----

| ☒ | 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, Dallas, Texas |   | 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 September 30, 2015 (Unaudited) and March 31, 2015                             | 3      |
|       |   | Consolidated Statements of Operations (Unaudited) For the three and six months ended September 30, 2015 and September 30, 2014  | 4      |
|       |   | Consolidated Statements of Changes in Net Assets (Unaudited) For the six months ended September 30, 2015 and September 30, 2014 | 5      |
|       |   | Consolidated Statements of Cash Flows (Unaudited) For the six months ended September 30, 2015 and September 30, 2014            | 6      |
|       |   | Consolidated Schedule of Investments September 30, 2015 (Unaudited) and March 31, 2015                                          | 7      |
|       |   | Notes to Consolidated Financial Statements                                                                                      | 15     |
| Item 2.    |   | Management's Discussion and Analysis of Financial Condition and Results of Operations                                           | 35     |
| Item 3.    |   | Quantitative and Qualitative Disclosures About Market Risk                                                                      | 40     |
| Item 4.    |   | Controls and Procedures                                                                                                         | 40     |
|       |   |                                                                                                                            |   |
| PART II    |   | OTHER INFORMATION                                                                                                               |   |
|       |   |                                                                                                                            |   |
| Item 1.    |   | Legal Proceedings                                                                                                               | 41     |
| Item 1A.   |   | Risk Factors                                                                                                                    | 41     |
| Item 6.    |   | Exhibits                                                                                                                        | 45     |
|       |   |                                                                                                                            |   |
| Signatures |   |                                                                                                                            | 46     |

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Table of Contents

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

|                                                                                                                                                  |   | September 30, |    |   | March 31, |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------|---------|--------|-----------|--------|
|                                                                                                                                                  |   | 2015          |    |   | 2015      |   |
| Assets                                                                                                                                                |   | (Unaudited)   |    |   |           |   |
| Investments at market or fair value                                                                                                                   |   |               |    |   |           |   |
| Control investments (Cost: September 30, 2015 - $5,415, March 31, 2015 - $12,396)                                                                     |   | $             | 31,325  |   |      | $      | 489,415 |   |
| Affiliate investments (Cost: September 30, 2015 - $5,444, March 31, 2015 - $6,944)                                                                    |   |          | 5,191   |   |      |   | 8,345 |   |
| Non-Control/Non-Affiliate investments (Cost: September 30, 2015 - $62,215, March 31, 2015 - $45,620)                                                  |   |          | 56,823  |   |      |   | 37,776 |   |
| Total investments (Cost: September 30, 2015 - $73,074, March 31, 2015 - $64,960)                                                                      |   |          | 93,339  |   |      |   | 535,536 |   |
| Cash and cash equivalents                                                                                                                             |   |          | 184,111 |   |      |   | 225,797 |   |
| Receivables                                                                                                                                           |   |          |    |   |      |   |   |   |
| Dividends and interest                                                                                                                                |   |          | 296     |   |      |   | 77 |   |
| Other                                                                                                                                                 |   |          | 5,326   |   |      |   | 4,246 |   |
| Income tax receivable                                                                                                                                 |   |          | 308     |   |      |   | 95 |   |
| Net pension assets                                                                                                                                    |   |          | -       |   |      |   | 10,294 |   |
| Deferred tax asset                                                                                                                                    |   |          | 1,649   |   |      |   | - |   |
| Other assets                                                                                                                                          |   |          | 621     |   |      |   | 827 |   |
| Total assets                                                                                                                                          |   | $             | 285,650 |   |      | $      | 776,872 |   |
|                                                                                                                                                  |   |          |    |   |      |   |   |   |
| Liabilities                                                                                                                                           |   |          |    |   |      |   |   |   |
| Other liabilities                                                                                                                                     |   | $             | 7,830   |   |      | $      | 4,923 |   |
| Accrued restoration plan liability                                                                                                                    |   |          | 2,229   |   |      |   | 3,119 |   |
| Deferred income taxes                                                                                                                                 |   |          | -       |   |      |   | 1,412 |   |
| Total liabilities                                                                                                                                     |   |          | 10,059  |   |      |   | 9,454 |   |
| Commitments and Contingencies (Note 9)                                                                                                                |   |          |    |   |      |   |   |   |
|                                                                                                                                                  |   |          |    |   |      |   |   |   |
| Net Assets                                                                                                                                            |   |          |    |   |      |   |   |   |
| Common stock, $0.25 par value: authorized, 25,000,000 shares; issued, 17,922,844 shares at September 30, 2015 and 17,904,844 shares at March 31, 2015 |   |          | 4,481   |   |      |   | 4,476 |   |
| Additional capital                                                                                                                                    |   |          | 273,171 |   |      |   | 298,338 |   |
| Accumulated net investment loss                                                                                                                       |   |          | (18,097 | )      |      |   | (4,390 | ) |
| Accumulated net realized gain                                                                                                                         |   |          | 19,708  |   |      |   | 22,355 |   |
| Unrealized appreciation of investments                                                                                                                |   |          | 20,265  |   |      |   | 470,576 |   |
| Treasury stock - at cost, 2,339,512 shares                                                                                                            |   |          | (23,937 | )      |      |   | (23,937 | ) |
| Total net assets                                                                                                                                      |   |          | 275,591 |   |      |   | 767,418 |   |
| Total liabilities and net assets                                                                                                                      |   | $             | 285,650 |   |      | $      | 776,872 |   |
| Net asset value per share (15,583,332 shares outstanding at September 30, 2015 and 15,565,332 at March 31, 2015)                                      |   | $             | 17.68   |   |      | $      | 49.30 |   |

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Table of Contents

|                                                              |   | Three Months Ended |    |   | Six Months Ended |   |
|-------------------------------------------------------------------|--------|--------------------|---------|--------|------------------|--------|
|                                                              |   | September 30,      |    |   | September 30,    |   |
|                                                              |   | 2015               |    |   | 2014             |   |   | 2015 |   |   | 2014 |   |
| Investment income:                                                |   |                    |    |   |                  |   |   |  |   |   |  |   |
| Interest                                                          |   | $                  | 945     |   |             | $      | 80 |   |   | $ | 1,404 |   |   | $ | 220 |   |
| Dividends                                                         |   |               | -       |   |             |   | 575 |   |   |   | 300 |   |   |   | 1,075 |   |
| Management fees and other income                                  |   |               | 133     |   |             |   | 140 |   |   |   | 338 |   |   |   | 280 |   |
|                                                              |   |               | 1,078   |   |             |   | 795 |   |   |   | 2,042 |   |   |   | 1,575 |   |
| Operating expenses:                                               |   |               |    |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Compensation expense                                              |   |               | 3,411   |   |             |   | 1,095 |   |   |   | 4,623 |   |   |   | 2,397 |   |
| Share-based compensation expense                                  |   |               | 370     |   |             |   | 77 |   |   |   | 729 |   |   |   | 192 |   |
| Net pension benefit                                               |   |               | (105    | )      |             |   | (184 | ) |   |   | (175 | ) |   |   | (140 | ) |
| Corporate Professional Fees                                       |   |               | 402     |   |             |   | 251 |   |   |   | 702 |   |   |   | 641 |   |
| Spin-off Professional Fees                                        |   |               | 5,474   |   |             |   | - |   |   |   | 6,712 |   |   |   | - |   |
| Other operating expenses                                          |   |               | 773     |   |             |   | 506 |   |   |   | 1,498 |   |   |   | 985 |   |
|                                                              |   |               | 10,325  |   |             |   | 1,745 |   |   |   | 14,089 |   |   |   | 4,075 |   |
| Loss before income taxes                                          |   |               | (9,247  | )      |             |   | (950 | ) |   |   | (12,047 | ) |   |   | (2,500 | ) |
| Income tax expense                                                |   |               | 88      |   |             |   | 289 |   |   |   | 118 |   |   |   | 222 |   |
|                                                              |   |               |    |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Net investment loss                                               |   | $                  | (9,335  | )      |             | $      | (1,239 | ) |   | $ | (12,165 | ) |   | $ | (2,722 | ) |
|                                                              |   |               |    |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Proceeds from disposition of investments and return of capital    |   | $                  | 8,500   |   |             | $      | 50,278 |   |   | $ | 16,393 |   |   | $ | 53,481 |   |
| Cost of investments sold                                          |   |               | (11,896 | )      |             |   | (3,885 | ) |   |   | (19,041 | ) |   |   | (22,801 | ) |
| Net realized (loss) gain on investments                           |   |               | (3,396  | )      |             |   | 46,393 |   |   |   | (2,648 | ) |   |   | 30,680 |   |
|                                                              |   |               |    |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Net increase (decrease) in unrealized appreciation of investments |   |               | 3,783   |   |             |   | (75,744 | ) |   |   | 5,879 |   |   |   | (38,827 | ) |
|                                                              |   |               |    |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Net realized and unrealized gain (losses) on investments          |   |               | 387     |   |             |   | (29,351 | ) |   |   | 3,231 |   |   |   | (8,147 | ) |
|                                                              |   |               |    |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Decrease in net assets from operations                            |   | $                  | (8,948  | )      |             | $      | (30,590 | ) |   | $ | (8,934 | ) |   | $ | (10,869 | ) |

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Table of Contents

|                                                                |   | Six Months Ended |     |
|---------------------------------------------------------------------|--------|------------------|----------|
|                                                                |   | September 30,    |     |
|                                                                |   | 2015             |     |   | 2014 |   |
| Operations:                                                         |   |                  |     |   |  |   |
| Net investment loss                                                 |   | $                | (12,165  | ) |   | $ | (2,722 | ) |
| Net realized (loss) gain on investments                             |   |             | (2,648   | ) |   |   | 30,680 |   |
| Net increase(decrease) in unrealized appreciation of investments    |   |             | 5,879    |   |   |   | (38,827 | ) |
| Decrease in net assets from operations                              |   |             | (8,934   | ) |   |   | (10,869 | ) |
| Distributions from:                                                 |   |             |     |   |   |   |   |   |
| Undistributed net investment loss                                   |   |             | (1,542   | ) |   |   | (1,541 | ) |
| Distributions of CSW Industrials, Inc.                              |   |             |     |   |   |   |   |   |
| Decrease in unrealized appreciation related to spin-off investments |   |             | (456,189 | ) |   |   | - |   |
| Distribution from additional capital                                |   |             | (26,278  | ) |   |   | - |   |
| Capital share transactions:                                         |   |             |     |   |   |   |   |   |
| Exercise of employee stock options                                  |   |             | 387      |   |   |   | 101 |   |
| Share-based compensation expense                                    |   |             | 729      |   |   |   | 192 |   |
| Decrease in net assets                                              |   |             | (491,827 | ) |   |   | (12,117 | ) |
| Net assets, beginning of period                                     |   |             | 767,418  |   |   |   | 770,388 |   |
| Net assets, end of period                                           |   | $                | 275,591  |   |   | $ | 758,271 |   |

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Table of Contents

|                                                                                                                    |   | Six Months Ended |    |
|-------------------------------------------------------------------------------------------------------------------------|--------|------------------|---------|
|                                                                                                                    |   | September 30,    |    |
|                                                                                                                    |   | 2015             |    |   | 2014 |   |
| Cash flows from operating activities                                                                                    |   |                  |    |   |  |   |
| Decrease in net assets from operations                                                                                  |   | $                | (8,934  | ) |   | $ | (10,869 | ) |
| Adjustments to reconcile increase in net assets from operations to net cash provided by (used in) operating activities: |   |             |    |   |   |   |   |   |
| Net proceeds from disposition of investments                                                                            |   |             | 15,749  |   |   |   | 53,405 |   |
| Return of capital on investments                                                                                        |   |             | 646     |   |   |   | 76 |   |
| Purchases of securities                                                                                                 |   |             | (34,136 | ) |   |   | (76 | ) |
| Depreciation and amortization                                                                                           |   |             | 36      |   |   |   | 9 |   |
| Net pension benefit                                                                                                     |   |             | (284    | ) |   |   | (290 | ) |
| Net realized (gain) losses on investments                                                                               |   |             | 2,648   |   |   |   | (30,680 | ) |
| Net (increase) decrease in unrealized appreciation of investments                                                       |   |             | (5,879  | ) |   |   | 38,827 |   |
| Share-based compensation expense                                                                                        |   |             | 729     |   |   |   | 192 |   |
| Increase in dividend and interest receivable                                                                            |   |             | (219    | ) |   |   | 508 |   |
| Increase in receivables from brokerage firm                                                                             |   |             | -       |   |   |   | (13,664 | ) |
| Increase in other receivables                                                                                           |   |             | (1,080  | ) |   |   | (663 | ) |
| Increase in income tax receivable                                                                                       |   |             | (212    | ) |   |   | (329 | ) |
| Decrease (Increase)  in other assets                                                                               |   |             | 167     |   |   |   | (203 | ) |
| Increase (decrease) in other liabilities                                                                                |   |             | 2,907   |   |   |   | (265 | ) |
| Decrease in deferred income taxes                                                                                       |   |             | 331     |   |   |   | 249 |   |
| Net cash (used in ) provided by operating activities                                                                    |   |             | (27,531 | ) |   |   | 36,227 |   |
| Cash flows from financing activities                                                                                    |   |             |    |   |   |   |   |   |
| Distributions from undistributed net investment income                                                                  |   |             | (1,542  | ) |   |   | (1,541 | ) |
| Proceeds from exercise of employee stock options                                                                        |   |             | 387     |   |   |   | 101 |   |
| Distribution to CSW Industrials                                                                                         |   |             | (13,000 | ) |   |   | - |   |
| Net cash used in financing activities                                                                                   |   |             | (14,155 | ) |   |   | (1,440 | ) |
| Net (decrease) increase in cash and cash equivalents                                                                    |   |             | (41,686 | ) |   |   | 34,787 |   |
| Cash and cash equivalents at beginning of period                                                                        |   |             | 225,797 |   |   |   | 88,163 |   |
| Cash and cash equivalents at end of period                                                                              |   | $                | 184,111 |   |   | $ | 122,950 |   |

| Cost of Investments spun-off              |   | $      | 6,981   |   |   |   | - |   |
|-------------------------------------------|--------|--------|---------|--------|--------|--------|---|--------|
| Decrease in unrealized appreciation       |   |   | 456,189 |   |   |   | - |   |
| Net Pension Assets                        |   |   | 9,687   |   |   |   | - |   |
| Decrease in deferred tax liabilities |   | $      | 3,391   |   |   |   | - |   |

| 1 | These non-cash items are related to the spin-off of CSW Industrials Inc. at September 30, 2015. |
|--------|-------------------------------------------------------------------------------------------------|

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Table of Contents

| Company (a)                                                                                                                                                                                     | Equity (b)                                                                                                                                        | Investment (c)                                                                                                                                      | Cost      | Value (d) |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------|-----------|-----------|
| BDF ACQUISITION CORP.Manchester, ConnecticutRetailer of value-priced furniture and home accents                                                                                                 | 0.0%                                                                                                                                              | LIBOR plus 8.00% (Floor 1.00%), Current coupon: 9.00%; Senior secured debt, due 2-12-22 (acquired 8-7-15)                                           | 4,790,653 | 4,790,653 |
| CAST AND CREW PAYROLL, LLCBurbank, CaliforniaProvides bundled payroll services and workers’ compensation solution to the entertainment and digital media markets                          | 0 0%                                                                                                                                              | LIBOR plus 7.75% (Floor 1.00%), Current coupon: 8.75%; Senior secured debt, due 8-12-23 (acquired 8-27-15)                                          | 4,969,011 | 4,969,011 |
| 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. | 41.1%                                                                                                                                             | 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 | 4,854,000 |
| FREEDOM TRUCK FINANCE, LLCDallas, TexasProvides sub-prime loans to independent owner operators for commercial, heavy-duty trucks                                                                | 0.0%                                                                                                                                              | PRIME plus 9.75% (Floor 3.25%), Current coupon: 13.00%; Senior secured debt, due 4-5-16 (acquired 9-22-15)                                          | 5,378,239 | 5,378,239 |
| iMEMORIES, INC.Scottsdale, ArizonaEnables online video and photo sharing and DVD creation for home movies recorded in analog and new digital format.                             | 24.5%                                                                                                                                             | 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                                                                                                                                           | –   |
|                                                                                                                                                                                            | 10% convertible notes, $308,000 principal due 7-31-16(acquired  9-7-12)                                                                      | 308,000                                                                                                                                             | –   |
|                                                                                                                                                                                            | 10% convertible notes, $880,000 principal due 7-31-16 (acquired  3-15-13)                                                                    | 880,000                                                                                                                                             | –   |
|                                                                                                                                                                                            | 18% notes, $148,507 principal due 7-31-16 (acquired 11-3-14)                                                                                      | 148,507                                                                                                                                             | 171,000   |
|                                                                                                                                                                                            |                                                                                                                                              |                                                                                                                                                | 6,414,986 | 171,000   |

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| *kSEP HOLDINGS, INC.Durham, North CarolinaManufacturer of single-use and scalable bioprocessing systems used in the area of recombinant therapeutics and cell therapy.                                                                | 17.1%                                               | 861,591 shares of common stock (exchanged 03-24-15)                                                                                                                            | 443,518    | 1,943,000  |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|------------|
| LTI HOLDINGS, INC.Modesto, CaliforniaDiversified custom components manufacturer that provides highly engineered solutions to OEMs.                                                                                                    | 0.0%                                                | LIBOR plus 9.25% (Floor 1.00%), Current coupon: 10.25%; Senior secured debt, due 4-17-23 (acquired 4-17-15)                                                                    | 6,830,283  | 6,830,283  |
| ¥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    | 5,200,000  |
|                                                                                                                                                                                                                                  | 4,000,002 shares of common stock (acquired 11-4-97) | 4,615,000                                                                                                                                                                      | 25,900,000 |
|                                                                                                                                                                                                                                  |                                                |                                                                                                                                                                           | 5,415,000  | 31,100,000 |
| PREPAID LEGAL SERVICES, INC.Ada, OklahomaProvides subscription-based legal and identity theft plans to the North American market                                                                                                      | 0.0%                                                | LIBOR plus 9.00% (Floor 1.25%), Current coupon: 10.25%; Senior secured debt, due 7-1-20 (acquired 9-28-15)                                                                     | 3,225,679  | 3,225,679  |
| RESEARCH NOW GROUP, INC.Plano, TexasProvides data collection through online and mobile surveys using proprietary consumer and business panels.                                                                                        | 0.0%                                                | LIBOR plus 8.75% (Floor: 1.00%), Current coupon: 9.75%; Senior secured debt, due 3-18-22 (acquired 3-18-15)                                                                    | 6,900,585  | 6,900,585  |
| ROYAL HOLDINGS, INC.South Bend, IndianaManufactures high-value specialty adhesives and sealants for complex applications.                                                                                                             | 0.0%                                                | LIBOR plus 7.50% (Floor: 1.00%), Current coupon: 8.50%; Senior secured debt, due 7-7-22 (acquired 7-7-15)                                                                      | 992,654    | 992,654    |
| TITANLINER, INC.Midland, TexasManufactures, installs and rents spill containment system for oilfield applications.                                                                                                                    | 28.7%                                               | 339,277 shares of Series A Convertible Preferred Stock convertible into 339,277 shares of Series A Preferred Stock at $14.76 per share (acquired 6-29-12)                      | 3,204,222  | 5,820,000  |
|                                                                                                                                                                                                                                  |                                                | 8.5%  senior subordinated secured promissory note, due 6-30-17 (acquired 6-29-12)                                                                                         | 2,747,000  | 2,747,000  |
|                                                                                                                                                                                                                                  |                                                |                                                                                                                                                                           | 5,951,222  | 8,567,000  |
| TRAX DATA REFINERY, INC.Scottsdale, ArizonaProvides a comprehensive set of solutions to improve the transportation validation, accounting, payment and information management process.                                                | 2.6%                                                | 211,368 shares of common stock (exchanged 3-19-15)                                                                                                                             | 817,781    | 2,200,000  |
| *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  | 3,248,000  |

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| WINZER CORPORATIONPlano, TexasDistributes fasteners, chemicals, tools and a wide variety of other products to customers in the industrial maintenance and repair, and automotive aftermarket sectors | 0.0%   | 11% Secured subordinated debt, due 6-1-21 (acquired 6-1-15)                                  | 7,944,389    | 7,944,389    |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------|--------------|--------------|
| MISCELLANEOUS                                                                                                                                                                                        | 100%   | ¥ ‡ Humac Company1,041,000 shares of common stock (acquired 1-31-75 and 12-31-75) | –      | 225,000      |
| TOTAL INVESTMENTS                                                                                                                                                                                    |   |                                                                                         | $ 73,074,000 | $ 93,339,493 |

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Table of Contents

| Company (a)                                                                                                                                                                                                 | Equity (b)                                                                                                                                        | Investment (c)                                                                                                                                                | Cost        | Value (d)   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------|-------------|
| ‡ 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 | $ 3,779,000 |
| ¥BALCO, INC.Wichita, KansasSpecialty architectural products used in the construction and remodeling of commercial and institutional buildings.                                                         | 100.0%                                                                                                                                            | 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     | 5,100,000   |
| *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   | 2,362,000   |
| ¥ 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   | 10,871,000  |
| 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   | 2,532,000   |
| iMEMORIES, INC.Scottsdale, ArizonaEnables online video and photo sharing and DVD creation for home movies recorded in analog and new digital format.                                                        | 24.5%                                                                                                                                             | 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                                                                                                                                                     | –     |
|                                                                                                                                                                                                        |                                                                                                                                              | 10% convertible notes, $308,000 principal due 7-31-14 (acquired  9-7-12)                                                                                 | 308,000     | –     |
|                                                                                                                                                                                                        |                                                                                                                                              | 10% convertible notes, $880,000 principal due 7-31-14 (acquired  3-15-13)                                                                                | 880,000     | –     |
|                                                                                                                                                                                                        |                                                                                                                                              | 18% notes, $148,507 principal due 7-31-15 (acquired 11-3-14)                                                                                                  | 148,507     | 159,000     |
|                                                                                                                                                                                                        |                                                                                                                                              |                                                                                                                                                          | 6,414,986   | 159,000     |
| 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   | 5,000,000   |
| *kSEP HOLDINGS, INC.Durham, North CarolinaManufacturer of single-use and scalable bioprocessing systems used in the area of recombinant therapeutics and cell therapy.                                      | 17.1%                                                                                                                                             | 861,591 shares of common stock (exchanged 03-24-15)                                                                                                           | 443,518     | 1,863,000   |

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| ¥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    | 4,300,000   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|-------------|
|                                                                                                                                                                                                                                                                  | 4,000,002 shares of common stock (acquired 11-4-97) | 4,615,000                                                                                                                                                                      | 21,700,000 |
|                                                                                                                                                                                                                                                                  |                                                |                                                                                                                                                                           | 5,415,000  | 26,000,000  |
| ¥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     | 358,200,000 |
| RESEARCH NOW GROUP, INC.Plano, TexasProvides data collection through online and mobile surveys using proprietary consumer and business panels.                                                                                                                        | 0.0%                                                | LIBOR plus 8.75% (Floor: 1.00%), Current coupon: 9.75%; Senior secured debt, due 3-18-22 (acquired 3-18-15)                                                                    | 6,895,231  | 6,895,231   |
| TITANLINER, INC.Midland, TexasManufactures, installs and rents spill containment system for oilfield applications.                                                                                                                                                    | 28.7%                                               | 339,277 shares of Series A Convertible Preferred Stock convertible into 339,277 shares of Series A Preferred Stock at $14.76 per share (acquired 6-29-12)                      | 3,204,222  | 5,939,000   |
|                                                                                                                                                                                                                                                                  |                                                | 8.5%  senior subordinated secured promissory note, due 6-30-17 (acquired 6-29-12)                                                                                         | 2,747,000  | 2,747,000   |
|                                                                                                                                                                                                                                                                  |                                                |                                                                                                                                                                           | 5,951,222  | 8,686,000   |
| TRAX DATA REFINERY, INC.Scottsdale, ArizonaProvides a comprehensive set of solutions to improve the transportation validation, accounting, payment and information management process.                                                                                | 2.6%                                                | 211,368 shares of common stock (exchanged 3-19-15)                                                                                                                             | 817,781    | 2,296,000   |
| *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  | 4,120,000   |
| ¥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  | 89,000,000  |
|  MISCELLANEOUS                                                                                                                                                                                                                                                   | –                                             | ‡Ballast Point Ventures II, L.P.2.1% limited partnership interest (acquired 8-4-08 thru 11-6-14)                                                                         | 2,634,790  | 3,288,000   |
|                                                                                                                                                                                                                                                                  | –                                             | ‡BankCap Partners Fund I, L.P.5.5% limited partnership interest (acquired 7-14-06 thru 11-16-12)                                                                         | 5,071,514  | 4,771,000   |

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|              | – | ‡CapitalSouth Partners Fund III, L.P.1.9% limited partnership interest (acquired 1-22-08 and 11-16-11)    | 433,403      | 232,000             |
|-------------------|---------|-----------------------------------------------------------------------------------------------------------------|--------------|---------------------|
|              | – | ‡Diamond State Ventures, L.P.1.4% limited partnership interest (acquired 10-12-99 thru 8-26-05)           | -            | 16,000              |
|              | – | ‡First Capital Group of Texas III, L.P.3.0% limited partnership interest (acquired 12-26-00 thru 8-12-05) | 778,895      | 108,000             |
|              | 100%    | ¥ ‡Humac Company1,041,000 shares of common stock (acquired 1-31-75 and 12-31-75)                     | –      | 244,000             |
|              | – | ‡STARTech Seed Fund II3.2% limited partnership interest (acquired 4-28-00 thru 2-23-05)                   | 622,783      | 14,000              |
| TOTAL INVESTMENTS |    |                                                                                                            | $ 64,960,262 | $  535,536,231 |

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| a) | Companies |
|----|-----------|

| b) | Equity |
|----|--------|

| (c) | Investments |
|-----|-------------|

| (d) | Value |
|-----|-------|

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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 quoted prices from active markets. We did not have any Level 1 investments as of September 30, 2015 and March 31, 2015. |
|--|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | 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 September 30, 2015 and March 31, 2015. |
|--|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | 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 that a market participant would use in pricing the investment.  We used Level 3 inputs for measuring the fair value of 100% of our investments as of September 30, 2015 and March 31, 2015.  See Note (c) in “Notes to Consolidated Schedule of Investments” 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; |
|--|--------|------------------------------------------------------------------------------------------------------------------------|

|  | · | Internal occurrences that may have an impact (both positive and negative) 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 Value at 9/30/2015 (in millions) |   | Unobservable Input |                     | Range  |   |               | Weighted Average |   |
|-------------------------------|--------|---------------------|--------|---------------------------------------|--------|--------------------|--------------------------|--------|--------|--------------------|------------------|--------|
| Preferred & Common Equity |   | Market Approach     |   | $                                     | 41.8   |               | EBITDA Multiple          |   |   | 4.00x – 7.0  | x                |   |   | 6.23 | x |
|                               |   | Market Approach     |   | $                                     | 2.2    |               | Revenue Multiple         |   |   | 3.70x – 3.70 | x                |   |   | 3.70 | x |
|                               |   | Market Approach     |   | $                                     | 0.2    |               | Cash and Asset Value     |   | NA     |               |             | NA     |   |
|                               |   | Market Approach     |   | $                                     | 3.2    |               | Liquidation Value        |   | NA     |               |             | NA     |   |
|                               |   | Market Approach     |   | $                                     | 1.9    |               | Recent Transaction Price |   | NA     |               |             | NA     |   |
|                          |   |           |   | $                                     | 49.3   |               |                     |   |   |               |             |   |   |   |   |
| Debt                          |   | Face Value          |   | $                                     | 41.1   |               | Cost                     |   | NA     |               |             | NA     |   |
|                               |   | Market Approach     |   | $                                     | 2.7    |               | Face Value               |   | NA     |               |             | NA     |   |
|                               |   | Liquidation Value   |   |                                  | 0.2    |               | Cash and Asset Value     |   | NA     |               |             | NA     |   |
|                          |   |           |   | $                                     | 44.0   |               |                     |   |   |               |             |   |   |   |   |
|                               |   | Total               |   | $                                     | 93.3   |               |                     |   |   |               |             |   |   |   |   |

| Type                          |   | Valuation Technique |   | Fair Value at 3/31/2015 (in millions) |   | Unobservable Input |                                | Range  |   |               | Weighted Average |   |
|-------------------------------|--------|---------------------|--------|---------------------------------------|--------|--------------------|-------------------------------------|--------|--------|--------------------|------------------|--------|
| Preferred & Common Equity |   | Market Approach     |   | $                                     | 494.1  |               | EBITDA Multiple                     |   |   | 3.00x – 7.75 | x                |   |   | 7.15 | x |
|                               |   | Market Approach     |   | $                                     | 4.2    |               | Recent Transaction Price            |   | NA     |               |             | NA     |   |
|                               |   | Market Approach     |   | $                                     | 15.0   |               | Cash and Asset Value                |   | NA     |               |             | NA     |   |
|                               |   | Market Approach     |   | $                                     | 3.8    |               | Multiple of Tangible Book Value     |   |   | 1.43               | x                |   |   | 1.43 | x |
|                               |   | Market Approach     |   | $                                     | 0.2    |               | Market Value of Held for Securities |   | NA     |               |             | NA     |   |
|                          |   |           |   | $                                     | 517.3  |               |                                |   |   |               |             |   |   |   |   |
| Debt                          |   | Face Value          |   | $                                     | 6.9    |               | Recent Transaction Price            |   | NA     |               |             | NA     |   |
|                               |   | Market Approach     |   | $                                     | 2.7    |               | Expected cash flow                  |   | NA     |               |             | NA     |   |
|                               |   | Liquidation Value   |   |                                  | 0.2    |               |                                |   |   |               |             |   |   |   |   |
| Partnership or LLC Interests  |   |                |   | $                                     | 9.8    |               |                                |   |   |               |             |   |   |   |   |
|                               |   | Net Asset Value     |   | $                                     | 8.4    |               | Fund Value                          |   | NA     |               |             | NA     |   |
|                               |   | Total               |   | $                                     | 535.5  |               |                                |   |   |               |             |   |   |   |   |

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|                          |   |        |   |   | Fair Value Measurementsat September 30, 2015 Using            |   |
|-------------------------------|--------|--------|--------|--------|---------------------------------------------------------------|--------|
| Asset Category                |   | Total  |   |   | Quoted Prices in Active Markets for Identical Assets(Level 1) |   |   | Significant Other Observable Inputs(Level 2) |   |   | Significant Unobservable Inputs(Level 3) |   |
| Debt                          |   | $      | 44.0   |   |                                                          | $      | − |   |   | $ | − |   |   | $ | 44.0 |   |
| Preferred & Common Equity |   |   | 49.3   |   |                                                          |   | − |   |   |   | − |   |   |   | 49.3 |   |
| Total Investments             |   | $      | 93.3   |   |                                                          | $      | − |   |   | $ | − |   |   | $ | 93.3 |   |

|                          |   |        |   |   | Fair Value Measurementsat March 31, 2015 Using                |   |
|-------------------------------|--------|--------|--------|--------|---------------------------------------------------------------|--------|
| Asset Category                |   | Total  |   |   | Quoted Prices in Active Markets for Identical Assets(Level 1) |   |   | Significant Other Observable Inputs(Level 2) |   |   | Significant Unobservable Inputs(Level 3) |   |
| Debt                          |   | $      | 9.8    |   |                                                          | $      | − |   |   | $ | − |   |   | $ | 9.8 |   |
| Partnership Interests         |   |   | 8.4    |   |                                                          |   | − |   |   |   | − |   |   |   | 8.4 |   |
| Preferred & Common Equity |   |   | 517.3  |   |                                                          |   | − |   |   |   | − |   |   |   | 517.3 |   |
| Total Investments             |   | $      | 535.5  |   |                                                          | $      | − |   |   | $ | − |   |   | $ | 535.5 |   |

|                          |   | Fair Value 3/31/15 |   |   | Net Unrealized Appreciation (Depreciation) |   |    | Unrealized Depreciation due to spin-off of CSWI |   |   | New Investments |   |   | Divestitures |    |   | Distributions |    |   | Fair Value at 9/30/15 |   |
|-------------------------------|--------|--------------------|--------|--------|--------------------------------------------|--------|---------|-------------------------------------------------|--------|--------|-----------------|--------|--------|--------------|---------|--------|---------------|---------|--------|-----------------------|--------|
| Debt                          |   | $                  | 9.8    |   |                                       | $      | − |                                            |   |        |            |   | $      | 34.2         |    |   | $             | − |   |                  | $      | − |   |   | $ | 44.0 |   |
| Partnership Interests         |   |               | 8.4    |   |                                       |   | 1.1     |                                            |   |        |            |   |   | −      |    |   |          | (8.8    | )      |                  |   | (0.7 | ) |   |   | - |   |
| Preferred & Common Equity |   |               | 517.3  |   |                                       |   | 4.8     |                                            |   |   | (456.2          | )      |   |         | − |   |          |    | (9.6   | )                     |   |   | (7.0 | )* |   |   | 49.3 |   |
| Total Investments             |   | $                  | 535.5  |   |                                       | $      | 5.9     |                                            |   |   | (456.2          | )      |   | $            | 34.2    |   |          | $       | (18.4  | )                     |   | $ | (7.7 | ) |   | $ | 93.3 |   |

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|                  |   | Fair Value 3/31/14 |    |   | Net Unrealized Appreciation (Depreciation) |   |   | New Investments |   |   | Divestitures |   |   | Conversion of Security from Debt to Equity |    |   | Fair Value at 9/30/2014 |   |
|-----------------------|--------|--------------------|---------|--------|--------------------------------------------|--------|--------|-----------------|--------|--------|--------------|--------|--------|--------------------------------------------|---------|--------|-------------------------|--------|
| Debt                  |   | $                  | 2.7     |   |                                       | $      | 0.6    |            |   | $      | −      |   |   | $                                          | − |   |                    | $      | − |   |   | $ | 3.3 |   |
| Partnership Interests |   |               | 9.5     |   |                                       |   | 0.1    |            |   |   | −      |   |   |                                       | (1.4    | )      |                    |   | − |   |   |   | 8.2 |   |
| Warrants              |   |               | − |   |                                       |   | 1.2    |            |   |   | −      |   |   |                                       |    |   |                    |   |   |   |   |   | 1.2 |   |
| Preferred Equity      |   |               | 47.0    |   |                                       |   | 3.0    |            |   |   | −      |   |   |                                       | − |   |                    |   | − |   |   |   | 50.0 |   |
| Common Equity         |   |               | 398.7   |   |                                       |   | 38.2   |            |   |   | −      |   |   |                                       | − |   |                    |   | − |   |   |   | 436.9 |   |
| Total Investments     |   | $                  | 457.9   |   |                                       | $      | 43.1   |            |   | $      | −      |   |   | $                                          | (1.4    | )      |                    | $      | − |   |   | $ | 499.6 |   |

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

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

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

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

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|                                   |   | Number of Options |     |   | Weighted Average Exercise Price |   |
|----------------------------------------|--------|-------------------|----------|--------|---------------------------------|--------|
| 2009 Plan                              |   |                   |     |   |                                 |   |
| 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                                |   |              | 259,000  |   |                            |   | 36.60 |   |
| Exercised                              |   |              | (6,800   | )      |                            |   | 23.95 |   |
| Canceled/Forfeited                     |   |              | (4,000   | )      |                            |   | 23.95 |   |
| Balance at March 31, 2015              |   |              | 372,000  |   |                            |   | 35.24 |   |
| Granted                                |   |              | –  |   |                            |   | – |   |
| Exercised                              |   |              | (8,000   | )      |                            |   | 19.18 |   |
| Canceled/Forfeited                     |   |              | –  |   |                            |   | – |   |
| Spin-off adjustments                   |   |              | (1,487   | )*     |                            | NA     |   |
| Balance at September 30, 2015          |   |              | 362,513  |   |                            | $      | 11.21 | * |
|                                   |   |              |     |   |                            |   |   |   |
| 1999 Plan                              |   |              |     |   |                            |   |   |   |
| 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                              |   |              | 22,000   |   |                            |   | 29.10 |   |
| Canceled/Forfeited                     |   |              | –  |   |                            |   | – |   |
| Balance at March 31, 2015              |   |              | 16,000   |   |                            |   | 23.37 |   |
| Granted                                |   |              | –  |   |                            |   | – |   |
| Exercised                              |   |              | (10,000  | )      |                            |   | 23.37 |   |
| Canceled/Forfeited                     |   |              | –  |   |                            |   | – |   |
| Spin-off adjustments                   |   |              | (26      | )*     |                            | NA     |   |
| Balance at September 30, 2015          |   |              | 5,974    |   |                            | $      | 7.36 | * |
|                                   |   |              |     |   |                            |   |   |   |
| Combined Balance at September 30, 2015 |   |              | 368,487  |   |                            | $      | 11.15 | * |

| September 30, 2015 | Weighted AverageRemaining Contractual Term |   | Aggregate Intrinsic Value |      |
|--------------------|--------------------------------------------|--------|---------------------------|-----------|
| Outstanding        | 2.3 years                                  |   | $                         | 2,457,760 |   |
| Exercisable        | 1.6 years                                  |   | $                         | 387,185   |   |
|               |                                       |   |                      |      |   |

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| Restricted stock available for issuance as of March 31, 2015            |   |   | 31,240  |   |
|-------------------------------------------------------------------------|--------|--------|---------|--------|
| Restricted stock granted during the six months ended September 30, 2015 |   |   | -       |   |
| Additional restricted stock approved under the plan                     |   |   | 450,000 |   |
| Restricted stock available for issuance as of September 30, 2015        |   |   | 481,240 |   |

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| Restricted Stock Awards        |   | Number of Shares |    |   | Weighted Average Fair Value Per Share at grant date |   |    | Weighted Average Remaining Vesting Term (in Years) |   |
|--------------------------------|--------|------------------|---------|--------|-----------------------------------------------------|--------|---------|---------------------------------------------------------|--------|
| Unvested at March 31, 2015     |   |             | 142,960 |   |                                                | $      | 17.07   |                                                    |   |   | 2.6 |   |
| Granted                        |   |             | − |   |                                                |   | − |                                                    |   |   | − |   |
| Vested                         |   |             | 1,000   |   |                                                |   | − |                                                    |   |   | − |   |
| Forfeited                      |   |             | − |   |                                                |   | − |                                                    |   |   | − |   |
| Unvested at September 30, 2015 |   |             | 141,960 |   |                                                |   | 16.93   |                                                    |   |   | 2.3 |   |

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| Individual Cash Incentive Awards |   | Number of Awards |    |   | Weighted Average Baseline Net Asset Value Per Award |   |    | Weighted Average Remaining Vesting Term (in Years) |   |
|----------------------------------|--------|------------------|---------|--------|-----------------------------------------------------|--------|---------|---------------------------------------------------------|--------|
| Unvested at March 31, 2015       |   |             | 82,000  |   |                                                | $      | 45.40   |                                                    |   |   | 3.3 |   |
| Granted                          |   |             | − |   |                                                |   | − |                                                    |   |   | − |   |
| Vested                           |   |             | − |   |                                                |   | − |                                                    |   |   | − |   |
| Forfeited or expired             |   |             | − |   |                                                |   | − |                                                    |   |   | − |   |
| Unvested at September 30, 2015   |   |             | 82,000  |   |                                                | $      | 45.40   |                                                    |   |   | 3.0 |   |

| 8. | RETIREMENT PLANS |
|----|------------------|

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| Projected benefit obligation |   |   | (2,831,886 | )      |
|------------------------------|--------|--------|------------|--------|
| Fair value of assets         |   |   | -          |   |
| Net gain                     |   |   | 603,151    |   |
| Accrued benefit cost         |   |   | (2,228,735 | )      |

|                                                                  |   | Qualified Plan |     |   | Restoration Plan |   |
|-----------------------------------------------------------------------|--------|----------------|----------|--------|------------------|--------|
|                                                                  |   |                |     |   |                  |   |
| Service Cost                                                          |   | $              | 189,886  |   |             | $      | 82,152 |   |
| Interest Cost                                                         |   |           | 173,120  |   |             |   | 73,460 |   |
| Expected Return on Assets                                             |   |           | (578,273 | )      |             |   | - |   |
| Net Prior Service cost/(credit)                                       |   |           | 4,689    |   |             |   | (8,107 | ) |
| Net Loss/(Gain) Amortization                                          |   |           | -        |   |             |   | 41,402 |   |
| Net Periodic Pension Cost/(Income)                                    |   |           | (210,578 | )      |             |   | 188,907 |   |
| Immediate Recognition of Benefit Cost due to Plan Freeze at 9/30/2015 |   |           | (71,946  | )      |             |   | (81,697 | ) |
| Benefit cost at 9/30/2015                                             |   | $              | (282,524 | )      |             | $      | 107,210 |   |

| 9. | COMMITMENTS AND CONTINGENCIES |
|----|-------------------------------|

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| 10. | RELATED PARTY TRANSACTION |
|-----|---------------------------|

| 11. | SIGINIFICANT SUBSIDIARY |
|-----|-------------------------|

|                    |   | September 30, 2015 |       |
|-------------------------|--------|--------------------|------------|
| Current Assets          |   | $                  | 11,914,926 |   |
| Non-Current Assets      |   |               | 16,961,673 |   |
| Current Liabilities     |   |               | 3,016,976  |   |
| Non-Current Liabilities |   | $                  | 123,870    |   |

|     |   | 3 months ended 9/30/2015 |      |   | 6 months ended 9/30/2015 |   |
|----------|--------|--------------------------|-----------|--------|--------------------------|--------|
| Revenue  |   | $                        | 4,861,437 |   |                     | $      | 10,166,841 |   |
| Net Loss |   |                     | (590,370  | )      |                     |   | (1,535,755 | ) |

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| 12. | SUMMARY OF PER SHARE INFORMATION |
|-----|----------------------------------|

|                                                             |   | Three Months EndedSeptember 30, |    |   | Six Months EndedSeptember 30, |   |
|------------------------------------------------------------------|--------|---------------------------------|---------|--------|-------------------------------|--------|
| Per Share Data                                                   |   | 2015                            |    |   | 2014                          |   |   | 2015 |   |   | 2014 |   |
| Investment income                                                |   | $                               | .07     |   |                          | $      | .05 |   |   | $ | .13 |   |   | $ | .10 |   |
| Operating expenses                                               |   |                            | (.66    | )      |                          |   | (.11 | ) |   |   | (.90 | ) |   |   | (.27 | ) |
| Income taxes                                                     |   |                            | (.01    | )      |                          |   | (.02 | ) |   |   | (.01 | ) |   |   | (.01 | ) |
| Net investment loss                                              |   |                            | (.60    | )      |                          |   | (.08 | ) |   |   | (.78 | ) |   |   | (.18 | ) |
| Distributions from undistributed net investment income           |   |                            | – |   |                          |   | – |   |   |   | (.10 | ) |   |   | (.10 | ) |
| Distribution to CSWI                                             |   |                            | (1.69   | )      |                          |   |   |   |   |   | (1.69 | ) |   |   |   |   |
| Decrease in unrealized appreciation due to distributions to CSWI |   |                            | (29.41  | )      |                          |   |   |   |   |   | (29.27 | ) |   |   |   |   |
|                                                             |   |                            |    |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Net realized (loss) gain                                         |   |                            | (.22    | )      |                          |   | 2.99 |   |   |   | (.17 | ) |   |   | 1.97 |   |
| Net increase (decrease) in unrealized appreciation of investment |   |                            | .25     |   |                          |   | (4.87 | ) |   |   | .37 |   |   |   | (2.50 | ) |
| Capital Share transactions:                                      |   |                            |    |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Exercise of employee stock options                               |   |                            | -       |   |                          |   | (.01 | ) |   |   | (.03 | ) |   |   | (.01 | ) |
| Issuance of restricted stock*                                    |   |                            | -       |   |                          |   | (.41 | ) |   |   | - |   |   |   | (.38 | ) |
| Share based compensation expense                                 |   |                            | .02     |   |                          |   | – |   |   |   | .05 |   |   |   | .01 |   |
|                                                             |   |                            |    |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Decrease in net asset value                                      |   |                            | (31.65  | )      |                          |   | (2.38 | ) |   |   | (31.62 | ) |   |   | (1.19 | ) |
| Net asset value                                                  |   |                            |    |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Beginning of period                                              |   |                            | 49.33   |   |                          |   | 51.17 |   |   |   | 49.30 |   |   |   | 49.98 |   |
| End of period                                                    |   | $                               | 17.68   |   |                          | $      | 48.79 |   |   | $ | 17.68 |   |   | $ | 48.79 |   |

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|                                 |   | Proceeds |      |   | Cost   |   |      | Realized gain (loss) |   |
|--------------------------------------|--------|----------|-----------|--------|--------|--------|-----------|----------------------|--------|
| Alamo Group, Inc.                    |   | $        | 36,872    |   |   | $      | -         |                 |   | $ | 36,872 |   |
| Atlantic Capital Bancshares, Inc.    |   |     | 3,956,401 |   |   |   | 3,000,000 |                 |   |   | 956,401 |   |
| Ballast Point Ventures II, L.P.      |   |     | 3,507,598 |   |   |   | 2,634,790 |                 |   |   | 872,808 |   |
| BankCap Partners, L.P.               |   |     | 1,596,999 |   |   |   | 5,071,514 |                 |   |   | (3,474,515 | ) |
| Boxx Technologies, Inc.              |   |     | 2,184,184 |   |   |   | 1,500,000 |                 |   |   | 684,184 |   |
| Capital South Partners Fund II, L.P. |   |     | 50,000    |   |   |   | 433,403   |                 |   |   | (383,403 | ) |
| Diamond State Ventures, L.P.         |   |     | 27,500    |   |   |   | -         |                 |   |   | 27,500 |   |
| First Capital Group of Texas         |   |     | 20,000    |   |   |   | 778,894   |                 |   |   | (758,894 | ) |
| Instawares Holding Company, LLC      |   |     | 5,000,000 |   |   |   | 5,000,000 |                 |   |   | - |   |
| StarTech Seed Fund II                |   |     | 14,000    |   |   |   | 622,783   |                 |   |   | (608,783 | ) |
| Total realized loss                  |   |     |      |   |   |   |      |                 |   | $ | (2,647,830 | ) |

|                             |   | Proceeds |       |   | Cost   |   |       | Realized gain (loss) |   |
|----------------------------------|--------|----------|------------|--------|--------|--------|------------|----------------------|--------|
| Alamo Group, Inc.                |   | $        | 33,854,271 |   |   | $      | 183,674    |                 |   | $ | 33,670,597 |   |
| Capitala Finance Corporation     |   |     | 2,019,661  |   |   |   | 1,363,799  |                 |   |   | 655,862 |   |
| 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          |   |     | 13,637,413 |   |   |   | 1,409,051  |                 |   |   | 12,228,362 |   |
| North American Energy Partners   |   |     | 588,577    |   |   |   | 236,986    |                 |   |   | 351,591 |   |
| StarTech Seed Fund II            |   |     | 75,706     |   |   |   | 75,706     |                 |   |   | - |   |
| Tristate Capital Holdings, Inc.  |   |     | 706,928    |   |   |   | 928,486    |                 |   |   | (221,558 | ) |
| Total realized gain              |   |     |       |   |   |   |       |                 |   | $ | 30,679,890 |   |

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|                               |   | Six Months EndedSeptember 30, |      |
|------------------------------------|--------|-------------------------------|-----------|
|                               |   | 2015                          |      |   | 2014 |   |
| Media Recovery, Inc.               |   |                          | 5,100,000 |   |   |   | 2,000,000 |   |
| Deepwater Corrosion Services, Inc. |   |                          | 2,322,000 |   |   |   | 32,000 |   |
| TitanLiner, Inc.                   |   |                          | (119,000  | ) |   |   | 5,636,999 |   |
| Trax Data Refinery, Inc.           |   |                          | (96,000   | ) |   | NA |   |
| Wellogix, Inc.                     |   |                          | (872,000  | ) |   |   | 1,875,000 |   |

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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 |
|----------|--------------|

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

| Exhibit No. |   | Description                                                                                                                                                                                                         |
|-------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 2.1         |   | Distribution Agreement by and between Capital Southwest Corporation and CSW Industrials, Inc. dated as of September 8, 2015 (filed as Exhibit 2.1 to Form 8-K dated September 14, 2015).                            |
| 10.1        |   | Tax Matters Agreement by and between Capital Southwest Corporation and CSW Industrials, Inc. dated as of September 8, 2015 (filed as Exhibit 10.1 to Form 8-K dated September 14, 2015).                            |
| 10.2        |   | Amended and Restated Employee Matters Agreement by and between Capital Southwest Corporation and CSW Industrials, Inc. dated as of September 14, 2015 (filed as Exhibit 10.2 to Form 8-K dated September 14, 2015). |
| 10.3        |   | Form of Amended and Restated Non-Qualified Stock Option Agreement (CSWC Employee Form), filed herewith.                                                                                                             |
| 10.4        |   | Form of Amended and Restated Non-Qualified Stock Option Agreement (CSWI Employee Form), filed herewith.                                                                                                             |
| 10.5        |   | Form of Amended and Restated Incentive Stock Option Agreement (CSWC Employee Form), filed herewith.                                                                                                                 |
| 10.6        |   | Form of Amended and Restated Incentive Stock Option Agreement (CSWI Employee Form), filed herewith.                                                                                                                 |
| 10.7        |   | Form of Amended and Restated Non-Qualified Stock Option Agreement (Executive Compensation Plan – CSWC Employee Form), filed herewith.                                                                         |
| 10.8        |   | Form of Amended and Restated Non-Qualified Stock Option Agreement (Executive Compensation Plan – CSWI Employee Form), filed herewith.                                                                         |
| 10.9        |   | Form of Restricted Stock Agreement (CSWC Employee Form), filed herewith.                                                                                                                                            |
| 10.10       |   | Form of Amended and Restated Restricted Stock Agreement (CSWI Employee Form), filed herewith.                                                                                                                       |
| 10.11       |   | Form of Amended and Restated Restricted Stock Award (Executive Compensation Plan – CSWC Employee Form), filed herewith.                                                                                       |
| 10.12       |   | Form of Amended and Restated Restricted Stock Award (Executive Compensation Plan – CSWI Employee Form), filed herewith.                                                                                       |
| 10.13       |   | Form of Amended and Restated Cash Incentive Award Agreement (Executive Compensation Plan), filed herewith.                                                                                                          |
| 10.14       |   | I-45 SLF LLC Agreement dated September 9, 2015, filed herewith.                                                                                                                                                     |
| 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 |
|------------------|--------|-------------------------------|
|             |   |                          |   |   |
| November 9, 2015 |   | By:                      | /s/ Bowen S. Diehl |   |
| Date             |   |                          | Bowen S. DiehlPresident and Chief Executive Officer |   |
|             |   |                          |   |   |
| November 9, 2015 |   | By:                      | /s/ Michael S. Sarner |   |
| Date             |   |                          | Michael S. SarnerChief Financial Officer |   |

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