |                                                                                 | 12% subordinated secured promissory note, due 10-31-17 (acquired 10-19-12)                                                                                     | 499,997           | 1                   |
|                                                                                                                                                                                                              |                                                                                 | 12% subordinated secured promissory note, due 9-30-14 (acquired 7-25-13)                                                                                       | 1,157,850         | 1                   |
|                                                                                                                                                                                                              |                                                                                 | 12% subordinated secured promissory note, due 9-30-14 (acquired 2-19-14)                                                                                       | 152,394           | 1                   |
|                                                                                                                                                                                                              |                                                                                      | 9,891,578 shares of Series A Convertible Preferred Stock, convertible into 9,891,578 shares of common stock at $1.00 per share (acquired 7-14-08 thru 3-15-14) | 9,891,578         | 1                   |
|                                                                                                                                                                                                              |                                                                                      | Warrants to purchase 1,436,499 shares of common stock at $1.00 per share, expiring 10-31-2027 (acquired 5-9-11 thru 10-19-12)                                  | –           | –             |
|                                                                                                                                                                                                              |                                                                                      |                                                                                                                                                                | 17,212,185        | 8                   |

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| Company                                                                                                                                                                                                                             | Equity (a)                                                                                                                                   | Investment (b)                                                                                                                                      | Cost                                                    | Value (c)                                |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------|------------------------------------------|
| DEEPWATER CORROSION SERVICES, INC.    Houston, TexasFull-service corrosion control   company providing the oil and gas industry with expertise in cathodic protection and asset integrity management. | 31.3%                                                                                                                                             | 127,004 shares of Series A convertible preferred stock, convertible into 127,004 shares of common stock at $1.00 per shares (acquired 4-9-13)       | 8,000,000                                               | 8,000,000                                |
| ¥DISCOVERY ALLIANCE, LLCDallas, TexasProvides services related to intellectual property protection and development.                                                                                                            | 90%                                                                                                                                               | 90.0% limited liability company interest (acquired  9-12-08 thru 10-15-12)                                                                | 1,315,000                                               | 400,000                                  |
| *†ENCORE WIRE   CORPORATIONMcKinney, TexasElectric wire and cable for residential, commercial and industrial construction use.                                                                                 |    6.2%                                                                                                                            | ‡1,312,500 shares of common stock (acquired 9-10-92 thru 10-15-98)                                                                            |      5,200,000                 |      63,590,625 |
| iMEMORIES, INC.Scottsdale, ArizonaEnables online video and photo sharing and DVD creation for home movies and photos recorded in analog anddigital formats.                                                                         | 23.3%                                                                                                                                             | 17,391,304 shares of Series B Convertible Preferred Stock, convertible into 19,891,304 shares of common stock at $0.23 per share (acquired 7-10-09) | 4,000,000                                               | 2                                        |
|                                                                                                                                                                                                                                | 4,684,967 shares of Series C Convertible Preferred Stock, convertible into 4,684,967 shares of common stock at $0.23 per share (acquired 7-20-11) | 1,078,479                                                                                                                                           | 994,000                                                 |
|                                                                                                                                                                                                                                |                                                                                                                                              | Warrants to purchase 8,396,000  shares of common stock at $0.12 per share, expiring 7-31-14 (acquired 9-13-10 thru 3-15-13)                    | –                                                 | –                                  |
|                                                                                                                                                                                                                                |                                                                                                                                              | 10% convertible notes, $308,000 principal due 7-31-14 (acquired  9-7-12)                                                                       | 308,000                                                 | 308,000                                  |
|                                                                                                                                                                                                                                |                                                                                                                                              | 10% convertible notes, $880,000 principal due 7-31-14 (acquired  from 3-15-13 to 9-26-13)                                                      |         880,000 | 880,000                                  |
|                                                                                                                                                                                                                                |                                                                                                                                              |                                                                                                                                                | 6,266,479                                               | 2,182,002                                |

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| Company                                                                                                                                                                                                                                                           | Equity (a)                                          | Investment (b)                                                                                                                                            | Cost                                                    | Value (c)                                                 |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------|-----------------------------------------------------------|
| INSTAWARES HOLDING COMPANY, LLCAtlanta, GeorgiaProvides services and distributes equipment and supplies to the restaurant industry via its five subsidiary companies.                                                                                             | 4.3%                                                | 3,846,154 Class D Convertible Preferred Stock (acquired 5-20-11)                                                                                          | 5,000,000                                               | 3,354,000                                                 |
| KBI BIOPHARMA, INC.Durham, North CarolinaProvides fully-integrated, outsourced drug development and bio-manufacturing services.                                                                                                                                   | 17.1%                                               | 10,204,082 shares of Series B-2 Convertible Preferred Stock, convertible into 10,204,802 shares of common stock at $0.49 per share (acquired 9-08-09)     | 5,000,000                                               |         7,000,000 |
|                                                                                                                                                                                                                                                              |                                                | Warrants to purchase 94,510 shares of Series B preferred stock at $ 0.70 per share, acquired 1-26-12                                                      | -                                                       | -                                                         |
|                                                                                                                                                                                                                                                              |                                                |                                                                                                                                                      | 5,000,000                                               | 7,000,000                                                 |
| ¥MEDIA RECOVERY, INC.Dallas, TexasDistributor of computer datacenter and office automation supplies and accessories; manufactures and distributes devices used to monitor and manage intransit inventory and dunnage products for protecting shipments.      |   97.9%                                   | 800,000 shares of Series A Convertible Preferred Stock, convertible into 800,000 shares of common stock at $1.00 per share (acquired 11-4-97)             |         800,000 |        4,000,000       |
|                                                                                                                                                                                                                                                              | 4,000,002 shares of common stock (acquired 11-4-97) | 4,615,000                                                                                                                                                 | 19,900,000                                              |
|                                                                                                                                                                                                                                                              |                                                |                                                                                                                                                      | 5,415,000                                               | 23,900,000                                                |
| ¥THE RECTORSEAL CORPORATIONHouston, TexasSpecialty chemicals, tools and products for plumbing, HVAC, electrical, construction, industrial, and oil field; smoke containment systems for building fires; also owns 20% of The Whitmore Manufacturing Company. | 100.0%                                              | 27,907 shares of common stock (acquired 1-5-73 and 3-31-73)                                                                                               | 52,600                                                  | 275,800,000                                               |
| TITANLINER, INC.Midland, TexasManufactures, installs and rents spill containment system for oilfield applications.                                                                                                                                                | 31.2%                                               | 217,038 shares of Series A Convertible Preferred Stock convertible into 217,038 shares of Series A Preferred Stock at $14.76 per share (acquired 6-29-12) | 3,203,000                                               | 1                                                         |
|                                                                                                                                                                                                                                                              |                                                | 7%  senior subordinated secured promissory note, due 6-30-17 (acquired 6-29-12)                                                                      | 2,747,000                                               | 1,519,000                                                 |
|                                                                                                                                                                                                                                                              |                                                | Warrants to purchase 122,239 shares of Series A Preferred Stock at $ 0.01 per share, expiring 12-31-22                                                    | -                                                       | -                                                         |
|                                                                                                                                                                                                                                                              |                                                |                                                                                                                                                      | 5,950,000                                               | 1,519,001                                                 |

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| Company                                                                                                                                                                                                  | Equity (a) | Investment (b)                                                                                                                                                                       | Cost  | Value (c)  |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|------------|
| TRAX HOLDINGS, INC.Scottsdale, ArizonaProvides a comprehensive set of solutions to improve the  validation, accounting and payment of transportation-related invoices.                              | 28.4%      | 475,430 shares of Series B convertible Preferred Stock convertible into 475,430 shares of  common stock at $8.41 per share(acquired 12-5-12)                                    | 4,000,000  | 7,700,000  |
|                                                                                                                                                                                                     |       | 1,061,279 shares of Series A Convertible Preferred Stock, convertible into 1,061,279 shares of common stock at $4.71 per share (acquired 12-8-08 and 2-17-09)                   | 5,000,000  | 13,300,000 |
|                                                                                                                                                                                                     |       |                                                                                                                                                                                 | 9,000,000  | 21,000,000 |
| *WELLOGIX, INC.Houston, TexasFormerly a developer and supporter of business process software used by the oil and gas industry.                                                                           | 19.0%      | 4,788,371 shares of Series A-1 Convertible Participating Preferred Stock, convertible into 4,788,371 shares of common stock at $1.04 per share (acquired 8-19-05 thru 6-15-08)  | 5,000,000  | 25,000     |
| ¥THE WHITMORE MANUFACTURING COMPANYRockwall, TexasSpecialized surface mining, railroad and industrial lubricants; coatings for automobiles and primary metals; fluid contamination control devices. | 80.0%      | 80 shares of common stock (acquired 8-31-79)                                                                                                                                         | 1,600,000  | 88,500,000 |
| MISCELLANEOUS                                                                                                                                                                                            | –    | Ballast Point Ventures II, L.P.2.2% limited partnership interest (acquired 8-4-08 thru 2-15-13)                                                                                 | 2,334,790  | 3,167,000  |
|                                                                                                                                                                                                     | –    | BankCap Partners Fund I, L.P.5.5% limited partnership interest (acquired 7-14-06 thru 11-16-12)                                                                                 | 6,000,000  | 5,385,000  |
|                                                                                                                                                                                                     | –    | ‡Capitala Finance Corporation108,105 shares of common stock (acquired 9-25-13)                                                                                                 | 1,363,799  | 2,083,183  |
|                                                                                                                                                                                                     | –    | CapitalSouth Partners Fund III, L.P.1.9% limited partnership interest (acquired 1-22-08 and 11-16-11)                                                                                | 467,457    | 237,000    |
|                                                                                                                                                                                                     | –    | Diamond State Ventures, L.P.1.4% limited partnership interest (acquired 10-12-99 thru 8-26-05)                                                                                  | -          | 16,000     |

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| Company           | Equity (a) | Investment (b)                                                                                           | Cost                                                    | Value (c)                                                                 |
|-------------------|------------|----------------------------------------------------------------------------------------------------------|---------------------------------------------------------|---------------------------------------------------------------------------|
|              | –    | First Capital Group of Texas III, L.P.3.0% limited partnership interest (acquired 12-26-00 thru 8-12-05) | 778,895                                                 | 117,000                                                                   |
|              | 100%       | ¥Humac Company1,041,000 shares of common stock (acquired 1-31-75 and 12-31-75)                      | –                                                 | 210,000                                                                   |
|              | –    | †North American Energy Partners, Inc.77,194 shares of common stock (acquired 8-20-12)              | 236,986                                                 | 555,797                                                                   |
|              | –    | STARTech Seed Fund II3.2% limited partnership interest (acquired 4-28-00 thru 2-23-05)              |         754,327 |            183,000 |
| TOTAL INVESTMENTS |       |                                                                                                     | $  98,966,994                                      | $  677,920,145                                                       |

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

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

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

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| (d) | Descriptions and ownership percentages |
|-----|----------------------------------------|

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

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

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

|  | · | Level 1:  Investments whose values are based on unadjusted quoted prices in active markets for identical assets or liabilities that we have the ability to access.  We use Level 1 inputs for publicly traded unrestricted securities.  Such investments are valued at the closing price for NYSE listed 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 December 31, 2014 and March 31, 2014. |
|--|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | Level 3: Investments whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement.  These inputs reflect management’s own assumptions about the assumptions a market participant would use in pricing the investment.  We used Level 3 inputs for measuring the fair value of approximately 100% and 67.5% of our investments as of December 31, 2014 and March 31, 2014, respectively. See “Notes to Consolidated Schedule of Investments” (c) on page 16 for the investment policy used to determine the fair value of these investments. |
|--|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|  | · | Financial information obtained from each portfolio company, including audited and unaudited statements of operations and balance sheets for the most recent period available as compared to budgeted numbers; |
|--|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | Current and projected financial condition of the portfolio company; |
|--|--------|---------------------------------------------------------------------|

|  | · | Current and projected ability of the portfolio company to service its debt obligations; |
|--|--------|-----------------------------------------------------------------------------------------|

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

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

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

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

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

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

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

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| Type                          | Valuation Technique         |   | Fair Valueat12/31/2014(in millions) |   | Unobservable Input |                            | Range  |   |               | WeightedAverage |   |
|-------------------------------|-----------------------------|--------|-------------------------------------|--------|--------------------|---------------------------------|--------|--------|--------------------|-----------------|--------|
| Preferred & Common Equity | Market Approach             |   | $                                   | 476.4  |               | EBITDA Multiple                 |   |   | 0.37x – 7.75 | x               |   |   | 7.07 | x |
|                               | Market Approach             |   |                                | 19.5   |               | Revenue Multiple                |   |   | 2.50               | x               |   |   | 2.50 | x |
|                               | Market Approach             |   |                                | 11.9   |               | Cash and Asset Value            |   | NA     |               |            | NA     |   |
|                               | Market Approach             |   |                                | 4.4    |               | Multiple of Tangible Book Value |   |   | 1.70               | x               |   |   | 1.70 | x |
|                               | Market Approach             |   |                                | 0.3    |               | Market Value of Held Securities |   | NA     |               |            | NA     |   |
|                               |                        |   |                                | 512.5  |               |                            |   |   |               |            |   |   |   |   |
| Warrants                      | Black Scholes Pricing Model |   |                                | 2.1    |               | Stock Price                     |   |   | $0.00-$17.51       |            |   |   | $17.51 |   |
| Debt                          | Market Approach             |   |                                | 2.8    |               | Face Value                      |   | NA     |               |            | NA     |   |
|                          | Liquidation Value           |   |                                | 0.2    |               | Cash and Asset  Value      |   | NA     |               |            | NA     |   |
|                               |                        |   |                                | 3.0    |               |                            |   |   |               |            |   |   |   |   |
| Partnership Interests         | Net Asset Value             |   |                                | 8.3    |               | Fund Value                      |   | NA     |               |            | NA     |   |
|                          | Total                       |   | $                                   | 525.9  |               |                            |   |   |               |            |   |   |   |   |

| Type                          | Valuation Technique      |   | Fair Valueat3/31/2014(in millions) |   | Unobservable Input |                            | Range  |   |               | Weighted Average |   |
|-------------------------------|--------------------------|--------|------------------------------------|--------|--------------------|---------------------------------|--------|--------|--------------------|------------------|--------|
| Preferred & Common Equity | Market Approach          |   | $                                  | 404.1  |               | EBITDA Multiple                 |   |   | 3.50x – 7.78 | x                |   |   | 7.00 | x |
|                          | Market Approach          |   |                               | 22.0   |               | Revenue Multiple                |   |   | 1.53x – 2.50 | x                |   |   | 2.46 | x |
|                          | Market Approach          |   |                               | 8.0    |               | Recent Transaction Price        |   | NA     |               |             | NA     |   |
|                          | Market Approach          |   |                               | 7.6    |               | Cash and Asset Value            |   | NA     |               |             | NA     |   |
|                          | Market Approach          |   |                               | 3.8    |               | Multiple of Tangible Book Value |   |   | 1.54               | x                |   |   | 1.54 | x |
|                          | Market Approach          |   |                               | 0.2    |               | Market Value of Held Securities |   | NA     |               |             | NA     |   |
|                          |                     |   |                               | 445.7  |               |                            |   |   |               |             |   |   |   |   |
| Debt                          | Discounted Cash Flow     |   |                               | 1.5    |               | Discount Rate                   |   |   | 11.69              | %                |   |   | 11.69 | % |
|                          | Recent Transaction Price |   |                               | 1.2    |               | Recent Transaction Price        |   | NA     |               |             | NA     |   |
| Partnership Interests         |                     |   |                               | 2.7    |               |                            |   |   |               |             |   |   |   |   |
|                          | Net Asset Value          |   |                               | 9.5    |               | Fund Value                      |   | NA     |               |             | NA     |   |
|                          | Total                    |   | $                                  | 457.9  |               |                            |   |   |               |             |   |   |   |   |

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|                  |   |        |   |   | Fair Value Measurementsat December 31, 2014 Using        |   |
|-----------------------|--------|--------|--------|--------|----------------------------------------------------------|--------|
| Asset Category        |   | Total  |   |   | QuotedPrices inActiveMarkets forIdenticalAssets(Level 1) |   |   | SignificantOtherObservableInputs(Level 2) |   |   | SignificantUnobservableInputs(Level 3) |   |
| Debt                  |   | $      | 3.0    |   |                                                     | $      | − |   |   | $ | − |   |   | $ | 3.0 |   |
| Partnership Interests |   |   | 8.3    |   |                                                     |   | − |   |   |   | − |   |   |   | 8.3 |   |
| Preferred Equity      |   |   | 54.6   |   |                                                     |   | − |   |   |   | − |   |   |   | 54.6 |   |
| Common Equity         |   |   | 458.0  |   |                                                     |   | 0.1 |   |   |   | − |   |   |   | 457.9 |   |
| Warrants              |   |   | 2.1    |   |                                                     |   | − |   |   |   | − |   |   |   | 2.1 |   |
| Total Investments     |   | $      | 526.0  |   |                                                     | $      | 0.1 |   |   | $ | − |   |   | $ | 525.9 |   |

|                  |   |        |   |   | Fair Value Measurementsat March 31, 2014 Using           |   |
|-----------------------|--------|--------|--------|--------|----------------------------------------------------------|--------|
| Asset Category        |   | Total  |   |   | QuotedPrices inActiveMarkets forIdenticalAssets(Level 1) |   |   | SignificantOtherObservableInputs(Level 2) |   |   | SignificantUnobservableInputs(Level 3) |   |
| Debt                  |   | $      | 2.7    |   |                                                     | $      | − |   |   | $ | − |   |   | $ | 2.7 |   |
| Partnership Interests |   |   | 9.5    |   |                                                     |   | − |   |   |   | − |   |   |   | 9.5 |   |
| Preferred Equity      |   |   | 47.0   |   |                                                     |   | − |   |   |   | − |   |   |   | 47.0 |   |
| Common Equity         |   |   | 618.7  |   |                                                     |   | 220.0 |   |   |   | − |   |   |   | 398.7 |   |
| Total Investments     |   | $      | 677.9  |   |                                                     | $      | 220.0 |   |   | $ | − |   |   | $ | 457.9 |   |

|                  |   | Fair Value3/31/14 |    |   | Net UnrealizedAppreciation(Depreciation) |   |    | NewInvestments |   |   | Divestitures |   |   | Distributions |    |   | Fair Value at12/31/2014 |   |
|-----------------------|--------|-------------------|---------|--------|------------------------------------------|--------|---------|----------------|--------|--------|--------------|--------|--------|---------------|---------|--------|-------------------------|--------|
| Debt                  |   | $                 | 2.7     |   |                                     | $      | 0.1     |           |   | $      | 0.2          |   |   | $             | − |   |                    | $      | − |   |   | $ | 3.0 |   |
| Partnership Interests |   |              | 9.5     |   |                                     |   | − |           |   |   | 0.3          |   |   |          | (1.4    | )      |                    |   | (0.1 | ) |   |   | 8.3 |   |
| Warrants              |   |              | − |   |                                     |   | 2.1     |           |   |   | −      |   |   |          | − |   |                    |   | − |   |   |   | 2.1 |   |
| Preferred Equity      |   |              | 47.0    |   |                                     |   | 7.6     |           |   |   | −      |   |   |          | − |   |                    |   | − |   |   |   | 54.6 |   |
| Common Equity         |   |              | 398.7   |   |                                     |   | 59.2    |           |   |   | −      |   |   |          | − |   |                    |   | − |   |   |   | 457.9 |   |
| Total Investments     |   | $                 | 457.9   |   |                                     | $      | 69.0    |           |   | $      | 0.5          |   |   | $             | (1.4    | )      |                    | $      | (0.1 | ) |   | $ | 525.9 |   |

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

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

| 6. | EXECUTIVE COMPENSATION PLAN |
|----|-----------------------------|

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| 7. | STOCK BASED COMPENSATION PLANS |
|----|--------------------------------|

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|             |   |                          |   |   | Black-Scholes Pricing Model Assumptions |   |   |                       |   |
|------------------|--------|--------------------------|--------|--------|-----------------------------------------|--------|--------|-----------------------|--------|
| Date of Issuance |   | WeightedAverageFairValue |   |   | ExpectedDividendYield                   |   |   | Risk-FreeInterestRate |   |   | ExpectedVolatility |   |   | ExpectedLife(in years) |   |
| 2009 Plan*       |   |                          |   |   |                                         |   |   |                       |   |   |  |   |   |  |   |
| July 18, 2011    |   | $                        | 8.27   |   |                                    |   | 0.83   | %                     |   |   | 1.45 | % |   |   | 40.0 | % |   |   | 5 |   |
| July 19, 2010    |   | $                        | 7.15   |   |                                    |   | 0.91   | %                     |   |   | 1.73 | % |   |   | 37.5 | % |   |   | 5 |   |
| March 22, 2010   |   | $                        | 8.14   |   |                                    |   | 0.84   | %                     |   |   | 2.43 | % |   |   | 37.8 | % |   |   | 5 |   |
| October 19, 2009 |   | $                        | 6.34   |   |                                    |   | 1.04   | %                     |   |   | 2.36 | % |   |   | 37.6 | % |   |   | 5 |   |
| July 15, 2013    |   | $                        | 11.82  |   |                                    |   | 0.54   | %                     |   |   | 1.40 | % |   |   | 36.1 | % |   |   | 5 |   |
| January 20, 2014 |   | $                        | 8.37   |   |                                    |   | 0.60   | %                     |   |   | 1.64 | % |   |   | 27.0 | % |   |   | 5 |   |
| March 17, 2014   |   | $                        | 7.04   |   |                                    |   | 0.57   | %                     |   |   | 1.58 | % |   |   | 21.1 | % |   |   | 5 |   |
| 1999 Plan        |   |                     |   |   |                                    |   |   |                  |   |   |   |   |   |   |   |   |   |   |   |   |
| July 30, 2008    |   | $                        | 7.48   |   |                                    |   | 0.62   | %                     |   |   | 3.36 | % |   |   | 20.2 | % |   |   | 5 |   |
| July 21, 2008    |   | $                        | 6.84   |   |                                    |   | 0.67   | %                     |   |   | 3.41 | % |   |   | 20.2 | % |   |   | 5 |   |
| July 16, 2007    |   | $                        | 10.44  |   |                                    |   | 0.39   | %                     |   |   | 4.95 | % |   |   | 19.9 | % |   |   | 5 |   |
| July 17, 2006    |   | $                        | 8.26   |   |                                    |   | 0.61   | %                     |   |   | 5.04 | % |   |   | 21.2 | % |   |   | 7 |   |
| May 15, 2006     |   | $                        | 7.82   |   |                                    |   | 0.64   | %                     |   |   | 5.08 | % |   |   | 21.1 | % |   |   | 7 |   |

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|                                  |   | Number of Shares |          |   | WeightedAverageExercisePrice |   |
|---------------------------------------|--------|------------------|---------------|--------|------------------------------|--------|
| 2009 Plan                             |   |                  |          |   |                              |   |
| Balance at March 31, 2012             |   |             | 335,000       |   |                         | $      | 21.44 |   |
| Granted                               |   |             | –       |   |                         |   | – |   |
| Exercised                             |   |             | (108,092      | )      |                         |   | 19.96 |   |
| Canceled/Forfeited                    |   |             | (56,000       | )      |                         |   | 21.44 |   |
| Balance at March 31, 2013             |   |             | 170,908       |   |                         |   | 22.37 |   |
| Granted                               |   |             | 85,000        |   |                         |   | 35.25 |   |
| Exercised                             |   |             | (69,108       | )      |                         |   | 22.27 |   |
| Canceled/Forfeited                    |   |             | (63,000       | )      |                         |   | 22.08 |   |
| Balance at March 31, 2014             |   |             | 123,800       |   |                         |   | 31.40 |   |
| Granted                               |   |             | 259,0001 |   |                         |   | 36.60 |   |
| Exercised                             |   |             | (6,800        | )      |                         |   | 23.95 |   |
| Canceled/Forfeited                    |   |             | (4,000        | )      |                         |   | 23.95 |   |
| Balance at December 31, 2014          |   |             | 372,000       |   |                         | $      | 35.24 |   |
| 1999 Plan                             |   |             |          |   |                         |   |   |   |
| Balance at March 31, 2012             |   |             | 380,000       |   |                         |   | 28.41 |   |
| Granted                               |   |             | –       |   |                         |   | – |   |
| Exercised                             |   |             | (76,420       | )      |                         |   | 23.83 |   |
| Canceled/Forfeited                    |   |             | (57,580       | )      |                         |   | 27.79 |   |
| Balance at March 31, 2013             |   |             | 246,000       |   |                         |   | 33.00 |   |
| Granted                               |   |             | –       |   |                         |   | – |   |
| Exercised                             |   |             | (108,000      | )      |                         |   | 30.37 |   |
| Canceled/Forfeited                    |   |             | (100,000      | )      |                         |   | 38.25 |   |
| Balance at March 31, 2014             |   |             | 38,000        |   |                         | $      | 26.68 |   |
| Granted                               |   |             | –       |   |                         |   | – |   |
| Exercised                             |   |             | –       |   |                         |   | – |   |
| Canceled/Forfeited                    |   |             | –       |   |                         |   | – |   |
| Balance at December 31, 2014          |   |             | 38,000        |   |                         |   | 26.68 |   |
| Combined Balance at December 31, 2014 |   |             | 410,000       |   |                         | $      | 34.44 |   |
| 1See Note 6.                     |   |

| December 31, 2014 | Weighted AverageAggregate IntrinsicRemaining Contractual Term |   | Value* |      |
|-------------------|---------------------------------------------------------------|--------|--------|-----------|
| Outstanding       | 2.4 years                                                     |   | $      | 1,219,407 |   |
| Exercisable       | 0.6 years                                                     |   | $      | 419,980   |   |

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| Restricted stock available for issuance as of March 31, 2014              |   |   | 154,240  |    |
|---------------------------------------------------------------------------|--------|--------|----------|---------|
| Restricted stock granted during the nine months ended December 31, 2014   |   |   | (127,000 | )1 |
| Restricted stock forfeited during the nine months ended December 31, 2014 |   |   | 4,000    |    |
| Restricted stock available for issuance as of December 31, 2014           |   |   | 31,240   |    |

| Restricted Stock Awards       |   | Number ofShares |          |   | WeightedAverage FairValue PerShare |   |    | WeightedAverageRemainingVesting Term(in Years) |   |
|-------------------------------|--------|-----------------|---------------|--------|------------------------------------|--------|---------|------------------------------------------------|--------|
| Unvested at March 31, 2014    |   |            | 24,680        |   |                               | $      | 30.30   |                                           |   |   | 4.1 |   |
| Granted                       |   |            | 127,0001 |   |                               |   | 36.60   |                                           |   | NA2 |   |
| Vested                        |   |            | −       |   |                               |   | − |                                           |   |   | − |   |
| Forfeited                     |   |            | (4,000        | )      |                               |   | 22.98   |                                           |   |   | − |   |
| Unvested at December 31, 2014 |   |            | 147,680       |   |                               | $      | 31.45   |                                           |   |   | 3.5 |   |

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| Phantom Stock Awards          |   | Number ofShares |    |   | WeightedAverage GrantPrice PerShare |   |    | WeightedAverageRemainingVesting Term(in Years) |   |
|-------------------------------|--------|-----------------|---------|--------|-------------------------------------|--------|---------|------------------------------------------------|--------|
| Unvested at March 31, 2014    |   |            | 95,000  |   |                                | $      | 43.59   |                                           |   |   | 4.1 |   |
| Granted                       |   |            | − |   |                                |   | − |                                           |   |   | − |   |
| Vested                        |   |            | 10,000  |   |                                |   | 36.74   |                                           |   |   | − |   |
| Forfeited or expired          |   |            | 3,000   |   |                                |   | 41.34   |                                           |   |   | − |   |
| Unvested at December 31, 2014 |   |            | 82,000  |   |                                | $      | 44.51   |                                           |   |   | 3.2 |   |

| 8. | COMMITMENTS |
|----|-------------|

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| 9. | SUMMARY OF PER SHARE INFORMATION |
|----|----------------------------------|

|                                                              |   | Three Months EndedDecember 31 |    |   | Nine Months EndedDecember 31 |   |
|-------------------------------------------------------------------|--------|-------------------------------|---------|--------|------------------------------|--------|
| Per Share Data                                                    |   | 2014                          |    |   | 2013                         |   |   | 2014 |   |   | 2013 |   |
| Investment income                                                 |   | $                             | .50     |   |                         | $      | .55 |   |   | $ | .60 |   |   | $ | .68 |   |
| Operating expenses                                                |   |                          | (.21    | )      |                         |   | (.18 | ) |   |   | (.48 | ) |   |   | (.48 | ) |
| Income taxes                                                      |   |                          | (.01    | )      |                         |   | .04 |   |   |   | (.01 | ) |   |   | .05 |   |
| Net investment income                                             |   |                          | .28     |   |                         |   | .41 |   |   |   | .11 |   |   |   | .25 |   |
| Distributions from undistributed net investment income            |   |                          | (.10    | )      |                         |   | (.10 | ) |   |   | (.20 | ) |   |   | (.20 | ) |
| Net realized gain/(loss) net of tax                               |   |                          | 3.66    |   |                         |   | (.25 | ) |   |   | 5.63 |   |   |   | (.25 | ) |
| Net increase (decrease) in unrealized appreciation of investments |   |                          | (5.47   | )      |                         |   | 3.49 |   |   |   | (7.96 | ) |   |   | 7.16 |   |
| Dividends from capital gains                                      |   |                          | – |   |                         |   | – |   |   |   | – |   |   |   | – |   |
| Exercise of employee stock options                                |   |                          | – |   |                         |   | (.04 | ) |   |   | (.01 | ) |   |   | (.07 | ) |
| Stock option expense                                              |   |                          | .01     |   |                         |   | – |   |   |   | .02 |   |   |   | .02 |   |
| Forfeiture (Issuance) of restricted stock*                        |   |                          | – |   |                         |   | .03 |   |   |   | (.40 | ) |   |   | .04 |   |
|                                                              |        |                               |         |        |                              |        |  |  |  |  |  |  |  |  |  |  |
| Increase (decrease) in net asset value                            |   |                          | (1.62   | )      |                         |   | 3.54 |   |   |   | (2.81 | ) |   |   | 6.95 |   |
| Net asset value                                                   |   |                          |    |   |                         |   |   |   |   |   |   |   |   |   |   |   |
| Beginning of period                                               |   |                          | 48.79   |   |                         |   | 46.71 |   |   |   | 49.98 |   |   |   | 43.30 |   |
| End of period                                                     |   | $                             | 47.17   |   |                         | $      | 50.25 |   |   | $ | 47.17 |   |   | $ | 50.25 |   |

| Item 2. – | Management's Discussion and Analysis of Financial Condition and Results of Operations |
|-----------------|---------------------------------------------------------------------------------------|

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|                               |   | Three Months EndedDecember 31, |      |   | Nine Months EndedDecember 31, |   |
|------------------------------------|--------|--------------------------------|-----------|--------|-------------------------------|--------|
|                               |   | 2014                           |      |   | 2013                          |   |   | 2014 |   |   | 2013 |   |
| Alamo Group, Inc.                  |   | $                              | 138,832   |   |                          | $      | 198,311 |   |   | $ | 535,452 |   |   | $ | 594,882 |   |
| Capitala Finance Corporation       |   |                           | 15,310    |   |                          |   | 50,809 |   |   |   | 66,120 |   |   |   | 50,809 |   |
| CapStar Holdings Corp              |   |                           | -         |   |                          |   | 350,000 |   |   |   | - |   |   |   | 350,000 |   |
| Encore Wire Corporation            |   |                           | 19,138    |   |                          |   | 52,500 |   |   |   | 45,388 |   |   |   | 105,000 |   |
| North American Energy Partners     |   |                           | –   |   |                          |   | – |   |   |   | 1,190 |   |   |   | – |   |
| The RectorSeal Corporation         |   |                           | 7,240,000 |   |                          |   | 6,200,000 |   |   |   | 7,720,000 |   |   |   | 6,680,000 |   |
| TCI Holdings, Inc.                 |   |                           | –   |   |                          |   | 20,318 |   |   |   | – |   |   |   | 60,953 |   |
| The Whitmore Manufacturing Company |   |                           | 60,000    |   |                          |   | 1,200,000 |   |   |   | 180,000 |   |   |   | 1,320,000 |   |
|                               |   | $                              | 7,473,279 |   |                          | $      | 8,071,938 |   |   | $ | 8,548,150 |   |   | $ | 9,161,644 |   |

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|                             |   | Proceeds |        |   | Cost   |   |       | Realized gain (loss) |   |
|----------------------------------|--------|----------|-------------|--------|--------|--------|------------|----------------------|--------|
| Alamo Group, Inc.                |   | $        | 114,975,105 |   |   | $      | 2,190,937  |                 |   | $ | 112,784,168 |   |
| Capitala Finance Corporation     |   |     | 2,019,661   |   |   |   | 1,363,799  |                 |   |   | 655,862 |   |
| Capital South Partners Fund III  |   |     | 34,054      |   |   |   | 34,054     |                 |   |   | - |   |
| Cinatra Clean Technologies, Inc. |   |     | 2,458,706   |   |   |   | 17,288,383 |                 |   |   | (14,829,677 | ) |
| Discovery Alliance, LLC          |   |     | 139,713     |   |   |   | 1,315,000  |                 |   |   | (1,175,287 | ) |
| Encore Wire Corporation          |   |     | 49,544,138  |   |   |   | 5,200,000  |                 |   |   | 44,344,138 |   |
| North American Energy Partners   |   |     | 588,577     |   |   |   | 236,986    |                 |   |   | 351,591 |   |
| StarTech Seed Fund II            |   |     | 131,544     |   |   |   | 131,544    |                 |   |   | - |   |
| Tristate Capital Holdings, Inc.  |   |     | 706,928     |   |   |   | 928,486    |                 |   |   | (221,558 | ) |
| Total realized gain              |   | $        | 170,598,426 |   |   | $      | 28,689,189 |                 |   | $ | 141,909,237 |   |

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|                               |   | Nine Months EndedDecember 31, |       |
|------------------------------------|--------|-------------------------------|------------|
|                               |   | 2014                          |       |   | 2013 |   |
| The RectorSeal Corporation         |   |                          | 59,500,000 |   |   |   | 19,000,000 |   |
| TitanLiner, Inc.                   |   |                          | 7,166,999  |   |   |   | (3,414,000 | ) |
| KBI Biopharma, Inc.                |   |                          | 4,500,000  |   |   |   | 1,700,000 |   |
| Wellogix, Inc.                     |   |                          | 4,480,000  |   |   |   | - |   |
| Boxx Technologies, Inc.            |   |                          | 1,326,000  |   |   |   | (220,000 | ) |
| Instawares Holding Company, LLC    |   |                          | (2,879,000 | ) |   |   | (2,323,000 | ) |
| iMemories, Inc.                    |   |                          | (2,112,002 | ) |   |   | - |   |
| Trax Holdings, Inc.                |   |                          | (1,500,000 | ) |   |   | 1,900,000 |   |
| Deepwater Corrosion Services, Inc. |   |                          | (1,144,000 | ) |   |   | - |   |
| The Whitmore Manufacturing Company |   |                          | (900,000   | ) |   |   | 2,500,000 |   |

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

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

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

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

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

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

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|             |  | CAPITAL SOUTHWEST CORPORATION |                                       |
|------------------|--|-------------------------------|---------------------------------------|
|             |  |                          |                                  |  |
| February 6, 2015 |  | By:                           | /s/ Joseph B. Armes                   |  |
|  Date       |  |                          | Joseph B. Armes                       |  |
|             |  |                          | Chairman of the Board                 |  |
|             |  |                          | President and Chief Executive Officer |  |
|             |  |                          |                                  |  |
| February 6, 2015 |  | By:                           | /s/ Kelly Tacke                       |  |
| Date             |  |                          | Kelly Tacke                           |  |
|             |  |                          | Chief Financial Officer               |  |

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