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|   | ☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|--------|---------|--------------------------------------------------------------------------------------|

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

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

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

| Securities registered pursuant to Section 12(g) of the Act:      |
|------------------------------------------------------------------|
|                                                             |   |
| Title of Each Class                                              | Name of Each Exchange on Which Registered |
| Common Stock, $0.25 par value per share                          | The Nasdaq Global Select Market |
|                                                             |   |
| Securities registered pursuant to Section 12(g) of the Act: None |

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| PART I     |                                                                                                         | Page   |
|------------|--------------------------------------------------------------------------------------------------------------|--------|
| Item 1.    | Business                                                                                                     | 2      |
| Item 1A.   | Risk Factors                                                                                                 | 22     |
| Item 1B.   | Unresolved Staff Comments                                                                                    | 34     |
| Item 2.    | Properties                                                                                                   | 34     |
| Item 3.    | Legal Proceedings                                                                                            | 34     |
| Item 4.    | Mine Safety Disclosures                                                                                      | 34     |
|       |                                                                                                         |   |
| PART II    |                                                                                                         |   |
| Item 5.    | Market for Registrant's Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities | 35     |
| Item 6.    | Selected Financial Data                                                                                      | 38     |
| Item 7.    | Management's Discussion and Analysis of Financial Condition and Results of Operations                        | 40     |
| Item 7A.   | Quantitative and Qualitative Disclosures About Market Risk                                                   | 49     |
| Item 8.    | Financial Statements and Supplementary Data                                                                  | 50     |
| Item 9.    | Changes in and Disagreements With Accountants on Accounting and Financial Disclosure                         | 98     |
| Item 9A.   | Controls and Procedures                                                                                      | 98     |
| Item 9B.   | Other Information                                                                                            | 98     |
|       |                                                                                                         |   |
| PART III   |                                                                                                         |   |
| Item 10.   | Directors, Executive Officers and Corporate Governance                                                       | 99     |
| Item 11.   | Executive Compensation                                                                                       | 99     |
| Item 12.   | Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters               | 99     |
| Item 13.   | Certain Relationships and Related Transactions, and Director Independence                                    | 100    |
| Item 14.   | Principal Accountant Fees and Services                                                                       | 100    |
|       |                                                                                                         |   |
| PART IV    |                                                                                                         |   |
| Item 15.   | Exhibits and Financial Statement Schedules                                                                   | 101    |
|       |                                                                                                         |   |
| Signatures |                                                                                                         | 102    |

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|  | · | our future operating results; |
|--|--------|-------------------------------|

|  | · | the valuation of our investments in portfolio companies, particularly those having no liquid trading market; |
|--|--------|--------------------------------------------------------------------------------------------------------------|

|  | · | the dependence of our future success on the general economy and its impact on the industries in which we invest; |
|--|--------|------------------------------------------------------------------------------------------------------------------|

|  | · | our transition to a debt focused investment strategy; |
|--|--------|-------------------------------------------------------|

|  | · | our expected financings and investments; |
|--|--------|------------------------------------------|

|  | · | the adequacy of our cash resources and working capital; |
|--|--------|---------------------------------------------------------|

|  | · | the timing of cash flows, if any, from the operations of our portfolio companies; |
|--|--------|-----------------------------------------------------------------------------------|

|  | · | our business prospects and the prospects of our existing and prospective portfolio companies; |
|--|--------|-----------------------------------------------------------------------------------------------|

|  | · | our contractual arrangements and other relationships with third parties; |
|--|--------|--------------------------------------------------------------------------|

|  | · | our ability to recover unrealized losses; |
|--|--------|-------------------------------------------|

|  | · | our regulatory structure and tax treatment; |
|--|--------|---------------------------------------------|

|  | · | our ability to operate as a business development company and a regulated investment company, including the impact of changes in laws or regulations governing our operations or the operations of our portfolio companies; |
|--|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | the financial condition and ability of our existing and prospective portfolio companies to achieve their objectives; |
|--|--------|----------------------------------------------------------------------------------------------------------------------|

|  | · | the return or impact of current and future investments; |
|--|--------|---------------------------------------------------------|

|  | · | the impact of a protracted decline in the liquidity of credit markets on our business; |
|--|--------|----------------------------------------------------------------------------------------|

|  | · | the impact of fluctuations in interest rates on our business; |
|--|--------|---------------------------------------------------------------|

|  | · | market conditions and our ability to access additional capital; and |
|--|--------|---------------------------------------------------------------------|

|  | · | the timing, form and amount of any dividend distributions; |
|--|--------|------------------------------------------------------------|

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| Item 1. | Business |
|---------|----------|

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|  | · | Leveraging the Experience of Our Management Team.  Our senior management team has extensive experience advising, investing in and lending to middle market companies across changing market cycles. The members of our management team have diverse investment backgrounds, with prior experience at investment banks, commercial banks, and business development companies in the capacity of senior officers. We believe this diverse experience provides us with an in-depth understanding of the strategic, financial and operational challenges and opportunities of the middle market companies in which we invest. We believe this understanding allows us to select and structure better investments and to efficiently monitor and provide managerial assistance to our portfolio companies. |
|--|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | Applying Rigorous Underwriting Policies and Active Portfolio Management.  Our senior management team has implemented rigorous underwriting policies that are followed in each transaction. These policies include a thorough analysis of each potential portfolio company’s competitive position, financial performance, management team operating discipline, growth potential and industry attractiveness, which we believe allows us to better assess the company’s prospects. After investing in a company, we monitor the investment closely, typically receiving monthly, quarterly and annual financial statements. As a team, we analyze and discuss in detail the company’s financial performance and industry trends monthly. We believe that our initial and ongoing portfolio review process allows us to monitor effectively the performance and prospects of our portfolio companies. |
|--|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | Invest Across Multiple Companies, Industries, Regions and End Markets.  We seek to maintain a portfolio of investments that is appropriately diverse among various companies, industries, geographic regions and end markets. This portfolio balance is intended to mitigate the potential effects of negative economic events for particular companies, regions, industries and end markets. However, we may from time to time hold securities of a single portfolio company that comprise more than 5% of our total assets and/or more than 10% of the outstanding voting securities of the portfolio company. For that reason, we are classified as a non-diversified management investment company under the 1940 Act. |
|--|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | Utilizing Long-Standing Relationships to Source Deals.  Our senior management team and investment professionals maintain extensive relationships with entrepreneurs, financial sponsors, attorneys, accountants, investment bankers, commercial bankers and other non-bank providers of capital who refer prospective portfolio companies to us. These relationships historically have generated significant investment opportunities. We believe that our network of relationships will continue to produce attractive investment opportunities. |
|--|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | Focusing on Underserved Markets.  The middle market has traditionally been underserved. We believe that operating margin and growth pressures, as well as regulatory concerns, have caused many financial institutions to de-emphasize services to middle market companies in favor of larger corporate clients and more liquid capital market transactions. We also invest in securities that would be rated below investment grade if they were rated. We believe these dynamics have resulted in the financing market for middle market companies being underserved, providing us with greater investment opportunities. |
|--|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|  | · | Focus on Established Companies.  We generally invest in companies with established market positions, experienced management teams and recurring cash flow streams. We believe that those companies generally possess better risk adjusted return profiles than earlier stage companies that are building their management teams and establishing their revenue base. We also believe that established companies in our target size range generally provide opportunities for capital appreciation. |
|--|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | Providing Customized Financing Solutions.  We offer a variety of financing structures and have the flexibility to structure our investments to meet the needs of our portfolio companies. Often we invest in senior and subordinated debt securities, coupled with equity interests. We believe our ability to customize financing structures makes us an attractive partner to middle market companies. |
|--|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | Companies with Positive and Sustainable Cash Flow: We generally seek to invest in established companies with sound historical financial performance. |
|--|--------|------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | Excellent Management: Management teams with a proven record of achievement, exceptional ability, unyielding determination and unquestionable integrity.  We believe management teams with these attributes are more likely to manage the companies in a manner that protects and enhances value. |
|--|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | Industry: We primarily focus on companies having competitive advantages in their respective markets and/or operating in industries with barriers to entry, which may help protect their market position. |
|--|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | Strong Private Equity Sponsors: We focus on developing relationships with leading private equity firms in order to partner with these firms and provide them capital to support the acquisition and growth of their portfolio companies. |
|--|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | Appropriate Risk-Adjusted Returns:  We focus on and price opportunities to generate returns that are attractive on a risk-adjusted basis, taking into consideration factors, in addition to the ones depicted above, including credit structure, leverage levels and the general volatility of cash flows. |
|--|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | Location: We primarily focus on companies located in the United States. Each new investment is evaluated for its appropriateness within our existing portfolio. Acquisition candidates for our existing portfolio companies may be located worldwide. |
|--|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|  | · | Deal Generation/Origination:  Deal generation and origination is maximized through long-standing and extensive relationships with private equity firms, leveraged loan syndication desks, brokers, commercial and investment bankers, entrepreneurs, service providers such as lawyers and accountants, and current and former portfolio companies and investors. |
|--|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | Screening:  Once it is determined that a potential investment has met our investment criteria, we will screen the investment by performing preliminary due diligence, which could include discussions with the private equity firm, management team, loan syndication desk, etc.  Upon successful screening of the proposed investment, the investment team makes a recommendation to move forward and prepares an initial screening memo for the CSWC investment committee.  We then issue either a non-binding term sheet (in the case of a directly originated transaction), or submit an order to the loan syndication desk (in the case of a large-market syndicated loan transaction). |
|--|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | Term Sheet:  In a directly originated transaction, the non-binding term sheet will typically include the key economic terms of our investment proposal, along with exclusivity, confidentiality, and expense reimbursement provisions, among other terms relevant to the particular investment. Upon acceptance of the term sheet, we will begin our formal due diligence process. In a syndicated loan transaction, rather than a formal term sheet, we will submit an order for an allocation to the syndicated loan desk. |
|--|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | Due Diligence:  Due diligence is performed under the direction of our senior investment professionals, involving the entire investment team as well as certain external resources, who together perform due diligence to understand the relationships among the prospective portfolio company’s business plan, operations, financial performance, and legal risks.  On our directly originated transactions, our due diligence will often include (1) conducting site visits with management and key personnel; (2) performing a detailed review of historical and projected financial statements, often with a third-party accounting firm, to evaluate the target company’s normalized cash flow; (3) interviewing key customers and suppliers; (4) evaluating company management, including a formal background check; (5) reviewing material contracts; (6) conducting an industry, market and strategy analysis; and (7) obtaining a review by legal, environmental or other consultants.  In instances where a financial sponsor is investing in the equity in a transaction, we will leverage work done by the financial sponsor for purposes of our due diligence.  In syndicated loan transactions, our due diligence may exclude direct customer and supplier interviews, and be limited to review of reports from the financial sponsor or syndication agent for industry and market analysis, and legal and environmental diligence. |
|--|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | Document and Close:  Upon completion of a satisfactory due diligence review, our investment team presents its written findings to the investment committee.  For transactions that are either over a certain hold size, or outside our general investment policy, the investment team will present the transaction to our Board of Directors for approval.  Upon approval for the investment, we re-confirm our regulatory company compliance, process and finalize all required legal documents and fund the investment. |
|--|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | Post-Investment:  We continuously monitor the status and progress of our portfolio companies, as well as our investment thesis developed at the time of investment.   We offer managerial assistance to our portfolio companies and provide them access to our investment experience, direct industry expertise and contacts.  The same investment team leader that was involved in the investment process will continue to be involved in the portfolio company post-investment.  This approach provides continuity of knowledge and allows the investment team to maintain a strong business relationship with the financial sponsor and key management of our portfolio companies.  As part of the monitoring process, members of our investment team will analyze monthly, quarterly and annual financial statements against previous periods, review financial projections, meet with the financial sponsor and management (when necessary), attend board meetings (where appropriate) and review all compliance certificates and covenants. |
|--|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|  | · | Investment Rating 1 represents the least amount of risk in our portfolio. The investment is performing above underwriting expectations and the trends and risk factors are favorable. |
|--|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | Investment Rating 2 indicates the investment is performing as expected at the time of underwriting and the risk factors are neutral to favorable. |
|--|--------|---------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | Investment Rating 3 involves an investment performing below underwriting expectations and indicates that the investment requires closer monitoring.  The portfolio company or investment may be out of compliance with financial covenants and interest payments may be impaired, however principal payments are generally not past due. |
|--|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | Investment Rating 4 indicates that the investment is performing materially below underwriting expectations and the risk of the investment has increased substantially.  Interest and principal payments on our investment are likely to be impaired. |
|--|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|  | · | We report our investments at market value or fair value with changes in value reported through our consolidated statements of operations. |
|--|--------|-------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | We intend to distribute substantially all of our income to our shareholders. We generally will be required to pay income taxes only on the portion of our taxable income we do not distribute to shareholders (actually or constructively). |
|--|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|  | · | Our ability to use leverage as a means of financing our portfolio of investments is limited. |
|--|--------|----------------------------------------------------------------------------------------------|

|  | · | We are required to comply with the provisions of the 1940 Act applicable to business development companies. |
|--|--------|-------------------------------------------------------------------------------------------------------------|

|  | · | Generally, to be eligible to elect BDC status, a company must primarily engage in the business of furnishing capital and making significant managerial assistance available to companies that do not have ready access to conventional financial channels.  Companies that satisfy certain additional criteria are defined as "eligible portfolio companies."  In general, in order to qualify as a BDC, a company must: (1) be a domestic company; (2) have registered a class of its securities pursuant to Section 12 of the Exchange Act; (3) operate for the purpose of investing in the securities of certain types of eligible portfolio companies, including early stage or emerging companies and businesses suffering or just recovering from financial distress (see following paragraph); (4) make available significant managerial assistance to such portfolio companies; and (5) file a proper notice of election with the SEC. |
|--|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|  | · | An eligible portfolio company generally is a domestic company that is not an investment company or is excluded from investment company status pursuant to exclusions for certain types of financial companies (such as brokerage firms, banks, insurance companies and investment banking firms) and that: (1) does not have a class of securities listed on a national securities exchange; (2) has a class of equity securities listed on a national securities exchange with a market capitalization of less than $250 million; or (3) is controlled by the BDC itself or together with others and has a representative on the board of directors of the company controlled by the BDC.  The 1940 Act presumes that a person has “control” of a portfolio company if that person owns at least 25% of its outstanding voting securities. |
|--|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | As a BDC, we are required to provide and maintain a bond issued by a reputable fidelity insurance company.  Furthermore, as a BDC, we are prohibited from protecting any director or officer against any liability to us or our shareholders arising from willful malfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of that person’s office. |
|--|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | We are required to adopt and implement written policies and procedures reasonably designed to prevent violation of the federal securities laws, review these policies and procedures annually for their adequacy and the effectiveness of their implementation and designate a chief compliance officer to be responsible for administering these policies and procedures. |
|--|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|  | · | Meet the Annual Distribution Requirement; |
|--|--------|-------------------------------------------|

|  | · | Qualify to be treated as a BDC or be registered as a management investment company under the 1940 Act at all times during each taxable year; |
|--|--------|----------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | Derive in each taxable year at least 90% of our gross income from dividends, interest, payments with respect to certain securities loans, gains from the sale or other disposition of stock or other securities or foreign currencies or other income derived with respect to our business of investing in such stock, securities or currencies and net income derived from an interest in a “qualified publicly traded partnership” (as defined in the Code), or the 90% Income Test; and |
|--|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | Diversify our holdings so that at the end of each quarter of the taxable year: |
|--|--------|--------------------------------------------------------------------------------|

|  | o | at least 50% of the value of our assets consists of cash, cash equivalents, U.S. Government securities, securities of other RICs, and other securities if such other securities of any one issuer do not represent more than 5% of the value of our assets or more than 10% of the outstanding voting securities of the issuer (which for these purposes includes the equity securities of a “qualified publicly traded partnership”); and |
|--|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | o | no more than 25% of the value of our assets is invested in the securities, other than U.S. Government securities or securities of other RICs, (1) of one issuer (2) of two or more issuers that are controlled, as determined under applicable tax rules, by us and that are engaged in the same or similar or related trades or businesses or (3) of one or more “qualified publicly traded partnerships,” or the Diversification Tests. |
|--|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|  | · | A citizen or individual resident of the United States; |
|--|--------|--------------------------------------------------------|

|  | · | A corporation, or other entity treated as a corporation for U.S. federal income tax purposes, created or organized in or under the laws of the United States or any state thereof of the District of Columbia; |
|--|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | An estate, the income of which is subject to U.S. federal income taxation regardless of its source; or |
|--|--------|--------------------------------------------------------------------------------------------------------|

|  | · | A trust if (1) a U.S. court is able to exercise primary supervision over the administration of the trust and one of more U.S. persons have the authority to control all substantial decisions of the trust or (2) it has a valid election in place to be treated as a U.S. person. |
|--|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|  | · | Pursuant to Rule 13a-14 of the Exchange Act, our Chief Executive Officer and Chief Financial Officer are required to certify the accuracy of the financial statements contained in our periodic reports; |
|--|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | Pursuant to Item 307 of Regulation S-K, our periodic reports are required to disclose our conclusions about the effectiveness of our disclosure controls and procedures; |
|--|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | Pursuant to Rule 13a-15 of the Exchange Act, our management is required to prepare a report on its assessment of our internal control over financial reporting, and we engage an independent registered public accounting firm to separately audit our internal control over financial reporting; and |
|--|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | Pursuant to Item 308 of Regulation S-K and Rule 13a-15 of the Exchange Act, our periodic reports must disclose whether there were significant changes in our internal control over financial reporting or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. |
|--|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

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|  | · | The annual distribution requirement for a RIC will be satisfied if we distribute to our shareholders on an annual basis at least 90% of our net ordinary income and realized short-term capital gains in excess of realized net long-term capital losses.  Depending on the level of taxable income earned in a tax year, we may choose to carry forward taxable income in excess of current year distributions into the next year and pay a 4.0% excise tax on such income. Any such carryover taxable income must be distributed through a dividend declared prior to filing the final tax return related to the year that generated such taxable income. |
|--|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | The source of income requirement will be satisfied if we obtain at least 90% of our gross income for each taxable year from dividends, interest, payments with respect to certain securities loans, gains from the sale or other disposition of stock or other securities or foreign currencies or other income derived with respect to our business of investing in such stock, securities or currencies and net income derived from an interest in a “qualified publicly traded partnership” (as defined in the Code), or the 90% Income Test. |
|--|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | The asset diversification requirement will be satisfied if we meet certain asset diversification requirements at the end of each quarter of our taxable year.  To satisfy this requirement, at least 50% of the value of our assets must consist of cash, cash equivalents, U.S Government securities, securities of other RICs, and other securities if such other securities of any one issuer do not represent more than 5% of the value of our assets or more than 10% of the outstanding voting securities of the issuer (which for these purposes includes the equity securities of a “qualified publicly traded partnership”).  In addition, no more than 25% of the value of our assets can be invested in the securities, other than U.S Government securities or securities of other RICs, (1) of one issuer (2) of two or more issuers that are controlled, as determined under applicable tax rules, by us and that are engaged in the same or similar or related trades or businesses or (3) of one or more “qualified publicly traded partnerships,” or the Diversification Tests. |
|--|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|  | · | Sudden electrical or telecommunications outages; |
|--|--------|--------------------------------------------------|

|  | · | Natural disasters such as earthquakes, tornadoes and hurricanes; |
|--|--------|------------------------------------------------------------------|

|  | · | Disease pandemics; |
|--|--------|--------------------|

|  | · | Events arising from local or larger scale political or social matters, including terrorist acts; and |
|--|--------|------------------------------------------------------------------------------------------------------|

|  | · | Cyber attacks. |
|--|--------|----------------|

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|  | · | Portfolio companies are more likely to depend on the management talents and efforts of a small group of key employees.  Therefore, the death, disability, resignation, termination, or significant under-performance of one or more of these persons could have a material adverse impact on our portfolio company and, in turn, on us. |
|--|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | Portfolio companies may have unpredictable operating results, could become parties to litigation, may be engaged in rapidly changing businesses with products subject to a substantial risk of obsolescence and may require substantial additional capital to support their operations, finance expansion or maintain their competitive position. |
|--|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|  | · | Most of our acquisition targets are private companies. Private companies may not have readily publicly available information about their businesses, operations and financial condition. Consequently, we rely on the ability of our management team and investment professionals to obtain adequate information to evaluate the potential returns from making acquisitions for both CSWC and our existing portfolio companies.  If we are unable to uncover all material information about these acquisition targets, we may not make a fully informed investment decision and may lose all or part of our investment. |
|--|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | Portfolio companies may have shorter operating histories, narrower product lines, smaller market shares and/or more significant customer concentration than larger businesses, which tend to render them more vulnerable to competitors’ actions and market conditions, as well as general economic downturns. |
|--|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | Portfolio companies may have limited financial resources and may be unable to meet their obligations under their debt instruments that we hold, which may be accompanied by a deterioration in the value of any collateral and a reduction in the likelihood of us realizing any guarantees from subsidiaries or affiliates of our portfolio companies that we may have obtained in connection with our investment, as well as a corresponding decrease in the value of the equity components of our investments. |
|--|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|  | · | Market conditions; |
|--|--------|--------------------|

|  | · | Our investment results; |
|--|--------|-------------------------|

|  | · | Trading volume of our stock; |
|--|--------|------------------------------|

|  | · | Our investment results; |
|--|--------|-------------------------|

|  | · | Departure of our key personnel; |
|--|--------|---------------------------------|

|  | · | Changes in regulatory policies, accounting pronouncements or tax guidelines, particularly with respect to RICs, BDCs or SBICs; and |
|--|--------|------------------------------------------------------------------------------------------------------------------------------------|

|  | · | Other influences and events over which we have no control and that may not be directly related to us. |
|--|--------|-------------------------------------------------------------------------------------------------------|

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| Item 1B. | Unresolved Staff Comments |
|----------|---------------------------|

| Item 2. | Properties |
|---------|------------|

| Item 3. | Legal Proceedings |
|---------|-------------------|

| Item 4. | Mine Safety Disclosures |
|---------|-------------------------|

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| Item 5. | Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities |
|---------|--------------------------------------------------------------------------------------------------------------------|

| Quarter Ended                                                              |   | High   |   |   | Low    |   |
|----------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| March 31, 2016           |   | $      | 15.25  |   |   | $      | 13.19 |   |
| December 31, 2015                                                          |   |   | 17.45  |   |   |   | 13.43 |   |
| September 30, 2015                                                         |   |   | 50.49  |   |   |   | 42.76 |   |
| June 30, 2015            |   |   | 51.95  |   |   |   | 46.26 |   |
|                                                                       |   |   |   |   |   |   |   |   |
| March 31, 2015           |   | $      | 50.44  |   |   | $      | 37.79 |   |
| December 31, 2014                                                          |   |   | 41.12  |   |   |   | 33.91 |   |
| September 30, 2014                                                         |   |   | 41.87  |   |   |   | 34.35 |   |
| June 30, 2014            |   |   | 36.57  |   |   |   | 32.01 |   |

| Payment Date                                                               |   | Cash Dividend |   |
|----------------------------------------------------------------------------|--------|---------------|--------|
| May 31, 2011             |   | $             | 0.10   |   |
| November 30, 2011                                                          |   |          | 0.10   |   |
| May 31, 2012             |   |          | 0.10   |   |
| June 8, 2012             |   |          | 4.40   |   |
| November 30, 2012                                                          |   |          | 0.10   |   |
| March 28, 2013           |   |          | 0.69   |   |
| May 31, 2013             |   |          | 0.10   |   |
| November 29, 2013                                                          |   |          | 0.10   |   |
| May 30, 2014             |   |          | 0.10   |   |
| November 28, 2014                                                          |   |          | 0.10   |   |
| June 10, 2015            |   |          | 0.10   |   |
| April 1, 2016            |   |          | 0.04   |   |
| July 1, 2016             |   |          | 0.06   |   |

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| Plan Category                                              |   | Number of securities to be issued upon exercise of outstanding options, warrants and rights |    |   | Weighted average exercise price of outstanding options, warrants and rights |   |   | Number of securities remaining available for future issuance underequity compensation plans (excluding securities reflected in column (a)) |   |
|------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------|---------|--------|-----------------------------------------------------------------------------|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                       |   | (a)                                                                                         |    |   | (b)                                                                         |   |   | (c)                                                                                                                                        |   |
| Equity compensation plans approved by security holders     |   |                                                                                        | 362,513 |   |                                                                        | $      | 11.21  |                                                                                                                                       |   |   | 348,540 |   |
| Equity compensation plans not approved by security holders |   |                                                                                        | -       |   |                                                                        |   | -      |                                                                                                                                       |   |   | - |   |
| Total                                                      |   |                                                                                        | 362,513 |   |                                                                        | $      | 11.21  |                                                                                                                                       |   |   | 348,540 |   |

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| Item 6. | Selected Financial Data |
|---------|-------------------------|

|                                                                     |   | Year Ended March 31, |         |
|--------------------------------------------------------------------------|--------|----------------------|--------------|
|                                                                     |   | 2016                 |         |   | 2015 |   |   | 2014 |   |   | 2013 |   |   | 2012 |   |
| Income statement data:                                                   |   |                 |         |   |   |   |   |   |   |   |   |   |   |   |   |
| Investment income:                                                       |   |                 |         |   |   |   |   |   |   |   |   |   |   |   |   |
| Total interest, fee and dividend income                                  |   | $                    | 8,689        |   |   | $ | 9,791 |   |   | $ | 12,475 |   |   | $ | 10,691 |   |   | $ | 9,212 |   |
| Interest income from cash and cash equivalents                           |   |                 | 386          |   |   |   | 122 |   |   |   | 67 |   |   |   | 71 |   |   |   | 52 |   |
| Other income           |   |                 | 85           |   |   |   | 35 |   |   |   | 65 |   |   |   | 73 |   |   |   | 70 |   |
| Total investment income                                                  |   |                 | 9,160        |   |   |   | 9,948 |   |   |   | 12,607 |   |   |   | 10,835 |   |   |   | 9,334 |   |
| Operating expenses:                                                      |   |                 |         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Compensation-related expenses                                            |   |                 | 9,515        |   |   |   | 6,440 |   |   |   | 5,489 |   |   |   | 5,628 |   |   |   | 4,703 |   |
| General, administrative and other                                        |   |                 | 11,610       |   |   |   | 5,683 |   |   |   | 2,963 |   |   |   | 2,710 |   |   |   | 1,969 |   |
| Total operating expenses                                                 |   |                 | 21,125       |   |   |   | 12,123 |   |   |   | 8,452 |   |   |   | 8,338 |   |   |   | 6,672 |   |
| (Loss) income before income taxes                                        |   |                 | (11,965      | ) |   |   | (2,175 | ) |   |   | 4,155 |   |   |   | 2,497 |   |   |   | 2,662 |   |
| Income tax (benefit) expense                                             |   |                 | (1,278       | ) |   |   | 270 |   |   |   | (739 | ) |   |   | 590 |   |   |   | 118 |   |
| Net investment (loss) income                                             |   |                 | (10,687      | ) |   |   | (2,445 | ) |   |   | 4,894 |   |   |   | 1,907 |   |   |   | 2,544 |   |
| Net realized gains (losses):                                             |   |                 |         |   |   |   |  |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-control/Non-affiliate investments                                    |   |                 | (9,575       | ) |   |   | 8,226  |   |   |   | 14,048 |   |   |   | 2,660 |   |   |   | 22,806 |   |
| Affiliate investments                                                    |   |                 | (1,458       | ) |   |   | 157,213 |   |   |   | - |   |   |   | 66,037 |   |   |   | (45 | ) |
| Control investments                                                      |   |                 | 231          |   |   |   | (1,175 | ) |   |   | - |   |   |   | 20,861 |   |   |   | (10,934 | ) |
| Net realized (losses) gains on investments                               |   |                 | (10,802      | ) |   |   | 164,264 |   |   |   | 14,084 |   |   |   | 89,558 |   |   |   | 11,827 |   |
| Net unrealized appreciation (depreciation) on investments                |   |                 | 16,089       |   |   |   | (108,377 | ) |   |   | 93,032 |   |   |   | 16,367 |   |   |   | 78,635 |   |
| Net realized and unrealized gains (losses) on investments                |   |                 | 5,287        |   |   |   | 55,887 |   |   |   | 107,116 |   |   |   | 105,925 |   |   |   | 90,462 |   |
| Net (decrease) increase in net assets resulting from operations          |   | $                    | (5,400       | ) |   | $ | 53,442 |   |   | $ | 112,010 |   |   | $ | 107,832 |   |   | $ | 93,006 |   |
| Net investment (loss) income per share - basic and diluted          |   | $                    | (0.68        | ) |   | $ | (0.16 | ) |   | $ | 0.32 |   |   | $ | 0.13 |   |   | $ | 0.17 |   |
| Net earnings per share                                                   |   | $                    | (0.35        | ) |   | $ | 3.44 |   |   | $ | 7.32 |   |   | $ | 7.09 |   |   | $ | 6.18 |   |
| Net asset value per common share                                         |   | $                    | 17.34        |   |   | $ | 49.30 |   |   | $ | 49.98 |   |   | $ | 43.30 |   |   | $ | 41.86 |   |
| Total dividends/distributions declared per common share                  |   | $                    | 0.14         |   |   | $ | 0.20 |   |   | $ | 0.20 |   |   | $ | 5.29 |   |   | $ | 0.20 |   |
| Weighted average number of shares outstanding - basic                    |   |                 |  15,636 |   |   |   | 15,492 |   |   |   | 15,278 |   |   |   | 15,177 |   |   |   | 15,016 |   |
| Weighted average number of shares outstanding - diluted                  |   |                 | 15,724       |   |   |   | 15,531 |   |   |   | 15,298 |   |   |   | 15,207 |   |   |   | 15,038 |   |

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|                                                                     |   | Year Ended March 31, |    |
|--------------------------------------------------------------------------|--------|----------------------|---------|
|                                                                     |   |                 | 2016    |   |   |   | 2015 |   |   |   | 2014 |   |   |   | 2013 |   |   |   | 2012 |   |
| Balance sheet data:                                                      |   |                 |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Assets:                                                                  |   |                 |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Investments at fair value                                                |   | $                    | 178,436 |   |   | $ | 535,536 |   |   | $ | 677,920 |   |   | $ | 574,187 |   |   | $ | 558,546 |   |
| Cash and cash equivalents                                                |   |                 | 95,969  |   |   |   | 225,797 |   |   |   | 88,163 |   |   |   | 81,767 |   |   |   | 64,895 |   |
| Interest, escrow and other receivables                                   |   |                 | 6,405   |   |   |   | 4,418 |   |   |   | 1,371 |   |   |   | 2,756 |   |   |   | 1,961 |   |
| Net pension assets                                                       |   |                 | -       |   |   |   | 10,294 |   |   |   | 10,962 |   |   |   | 8,762 |   |   |   | 7,349 |   |
| Deferred tax asset                                                       |   |                 | 2,342   |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Other assets           |   |                 | 1,341   |   |   |   | 827 |   |   |   | 278 |   |   |   | 200 |   |   |   | 238 |   |
| Total assets           |   | $                    | 284,493 |   |   | $ | 776,872 |   |   | $ | 778,694 |   |   | $ | 667,672 |   |   | $ | 632,989 |   |
| Liabilities:                                                             |   |                 |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Accounts payable and other liabilities                                   |   | $                    | 9,653   |   |   | $ | 4,923 |   |   | $ | 3,263 |   |   | $ | 3,102 |   |   | $ | 688 |   |
| Accrued restoration plan liability                                       |   |                 | 2,205   |   |   |   | 3,119 |   |   |   | 3,103 |   |   |   | 2,650 |   |   |   | 1,568 |   |
| Deferred income taxes                                                    |   |                 | -       |   |   |   | 1,412 |   |   |   | 1,940 |   |   |   | 2,143 |   |   |   | 2,027 |   |
| Total liabilities                                                        |   |                 | 11,858  |   |   |   | 9,454 |   |   |   | 8,306 |   |   |   | 7,895 |   |   |   | 4,283 |   |
| Net assets             |   |                 | 272,635 |   |   |   | 767,418 |   |   |   | 770,388 |   |   |   | 659,777 |   |   |   | 628,706 |   |
| Total liabilities and net assets                                         |   | $                    | 284,493 |   |   | $ | 776,872 |   |   | $ | 778,694 |   |   | $ | 667,672 |   |   | $ | 632,989 |   |
| Other data:                                                              |   |                 |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Number of portfolio companies                                            |   |                 | 23      |   |   |   | 22 |   |   |   | 27 |   |   |   | 28 |   |   |   | 30 |   |
| Expense ratios (as percentage of average net assets):                    |   |                 |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total expenses                                                           |   |                 | 4.48    | % |   |   | 1.59 | % |   |   | 1.18 | % |   |   | 1.36 | % |   |   | 1.07 | % |

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| Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
|---------|---------------------------------------------------------------------------------------------|

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|                                           |   | Cost                  |   |   | Percentage of Total Portfolio |   |   | Fair Value |   |   | Percentage of Total Portfolio |   |
|------------------------------------------------|--------|-----------------------|--------|--------|-------------------------------|--------|--------|------------|--------|--------|-------------------------------|--------|
|                                           |   | (dollars in millions) |   |
| March 31, 2016:                                |   |                  |   |   |                          |   |   |       |   |   |                          |   |
| 1st lien notes                                 |   | $                     | 39.3   |   |                          |   | 26.2   | %          |   | $      | 39.5                          |   |   |   | 22.1 | % |
| 2nd lien notes                                 |   |                  | 39.0   |   |                          |   | 26.0   |       |   |   | 38.2                          |   |   |   | 21.4 |   |
| Subordinated debt                              |   |                  | 15.1   |   |                          |   | 10.1   |       |   |   | 15.1                          |   |   |   | 8.5 |   |
| Preferred equity, common equity & warrants |   |                  | 19.9   |   |                          |   | 13.2   |       |   |   | 49.3                          |   |   |   | 27.6 |   |
| I-45 SLF, LLC                                  |   |                  | 36.8   |   |                          |   | 24.5   |       |   |   | 36.3                          |   |   |   | 20.4 |   |
|                                           |   | $                     | 150.1  |   |                          |   | 100.0  | %          |   | $      | 178.4                         |   |   |   | 100.0 | % |
|                                                |   |                  |   |   |                          |   |   |       |   |   |                          |   |   |   |   |   |
| March 31, 2015:                                |   |                  |   |   |                          |   |   |       |   |   |                          |   |   |   |   |   |
| 2nd lien notes                                 |   | $                     | 6.9    |   |                          |   | 10.6   | %          |   | $      | 6.9                           |   |   |   | 1.3 | % |
| Subordinated debt                              |   |                  | 4.1    |   |                          |   | 6.3    |       |   |   | 2.9                           |   |   |   | 0.5 |   |
| Preferred & common equity                  |   |                  | 44.4   |   |                          |   | 68.4   |       |   |   | 517.3                         |   |   |   | 96.6 |   |
| Partnership interest                           |   |                  | 9.5    |   |                          |   | 14.7   |       |   |   | 8.4                           |   |   |   | 1.6 |   |
|                                           |   | $                     | 64.9   |   |                          |   | 100.0  | %          |   | $      | 535.5                         |   |   |   | 100.0 | % |

|  | · | Investment Rating 1 represents the least amount of risk in our portfolio. The investment is performing above underwriting expectations and the trends and risk factors are favorable. |
|--|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | Investment Rating 2 indicates the investment is performing as expected at the time of underwriting and the risk factors are neutral to favorable. |
|--|--------|---------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | Investment Rating 3 involves an investment performing below underwriting expectations and indicates that the investment requires closer monitoring.  The portfolio company or investment may be out of compliance with financial covenants and interest payments may be impaired, however principal payments are generally not past due. |
|--|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|  | · | Investment Rating 4 indicates that the investment is performing materially below underwriting expectations and the risk of the investment has increased substantially.  Interest and principal payments on our investment are likely to be impaired. |
|--|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|              |   | As of March 31, 2016                     |   |
|-------------------|--------|------------------------------------------|--------|
| Investment Rating |   | Debt Investments at Fair Value |   |   | Percentage of Total Portfolio |   |
|                   |   | (dollars in thousands)                   |   |
| 1                 |   | $                                        | 4,626  |   |   |   | 2.6 | % |
| 2                 |   |                                     | 88,205 |   |   |   | 49.4 |   |
| 3                 |   |                                     | -      |   |   |   | - |   |
| 4                 |   |                                     | -      |   |   |   | - |   |
| Total             |   | $                                        | 92,831 |   |   |   | 52.0 | % |

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| March 31, 2016                                                      |   | 1st Lien Notes |   |   | 2nd Lien Notes |   |   | Subordinated Debt |   |   | Preferred equity, common equity & warrants |   |   | I-45 SLF, LLC |     |   | Partnership Interest |   |   | Total  |   |
|---------------------------------------------------------------------|--------|----------------|--------|--------|----------------|--------|--------|-------------------|--------|--------|-----------------------------------------------------|--------|--------|---------------|----------|--------|----------------------|--------|--------|--------|--------|
| Fair value, beginning of period                                     |   | $              | -      |   |           | $      | 6,895  |              |   | $      | 2,906                                               |   |   | $             | 517,306  |   |                 | $      | -      |   |   | $ | 8,429 |   |   | $ | 535,536 |   |
| New investments                                                     |   |           | 39,795 |   |           |   | 32,025 |              |   |   | 12,348                                              |   |   |          | 2,046    |   |                 |   | 36,800 |   |   |   | - |   |   |   | 123,014 |   |
| Proceeds from sales of investments                                  |   |           | (12    | )      |           |   | (5     | )                 |   |   | (150                                                | )      |   |          | (14,267  | )      |                 |   | -      |   |   |   | (5,221 | ) |   |   | (19,655 | ) |
| Cost of investments spun off                                        |   |           | -      |   |           |   | -      |              |   |   | -                                                   |   |   |          | (6,981   | )      |                 |   | -      |   |   |   | - |   |   |   | (6,981 | ) |
| Principal repayments received                                       |   |           | (523   | )      |           |   | -      |              |   |   | -                                                   |   |   |          | -        |   |                 |   | -      |   |   |   | - |   |   |   | (523 | ) |
| Accretion of loan discounts                                         |   |           | 20     |   |           |   | 57     |              |   |   | 19                                                  |   |   |          | -        |   |                 |   | -      |   |   |   | - |   |   |   | 96 |   |
| Realized gain (loss)                                                |   |           | 12     |   |           |   | 5      |              |   |   | (1,187                                              | )      |   |          | (5,312   | )      |                 |   | -      |   |   |   | (4,320 | ) |   |   | (10,802 | ) |
| Unrealized gain (loss)                                              |   |           | 199    |   |           |   | (750   | )                 |   |   | 1,178                                               |   |   |          | 14,813   |   |                 |   | (463   | )      |   |   | 1,112 |   |   |   | 16,089 |   |
| Decrease in unrealized appreciation related to spin-off investments |   |           | -      |   |           |   | -      |              |   |   | -                                                   |   |   |          | (458,338 | )      |                 |   | -      |   |   |   | - |   |   |   | (458,338 | ) |
| Fair value, end of period                                           |   | $              | 39,491 |   |           | $      | 38,227 |              |   | $      | 15,114                                              |   |   | $             | 49,267   |   |                 | $      | 36,337 |   |   | $ | - |   |   | $ | 178,436 |   |
| Weighted average yield on debt investments at end of period         |   |           |   |   |           |   |   |              |   |   |                                                |   |   |          |     |   |                 |   |   |   |   |   |   |   |   |   | 10.67 | % |
| Weighted average yield on total investments at end of period        |   |           |   |   |           |   |   |              |   |   |                                                |   |   |          |     |   |                 |   |   |   |   |   |   |   |   |   | 9.46 | % |

| March 31, 2015                                               |   | 1st Lien Notes |   |   | 2nd Lien Notes |   |   | Subordinated Debt |   |   | Preferred & Common Equity |   |   | I-45 SLF, LLC |     |   | Partnership Interest |   |   | Total  |   |
|--------------------------------------------------------------|--------|----------------|--------|--------|----------------|--------|--------|-------------------|--------|--------|-------------------------------|--------|--------|---------------|----------|--------|----------------------|--------|--------|--------|--------|
| Fair value, beginning of period                              |   | $              | -      |   |           | $      | -      |              |   | $      | 2,707                         |   |   | $             | 665,708  |   |                 | $      | -      |   |   | $ | 9,505 |   |   | $ | 677,920 |   |
| New investments                                              |   |           | -      |   |           |   | 6,895  |              |   |   | 225                           |   |   |          | 1        |   |                 |   | -      |   |   |   | 300 |   |   |   | 7,421 |   |
| Proceeds from sales of investments                           |   |           | -      |   |           |   | -      |              |   |   | -                             |   |   |          | (204,680 | )      |                 |   | -      |   |   |   | (1,012 | ) |   |   | (205,692 | ) |
| Accretion of loan discounts                                  |   |           | -      |   |           |   | -      |              |   |   | -                             |   |   |          | -        |   |                 |   | -      |   |   |   | - |   |   |   | - |   |
| Realized gain (loss)                                         |   |           | -      |   |           |   | -      |              |   |   | (7,397                        | )      |   |          | 173,058  |   |                 |   | -      |   |   |   | (1,397 | ) |   |   | 164,264 |   |
| Unrealized gain (loss)                                       |   |           | -      |   |           |   | -      |              |   |   | 7,371                         |   |   |          | (116,781 | )      |                 |   | -      |   |   |   | 1,033 |   |   |   | (108,377 | ) |
| Fair value, end of period                                    |   | $              | -      |   |           | $      | 6,895  |              |   | $      | 2,906                         |   |   | $             | 517,306  |   |                 | $      | -      |   |   | $ | 8,429 |   |   | $ | 535,536 |   |
| Weighted average yield on debt investments at end of period  |   |           |   |   |           |   |   |              |   |   |                          |   |   |          |     |   |                 |   |   |   |   |   |   |   |   |   | 3.14 | % |
| Weighted average yield on total investments at end of period |   |           |   |   |           |   |   |              |   |   |                          |   |   |          |     |   |                 |   |   |   |   |   |   |   |   |   | 0.46 | % |

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|                                                                  |   | Year Ended March 31, |    |   | Net Change |   |
|-----------------------------------------------------------------------|--------|----------------------|---------|--------|------------|--------|
|                                                                  |   | 2016                 |    |   | 2015       |   |   | Amount |   |   | % |   |
|                                                                  |   | (in thousands)       |    |
| Total investment income                                               |   | $                    | 9,160   |   |       | $      | 9,948 |   |   | $ | (788 | ) |   |   | (7.9 | %) |
| Total operating expenses                                              |   |                 | (21,125 | )      |       |   | (12,123 | ) |   |   | (9,002 | ) |   |   | 74.3 | % |
| Income tax (benefit) expense                                          |   |                 | (1,278  | )      |       |   | 270 |   |   |   | (1,548 | ) |   |   |   |   |
| Net investment loss                                                   |   |                 | (10,687 | )      |       |   | (2,445 | ) |   |   | (8,242 | ) |   |   | 337.1 | % |
| Net realized (loss) gain on investments before income tax             |   |                 | (10,802 | )      |       |   | 164,264 |   |   |   | (175,066 | ) |   |   |   |   |
| Net increase (decrease) in net unrealized appreciation on investments |   |                 | 16,089  |   |       |   | (108,377 | ) |   |   | 124,466 |   |   |   |   |   |
| Net (decrease) increase in net assets from operations                 |   | $                    | (5,400  | )      |       | $      | 53,442 |   |   | $ | (58,842 | ) |   |   | (110.1 | %) |

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|                              |   | Year Ended March 31, 2016 |       |
|-----------------------------------|--------|---------------------------|------------|
|                              |   | Proceeds                  |       |   | Cost |   |   | Realized gain (loss) |   |
| 360 Holdings III Corp.            |   | $                         | 1,374      |   |   | $ | - |   |   | $ | 1,374 |   |
| Alamo Group, Inc.                 |   |                      | 36,872     |   |   |   | - |   |   |   | 36,872 |   |
| Atlantic Capital Bancshares, Inc  |   |                      | 3,956,401  |   |   |   | 3,000,000 |   |   |   | 956,401 |   |
| Ballast Point Ventures II, LP     |   |                      | 3,507,598  |   |   |   | 2,634,790 |   |   |   | 872,808 |   |
| BankCap Partners GP, L.P.         |   |                      | 1,596,999  |   |   |   | 5,071,514 |   |   |   | (3,474,515 | ) |
| Boxx Technologies, Inc.           |   |                      | 2,184,184  |   |   |   | 1,500,000 |   |   |   | 684,184 |   |
| CapitalSouth Partners Fund        |   |                      | 50,000     |   |   |   | 433,403 |   |   |   | (383,403 | ) |
| Diamond State Ventures, LP        |   |                      | 32,150     |   |   |   | - |   |   |   | 32,150 |   |
| First Capital Group of Texas      |   |                      | 20,000     |   |   |   | 778,894 |   |   |   | (758,894 | ) |
| Humac Company                     |   |                      | 231,000    |   |   |   | - |   |   |   | 231,000 |   |
| iMemories, Inc.                   |   |                      | 150,030    |   |   |   | 6,414,986 |   |   |   | (6,264,956 | ) |
| Instawares Holding Company, LLC   |   |                      | 5,000,000  |   |   |   | 5,000,000 |   |   |   | - |   |
| StarTech Seed Fund II             |   |                      | 14,000     |   |   |   | 622,783 |   |   |   | (608,783 | ) |
| TaxAct                            |   |                      | 10,555     |   |   |   | - |   |   |   | 10,555 |   |
| Water Pik, Inc.                   |   |                      | 5,482      |   |   |   | - |   |   |   | 5,482 |   |
| Wellogix, Inc.                    |   |                      | 2,858,105  |   |   |   | 5,000,000 |   |   |   | (2,141,895 | ) |
| Total realized loss               |   | $                         | 19,654,750 |   |   | $ | 30,456,370 |   |   | $ | (10,801,620 | ) |
| Income taxes paid                 |   |                      |       |   |   |   |   |   |   |   | (2,947,944 | ) |
| Total realized loss, net of taxes |   |                      |       |   |   |   |   |   |   | $ | (13,749,564 | ) |

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|                                                              |   | Year Ended March 31, |     |   | Net Change |   |
|-------------------------------------------------------------------|--------|----------------------|----------|--------|------------|--------|
|                                                              |   | 2015                 |     |   | 2014       |   |   | Amount |   |   | % |   |
|                                                              |   | (in thousands)       |     |   |       |   |
| Total investment income                                           |   | $                    | 9,948    |   |       | $      | 12,607 |   |   | $ | (2,659 | ) |   |   | (21.1 | %) |
| Total operating expenses                                          |   |                 | (12,123  | )      |       |   | (8,452 | ) |   |   | (3,671 | ) |   |   | 43.4 | % |
| Income tax expense (benefit)                                      |   |                 | 270      |   |       |   | (739 | ) |   |   | 1,009 |   |   |   |   |   |
| Net investment (loss) income                                      |   |                 | (2,445   | )      |       |   | 4,894 |   |   |   | (7,339 | ) |   |   | (150.0 | %) |
| Net realized gain on investments before income tax                |   |                 | 164,264  |   |       |   | 14,084 |   |   |   | 150,180 |   |   |   |   |   |
| Net (decrease) increase in unrealized appreciation of investments |   |                 | (108,377 | )      |       |   | 93,032 |   |   |   | (201,409 | ) |   |   |   |   |
| Net increase in net assets from operations                        |   | $                    | 53,442   |   |       | $      | 112,010 |   |   | $ | (58,568 | ) |   |   | (52.3 | %) |

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|                        |   | Payments Due By Period(In thousands) |   |
|-----------------------------|--------|--------------------------------------|--------|
| Contractual Obligations     |   | Total                                |   |   | 1 Year |   |   | 2-3 Years |   |   | More Than 3 Years |   |
| Operating lease obligations |   | $                                    | 1,468  |   |   | $ | 230 |   |   | $ | 488 |   |   | $ | 750 |   |

| Item 7A. | Quantitative and Qualitative Disclosures about Market Risk |
|----------|------------------------------------------------------------|

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| Item 8. | Financial Statements and Supplementary Data |
|---------|---------------------------------------------|

|                                                                                           | Page |
|------------------------------------------------------------------------------------------------|------|
| Reports of Independent Registered Public Accounting Firm                                       | 51   |
| Consolidated Statements of Assets and Liabilities as of March 31, 2016 and 2015                | 53   |
| Consolidated Statements of Operations for Years Ended March 31, 2016, 2015 and 2014            | 54   |
| Consolidated Statements of Changes in Net Assets for Years Ended March 31, 2016, 2015 and 2014 | 55   |
| Consolidated Statements of Cash Flows for Years Ended March 31, 2016, 2015 and 2014            | 56   |
| Consolidated Schedules of Investments as of March 31, 2016 and 2015                            | 58   |
| Notes to Consolidated Financial Statements                                                     | 64   |

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|                                                                                                                                              |   | March 31,2016 |    |   | March 31,2015 |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------|---------|--------|---------------|--------|
| Assets                                                                                                                                            |   |          |    |   |          |   |
| Investments at fair value:                                                                                                                        |   |          |    |   |          |   |
| Non-control/Non-affiliate investments (Cost: March 31, 2016 - $101,538, March 31, 2015 - $12,396)                                                 |   | $             | 99,279  |   |          | $      | 37,776 |   |
| Affiliate investments (Cost: March 31, 2016 - $6,356, March 31, 2015 - $6,944)                                                                    |   |          | 10,618  |   |          |   | 8,345 |   |
| Control investments (Cost: March 31, 2016 - $42,215, March 31, 2015 - $45,620)                                                                    |   |          | 68,539  |   |          |   | 489,415 |   |
| Total investments (Cost: March 31, 2016 - $150,110, March 31, 2015 - $64,960)                                                                     |   |          | 178,436 |   |          |   | 535,536 |   |
| Cash and cash equivalents                                                                                                                         |   |          | 95,969  |   |          |   | 225,797 |   |
| Receivables                                                                                                                                       |   |          |    |   |          |   |   |   |
| Dividends and interest                                                                                                                            |   |          | 1,752   |   |          |   | 77 |   |
| Escrow                                                                                                                                            |   |          | 3,424   |   |          |   | 2,854 |   |
| Other                                                                                                                                             |   |          | 219     |   |          |   | 1,392 |   |
| Income tax receivable                                                                                                                             |   |          | 1,010   |   |          |   | 95 |   |
| Net pension assets                                                                                                                                |   |          | -       |   |          |   | 10,294 |   |
| Deferred tax asset                                                                                                                                |   |          | 2,342   |   |          |   | - |   |
| Other assets                                                                                                                                      |   |          | 1,341   |   |          |   | 827 |   |
| Total assets                                                                                                                                      |   | $             | 284,493 |   |          | $      | 776,872 |   |
|                                                                                                                                              |   |          |    |   |          |   |   |   |
| Liabilities                                                                                                                                       |   |          |    |   |          |   |   |   |
| Other liabilities                                                                                                                                 |   | $             | 5,713   |   |          | $      | 4,923 |   |
| Payable for unsettled transaction                                                                                                                 |   |          | 3,940   |   |          |   | - |   |
| Accrued restoration plan liability                                                                                                                |   |          | 2,205   |   |          |   | 3,119 |   |
| Deferred income taxes                                                                                                                             |   |          | -       |   |          |   | 1,412 |   |
| Total liabilities                                                                                                                                 |   |          | 11,858  |   |          |   | 9,454 |   |
|                                                                                                                                              |   |          |    |   |          |   |   |   |
| Net Assets                                                                                                                                        |   |          |    |   |          |   |   |   |
| Common stock, $0.25 par value: authorized, 25,000,000 shares; issued, 18,065,518 shares at March 31, 2016 and 17,904,844 shares at March 31, 2015 |   |          | 4,516   |   |          |   | 4,476 |   |
| Additional capital                                                                                                                                |   |          | 262,539 |   |          |   | 298,338 |   |
| Accumulated net investment (loss) income                                                                                                          |   |          | (307    | )      |          |   | (4,390 | ) |
| Accumulated net realized gain                                                                                                                     |   |          | 1,498   |   |          |   | 22,355 |   |
| Unrealized appreciation of investments                                                                                                            |   |          | 28,326  |   |          |   | 470,576 |   |
| Treasury stock - at cost, 2,339,512 shares                                                                                                        |   |          | (23,937 | )      |          |   | (23,937 | ) |
| Total net assets                                                                                                                                  |   |          | 272,635 |   |          |   | 767,418 |   |
| Total liabilities and net assets                                                                                                                  |   | $             | 284,493 |   |          | $      | 776,872 |   |
| Net asset value per share (15,726,006 shares outstanding at March 31, 2016 and 15,565,332 shares outstanding at March 31, 2015)                   |   | $             | 17.34   |   |          | $      | 49.30 |   |

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|                                                                            |   | Years Ended March 31, |       |
|---------------------------------------------------------------------------------|--------|-----------------------|------------|
|                                                                            |   | 2016                  |       |   | 2015 |   |   | 2014 |   |
| Investment income:                                                              |   |                  |       |   |   |   |   |   |   |
| Interest and dividends                                                          |   |                  |       |   |   |   |   |   |   |
| Non-control/Non-affiliate investments                                           |   | $                     | 4,409      |   |   | $ | 356 |   |   | $ | 439 |   |
| Affiliate investments                                                           |   |                  | 135        |   |   |   | 581 |   |   |   | 2,826 |   |
| Control investments                                                             |   |                  | 3,489      |   |   |   | 8,294 |   |   |   | 8,650 |   |
| Interest income from cash and cash equivalents                                  |   |                  | 386        |   |   |   | 122 |   |   |   | 67 |   |
| Fees and other income                                                           |   |                  | 741        |   |   |   | 595 |   |   |   | 625 |   |
| Total investment income                                                         |   |                  | 9,160      |   |   |   | 9,948 |   |   |   | 12,607 |   |
| Operating expenses:                                                             |   |                  |       |   |   |   |   |   |   |   |   |   |
| Compensation                                                                    |   |                  | 7,031      |   |   |   | 5,413 |   |   |   | 6,121 |   |
| Spin-off compensation plan                                                      |   |                  | 1,303      |   |   |   | - |   |   |   | - |   |
| Share-based compensation (benefit)                                              |   |                  | 1,181      |   |   |   | 1,027 |   |   |   | (632 | ) |
| Net pension (benefit) expense                                                   |   |                  | (99        | ) |   |   | (280 | ) |   |   | 176 |   |
| Spin-off professional fees                                                      |   |                  | 7,040      |   |   |   | 1,819 |   |   |   | - |   |
| General and administrative                                                      |   |                  | 4,669      |   |   |   | 4,144 |   |   |   | 2,787 |   |
| Total operating expenses                                                        |   |                  | 21,125     |   |   |   | 12,123 |   |   |   | 8,452 |   |
| (Loss) income before income taxes                                               |   |                  | (11,965    | ) |   |   | (2,175 | ) |   |   | 4,155 |   |
| Income tax (benefit) expense                                                    |   |                  | (1,278     | ) |   |   | 270 |   |   |   | (739 | ) |
|                                                                            |   |                  |       |   |   |   |   |   |   |   |   |   |
| Net investment (loss) income                                                    |   | $                     | (10,687    | ) |   | $ | (2,445 | ) |   | $ | 4,894 |   |
|                                                                            |   |                  |       |   |   |   |   |   |   |   |   |   |
| Realized (loss) gain:                                                           |   |                  |       |   |   |   |   |   |   |   |   |   |
| Non-control/Non-affiliate investments                                           |   |                  | (9,575     | ) |   |   | 8,226 |   |   |   | 14,084 |   |
| Affiliate investments                                                           |   |                  | (1,458     | ) |   |   | 157,213 |   |   |   | - |   |
| Control investments                                                             |   |                  | 231        |   |   |   | (1,175 | ) |   |   | - |   |
| Total net realized (loss) gain on investments before income tax                 |   |                  | (10,802    | ) |   |   | 164,264 |   |   |   | 14,084 |   |
|                                                                            |   |                  |       |   |   |   |   |   |   |   |   |   |
| Net increase (decrease) in unrealized appreciation of investments               |   |                  | 16,089     |   |   |   | (108,377 | ) |   |   | 93,032 |   |
|                                                                            |   |                  |       |   |   |   |   |   |   |   |   |   |
| Net realized and unrealized gain on investments                                 |   | $                     | 5,287      |   |   | $ | 55,887 |   |   | $ | 107,116 |   |
|                                                                            |   |                  |       |   |   |   |   |   |   |   |   |   |
| Net (decrease) increase in net assets from operations                           |   | $                     | (5,400     | ) |   | $ | 53,442 |   |   | $ | 112,010 |   |
|                                                                            |   |                  |       |   |   |   |   |   |   |   |   |   |
| Net investment (loss) income per share – basic and diluted                |   | $                     | (.68       | ) |   | $ | (.16 | ) |   | $ | .32 |   |
| Net (decrease) increase in net assets from operations – basic and diluted |   | $                     | (.35       | ) |   | $ | 3.44 |   |   | $ | 7.32 |   |
| Weighted average shares outstanding - basic                                     |   |                  | 15,635,597 |   |   |   | 15,491,870 |   |   |   | 15,227,581 |   |
| Weighted average shares outstanding – diluted                        |   |                  | 15,723,617 |   |   |   | 15,530,974 |   |   |   | 15,298,343 |   |

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|                                                                |   | Years Ended March 31, |     |
|---------------------------------------------------------------------|--------|-----------------------|----------|
|                                                                |   | 2016                  |     |   | 2015 |   |   | 2014 |   |
| Operations:                                                         |   |                  |     |   |   |   |   |   |   |
| Net investment (loss) income                                        |   | $                     | (10,687  | ) |   | $ | (2,445 | ) |   | $ | 4,894 |   |
| Net realized (loss) gain on investments                             |   |                  | (10,802  | ) |   |   | 164,264 |   |   |   | 14,084 |   |
| Net increase (decrease) in unrealized appreciation of investments   |   |                  | 16,089   |   |   |   | (108,377 | ) |   |   | 93,032 |   |
| Net (decrease) increase in net assets from operations               |   |                  | (5,400   | ) |   |   | 53,442 |   |   |   | 112,010 |   |
| Distributions from:                                                 |   |                  |     |   |   |   |   |   |   |   |   |   |
| Undistributed net investment income                                 |   |                  | (625     | ) |   |   | (3,083 | ) |   |   | (3,050 | ) |
| Net realized gains                                                  |   |                  | (1,544   | ) |   |   | - |   |   |   | - |   |
| Taxes incurred on deemed capital gain distributions                 |   |                  | (2,948   | ) |   |   | (54,370 | ) |   |   | (3,787 | ) |
| Distributions of CSW Industrials, Inc.                              |   |                  |     |   |   |   |   |   |   |   |   |   |
| Decrease in unrealized appreciation related to spin-off investments |   |                  | (458,338 | ) |   |   | - |   |   |   | - |   |
| Distribution from additional capital                                |   |                  | (27,540  | ) |   |   | - |   |   |   | - |   |
| Capital share transactions:                                         |   |                  |     |   |   |   |   |   |   |   |   |   |
| Change in pension plan funded status                                |   |                  | -        |   |   |   | (789 | ) |   |   | 1,250 |   |
| Exercise of employee stock options                                  |   |                  | 431      |   |   |   | 803 |   |   |   | 4,820 |   |
| Share-based compensation expense (benefit)                          |   |                  | 1,181    |   |   |   | 1,027 |   |   |   | (632 | ) |
| (Decrease) increase in net assets                                   |   |                  | (494,783 | ) |   |   | (2,970 | ) |   |   | 110,611 |   |
| Net assets, beginning of period                                     |   |                  | 767,418  |   |   |   | 770,388 |   |   |   | 659,777 |   |
| Net assets, end of period                                           |   | $                     | 272,635  |   |   | $ | 767,418 |   |   | $ | 770,388 |   |

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|                                                                                                                         |   | Years Ended March 31, |     |
|------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------|----------|
|                                                                                                                         |   | 2016                  |     |   | 2015 |   |   | 2014 |   |
| Cash flows from operating activities                                                                                         |   |                  |     |   |   |   |   |   |   |
| Net (decrease) increase in net assets from operations                                                                        |   | $                     | (5,400   | ) |   | $ | 53,442 |   |   | $ | 112,010 |   |
| Adjustments to reconcile net (decrease) increase in net assets from operations to net cash provided by operating activities: |   |                  |     |   |   |   |   |   |   |   |   |   |
| Purchases and originations of investments                                                                                    |   |                  | (123,014 | ) |   |   | (7,421 | ) |   |   | (12,607 | ) |
| Net proceeds from disposition of and return of capital on investments                                                        |   |                  | 19,643   |   |   |   | 205,692 |   |   |   | 15,990 |   |
| Principal repayments on debt investments                                                                                     |   |                  | 523      |   |   |   | - |   |   |   | - |   |
| Payment of accreted original issue discounts                                                                                 |   |                  | 12       |   |   |   | - |   |   |   | - |   |
| Depreciation and amortization                                                                                                |   |                  | 86       |   |   |   | 55 |   |   |   | 23 |   |
| Net pension (benefit) expense                                                                                                |   |                  | (308     | ) |   |   | (530 | ) |   |   | 176 |   |
| Realized loss (gain) on investments before income tax                                                                        |   |                  | 10,802   |   |   |   | (164,264 | ) |   |   | (14,084 | ) |
| Net (increase) decrease in unrealized appreciation of investments                                                            |   |                  | (16,089  | ) |   |   | 108,377 |   |   |   | (93,032 | ) |
| Accretion of discounts on investments                                                                                        |   |                  | (96      | ) |   |   | - |   |   |   | - |   |
| Stock option and restricted awards expense (benefit)                                                                         |   |                  | 1,181    |   |   |   | 1,027 |   |   |   | (632 | ) |
| Deferred income tax benefit                                                                                                  |   |                  | (1,278   | ) |   |   | - |   |   |   | - |   |
| (Increase) decrease in dividend and interest receivable                                                                      |   |                  | (1,675   | ) |   |   | 705 |   |   |   | 1,683 |   |
| (Increase) decrease in escrow receivables                                                                                    |   |                  | (570     | ) |   |   | (3,687 | ) |   |   | - |   |
| Decrease (increase) in other receivables                                                                                     |   |                  | 1,173    |   |   |   | (137 | ) |   |   | (131 | ) |
| (Increase) decrease in tax receivable                                                                                        |   |                  | (915     | ) |   |   | 72 |   |   |   | (167 | ) |
| Increase in other assets                                                                                                     |   |                  | (601     | ) |   |   | (604 | ) |   |   | (100 | ) |
| (Decrease) increase in other liabilities                                                                                     |   |                  | 165      |   |   |   | 2,085 |   |   |   | (513 | ) |
| Increase in payable for unsettled transaction                                                                                |   |                  | 3,940    |   |   |   | - |   |   |   | - |   |
| Decrease in deferred income taxes                                                                                            |   |                  | 915      |   |   |   | (528 | ) |   |   | (203 | ) |
| Net cash (used in) provided by operating activities                                                                          |   |                  | (111,506 | ) |   |   | 194,284 |   |   |   | 8,413 |   |
| Cash flows from financing activities                                                                                         |   |                  |     |   |   |   |   |   |   |   |   |   |
| Taxes incurred on deemed capital gain distribution                                                                           |   |                  | (2,948   | ) |   |   | (54,370 | ) |   |   | (3,787 | ) |
| Distributions from undistributed net investment income                                                                       |   |                  | -        |   |   |   | (3,083 | ) |   |   | (3,050 | ) |
| Distributions from undistributed net realized gain                                                                           |   |                  | (1,544   | ) |   |   | - |   |   |   | - |   |
| Proceeds from exercise of employee stock options                                                                             |   |                  | 431      |   |   |   | 803 |   |   |   | 4,820 |   |
| Spin-off Compensation Plan distribution                                                                                      |   |                  | (1,261   | ) |   |   | - |   |   |   | - |   |
| Cash distribution to CSW Industrials                                                                                         |   |                  | (13,000  | ) |   |   | - |   |   |   | - |   |
| Net cash (used in) provided by financing activities                                                                          |   |                  | (18,322  | ) |   |   | (56,650 | ) |   |   | (2,017 | ) |
| Net (decrease) increase in cash and cash equivalents                                                                         |   |                  | (129,828 | ) |   |   | 137,634 |   |   |   | 6,396 |   |
| Cash and cash equivalents at beginning of period                                                                             |   |                  | 225,797  |   |   |   | 88,163 |   |   |   | 81,767 |   |
| Cash and cash equivalents at end of period                                                                                   |   | $                     | 95,969   |   |   | $ | 225,797 |   |   | $ | 88,163 |   |
| Supplemental disclosure of cash flow information:                                                                            |   |                  |     |   |   |   |   |   |   |   |   |   |
| Income taxes paid                                                                                                            |   | $                     | -        |   |   | $ | 362 |   |   | $ | 350 |   |

----

| Summary of Non-Cash Financing Activities                     |   |   |     |    |   |   |   |   |   |
|--------------------------------------------------------------|--------|--------|----------|---------|--------|--------|--------|--------|--------|
| Cost of Investments spun-off1                                |   | $      | 6,981    |    |   | $      | -      |   |   | $ | - |   |
| Decrease in unrealized appreciation due to spin-off of CSWI1 |   |   | (458,338 | )  |   |   | -      |   |   |   | - |   |
| Net pension assets1                                          |   |   | 9,687    |    |   |   | -      |   |   |   | - |   |
| Change in deferred tax liabilities1                          |   |   | 3,391    |    |   |   | -      |   |   |   | - |   |
| Dividend declared, not yet paid                              |   |   | 625      |    |   |   |   |   |   |   |   |   |

|   | a. | In March 2014, the $5,279,112 investment in Cinatra Clean Technologies, Inc. debt security and $1,579,056 accrued interest were converted into Preferred Stock. |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | b. | In March 2015, we received net proceeds of $18,922,619 and 861,561 shares of common stock in kSep, Inc. from the sale of our preferred shares of KBI Biopharma, Inc. |
|--------|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | c. | In March 2015, we received net proceeds of $16,085,826 and 211,368 shares of common stock in Trax Data Refinery, Inc. from the sale of our preferred shares of Trax Holdings, Inc. |
|--------|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|              |   | 2016 |   |   | 2015   |   |   | 2014   |   |
|-------------------|--------|------|--------|--------|--------|--------|--------|--------|--------|
| Total Investments |   | $    | -      |   |   | $      | 1,261  |   |   | $ | 6,858 |   |

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| Portfolio Company1                     |   | Type ofInvestment                                      |   | Industry                             |   | Current InterestRate2         |   | Maturity   |   |   | Principal |      |   | Cost   |   |      | FairValue3 |         |
|----------------------------------------|--------|--------------------------------------------------------|--------|--------------------------------------|--------|-------------------------------|--------|------------|--------|--------|-----------|-----------|--------|--------|--------|-----------|------------|--------------|
| Non-control/Non-affiliate Investments4 |   |                                                   |   |                                 |   |                          |   |       |   |   |      |      |   |   |   |      |       |         |
| 360 HOLDINGS III CORP.                 |   | Senior secured debt                                    |   | Consumer products & retail       |   | L+9.00%(Floor 1.00%)          |   | 10/1/2021  |   |   | $         | 6,965,000 |   |   | $      | 6,695,926 |       |         | $ | 6,721,225 |   |
| ARGON MEDICAL DEVICES                  |   | Senior secured debt                                    |   | Healthcare products                  |   | L+9.50%(Floor 1.00%)          |   | 12/23/2021 |   |   |      | 5,000,000 |   |   |   | 4,854,244 |       |         |   | 4,962,500 |   |
| BDF ACQUISITION CORP.                  |   | Senior secured debt                                    |   | Consumer products & retail       |   | L+8.00%(Floor 1.00%)          |   | 2/12/2022  |   |   |      | 5,000,000 |   |   |   | 4,803,167 |       |         |   | 4,825,000 |   |
| CAST AND CREW PAYROLL, LLC             |   | Senior secured debt                                    |   | Media, marketing & entertainment |   | L+7.75%(Floor 1.00%)          |   | 8/12/2023  |   |   |      | 5,000,000 |   |   |   | 4,970,378 |       |         |   | 4,725,000 |   |
| DEEPWATER CORROSION SERVICES, INC.     |   | 127,004 shares of Series A convertible preferred stock |   | Energy services (upstream)           |   | -                             |   | -          |   |   |      | -         |   |   |   | 8,000,000 |       |         |   | 5,046,000 |   |
| DIGITAL RIVER, INC.                    |   | Senior secured debt                                    |   | Software & IT services           |   | L+6.50%(Floor 1.00%)          |   | 2/12/2021  |   |   |      | 4,632,285 |   |   |   | 4,598,218 |       |         |   | 4,626,495 |   |
| FREEDOM TRUCK FINANCE, LLC5,6          |   | Senior secured debt                                    |   |  Financial services             |   | Prime plus 9.75%(Floor 3.25%) |   | 4/15/2016  |   |   |      | 5,839,504 |   |   |   | 5,839,504 |       |         |   | 5,839,504 |   |
| HYGEA HOLDINGS                         |   | Senior secured debt                                    |   | Healthcare services                  |   | L+9.25%                       |        | 2/22/2016  |   |   |      | 8,000,000 |   |   |   | 7,298,715 |       |         |   | 7,298,715 |   |
|                                   |   |                                                   |   |                                 |   |                          |   |       |   |   |      |      |   |   |   |      |       |         |   |   |   |
|                                   |   | Warrants                                               |   |                                 |   | -                             |   | -          |   |   |      | -         |   |   |   | 546,000   |       |    |   | 546,000 |   |
|                                   |   |                                                        |   |                                 |   |                          |   |       |   |   |      |      |   |   |   | 7,844,715 |       |         |   | 7,844,715 |   |
| IMAGINE! PRINT SOLUTIONS, INC.         |   | Senior secured debt                                    |   | Media, marketing & entertainment |   | L+6.00%(Floor 1.00%)          |   | 3/30/2022  |   |   |      | 4,000,000 |   |   |   | 3,940,000 |       |         |   | 3,940,000 |   |
| LTI HOLDINGS, INC.                     |   | Senior secured debt                                    |   | Industrial products                  |   | L+9.25%(Floor 1.00%)          |   | 4/30/2023  |   |   |      | 7,000,000 |   |   |   | 6,837,644 |       |         |   | 6,298,099 |   |
| PREPAID LEGAL SERVICES. INC.           |   | Senior secured debt                                    |   | Consumer services                    |   | L+9.00%(Floor 1.25%)          |   | 7/1/2020   |   |   |      | 5,000,000 |   |   |   | 4,944,630 |       |         |   | 4,950,000 |   |
| RESEARCH NOW GROUP, INC.               |   | Senior secured debt                                    |   | Business services                    |   | L+8.75%(Floor 1.00%)          |   | 3/18/2022  |   |   |      | 7,000,000 |   |   |   | 6,906,072 |       |         |   | 6,790,000 |   |
| ROYAL HOLDINGS, INC.                   |   | Senior secured debt                                    |   | Specialty chemicals                  |   | L+7.50%(Floor 1.00%)          |   | 6/19/2023  |   |   |      | 1,000,000 |   |   |   | 992,994   |       |         |   | 955,000 |   |
| TAXACT, INC.                           |   | Senior secured debt                                    |   | Financial services                   |   | L+6.00%(Floor 1.00%)          |   | 3/1/2022   |   |   |      | 4,500,000 |   |   |   | 4,405,601 |       |         |   | 4,432,500 |   |
| TITANLINER, INC.                       |   | Senior subordinated debt                               |   |                                 |   | 8.50%                         |   | 6/30/2017  |   |   |      | 2,747,000 |   |   |   | 2,747,000 |       |         |   | 2,747,000 |   |
|                                   |   | 339,277 shares of Series A convertible preferred stock |   | Energy services (upstream)           |   | -                             |   | -          |   |   |      | -         |   |   |   | 3,204,222 |       |         |   | 3,352,000 |   |
|                                   |   |                                                        |   |                                 |   |                          |   |       |   |   |      |      |   |   |   | 5,951,222 |       |         |   | 6,099,000 |   |

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Table of Contents

| TRAX DATA REFINERY, INC.                    |   | Common stock                                           |   | Software & IT services           |   | -                    |   | -         |   |   |   | -         |   |   |   | 817,781     |   |   |   | 1,916,000   |   |
|---------------------------------------------|--------|--------------------------------------------------------|--------|--------------------------------------|--------|----------------------|--------|-----------|--------|--------|--------|-----------|--------|--------|--------|-------------|--------|--------|--------|-------------|--------|
| VIVID SEATS                                 |   | Senior secured debt                                    |   | Media, marketing & entertainment |   | L+6.00%(Floor 1.00%) |   | 3/1/2022  |   |   |   | 7,000,000 |   |   |   | 6,514,058   |   |   |   | 6,632,500   |   |
| WATER PIK, INC.                             |   | Senior secured debt                                    |   | Consumer products & retail       |   | L+8.75%(Floor 1.00%) |   | 1/8/2021  |   |   |   | 4,780,702 |   |   |   | 4,667,815   |   |   |   | 4,720,943   |   |
| WINZER CORPORATION                          |   | Senior subordinated debt                               |   | Distribution                         |   | 11.00%               |        | 5/31/2021 |   |   |   | 8,100,000 |   |   |   | 7,954,440   |   |   |   | 7,954,440   |   |
|                                        |   |                                                   |   |                                 |   |                 |   |      |   |   |   |      |   |   |   |        |   |   |   |        |   |
| Total Non-control/Non-affiliate Investments |   |                                                   |   |                                 |   |                 |   |      |   |   |   |      |   |   | $      | 101,538,409 |   |   | $      | 99,278,921  |   |
|                                        |   |                                                   |   |                                 |   |                 |   |      |   |   |   |      |   |   |   |        |   |   |   |        |   |
| Affiliate Investments7                      |   |                                                   |   |                                 |   |                 |   |      |   |   |   |      |   |   |   |        |   |   |   |        |   |
| CHANDLER SIGNS, LP                          |   | Senior subordinated debt                               |   | Business services                    |   | 12.00%               |        | 7/4/2021  |   |   |   | 4,500,000 |   |   | $      | 4,412,800   |   |   | $      | 4,412,800   |   |
|                                        |   |                                                   |   |                                 |   |                 |   |      |   |   |   |      |   |   |   |        |   |   |   |        |   |
|                                        |   | 1,500,000 units of Class A-1 common stock              |   |                                 |   | -                    |   | -         |   |   |   | -         |   |   |   | 1,500,000   |   |   |   | 2,529,000   |   |
|                                        |   |                                                   |   |                                 |   |                 |   |      |   |   |   |      |   |   |   | 5,912,800   |   |   |   | 6,941,800   |   |
| kSEP HOLDINGS, INC.                         |   | 861,591 shares of common stock                         |   | Healthcare products                  |   | -                    |   | -         |   |   |   | -         |   |   |   | 443,518     |   |   |   | 3,676,000   |   |
|                                             |   |                                                   |   |                                 |   |                 |   |      |   |   |   |      |   |   |   |        |   |   |   |        |   |
| Total Affiliate Investments                 |   |                                                   |   |                                 |   |                 |   |      |   |   |   |      |   |   | $      | 6,356,318   |   |   | $      | 10,617,800  |   |
|                                        |   |                                                   |   |                                 |   |                 |   |      |   |   |   |      |   |   |   |        |   |   |   |        |   |
| Control Investments8                        |   |                                                   |   |                                 |   |                 |   |      |   |   |   |      |   |   |   |        |   |   |   |        |   |
| I-45 SLF, LLC6, 9, 10                       |   | 80% LLC equity interest                                |   | Multi-sector holdings                |   | -                    |   | -         |   |   |   | -         |   |   | $      | 36,800,000  |   |   | $      | 36,337,174  |   |
| MEDIA RECOVERY, INC.10                      |   | 800,000 shares of Series A convertible preferred stock |   | Industrial products                  |   | -                    |   | -         |   |   |   | -         |   |   |   | 800,000     |   |   |   | 4,757,452   |   |
|                                        |   | 4,000,002 shares of common stock                       |   |                                 |   | -                    |   | -         |   |   |   | -         |   |   |   | 4,615,000   |   |   |   | 27,444,548  |   |
|                                        |   |                                                   |   |                                 |   |                 |   |      |   |   |   |      |   |   |   | 5,415,000   |   |   |   | 32,202,000  |   |
| Total Control Investments                   |   |                                                   |   |                                 |   |                 |   |      |   |   |   |      |   |   | $      | 42,215,000  |   |   | $      | 68,539,174  |   |
|                                        |   |                                                   |   |                                 |   |                 |   |      |   |   |   |      |   |   |   |        |   |   |   |        |   |
| TOTAL INVESTMENTS11                         |   |                                                   |   |                                 |   |                 |   |      |   |   |   |      |   |   | $      | 150,109,727 |   |   | $      | 178,435,895 |   |

----

|  | 1 | All debt investments are income-producing, unless otherwise noted. Equity investments are non-income producing, unless otherwise noted. |
|--|---|-----------------------------------------------------------------------------------------------------------------------------------------|

|  | 2 | Some investments bear interest at a rate that may be determined by reference to London Interbank Offered Rate (“LIBOR” or “L”) or Prime (“Prime”) which reset daily, monthly, quarterly, or semiannually.  For each investment, the Company has provided the spread over LIBOR or Prime and the current contractual interest rate in effect at March 31, 2016.  Certain investments are subject to a LIBOR or Prime interest rate floor. |
|--|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | 3 | Investments are carried at fair value in accordance with the Investment Company Act of 1940 (the “1940 Act”) and Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) 820, Fair Value Measurements and Disclosures.  We determine in good faith the fair value of our Investment portfolio pursuant to a valuation policy in accordance with ASC 820 and a valuation process approved by our Board of Directors. See Note 5 to the consolidated financial statements. |
|--|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | 4 | Non-Control/Non-Affiliate investments are defined by the 1940 Act as investments that are neither Control investments nor Affiliate investments. At March 31, 2016, approximately 55.6% of the Company’s investment assets were non-control investments. |
|--|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | 5 | The investment has $1.7 million unfunded commitment. |
|--|---|------------------------------------------------------|

|  | 6 | Indicates assets that are considered “non-qualifying assets” under section 55(a) of the 1940 Act.  Qualifying assets must represent at least 70% of total assets at the time of acquisition of any additional non-qualifying assets. |
|--|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | 7 | Affiliate investments are defined by the 1940 Act as investments in which between 5% and 25% of the voting securities are owned and the investments are not classified as control investments. At March 31, 2016, approximately 6.0% of the Company’s investment assets were affiliate investments. |
|--|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | 8 | Control investments are defined by the 1940 Act as investments in which more than 25% of the voting securities are owned or where greater than 50% of the board representation is maintained. At March 31, 2016, approximately 38.4% of the Company’s investment assets were control investments. |
|--|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | 9 | The investment has approximately $31.2 million unfunded commitment. |
|--|---|---------------------------------------------------------------------|

|  | 10 | Income producing through dividends on distributions. |
|--|----|------------------------------------------------------|

|  | 11 | The cumulative gross unrealized appreciation for federal income tax purposes is approximately $28.4 million; cumulative gross unrealized depreciation for federal income tax purposes is $4.3 million.  Cumulative net unrealized appreciation is $32.7 million, based on a tax cost of $150.1 million. |
|--|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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Table of Contents

| Portfolio Company1                      |   | Type of Investment                                        |   | Industry                   |   | Current Interest Rate2 |   |   | Maturity  |      |   | Principal |      |      | Cost   |   |      | FairValue3 |      |
|-----------------------------------------|--------|-----------------------------------------------------------|--------|----------------------------|--------|------------------------|--------|--------|-----------|-----------|--------|-----------|-----------|-----------|--------|--------|-----------|------------|-----------|
| Non-control/Non-affiliate Investments4  |   |                                                      |   |                       |   |                   |   |   |      |      |   |      |      |      |   |   |      |       |      |
| ATLANTIC CAPITAL BANCSHARES, INC.5      |   | 300,000 shares of common stock                            |   | Financial services         |   |                   | -      |   |      |      | -      |      |      |      | -      |   |      | $          | 3,000,000 |   |   | $ | 3,779,000 |   |
| BALLAST POINT VENTURES II, L.P.5        |   | 2.1% Limited partnership interest                         |   | Multi-sector holdings      |   |                   | -      |   |      |      | -      |      |      |      | -      |   |      |       | 2,634,790 |   |   |   | 3,288,000 |   |
| BANKCAP PARTNERS FUND I, L.P.5          |   | 5.5% Limited partnership interest                         |   | Multi-sector holdings      |   |                   | -      |   |      |      | -      |      |      |      | -      |   |      |       | 5,071,514 |   |   |   | 4,771,000 |   |
| CAPITALSOUTH PARTNERS FUND III, L.P.5   |   | 1.9% Limited partnership interest                         |   | Multi-sector holdings      |   |                   | -      |   |      |      | -      |      |      |      | -      |   |      |       | 433,403   |   |   |   | 232,000 |   |
| DEEPWATER CORROSION SERVICES, INC.      |   | 127,004 shares of Series A Convertible Preferred Stock    |   | Energy services (upstream) |   |                   | -      |   |      |      | -      |      |      |      | -      |   |      |       | 8,000,000 |   |   |   | 2,532,000 |   |
| DIAMOND STATE VENTURES, L.P.5           |   | 1.4% Limited partnership interest                         |   | Multi-sector holdings      |   |                   | -      |   |      |      | -      |      |      |      | -      |   |      |       | –   |   |   |   | 16,000 |   |
| FIRST CAPITAL GROUP OF TEXAS III, L.P.5 |   | 3.0% Limited partnership interest                         |   | Multi-sector holdings      |   |                   | -      |   |      |      | -      |      |      |      | -      |   |      |       | 778,895   |   |   |   | 108,000 |   |
| iMEMORIES, INC.6                        |   | 17,391,304 shares of Series B convertible preferred stock |   | Software & IT services |   |                   | -      |   |      |      | -      |      |      |      | -      |   |      |       | 4,000,000 |   |   |   | – |   |
|                                         |   | 4,684,967 shares of Series C convertible preferred stock  |   |                       |   |                   | -      |   |      |      | -      |      |      |      | -      |   |      |       | 1,078,479 |   |   |   | – |   |
|                                         |   | Convertible debt6                                         |   |                       |   |                   | 10.00% |        |      | 7/31/2016 |   |      |      | 1,188,000 |   |   |      | 1,188,000  |      |   |   | – |   |
|                                         |   | Senior secured debt6                                      |   |                       |   |                   | 18.00% |   |      | 7/31/2016 |   |      |      | 148,507   |   |   |      | 148,507    |      |   |   | 159,000 |   |
|                                    |   |                                                      |   |                       |   |                   |   |   |      |      |   |      |      |      |   |   |      |       | 6,414,986 |   |   |   | 159,000 |   |
| INSTAWARES HOLDING COMPANY, LLC         |   | 3,846,154 shares of Class D convertible preferred stock   |   | Software & IT services |   |                   | -      |   |      |      | -      |      |      |      | -      |   |      |       | 5,000,000 |   |   |   | 5,000,000 |   |
| RESEARCH NOW GROUP, INC.                |   | Senior secured debt                                       |   | Business services          |   | L+8.75%(Floor 1.00%)   |   |   | 3/18/2022 |      |   |      | 7,000,000 |      |   |   | 6,895,231 |       |      |   | 6,895,231 |   |

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| STARTECH SEED FUND II5                      |   | 3.2% Limited partnership interest                                                |   | Multi-sector holdings                  |   |   | -      |   |   |   | -         |   |   |   | -         |   |   |   | 622,783    |   |   |   | 14,000     |   |
|---------------------------------------------|--------|----------------------------------------------------------------------------------|--------|----------------------------------------|--------|--------|--------|--------|--------|--------|-----------|--------|--------|--------|-----------|--------|--------|--------|------------|--------|--------|--------|------------|--------|
| TITANLINER, INC.                       |   | 339,277 shares of Series A convertible preferred stock                           |   | Energy services (upstream)             |   |   | -      |   |   |   | -         |   |   |   | -         |   |   |   | 3,204,222  |   |   |   | 5,939,000  |   |
|                                        |   | Senior subordinated debt                                                         |   |                                   |   |   | 8.50%  |        |   |        | 6/30/2017 |   |   |   | 2,747,000 |   |   |   | 2,747,000  |   |   |   | 2,747,000  |   |
|                                        |   |                                                                             |   |                                   |   |   |   |   |   |   |      |   |   |   |      |   |   |   | 5,951,222  |   |   |   | 8,686,000  |   |
| TRAX DATA REFINERY, INC.                    |   | 211,368 shares of common stock                                                   |   | Software & IT services             |   |   | -      |   |   |   | -         |   |   |   | -         |   |   |   | 817,781    |   |   |   | 2,296,000  |   |
|                                        |   |                                                                             |   |                                   |   |   |   |   |   |   |      |   |   |   |      |   |   |   |       |   |   |   |       |   |
| Total Non-Control/Non-Affiliate Investments |   |                                                                             |   |                                   |   |   |   |   |   |   |      |   |   |   |      |   |   | $      | 45,620,605 |   |   | $      | 37,776,231 |   |
| Affiliate Investments7                      |   |                                                                             |   |                                   |   |   |   |   |   |   |      |   |   |   |      |   |   |   |       |   |   |   |       |   |
| BOXX TECHNOLOGIES, INC.                     |   | 3,125,354 shares of Series B convertible preferred stock                         |   | Technology products & components   |   |   | -      |   |   |   | -         |   |   |   | -         |   |   | $      | 1,500,000  |   |   | $      | 2,362,000  |   |
| kSEP HOLDINGS, INC.                         |   | 861,591 shares of common stock                                                   |   | Healthcare products                    |   |   | -      |   |   |   | -         |   |   |   | -         |   |   |   | 443,518    |   |   |   | 1,863,000  |   |
| WELLOGIX, INC.                              |   | 4,788,371 shares of Series A-1 convertible participating preferred stock         |   | Software & IT services             |   |   | -      |   |   |   | -         |   |   |   | -         |   |   |   | 5,000,000  |   |   |   | 4,120,000  |   |
|                                             |   |                                                                             |   |                                   |   |   |   |   |   |   |      |   |   |   |      |   |   |   |       |   |   |   |       |   |
| Total Affiliate Investments                 |   |                                                                             |   |                                   |   |   |   |   |   |   |      |   |   |   |      |   |   | $      | 6,943,518  |   |   | $      | 8,345,000  |   |
|                                        |   |                                                                             |   |                                   |   |   |   |   |   |   |      |   |   |   |      |   |   |   |       |   |   |   |       |   |
| Control Investments8                        |   |                                                                             |   |                                   |   |   |   |   |   |   |      |   |   |   |      |   |   |   |       |   |   |   |       |   |
| BALCO, INC.                                 |   | 445,000 shares of common stock and 60,920 shares Class B non-voting common stock |   | Building & infrastructure products |   |   | -      |   |   |   | -         |   |   |   | -         |   |   | $      | 624,920    |   |   | $      | 5,100,000  |   |
| CAPSTAR HOLDINGS CORPORATION                |   | 500 shares of common stock and 1,000,000 shares of preferred stock               |   | Real estate                            |   |   | -      |   |   |   | -         |   |   |   | -         |   |   |   | 4,703,619  |   |   |   | 10,871,000 |   |

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| HUMAC COMPANY5                     |   | 1,041,000 shares of common stock                       |   | Financial services  |   |   | -      |   |   |   | -      |   |   |   | -      |   |   |   | –    |   |   |   | 244,000     |   |
|------------------------------------|--------|--------------------------------------------------------|--------|---------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|------------|--------|--------|--------|-------------|--------|
| MEDIA RECOVERY, INC.9              |   | 800,000 shares of Series A convertible preferred stock |   | Industrial products |   |   | -      |   |   |   | -      |   |   |   | -      |   |   |   | 800,000    |   |   |   | 4,300,000   |   |
|                               |   | 4,000,002 shares of common stock                       |   |                |   |   | -      |   |   |   | -      |   |   |   | -      |   |   |   | 4,615,000  |   |   |   | 21,700,000  |   |
|                               |   |                                                   |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 5,415,000  |   |   |   | 26,000,000  |   |
| THE RECTORSEAL CORPORATION         |   | 27,907 shares of common stock                          |   | Specialty chemicals |   |   | -      |   |   |   | -      |   |   |   | -      |   |   |   | 52,600     |   |   |   | 358,200,000 |   |
| THE WHITMORE MANUFACTURING COMPANY |   | 80 shares of common stock                              |   | Specialty chemicals |   |   | -      |   |   |   | -      |   |   |   | -      |   |   |   | 1,600,000  |   |   |   | 89,000,000  |   |
|                               |   |                                                   |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |       |   |   |   |        |   |
| Total Control Investments          |   |                                                   |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   | $      | 12,396,139 |   |   | $      | 489,415,000 |   |
| TOTAL INVESTMENTS10                |   |                                                   |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   | $      | 64,960,262 |   |   | $      | 535,536,231 |   |

|  | 1 | All debt investments are income-producing, unless otherwise noted. Equity investments are non-income producing, unless otherwise noted. |
|--|---|-----------------------------------------------------------------------------------------------------------------------------------------|

|  | 2 | Some investments bear interest at a rate that may be determined by reference to London Interbank Offered Rate (“LIBOR” or “L”) or Prime (“Prime”) which reset daily, monthly, quarterly, or semiannually.  For each investment, the Company has provided the spread over LIBOR or Prime and the current contractual interest rate in effect at March 31, 2015.  Certain investments are subject to a LIBOR or Prime interest rate floor. |
|--|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | 3 | Investments are carried at fair value in accordance with the Investment Company Act of 1940 (the “1940 Act”) and Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) 820, Fair Value Measurements and Disclosures.  We determine in good faith the fair value of our Investment portfolio pursuant to a valuation policy in accordance with ASC 820 and a valuation process approved by our Board of Directors. See Note 5 to the consolidated financial statements. |
|--|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | 4 | Non-Control/Non-Affiliate investments are defined by the 1940 Act as investments that are neither Control investments nor Affiliate investments. At March 31, 2015, approximately 7.1% of the Company’s investment assets are non-control investments. |
|--|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | 5 | Indicates assets that the Company believes do not represent “qualifying assets” under section 55(a) of the 1940 Act.  Qualifying assets must represent at least 70% of total assets at the time of acquisition of any additional non-qualifying assets. |
|--|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | 6 | Investment was on non-accrual status as of March 31, 2015, meaning the Company has ceased recognizing interest income on the investment. |
|--|---|------------------------------------------------------------------------------------------------------------------------------------------|

|  | 7 | Affiliate investments are defined by the 1940 Act as investments in which between 5% and 25% of the voting securities are owned and the investments are not classified as control investments. At March 31, 2015, approximately 1.5% of the Company’s investment assets are affiliate investments. |
|--|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | 8 | Control investments are defined by the 1940 Act as investments in which more than 25% of the voting securities are owned or maintains greater than 50% of the board representation. At March 31, 2015, approximately 91.4% of the Company’s investment assets are control investments. |
|--|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | 9 | Income producing through dividends on distributions. |
|--|---|------------------------------------------------------|

|  | 10 | The cumulative gross unrealized appreciation for federal income tax purposes is approximately $487.0 million; cumulative gross unrealized depreciation for federal income tax purposes is $13.5 million.  Cumulative net unrealized appreciation is $473.5 million, based on a tax cost of $62.0 million. |
|--|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | 11 | Changes to the Consolidated Schedule of Investments at March 31, 2015 are presentation changes only to conform to current period presentation. |
|--|----|------------------------------------------------------------------------------------------------------------------------------------------------|

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Table of Contents

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

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Table of Contents

----

Table of Contents

| 2. | CORRECTION OF IMMATERIAL ERROR |
|----|--------------------------------|

|                                                |   | As Previously Reported March 31, 2015 |    |   |   Adjustment |   |    | As Adjusted March 31, 2015 |   |   | As Previously Reported March 31, 2014 |   |   |   Adjustment |   |   | As Adjusted March 31, 2014 |   |
|-----------------------------------------------------|--------|---------------------------------------|---------|--------|------------------------|--------|---------|----------------------------|--------|--------|---------------------------------------|--------|--------|------------------------|--------|--------|----------------------------|--------|
| Net cash (used in) provided by operating activities |   | $                                     | 139,914 |   |                   | $      | 54,370  |                       |   | $      | 194,284                               |   |   | $                      | 4,626  |   |                       | $      | 3,787 |   |   | $ | 8,413 |   |
| Net cash (used in) provided by financing activities |   | $                                     | (2,280  | )      |                   | $      | (54,370 | )                          |   | $      | (56,650                               | )      |   | $                      | 1,770  |   |                       | $      | (3,787 | ) |   | $ | (2,017 | ) |

| 3. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
|----|--------------------------------------------|

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| 4. | INVESTMENTS |
|----|-------------|

|                                                |   | Cost                  |   |   | Percentage of Total Portfolio |   |   | Fair Value |   |   | Percentage of Total Portfolio |   |
|-----------------------------------------------------|--------|-----------------------|--------|--------|-------------------------------|--------|--------|------------|--------|--------|-------------------------------|--------|
|                                                |   | (dollars in millions) |   |
| March 31, 2016:                                     |   |                  |   |   |                          |   |   |       |   |   |                          |   |
| 1st lien notes                                      |   | $                     | 39.3   |   |                          |   | 26.2   | %          |   | $      | 39.5                          |   |   |   | 22.1 | % |
| 2nd lien notes                                      |   |                  | 39.0   |   |                          |   | 26.0   |       |   |   | 38.2                          |   |   |   | 21.4 |   |
| Subordinated debt                                   |   |                  | 15.1   |   |                          |   | 10.1   |       |   |   | 15.1                          |   |   |   | 8.5 |   |
| Preferred equity, common equity & warrants |   |                  | 19.9   |   |                          |   | 13.2   |       |   |   | 49.3                          |   |   |   | 27.6 |   |
| I-45 SLF, LLC                                       |   |                  | 36.8   |   |                          |   | 24.5   |       |   |   | 36.3                          |   |   |   | 20.4 |   |
|                                                |   | $                     | 150.1  |   |                          |   | 100.0  | %          |   | $      | 178.4                         |   |   |   | 100.0 | % |
|                                                |   |                  |   |   |                          |   |   |       |   |   |                          |   |   |   |   |   |
| March 31, 2015:                                     |   |                  |   |   |                          |   |   |       |   |   |                          |   |   |   |   |   |
| 2nd lien notes                                      |   | $                     | 6.9    |   |                          |   | 10.6   | %          |   | $      | 6.9                           |   |   |   | 1.3 | % |
| Subordinated debt                                   |   |                  | 4.1    |   |                          |   | 6.3    |       |   |   | 2.9                           |   |   |   | 0.5 |   |
| Preferred & common equity                       |   |                  | 44.4   |   |                          |   | 68.4   |       |   |   | 517.3                         |   |   |   | 96.6 |   |
| Partnership interests                               |   |                  | 9.5    |   |                          |   | 14.7   |       |   |   | 8.4                           |   |   |   | 1.6 |   |
|                                                |   | $                     | 64.9   |   |                          |   | 100.0  | %          |   | $      | 535.5                         |   |   |   | 100.0 | % |

|                                  |   | Cost   |   |   | Percentage of Total Portfolio |   |   | Fair Value |   |   | Percentage of Total Portfolio |   |
|---------------------------------------|--------|--------|--------|--------|------------------------------------|--------|--------|------------|--------|--------|-------------------------------|--------|
| March 31, 2016:                       |   |   |   |   |                               |   |   |       |   |   |                          |   |
| I-45 SLF, LLC1                        |   | $      | 36.8   |   |                               |   | 24.5   | %          |   | $      | 36.3                          |   |   |   | 20.4 | % |
| Consumer Products and Retail          |   |   | 16.2   |   |                               |   | 10.8   |       |   |   | 16.3                          |   |   |   | 9.1 |   |
| Media, Marketing, & Entertainment |   |   | 15.4   |   |                               |   | 10.3   |       |   |   | 15.3                          |   |   |   | 8.6 |   |
| Energy Services (Upstream)            |   |   | 14.0   |   |                               |   | 9.3    |       |   |   | 11.1                          |   |   |   | 6.2 |   |
| Business Services                     |   |   | 12.8   |   |                               |   | 8.5    |       |   |   | 13.7                          |   |   |   | 7.7 |   |
| Industrial Products                   |   |   | 12.3   |   |                               |   | 8.2    |       |   |   | 38.5                          |   |   |   | 21.5 |   |
| Financial Services                    |   |   | 10.2   |   |                               |   | 6.8    |       |   |   | 10.3                          |   |   |   | 5.8 |   |
| Distribution                          |   |   | 8.0    |   |                               |   | 5.3    |       |   |   | 8.0                           |   |   |   | 4.5 |   |
| Healthcare Services                   |   |   | 7.8    |   |                               |   | 5.2    |       |   |   | 7.8                           |   |   |   | 4.4 |   |
| Software & IT Services            |   |   | 5.4    |   |                               |   | 3.6    |       |   |   | 6.5                           |   |   |   | 3.7 |   |
| Healthcare Products                   |   |   | 5.3    |   |                               |   | 3.5    |       |   |   | 8.6                           |   |   |   | 4.8 |   |
| Consumer Services                     |   |   | 4.9    |   |                               |   | 3.3    |       |   |   | 5.0                           |   |   |   | 2.8 |   |
| Specialty Chemicals                   |   |   | 1.0    |   |                               |   | 0.7    |       |   |   | 1.0                           |   |   |   | 0.5 |   |
|                                  |   | $      | 150.1  |   |                               |   | 100.0  | %          |   | $      | 178.4                         |   |   |   | 100.0 | % |

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| March 31, 2015:                        |   |   |   |   |   |   |   |   |   |   |   |   |
|----------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Software & IT Services             |   | $      | 17.2   |   |   |   | 26.5   | %      |   | $      | 11.5   |   |   |   | 2.1 | % |
| Energy Services (Upstream)             |   |   | 14.0   |   |   |   | 21.6   |   |   |   | 11.2   |   |   |   | 2.1 |   |
| Multi-sector Holdings                  |   |   | 9.5    |   |   |   | 14.6   |   |   |   | 8.6    |   |   |   | 1.6 |   |
| Business Services                      |   |   | 6.9    |   |   |   | 10.7   |   |   |   | 6.9    |   |   |   | 1.3 |   |
| Industrial Products                    |   |   | 5.4    |   |   |   | 8.3    |   |   |   | 26.0   |   |   |   | 4.9 |   |
| Real Estate                            |   |   | 4.7    |   |   |   | 7.3    |   |   |   | 10.9   |   |   |   | 2.0 |   |
| Financial Services                     |   |   | 3.0    |   |   |   | 4.6    |   |   |   | 3.8    |   |   |   | 0.7 |   |
| Specialty Chemicals                    |   |   | 1.7    |   |   |   | 2.6    |   |   |   | 447.2  |   |   |   | 83.5 |   |
| Technology Products & Components   |   |   | 1.5    |   |   |   | 2.3    |   |   |   | 2.4    |   |   |   | 0.4 |   |
| Building & Infrastructure Products |   |   | 0.6    |   |   |   | 0.9    |   |   |   | 5.1    |   |   |   | 1.0 |   |
| Healthcare Products                    |   |   | 0.4    |   |   |   | 0.6    |   |   |   | 1.9    |   |   |   | 0.4 |   |
|                                   |   | $      | 64.9   |   |   |   | 100.0  | %      |   | $      | 535.5  |   |   |   | 100.0 | % |

|            |   | Cost                  |   |   | Percentage of Total Portfolio |   |   | Fair Value |   |   | Percentage of Total Portfolio |   |
|-----------------|--------|-----------------------|--------|--------|------------------------------------|--------|--------|------------|--------|--------|-------------------------------|--------|
|            |   | (dollars in millions) |   |
| March 31, 2016: |   |                  |   |   |                               |   |   |       |   |   |                          |   |
| Southwest       |   | $                     | 55.8   |   |                               |   | 37.2   | %          |   | $      | 80.8                          |   |   |   | 45.3 | % |
| I-45 SLF, LLC1  |   |                  | 36.8   |   |                               |   | 24.5   |       |   |   | 36.3                          |   |   |   | 20.4 |   |
| West            |   |                  | 24.0   |   |                               |   | 16.0   |       |   |   | 24.4                          |   |   |   | 13.7 |   |
| Midwest         |   |                  | 20.4   |   |                               |   | 13.6   |       |   |   | 20.6                          |   |   |   | 11.4 |   |
| South           |   |                  | 8.3    |   |                               |   | 5.5    |       |   |   | 11.5                          |   |   |   | 6.5 |   |
| Northeast       |   |                  | 4.8    |   |                               |   | 3.2    |       |   |   | 4.8                           |   |   |   | 2.7 |   |
|            |   | $                     | 150.1  |   |                               |   | 100.0  | %          |   | $      | 178.4                         |   |   |   | 100.0 | % |
| March 31, 2015: |   |                  |   |   |                               |   |   |       |   |   |                          |   |   |   |   |   |
| Southwest       |   | $                     | 45.7   |   |                               |   | 70.3   | %          |   | $      | 503.9                         |   |   |   | 94.1 | % |
| South           |   |                  | 8.4    |   |                               |   | 13.0   |       |   |   | 10.6                          |   |   |   | 2.0 |   |
| Northeast       |   |                  | 5.5    |   |                               |   | 8.5    |       |   |   | 5.0                           |   |   |   | 0.9 |   |
| West            |   |                  | 4.7    |   |                               |   | 7.2    |       |   |   | 10.9                          |   |   |   | 2.0 |   |
| Midwest         |   |                  | 0.6    |   |                               |   | 1.0    |       |   |   | 5.1                           |   |   |   | 1.0 |   |
|            |   | $                     | 64.9   |   |                               |   | 100.0  | %          |   | $      | 535.5                         |   |   |   | 100.0 | % |

| 5. | FAIR VALUE MEASUREMENTS |
|----|-------------------------|

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Table of Contents

|  | · | Level 1:  Investments whose values are based on unadjusted quoted prices in active markets for identical assets or liabilities. |
|--|--------|--------------------------------------------------------------------------------------------------------------------------------------|

|  | · | Level 2: Investments whose values are based on quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. |
|--|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | Level 3: Investments whose values are based on unobservable inputs that are significant to the overall fair value measurement. |
|--|--------|--------------------------------------------------------------------------------------------------------------------------------|

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|  | • | Financial information obtained from each portfolio company, including 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; |
|--|---------|-----------------------------------------------------------------------------------------|

|  | • | Type and amount of collateral, if any, underlying the investment; |
|--|---------|-------------------------------------------------------------------|

|  | • | Current financial ratios (e.g., fixed charge coverage ratio, interest coverage ratio and net debt/EBITDA ratio) applicable to the investment; |
|--|---------|-----------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | Current liquidity of the investment and related financial ratios (e.g., current ratio and quick ratio); |
|--|---------|---------------------------------------------------------------------------------------------------------|

|  | • | Indicative dealer quotations from brokers, banks, and other market participants; |
|--|---------|----------------------------------------------------------------------------------|

|  | • | Market yields on other securities of similar risk; |
|--|---------|----------------------------------------------------|

|  | • | Pending debt or capital restructuring of the portfolio company; |
|--|---------|-----------------------------------------------------------------|

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

|  | • | Current information regarding any offers to purchase the investment; |
|--|---------|----------------------------------------------------------------------|

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

|  | • | Changes 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 performance 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 3/31/2016 (in millions) |   | Significant Unobservable Inputs |                     | Range  |   |            | Weighted Average |   |
|---------------------------|-------------------------------------|--------|---------------------------------------|--------|---------------------------------|--------------------------|--------|--------|-----------------|------------------|--------|
|                      |                                |   |                                  |   |                            |                     |   |   |            |             |   |
| Equity Investments        | Enterprise Value Waterfall Approach |   | $                                     | 49.3   |                            | EBITDA Multiple          |   |   | 3.50x - 7.60x   |                  |   |   | 6.78x |  |
|                      |                                |   |                                  |   |                            | Revenue Multiple         |   |   | 3.70x           |             |   |   | 3.70x |  |
|                      |                                |   |                                  |   |                            | Discount Rate            |   |   | 12.92% - 18.62% |                  |   |   | 14.0% |   |
| Debt Investments          | Income Approach                     |   |                                  | 68.6   |                            | Discount Rate            |   |   | 6.00% - 11.50%  |             |   |   | N/A |   |
|                      |                                |   |                                  |   |                            | Third Party Broker Quote |   |   | N/A             |             |   |   | N/A |   |
|                           | Market Approach                     |   |                                  | 24.2   |                            | Cost                     |   |   | N/A             |             |   |   | N/A |   |
|                      |                                |   |                                  | 92.8   |                            |                     |   |   |            |             |   |   |   |   |
| Total Level 3 Investments |                                |   | $                                     | 142.1  |                            |                     |   |   |            |             |   |   |   |   |

| Type                      | Valuation Technique |   | Fair Value at 3/31/2015 (in millions) |   | Significant Unobservable Inputs |                                | Range  |   |          | Weighted Average |   |
|---------------------------|---------------------|--------|---------------------------------------|--------|---------------------------------|-------------------------------------|--------|--------|---------------|------------------|--------|
|                      |                |   |                                  |   |                            |                                |   |   |          |             |   |
| Equity Investments        | Market Approach     |   | $                                     | 494.1  |                            | EBITDA Multiple                     |   |   | 3.00x - 7.75x |                  |   |   | 7.15x |   |
|                           | Market Approach     |   |                                  | 4.2    |                            | Recent Transaction Price            |   |   | N/A           |             |   |   | N/A |   |
|                           | Market Approach     |   |                                  | 15.0   |                            | Cash and Asset Value                |   |   | N/A           |             |   |   | N/A |   |
|                           | Market Approach     |   |                                  | 3.8    |                            | Multiple of Tangible Book Value     |   |   | 1.43x         |             |   |   | 1.43x |   |
|                           | Market Approach     |   |                                  | 0.2    |                            | Market Value of Held for Securities |   |   | N/A           |             |   |   | N/A |   |
|                      |                |   |                                  | 517.3  |                            |                                |   |   |          |             |   |   |   |   |
|                      |                |   |                                  |   |                            |                                |   |   |          |             |   |   |   |   |
| Debt Investments          | Face Value          |   |                                  | 6.9    |                            | Recent Transaction Price            |   |   | N/A           |             |   |   | N/A |   |
|                           | Market Approach     |   |                                  | 2.7    |                            | Expected Cash Flow                  |   |   | N/A           |             |   |   | N/A |   |
|                           | Liquidation Value   |   |                                  | 0.2    |                            |                                |   |   |          |             |   |   |   |   |
|                      |                |   |                                  | 9.8    |                            |                                |   |   |          |             |   |   |   |   |
| Total Level 3 Investments |                |   | $                                     | 527.1  |                            |                                |   |   |          |             |   |   |   |   |

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|                                                |   |   |   |   | Fair Value Measurementsat March 31, 2016 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) |   |
| 1st lien notes                                      |   | $      | 39.5   |   |                                                          | $                                              | − |   |   | $ | − |   |   | $ | 39.5 |   |
| 2nd lien notes                                      |   |   | 38.2   |   |                                                          |                                           | − |   |   |   | − |   |   |   | 38.2 |   |
| Subordinated debt                                   |   |   | 15.1   |   |                                                          |                                           | − |   |   |   | − |   |   |   | 15.1 |   |
| Preferred equity, common equity & warrants |   |   | 49.3   |   |                                                          |                                           | − |   |   |   | − |   |   |   | 49.3 |   |
| Investments measured at net asset value1            |   |   | 36.3   |   |                                                          |                                           | − |   |   |   | − |   |   |   | − |   |
| Total Investments                                   |   | $      | 178.4  |   |                                                          | $                                              | − |   |   | $ | − |   |   | $ | 142.1 |   |
|                                                |   |   |   |   |                                                          |                                           |   |   |   |   |   |   |   |   |   |   |
|                                                     |   |   |   |   |                                                          | 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) |   |
| 2nd lien notes                                      |   | $      | 6.9    |   |                                                          | $                                              | − |   |   | $ | − |   |   | $ | 6.9 |   |
| Subordinated debt                                   |   |   | 2.9    |   |                                                          |                                           | − |   |   |   | − |   |   |   | 2.9 |   |
| Preferred  & common equity                 |   |   | 517.3  |   |                                                          |                                           | − |   |   |   | − |   |   |   | 517.3 |   |
| Partnership interests1                              |   |   | 8.4    |   |                                                          |                                           | − |   |   |   | − |   |   |   | − |   |
| Total Investments                                   |   | $      | 535.5  |   |                                                          | $                                              | − |   |   | $ | − |   |   | $ | 527.1 |   |

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|                                           |   | Fair Value 3/31/15 |    |   | Net Unrealized Appreciation (Depreciation) |   |   | Unrealized Depreciation due to spin-off of CSWI |   |   | Purchases of Investments1 |   |   | Divestitures |   |   | Distributions |   |    | Fair Value at 3/31/16 |   |
|------------------------------------------------|--------|--------------------|---------|--------|-------------------------------------------------|--------|--------|-------------------------------------------------|--------|--------|--------------------------------|--------|--------|--------------|--------|--------|---------------|--------|---------|-----------------------|--------|
| 1st lien notes                                 |   | $                  | − |   |                                            | $      | 0.2    |                                            |   | $      | −                        |   |   | $            | 39.3   |   |          | $      | − |                  |   | $ | − |   |   | $ | 39.5 |   |
| 2nd lien notes                                 |   |               | 6.9     |   |                                                 |   | (0.7   | )                                               |   |   | −                        |   |   |         | 32.0   |   |          |   | − |                  |   |   | − |   |   |   | 38.2 |   |
| Subordinated debt                              |   |               | 2.9     |   |                                            |   | 1.1    |                                            |   |   | −                        |   |   |         | 12.4   |   |          |   | (1.3    | )                     |   |   | − |   |   |   | 15.1 |   |
| Preferred equity, common equity & warrants |   |               | 517.3   |   |                                            |   | 14.8   |                                            |   |   | (458.3                         | )      |   |         | 2.0    |   |          |   | (19.5   | )                     |   |   | (7.0 | )* |   |   | 49.3 |   |
| Total Investments                              |   | $                  | 527.1   |   |                                            | $      | 15.4   |                                            |   | $      | (458.3                         | )      |   | $            | 85.7   |   |          | $      | (20.8   | )                     |   | $ | (7.0 | ) |   | $ | 142.1 |   |

|                          |   | Fair Value 3/31/14 |    |   | Net Unrealized Appreciation (Depreciation) |   |    | Purchases of Investments |   |   | Divestitures |   |   | Distributions |    |   | Fair Value at 3/31/15 |   |
|-------------------------------|--------|--------------------|---------|--------|-------------------------------------------------|--------|---------|--------------------------|--------|--------|--------------|--------|--------|---------------|---------|--------|-----------------------|--------|
| 2nd lien notes                |   | $                  | − |   |                                            | $      | − |                     |   | $      | 6.9          |   |   | $             | − |   |                  | $      | − |   |   | $ | 6.9 |   |
| Subordinated debt             |   |               | 2.7     |   |                                            |   | 0.1     |                     |   |   | 0.1          |   |   |          | − |   |                  |   | − |   |   |   | 2.9 |   |
| Preferred & common equity |   |               | 445.7   |   |                                            |   | 98.3    |                     |   |   | 1.3          |   |   |          | (28.0   | )      |                  |   | − |   |   |   | 517.3 |   |
| Total Investments             |   | $                  | 448.4   |   |                                            | $      | 98.4    |                     |   | $      | 8.3          |   |   | $             | (28.0   | )      |                  | $      | − |   |   | $ | 527.1 |   |

| 6. | INCOME TAXES |
|----|--------------|

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Table of Contents

| Net Realized Gains on Transactions In                            |   | For the Tax Year Ended December 31 |       |
|------------------------------------------------------------------|--------|------------------------------------|------------|
| Investment Securities of                                         |   | 2015                               |       |   | 2014 |   |
| Control investments                                              |   | $                                  | 231,000    |   |   | $ | − |   |
| Affiliate investments                                            |   |                               | (1,457,711 | ) |   |   | 157,128,306 |   |
| Non-control/Non-affiliate investments                            |   |                               | 12,758,384 |   |   |   | (1,189,983 | ) |
| Net realized gain on investments                                 |   | $                                  | 11,531,673 |   |   | $ | 155,938,323 |   |
| Capital gain distribution                                        |   |                               | (1,543,833 | ) |   |   | − |   |
| Taxes incurred on deemed capital gain distribution               |   |                               | 2,947,944  |   |   |   | 54,370,006 |   |
| Net realized gains on investments (for book purposes; after tax) |   | $                                  | 7,039,896  |   |   | $ | 101,568,317 |   |
| Net realized gains on investments (for tax purposes; after tax)  |   | $                                  | 5,474,753  |   |   | $ | 100,972,869 |   |

----

Table of Contents

|                                        |   | Years ended |   |
|---------------------------------------------|--------|-------------|--------|
|                                        |   | 2016        |   |   | 2015 |   |
| Deferred tax asset:                         |   |        |   |   |   |   |
| Net operating loss carryforwards            |   | $           | 1,381  |   |   | $ | - |   |
| Compensation                                |   |        | 874    |   |   |   | 741 |   |
| Pension liability                           |   |        | 750    |   |   |   | 1,092 |   |
| Other                                       |   |        | 203    |   |   |   | 370 |   |
| Total deferred tax asset                    |   |        | 3,208  |   |   |   | 2,203 |   |
| Less valuation allowance                    |   |        | (866   | ) |   |   | - |   |
| Total net deferred tax asset                |   |        | 2,342  |   |   |   | 2,203 |   |
| Deferred tax liabilities:                   |   |        |   |   |   |   |   |   |
| Pension benefit                             |   |        | -      |   |   |   | (3,603 | ) |
| Other                                       |   |        | -      |   |   |   | (12 | ) |
| Total deferred tax liabilities              |   |        | -      |   |   |   | (3,615 | ) |
| Total net deferred tax assets (liabilities) |   | $           | 2,342  |   |   | $ | (1,412 | ) |

| 7. | ACCUMULATED NET REALIZED GAINS (LOSSES) ON INVESTMENTS |
|----|--------------------------------------------------------|

|                                                                                                                                                                                                                                                  |   | Year Ended March 31, 2016 |    |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------|---------|
| Additional capital                                                               |   | $                         | (16,877 | ) |
| Accumulated net investment loss                                                                                                                   |   | $                         | 15,395  |   |
| Accumulated net realized gains                                                                                                          |   | $                         | 1,482   |   |

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| 8. | SPIN-OFF COMPENSATION PLAN |
|----|----------------------------|

| 9. | EMPLOYEE STOCK BASED COMPENSATION PLANS |
|----|-----------------------------------------|

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|                                    |   | Number of Shares |     |   | 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   | )      |                            |   | 23.37 |   |
| Canceled/Forfeited                 |   |             | –  |   |                            |   | – |   |
| Spin-off adjustments               |   |             | (1,487   | )*     |                            | NA     |   |
| Balance at March 31, 2016          |   |             | 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                          |   |             | (15,974  | )      |                            |   | 17.38 |   |
| Canceled/Forfeited                 |   |             | –  |   |                            |   | – |   |
| Spin-off adjustments               |   |             | (26      | )*     |                            |   |   |   |
| Balance at March 31, 2016          |   |             | –  |   |                            |   | – |   |
| Combined Balance at March 31, 2016 |   |             | 362,513  |   |                            | $      | 11.21 | * |

| March 31, 2016 | Weighted AverageRemaining Contractual Term |   | Aggregate IntrinsicValue |      |
|----------------|--------------------------------------------|--------|--------------------------|-----------|
| Outstanding    | 2.1 years                                  |   | $                        | 2,426,559 |   |
| Exercisable    | 1.9 years                                  |   | $                        | 968,416   |   |

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Table of Contents

| Restricted stock available for issuance as of March 31, 2015             |   |   | 31,240   |   |
|--------------------------------------------------------------------------|--------|--------|----------|--------|
| Additional restricted stock approved under the plan                      |   |   | 450,000  |   |
| Restricted stock granted during the twelve months ended March 31, 2016   |   |   | (143,500 | )      |
| Restricted stock forfeited during the twelve months ended March 31, 2016 |   |   | 6,800    |   |
| Restricted stock available for issuance as of March 31, 2016             |   |   | 344,540  |   |

----

Table of Contents

| 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, 2014 |   |             | 24,680        |   |                                                | $      | 30.30       |                                               |   |   | 4.1 |   |
| Granted                    |   |             | 127,0001 |   |                                                |   | 15.192 |                                               |   |   | 2.0 |   |
| Vested                     |   |             | (4,720        | )      |                                                |   | 30.51       |                                               |   |   | − |   |
| Forfeited                  |   |             | (4,000        | )      |                                                |   | 22.98       |                                               |   |   | − |   |
| Unvested at March 31, 2015 |   |             | 142,960       |   |                                                | $      | 17.07       |                                               |   |   | 2.6 |   |
| Granted                    |   |             | 143,500       |   |                                                |   | 14.87       |                                               |   |   | 3.6 |   |
| Vested                     |   |             | (46,453       | )      |                                                |   | 17.93       |                                               |   |   | − |   |
| Forfeited                  |   |             | (6,800        | )      |                                                |   | 17.84       |                                               |   |   | − |   |
| Unvested at March 31, 2016 |   |             | 233,207       |   |                                                | $      | 15.79       |                                               |   |   | 3.0 |   |

----

| 1 | See Note 8. |
|--------|-------------|

| 2 | Monte Carlo simulation was utilized to develop the grant date fair value for the restricted stock awards under the executive compensation plan. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------|

----

Table of Contents

| Individual Cash Incentive Awards |   | Number of Shares |    |   | Weighted Average Grant Price Per Share |   |    | Weighted Average Remaining Vesting Term (in Years) |   |
|----------------------------------|--------|------------------|---------|--------|----------------------------------------|--------|---------|----------------------------------------------------|--------|
| Unvested at March 31, 2015       |   |             | 82,000  |   |                                   | $      | 45.40   |                                               |   |   | 3.3 |   |
| Granted                          |   |             | − |   |                                   |   | − |                                               |   |   | − |   |
| Vested                           |   |             | − |   |                                   |   | − |                                               |   |   | − |   |
| Forfeited or expired             |   |             | (8,000  | )      |                                   |   | 43.57   |                                               |   |   | − |   |
| Unvested at March 31, 2016       |   |             | 74,000  |   |                                   | $      | 45.60   |                                               |   |   | 2.3 |   |

| 10. | OTHER EMPLOYEE COMPENSATION |
|-----|-----------------------------|

| 11. | RETIREMENT PLANS |
|-----|------------------|

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Table of Contents

|                                                                  |   | Years ended March 31, |     |
|-----------------------------------------------------------------------|--------|-----------------------|----------|
|                                                                  |   | 2016                  |     |   | 2015 |   |   | 2014 |   |
| Net pension benefit                                                   |   |                  |     |   |   |   |   |   |   |
| Service cost-benefits earned during the year                          |   | $                     | 189,886  |   |   | $ | 199,097 |   |   | $ | 253,837 |   |
| Interest cost on projected benefit obligation                         |   |                  | 173,120  |   |   |   | 347,933 |   |   |   | 291,699 |   |
| Expected return on assets                                             |   |                  | (578,273 | ) |   |   | (1,043,584 | ) |   |   | (906,816 | ) |
| Net amortization                                                      |   |                  | 4,689    |   |   |   | 25,284 |   |   |   | 68,813 |   |
| Immediate recognition of benefit cost due to Plan Freeze at 9/30/2015 |   |                  | (71,946  | ) |   |   | – |   |   |   | – |   |
| Net pension benefit from qualified plan                               |   | $                     | (282,524 | ) |   | $ | (471,270 | ) |   | $ | (292,467 | ) |

|                                    |   | Years ended March 31, |       |
|-----------------------------------------|--------|-----------------------|------------|
|                                    |   | 2016                  |       |   | 2015 |   |   | 2014 |   |
| Change in benefit obligation            |   |                  |       |   |   |   |   |   |   |
| Benefit obligation at beginning of year |   | $                     | 8,328,554  |   |   | $ | 7,149,380 |   |   | $ | 6,421,611 |   |
| Service cost                            |   |                  | 189,886    |   |   |   | 199,097 |   |   |   | 253,837 |   |
| Interest cost                           |   |                  | 173,120    |   |   |   | 347,933 |   |   |   | 291,699 |   |
| Actuarial gain                          |   |                  | (507,703   | ) |   |   | 930,588 |   |   |   | 306,173 |   |
| Benefits paid                           |   |                  | (171,791   | ) |   |   | (298,444 | ) |   |   | (123,940 | ) |
| Curtailment recognition                 |   |                  | (409,285   | ) |   |   | – |   |   |   | – |   |
| Transferred to CSWI at 9/30/2015        |   |                  | (7,602,781 | ) |   |   | – |   |   |   | – |   |
| Benefit obligation at end of year       |   | $                     | –    |   |   | $ | 8,328,554 |   |   | $ | 7,149,380 |   |

|                                           |   | Years ended March 31, |        |
|------------------------------------------------|--------|-----------------------|-------------|
|                                           |   | 2016                  |        |   | 2015 |   |   | 2014 |   |
| Change in plan assets                          |   |                  |        |   |   |   |   |   |   |
| Fair value of plan assets at beginning of year |   | $                     | 18,622,781  |   |   | $ | 18,112,073 |   |   | $ | 15,183,833 |   |
| Actual return on plan assets                   |   |                  | (314,549    | ) |   |   | 809,152 |   |   |   | 3,052,180 |   |
| Benefits paid                                  |   |                  | (171,791    | ) |   |   | (298,444 | ) |   |   | (123,940 | ) |
| Transferred to CSWI at 9/30/2015               |   |                  | (18,136,441 | ) |   |   | – |   |   |   | – |   |
| Fair value of plan assets at end of year       |   | $                     | –     |   |   | $ | 18,622,781 |   |   | $ | 18,112,073 |   |

|                                                                                      |   | Years ended March 31, |    |
|-------------------------------------------------------------------------------------------|--------|-----------------------|---------|
|                                                                                      |   | 2016                  |    |   | 2015 |   |
| Funded status and amounts recognized in consolidated statements of assets and liabilities |   |                  |    |   |   |   |
| Actuarial present value of benefit obligations:                                           |   |                  |    |   |   |   |
| Accumulated benefit obligation                                                            |   | $                     | – |   |   | $ | (7,149,380 | ) |
|                                                                                      |   |                  |    |   |   |   |   |   |
| Projected benefit obligation for service rendered to date                                 |   |                  | – |   |   |   | (8,328,554 | ) |
| Plan assets at fair value*                                                                |   |                  | – |   |   |   | 18,622,781 |   |
| Funded status                                                                             |   |                  | – |   |   |   | 10,294,227 |   |
| Unrecognized net (gain)loss                                                               |   |                  | – |   |   |   | (146,916 | ) |
| Unrecognized prior service costs                                                          |   |                  | – |   |   |   | 103,825 |   |
| ASC 715 adjustment                                                                        |   |                  | – |   |   |   | 43,091 |   |
| Prepaid pension cost included in pension assets                                           |   | $                     | – |   |   | $ | 10,294,227 |   |

| * | Includes approximately 238,252 shares of CSWC Common Stock at 3/31/2015. |
|---|--------------------------------------------------------------------------|

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Table of Contents

|                                                                  |   | Years ended March 31, |    |
|-----------------------------------------------------------------------|--------|-----------------------|---------|
|                                                                  |   | 2016                  |    |   | 2015 |   |   | 2014 |   |
| Net pension cost                                                      |   |                  |    |   |   |   |   |   |   |
| Service cost-benefits earned during the year                          |   | $                     | 82,152  |   |   | $ | 17,795 |   |   | $ | 106,199 |   |
| Interest cost on projected benefit obligation                         |   |                  | 138,344 |   |   |   | 142,579 |   |   |   | 197,366 |   |
| Net amortization                                                      |   |                  | 44,485  |   |   |   | 31,154 |   |   |   | 164,649 |   |
| Immediate recognition of benefit cost due to Plan Freeze at 9/30/2015 |   |                  | (81,697 | ) |   |   | – |   |   |   | – |   |
| Net pension cost from restoration plan                                |   | $                     | 183,284 |   |   | $ | 191,528 |   |   | $ | 468,214 |   |

|                                    |   | Years ended March 31, |      |
|-----------------------------------------|--------|-----------------------|-----------|
|                                    |   | 2016                  |      |   | 2015 |   |   | 2014 |   |
| Change in benefit obligation            |   |                  |      |   |   |   |   |   |   |
| Benefit obligation at beginning of year |   | $                     | 3,119,234 |   |   | $ | 3,103,308 |   |   | $ | 2,649,966 |   |
| Service cost                            |   |                  | 82,152    |   |   |   | 17,795 |   |   |   | 106,199 |   |
| Interest cost                           |   |                  | 138,344   |   |   |   | 142,579 |   |   |   | 197,366 |   |
| Actuarial gain                          |   |                  | 427,370   |   |   |   | 105,475 |   |   |   | 149,777 |   |
| Benefits paid                           |   |                  | (199,938  | ) |   |   | (249,923 | ) |   |   | – |   |
| Curtailment recognition                 |   |                  | (329,449  | ) |   |   | – |   |   |   | – |   |
| Other adjustments                       |   |                  | (177,051  | ) |   |   | – |   |   |   | – |   |
| Benefit obligation at end of year       |   | $                     | 3,060,662 |   |   | $ | 3,119,234 |   |   | $ | 3,103,308 |   |

|                                                                        |   | Years ended March 31, |       |
|-----------------------------------------------------------------------------|--------|-----------------------|------------|
|                                                                        |   | 2016                  |       |   | 2015 |   |
| Amounts recognized in our consolidated statements of assets and liabilities |   |                  |       |   |   |   |
| Projected benefit obligation                                                |   | $                     | (3,060,662 | ) |   | $ | (3,119,234 | ) |
| Unrecognized net gain                                                       |   |                  | 855,822    |   |   |   | 863,079 |   |
| Unrecognized prior service costs                                            |   |                  | –    |   |   |   | (89,804 | ) |
| ASC 715 adjustment                                                          |   |                  | –    |   |   |   | (773,275 | ) |
| Accrued pension cost included in pension liabilities                        |   | $                     | (2,204,840 | ) |   | $ | (3,119,234 | ) |

|                           |   | Years ended March 31, |   |
|--------------------------------|--------|-----------------------|--------|
|                           |   | 2016                  |   |   | 2015 |   |   | 2014 |   |
| Discount rate                  |   |                  | 4.25   | % |   |   | 4.25 | % |   |   | 5.00 | % |
| Rate of compensation increases |   |                  | 5.00   | % |   |   | 5.00 | % |   |   | 5.00 | % |

|                           |   | Years ended March 31, |   |
|--------------------------------|--------|-----------------------|--------|
|                           |   | 2016                  |   |   | 2015 |   |   | 2014 |   |
| Discount rate                  |   |                  | 4.25   | % |   |   | 5.00 | % |   |   | 4.50 | % |
| Expected return on plan assets |   |                  | N/A    |   |   |   | 7.00 | % |   |   | 7.00 | % |
| Rate of compensation increases |   |                  | N/A    |   |   |   | 5.00 | % |   |   | 5.00 | % |

----

Table of Contents

| (In thousands)   |   | 2017 |   |   | 2018   |   |   | 2019   |   |   | 2020 |   |   | 2021 |   |   |   | 2022-2026 |   |
|------------------|--------|------|--------|--------|--------|--------|--------|--------|--------|--------|------|--------|--------|------|--------|--------|--------|-----------|--------|
| Restoration Plan |   | $    | 212    |   |   | $      | 214    |   |   | $      | 215  |   |   | $    | 214    |   |   | $         | 214    |   |   | $ | 1,122 |   |

|                      |   | Percentage of Plan Assets atMarch 31, 2015 |   |
|---------------------------|--------|--------------------------------------------|--------|
| Asset Category            |   |                                       |   |
| Equity securities         |   |                                       | 57.9   | % |
| Fixed income securities   |   |                                       | 35.7   | % |
| Other                     |   |                                       | 2.9    | % |
| Cash and cash equivalents |   |                                       | 3.5    | % |
|                      |   |                                       | 100.0  | % |

----

Table of Contents

|                             |   |   |   |   | Fair Value Measurements at Reporting Date Using              |   |
|-----------------------------|--------|--------|--------|--------|--------------------------------------------------------------|--------|
| Asset Category              |   | Total  |   |   | Quoted Prices in Active Markets for Identical Assets Level I |   |   | Significant Other Observable Inputs Level 2 |   |   | Significant Observable Inputs Level 3 |   |
| Equity securities (a)       |   | $      | 35.7   |   |                                                         | $      | 19.5 |   |   | $ | 16.2 |   |   | $ | – |   |
| Fixed income securities (b) |   |   | 22.0   |   |                                                         |   | 2.1 |   |   |   | 19.9 |   |   |   | – |   |
| Cash and cash equivalents   |   |   | 2.2    |   |                                                         |   | 2.2 |   |   |   | – |   |   |   | – |   |
| Other                       |   |   | 1.8    |   |                                                         |   | 1.1 |   |   |   | 0.7 |   |   |   | – |   |
| Total                       |   | $      | 61.7   |   |                                                         | $      | 24.9 |   |   | $ | 36.8 |   |   | $ | – |   |

|  | (a) | This category includes investment in equity securities of large, medium and small companies and equity investments in foreign companies.  Mutual funds included in this category are valued using the net asset value per unit as of the valuation date.  These investments include shares of our common stock.  At March 31, 2015, our common stock represented 17.7% of the plan assets. |
|--|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (b) | This category includes investments in investment grade fixed income instruments, primarily U.S. government obligations. |
|--|-----|-------------------------------------------------------------------------------------------------------------------------|

| 12. | COMMITMENTS AND CONTINGENCIES |
|-----|-------------------------------|

| Year ending March 31, |   | Rent Commitment |      |
|-----------------------|--------|-----------------|-----------|
| 2017                  |   |            | 229,982   |   |
| 2018                  |   |            | 239,242   |   |
| 2019                  |   |            | 248,503   |   |
| 2020                  |   |            | 257,765   |   |
| 2021                  |   |            | 267,026   |   |
| Thereafter            |   |            | 225,737   |   |
| Total                 |   | $               | 1,468,255 |   |

----

Table of Contents

| 13. | SOURCES OF INCOME |
|-----|-------------------|

|                                                |   | Investment Income |      |   | Realized Gain (Loss) on Investments before Income Taxes |   |
|------------------------------------------------|--------|-------------------|-----------|--------|---------------------------------------------------------|--------|
| Year ended March 31, 2016                      |   | Interest          |      |   | Dividends                                               |   |   | Other Income |   |   |   |   |
| Non-control/Non-affiliate investments          |   | $                 | 4,408,912 |   |                                                    | $      | 110 |   |   | $ | 130,586 |   |   | $ | (9,574,909 | ) |
| Affiliate investments                          |   |              | 134,800   |   |                                                    |   | − |   |   |   | − |   |   |   | (1,457,711 | ) |
| Control investments                            |   |              | −   |   |                                                    |   | 3,489,205 |   |   |   | 530,000 |   |   |   | 231,000 |   |
| Other sources, including temporary investments |   |              | 385,752   |   |                                                    |   | − |   |   |   | 80,576 |   |   |   | − |   |
|                                           |   | $                 | 4,929,464 |   |                                                    | $      | 3,489,315 |   |   | $ | 741,162 |   |   | $ | (10,801,620 | ) |

|                                                |   | Investment Income |    |   | Realized Gain (Loss) on Investments before Income Taxes |   |
|------------------------------------------------|--------|-------------------|---------|--------|---------------------------------------------------------|--------|
| Year ended March 31, 2015                      |   | Interest          |    |   | Dividends                                               |   |   | Other Income |   |   |   |   |
| Non-control/Non-affiliate investments          |   | $                 | 288,292 |   |                                                    | $      | 67,309 |   |   | $ | 75,000 |   |   | $ | 8,225,962 |   |
| Affiliate investments                          |   |              | − |   |                                                    |   | 581,021 |   |   |   | − |   |   |   | 157,213,916 |   |
| Control investments                            |   |              | − |   |                                                    |   | 8,294,500 |   |   |  | 484,800 |   |   |   | (1,175,287 | ) |
| Other sources, including temporary investments |   |              | 122,225 |   |                                                    |   | − |   |   |   | 35,185 |   |   |   | − |   |
|                                           |   | $                 | 410,517 |   |                                                    | $      | 8,942,830 |   |   | $ | 594,985 |   |   | $ | 164,264,591 |   |

|                                                |   | Investment Income |    |   | Realized Gain (Loss) on Investments before Income Taxes |   |
|------------------------------------------------|--------|-------------------|---------|--------|---------------------------------------------------------|--------|
| Year ended March 31, 2014                      |   | Interest          |    |   | Dividends                                               |   |   | Other Income |   |   |   |   |
| Non-control/Non-affiliate investments          |   | $                 | 259,377 |   |                                                    | $      | 179,728 |   |   | $ | 89,189 |   |   | $ | 14,084,087 |   |
| Affiliate investments                          |   |              | 250,811 |   |                                                    |   | 2,575,038 |   |   |   | 48,800 |   |   |   | − |   |
| Control investments                            |   |              | − |   |                                                    |   | 8,650,000 |   |   |   | 485,267 |   |   |   | − |   |
| Other sources, including temporary investments |   |              | 66,949  |   |                                                    |   | − |   |   |   | 1,386 |   |   |   | − |   |
|                                           |   | $                 | 577,137 |   |                                                    | $      | 11,404,766 |   |   | $ | 624,642 |   |   | $ | 14,084,087 |   |

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| 14. | SELECTED QUARTERLY FINANCIAL DATA |
|-----|-----------------------------------|

| 2016                                                              |   | FirstQuarter |   |   | SecondQuarter |   |   | ThirdQuarter |   |   | FourthQuarter |   |   | Total  |   |
|-------------------------------------------------------------------|--------|--------------|--------|--------|---------------|--------|--------|--------------|--------|--------|---------------|--------|--------|--------|--------|
| Net investment income (loss)                                      |   | $            | (2,830 | )      |          | $      | (9,335 | )            |   | $      | (20           | )      |   | $      | 1,498  |   |   | $ | (10,687 | ) |
| Net realized gain (loss) on investments                           |   |         | 749    |   |          |   | (3,396 | )            |   |   | (8,170        | )      |   |   | 15     |   |   |   | (10,802 | ) |
| Net increase (decrease) in unrealized appreciation of investments |   |         | 4,245  |   |          |   | 3,783  |         |   |   | 7,060         |   |   |   | 1,001  |   |   |   | 16,089 |   |
| Net increase (decrease) in net assets from operations             |   |         | 2,164  |   |          |   | (8,948 | )            |   |   | (1,130        | )      |   |   | 2,514  |   |   |   | (5,400 | ) |
| Net investment (loss) income per share                            |   |         | (0.18  | )      |          |   | (0.60  | )            |   |   | (0.00         | )      |   |   | 0.10   |   |   |   | (0.68 | ) |
| Net increase (decrease) in net assets from operations per share   |   |         | 0.14   |   |          |   | (0.58  | )            |   |   | (0.07         | )      |   |   | 0.16   |   |   |   | (0.35 | ) |

| 2015                                                              |   | FirstQuarter |    |   | SecondQuarter |   |    | ThirdQuarter |   |   | FourthQuarter |   |   | Total  |   |
|-------------------------------------------------------------------|--------|--------------|---------|--------|---------------|--------|---------|--------------|--------|--------|---------------|--------|--------|--------|--------|
| Net investment income (loss)                                      |   | $            | (1,483  | )      |          | $      | (1,239  | )            |   | $      | 4,429         |   |   | $      | (4,152 | ) |   | $ | (2,445 | ) |
| Net realized gain (loss) on investments                           |   |         | (15,713 | )      |          |   | 46,393  |         |   |   | 111,229       |   |   |   | 22,356 |   |   |   | 164,265 |   |
| Net increase (decrease) in unrealized appreciation of investments |   |         | 36,917  |   |          |   | (75,744 | )            |   |   | (84,964       | )      |   |   | 15,414 |   |   |   | (108,377 | ) |
| Net increase (decrease) in net assets from operations             |   |         | 19,721  |   |          |   | (30,590 | )            |   |   | 30,694        |   |   |   | 33,617 |   |   |   | 53,442 |   |
| Net investment (loss) income per share                            |   |         | (0.10   | )      |          |   | (0.08   | )            |   |   | 0.28          |   |   |   | (0.26  | ) |   |   | (0.16 | ) |
| Net increase (decrease) in net assets from operations per share   |   |         | 1.19    |   |          |   | (2.38   | )            |   |   | (1.62         | )      |   |   | 2.13   |   |   |   | (0.68 | ) |

----

Table of Contents

| 15. | SELECTED PER SHARE DATA AND RATIOS |
|-----|------------------------------------|

|                                                                                    |   | Years Ended March 31 |    |
|------------------------------------------------------------------------------------|--------|----------------------|---------|
| Per Share Data                                                                     |   | 2016                 |    |   | 2015 |   |   | 2014 |   |   | 2013 |   |   | 2012 |   |
| Investment income                                                                  |   | $                    | .58     |   |   | $ | .64 |   |   | $ | .82 |   |   | $ | .71 |   |   | $ | .62 |   |
| Operating expenses                                                                 |   |                 | (1.34   | ) |   |   | (.78 | ) |   |   | (.55 | ) |   |   | (.55 | ) |   |   | (.44 | ) |
| Income taxes                                                                       |   |                 | .08     |   |   |   | (.02 | ) |   |   | .05 |   |   |   | (.04 | ) |   |   | (.01 | ) |
| Net investment (loss) income                                                       |   |                 | (.68    | ) |   |   | (.16 | ) |   |   | .32 |   |   |   | .12 |   |   |   | .17 |   |
| Distributions from undistributed net investment income                             |   |                 | (.04    | ) |   |   | (.20 | ) |   |   | (.20 | ) |   |   | (.20 | ) |   |   | (.20 | ) |
| Net realized (loss) gain, net of tax incurred on deemed capital gain distributions |   |                 | (.88    | ) |   |   | 7.06 |   |   |   | .66 |   |   |   | 5.81 |   |   |   | .70 |   |
| Dividends from capital gains                                                       |   |                 | (.10    | ) |   |   | – |   |   |   | – |   |   |   | (5.07 | ) |   |   | – |   |
| Net increase (decrease) in unrealized appreciation of investments                  |   |                 | 1.02    |   |   |   | (6.96 | ) |   |   | 6.04 |   |   |   | 1.08 |   |   |   | 5.23 |   |
| Distribution to CSWI                                                               |   |                 | (1.75   | ) |   |   | – |   |   |   | – |   |   |   | – |   |   |   | – |   |
| Decrease in unrealized appreciation due to distributions to CSWI                   |   |                 | (29.15  | ) |   |   | – |   |   |   | – |   |   |   | – |   |   |   | – |   |
| Exercise of employee stock options1                                                |   |                 | .03     |   |   |   | (.04 | ) |   |   | (.18 | ) |   |   | (.24 | ) |   |   | – |   |
| Forfeiture/ (Issuance) of restricted stock2                                        |   |                 | (.49    | ) |   |   | (.40 | ) |   |   | – |   |   |   | (.10 | ) |   |   | – |   |
| Share based compensation expense                                                   |   |                 | .08     |   |   |   | .07 |   |   |   | (.04 | ) |   |   | .03 |   |   |   | .07 |   |
| Net change in pension plan funded status                                           |   |                 | – |   |   |   | (.05 | ) |   |   | .08 |   |   |   | .01 |   |   |   | (.03 | ) |
| Increase (decrease) in net asset value                                             |   |                 | (31.96  | ) |   |   | (.68 | ) |   |   | 6.68 |   |   |   | 1.44 |   |   |   | 5.94 |   |
| Net asset value                                                                    |   |                 |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Beginning of year                                                                  |   |                 | 49.30   |   |   |   | 49.98 |   |   |   | 43.30 |   |   |   | 41.86 |   |   |   | 35.92 |   |
| End of year                                                                        |   | $                    | 17.34   |   |   | $ | 49.30 |   |   | $ | 49.98 |   |   | $ | 43.30 |   |   | $ | 41.86 |   |
|                                                                               |   |                 |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ratios and Supplemental Data                                                       |   |                 |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ratio of operating expenses to average net assets                                  |   |                 | 4.48    | % |   |   | 1.59 | % |   |   | 1.18 | % |   |   | 1.36 | % |   |   | 1.07 | % |
| Ratio of net investment income to average net assets                               |   |                 | (2.27   | %) |   |   | (.32 | %) |   |   | .68 | % |   |   | .31 | % |   |   | .41 | % |
| Total investment return3                                                           |   |                 | (20.7   | %) |   |   | 8.4 | % |   |   | 16.9 | % |   |   | 27.0 | % |   |   | 18.1 | % |
| Total return based on change in NAV4                                               |   |                 | (2.2    | %) |   |   | (1.0 | %) |   |   | 15.9 | % |   |   | 16.0 | % |   |   | 17.1 | % |
|                                                                               |   |                 |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Weighted-average fully diluted shares outstanding                                  |   |                 | 15,724  |   |   |   | 15,531 |   |   |   | 15,298 |   |   |   | 15,207 |   |   |   | 15,038 |   |
| Common shares outstanding at end of period                                         |   |                 | 15,726  |   |   |   | 15,565 |   |   |   | 15,414 |   |   |   | 15,236 |   |   |   | 15,020 |   |

| 1 | Net decrease is due to the exercise of employee stock options at prices less than beginning of period net asset value. |
|---|------------------------------------------------------------------------------------------------------------------------|

| 2 | Reflects impact of the different share amounts as a result of issuance or forfeiture of restricted stock during the period. |
|---|-----------------------------------------------------------------------------------------------------------------------------|

| 3 | Total investment return based on purchase of stock at the current market price on the first day and a sale at the current market price on the last day of each period reported on the table and assumes reinvestment of dividends at prices obtained by CSWC’s dividend reinvestment plan during the period. The return does not reflect any sales load that may be paid by an investor. |
|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4 | Total return based on change in net asset value was calculated using the sum of ending net asset value plus dividends to shareholders and other non-operating changes during the period, as divided by the beginning net asset value. |
|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| 16. | SIGNIFICANT SUBSIDIARY |
|-----|------------------------|

|                    |   | March 31, 2016 |       |
|-------------------------|--------|----------------|------------|
| Current Assets          |   | $              | 11,242,247 |   |
| Non-Current Assets      |   |           | 23,643,815 |   |
| Current Liabilities     |   |           | 1,996,523  |   |
| Non-Current Liabilities |   | $              | 2,239,678  |   |

|                                   |   | Twelve months ended 3/31/2016 |       |
|----------------------------------------|--------|-------------------------------|------------|
| Revenue                                |   | $                             | 20,764,570 |   |
| Income from continuing operations |   |                          | 591,072    |   |
| Net Income                        |   |                          | 471,762    |   |

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Table of Contents

|  Portfolio Company     |   Industry                 |  Investment Type |  Maturity Date | Current Interest Rate1,3 |   Principal                                     |   Cost                                                      |   Fair Value2                                               |
|-----------------------------|--------------------------------------|-----------------------|---------------------|--------------------------|-----------------------------------------------------------|-----------------------------------------------------------------------|-----------------------------------------------------------------------|
| Ahead, LLC                  | Business services                    | First Lien            | 11/2/2020           | L+ 6.50%                 | $4,937,500                                                | 4,800,794                                                             | 4,814,063                                                             |
| ATX Networks Corp.          | Technology products & components | First Lien            | 6/12/2021           | L+6.00%(Floor 1.00%)     | 4,974,937                                                 | 4,915,874                                                             | 4,925,188                                                             |
| BDF Acquisition Corp.       | Consumer products & retail       | Second Lien           | 2/12/2022           | L+8.00%(Floor 1.00%)     | 3,000,000                                                 |  2,859,650                                                       |           2,895,000 |
| Compuware Corporation       | Software & IT services           | First Lien            | 12/15/2019          | L+5.25%(Floor 1.00%)     |         2,922,078 | 2,854,681                                                             |           2,829,857 |
| CRGT                        | Aerospace & defense              | First Lien            | 12/19/2020          | L+6.50%(Floor 1.00%)     |         3,923,567 |           3,918,804 |           3,913,758 |
| Digital River               | Software & IT services           | First Lien            | 2/12/2021           | L+6.50%(Floor 1.00%)     |         5,415,452 |           5,383,375 |           5,408,683 |
| Hunter Defense Technologies | Aerospace & Defense              | First Lien            | 8/5/2019            | L+5.50%(Floor 1.00%)     | 2,960,526                                                 |           2,950,002 |           2,442,434 |
| ICSH, Inc.                  | Containers & packaging           | First Lien            | 12/31/2018          | L+5.75%(Floor 1.00%)     | 4,974,243                                                 |           4,953,875 |           4,941,503 |
| Imagine! Print Solutions    | Media, marketing & entertainment | First Lien            | 3/30/2022           | L+6.00%(Floor 1.00%)     | 3,000,000                                                 |           2,947,500 |           3,011,250 |
| Integro Parent Inc.         | Business services                    | First Lien            | 11/2/2022           | L+5.75%(Floor 1.00%)     | 4,988,287                                                 | 4,821,625                                                             | 4,813,697                                                             |
| iPayment, Inc.              | Financial services                   | First Lien            | 5/8/2017            | L+5.25%(Floor 1.50%)     | 5,000,000                                                 |           4,904,057 |           4,778,150 |
| Jet Support Services, Inc.  | Aerospace & Defense              | First Lien            | 8/31/2021           | L+6.50%(Floor 1.00%)     | 4,875,000                                                 |           4,768,698 |           4,631,250 |
| Kendra Scott                | Consumer products & retail       | First Lien            | 7/17/2020           | L+6.00%(Floor 1.00%)     |  4,899,684                                           |           4,892,037 |           4,887,434 |
| LTI Holdings, Inc.          | Industrial products                  | First Lien            | 4/17/2022           | L+4.25%(Floor 1.00%)     | 1,994,975                                                 |           1,760,565 |           1,890,239 |

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Table of Contents

| MediMedia USA                   | Healthcare services                     | First Lien        | 11/20/2018     | L+6.75%(Floor 1.25%)       |         5,000,000 |           4,876,157 |           4,887,500 |
|---------------------------------|-----------------------------------------|-------------------|----------------|----------------------------|-----------------------------------------------------------|-----------------------------------------------------------------------|-----------------------------------------------------------------------|
| Milk Specialties                | Food, agriculture & beverage        | First Lien        | 11/9/2018      | L+7.00%(Floor 1.25%)       |         3,686,288 |           3,681,983 |           3,693,200 |
| Mood Media Corporation          | Media, marketing & entertainment    | First Lien        | 5/1/2019       | L+6.00%(Floor 1.00%)       |         4,549,714 |           4,435,393 |           4,260,375 |
| New Media Holdings II LLC       | Media, marketing & entertainment    | First Lien        | 6/4/2020       | L+6.25%(Floor 1.00%)       |         4,962,311 |           4,951,057 |           4,853,785 |
| Prepaid Legal Services, Inc.    | Consumer services                       | First Lien        | 7/1/2019       | L+5.25%(Floor 1.25%)       |         4,824,760 |           4,819,070 |           4,812,698 |
|                            |                                    |  Second Lien |  7/1/2020 |  L+9.00%(Floor 1.25%) |  405,000                                             |  392,850                                                         |  400,950                                                         |
| Stardust Finance Holdings, Inc. | Buildings & infrastructure products | First Lien        | 3/13/2022      | L+5.50%(Floor 1.00%)       |         4,974,874 |           4,928,459 |           4,937,563 |
| TaxACT                          | Financial services                      | First Lien        | 12/31/2022     | L+6.00%(Floor 1.00%)       |         4,500,000 |           4,369,102 |           4,432,500 |
| US Joiner (IMECO and RAACI)     | Transportation & logistics          | First Lien        | 4/16/2020      | L+6.00%(Floor 1.00%)       |         2,992,366 |           2,940,000 |           2,947,481 |
| Vivid Seats                     | Media, marketing & entertainment    | First Lien        | 3/1/2022       | L+6.00%(Floor 1.00%)       |         5,000,000 |           4,653,688 |           4,737,500 |
| Water Pik, Inc.                 | Consumer products & retail          | First Lien        | 7/9/2020       | L+4.75%(Floor 1.00%)       |         1,191,287 |           1,188,560 |           1,179,868 |
|                            |                                    | Second Lien       | 1/9/2021       | L+8.75%(Floor 1.00%)       |         1,912,281 |           1,867,957 |           1,888,377 |
|                            |                                    |              |           |                       |                                                      |                                                                  |                                                                  |
| Total Investments               |                                         |              |           |                       |                                                           | $99,835,813                                                           | $99,214,303                                                           |

|  | 1 | Represents the interest rate as of March 31, 2016. All interest rates are payable in cash, unless otherwise noted. |
|--|---|--------------------------------------------------------------------------------------------------------------------|

|  | 2 | Represents the fair value determined utilizing a similar process as the Company in accordance with ASC 820. However, the fair value is determined by the Board of Managers of the Joint Venture. It is not included in the Company’s Board of Directors’ valuation process described elsewhere herein. |
|--|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | 3 | The majority of investments bear interest at a rate that may be determined by reference to London Interbank Offered Rate (“LIBOR” or “L”) or Prime (“Prime”) which reset daily, monthly, quarterly, or semiannually.  For each the Company has provided the spread over LIBOR or Prime and the current contractual interest rate in effect at March 31, 2016.  Certain investments are subject to a LIBOR or Prime interest rate floor. |
|--|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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Table of Contents

|                                           |   | As of March 31, 2016 |    |
|-------------------------------------------|--------|----------------------|---------|
| Selected Balance Sheet Information:       |   |                 |    |
| Investments, at fair value (cost $99,836) |   | $                    | 99,214  |   |
| Cash and cash equivalents                 |   |                 | 2,181   |   |
| Deferred financing costs                  |   |                 | 1,060   |   |
| Interest receivable                       |   |                 | 436     |   |
| Total assets                              |   | $                    | 102,891 |   |
|                                      |   |                 |    |   |
| Senior credit facility payable            |   | $                    | 48,000  |   |
| Payable for unsettled transactions        |   |                 | 8,040   |   |
| Other liabilities                         |   |                 | 1,494   |   |
| Total liabilities                         |   | $                    | 57,534  |   |
| Members’ equity                     |   |                 | 45,357  |   |
| Total liabilities and net assets          |   | $                    | 102,891 |   |

|                                                                 |   | Period from Inception through March 31, 2016 |   |
|-----------------------------------------------------------------|--------|----------------------------------------------|--------|
| Selected Statement of Operations Information:                   |   |                                         |   |
| Total revenues                                                  |   | $                                            | 2,401  |   |
| Total expenses                                                  |   |                                         | (689   | ) |
| Net investment income                                           |   |                                         | 1,712  |   |
| Net unrealized depreciation                                     |   |                                         | (621   | ) |
| Net realized gains                                              |   |                                         | 42     |   |
| Net increase in members’ equity resulting from operations |   | $                                            | 1,133  |   |

| 17. | RELATED PARTY TRANSACTIONS |
|-----|----------------------------|

| 18. | SUBSEQUENT EVENTS |
|-----|-------------------|

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Table of Contents

| Portfolio Company/ Type of Investment (1)                                                                             |   | Amount of Interest, Fees or Dividends Credited in Income (2) |    |   | Fair Value at March 31, 2015 |   |    | Gross Additions (3) |   |   | Gross Reductions (4) |   |   | Fair Value at March 31, 2016 |     |
|-----------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------|---------|--------|------------------------------|--------|---------|---------------------|--------|--------|----------------------|--------|--------|------------------------------|----------|
|                                                                                                                       |   |                                                         |    |   |                         |   |    |                |   |   |                 |   |   |                         |     |
| Control Investments                                                                                                   |   |                                                         |    |   |                         |   |    |                |   |   |                 |   |   |                         |     |
| The RectorSeal Corporation27,907 shares common stock                                                                  |   | $                                                            | 420     |   |                         | $      | 358,200 |                |   | $      | −              |   |   | $                            | (358,200 | ) |   | $ | − |   |
| The Whitmore Manufacturing Company80 shares common stock                                                              |   |                                                         | 60      |   |                         |   | 89,000  |                |   |   | −              |   |   |                         | (89,000  | ) |   |   | − |   |
| I-45 SLF LLC80% LLC equity interest                                                                                   |   |                                                         | 1,342   |   |                         |   | -       |                |   |   | 36,800               |   |   |                         | (463     | ) |   |   | 36,337 |   |
| Media Recovery, Inc.800,000 shares Series A Convertible Preferred Stock, convertible into 800,000 shares common stock |   |                                                         | 641     |   |                         |   | 4,300   |                |   |   | 457                  |   |   |                         | −  |   |   |   | 4,757 |   |
| 4,000,002 shares common stock                                                                                         |   |                                                         | 1,331   |   |                         |   | 21,700  |                |   |   | 5,745                |   |   |                         | −  |   |   |   | 27,445 |   |
| Balco, Inc.445,000 shares common stock; 60,920 shares Class B non-voting common                                       |   |                                                         | − |   |                         |   | 5,100   |                |   |   | −              |   |   |                         | (5,100   | ) |   |   | − |   |
| CapStar Holdings Corporation500 shares common stock                                                                   |   |                                                         |         |   |                         |   | 8,560   |                |   |   | −              |   |   |                         | (8,560   | ) |   |   | − |   |
| 1,000,000 shares preferred stock                                                                                      |   |                                                         | − |   |                         |   | 2,311   |                |   |   | −              |   |   |                         | (2,311   | ) |   |   | − |   |
| Humac Company1,041,000 shares of common stock                                                                         |   |                                                         | 1       |   |                         |   | 244     |                |   |   | −              |   |   |                         | (244     | ) |   |   | − |   |
| Total Control Investments                                                                                             |   | $                                                            | 3,795   |   |                         | $      | 489,415 |                |   | $      | 43,002               |   |   | $                            | (463,878 | ) |   | $ | 68,539 |   |

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| Portfolio Company / Type of Investment (1)                                                                                                         |   | Amount of Interest, Fees or Dividends Credited in Income (2) |    |   | Fair Value at March 31, 2015 |   |    | Gross Additions (3) |   |   | Gross Reductions (4) |   |   | Fair Value at March 31, 2016 |     |
|----------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------|---------|--------|------------------------------|--------|---------|---------------------|--------|--------|----------------------|--------|--------|------------------------------|----------|
| Affiliated  Investments                                                                                                                       |   |                                                         |    |   |                         |   |    |                |   |   |                 |   |   |                         |     |
| Boxx Technologies, Inc.3,125,354 shares Series B Convertible Preferred Stock, convertible into 3,125,354 shares of common stock at $0.50 per share |   |                                                         | − |   |                         |   | 2,362   |                |   |   | −              |   |   |                         | (2,362   | ) |   |   | − |   |
| Chandler Signs, LPSenior secured debt                                                                                                              |   |                                                         | 135     |   |                         |   | − |                |   |   | 4,413                |   |   |                         |     |   |   |   | 4,413 |   |
| 1,500,000 units of Class A-1 common stock                                                                                                          |   |                                                         | − |   |                         |   | − |                |   |   | 2,529                |   |   |                         | −  |   |   |   | 2,529 |   |
| kSEP Holdings, Inc.861,591 shares of common stock                                                                                                  |   |                                                         | − |   |                         |   | 1,863   |                |   |   | 1,813                |   |   |                         |     |   |   |   | 3,676 |   |
| Wellogix, Inc. 4,788,371 shares Series A-1 Convertible Preferred Stock, convertible into 4,788,371 shares of common stock at $1.0441 per share     |   |                                                         | -       |   |                         |   | 4,120   |                |   |   | −              |   |   |                         | (4,120   | ) |   |   | − |   |
| Total Affiliated Investments                                                                                                                       |   | $                                                            | 135     |   |                         | $      | 8,345   |                |   | $      | 8,755                |   |   | $                            | (6,482   | ) |   | $ | 10,618 |   |
| Total Control & Affiliated Investments                                                                                                         |   | $                                                            | 3,930   |   |                         | $      | 497,760 |                |   | $      | 51,757               |   |   | $                            | (470,360 | ) |   | $ | 79,157 |   |

| (1) | The principal amount and ownership detail as shown in the Consolidated Schedules of Investments. |
|-----|--------------------------------------------------------------------------------------------------|

| (2) | Represents the total amount of interest, fees and dividends, credited to income for the portion of the year an investment was included in the Control or Affiliate categories, respectively. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Gross additions include increases in the cost basis of investments resulting from new portfolio investments, follow-on investments and accrued PIK interest, and the exchange of one or more existing securities for one or more new securities.  Gross additions also include net increases in unrealized appreciation or net decreases in unrealized depreciation as well as movement of an existing portfolio company into this category and out of a different category. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | Gross reductions include in decreases in the cost basis of investments resulting from principal repayments or sales and exchanges of one or more existing securities for one or more new securities.  Gross reductions also include net increases in unrealized depreciation or net decreases in unrealized appreciation as well as the movement of an existing portfolio company out of this category and into a different category. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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Table of Contents

| Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure |
|---------|--------------------------------------------------------------------------------------|

| Item 9A. | Controls and Procedures |
|----------|-------------------------|

| (a) | Evaluation of Disclosure Controls and Procedures |
|-----|--------------------------------------------------|

| (b) | Management’s Report on Internal Control over Financial Reporting |
|-----|------------------------------------------------------------------------|

|  (c) | Changes in Internal Control over Financial Reporting |
|-----------|------------------------------------------------------|

| (d) | Limitations on Controls |
|-----|-------------------------|

| Item 9B. | Other Information |
|----------|-------------------|

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Table of Contents

| Item 10. | Directors, Executive Officers and Corporate Governance |
|----------|--------------------------------------------------------|

| Item 11. | Executive Compensation |
|----------|------------------------|

| Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters |
|----------|------------------------------------------------------------------------------------------------|

| Plan Category                                              |   | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights |    |   | Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights |   |    | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans |   |
|------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------|---------|--------|-----------------------------------------------------------------------------|--------|---------|----------------------------------------------------------------------------------------------|--------|
| Equity compensation plans approved by shareholders (1)     |   |                                                                                        | 362,513 |   |                                                                        | $      | 11.21   |                                                                                         |   |   | 348,540 |   |
| Equity compensation plans not approved by shareholders (2) |   |                                                                                        | − |   |                                                                        |   | − |                                                                                         |   |   | − |   |
| Total                                                      |   |                                                                                        | 362,513 |   |                                                                        | $      | 11.21   |                                                                                         |   |   | 348,540 |   |

|  | 1) | Includes the 1999 Stock Option Plan, 2009 Stock Incentive Plan and 2010 Restricted Stock Award Plan.   For a description of all plans, please refer to Footnotes 8 and 9 contained in our consolidated financial statements. |
|--|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | 2) | We have no equity compensation plans that were not approved by shareholders. |
|--|----|------------------------------------------------------------------------------|

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| Item 13. | Certain Relationships and Related Transactions, and Director Independence |
|----------|---------------------------------------------------------------------------|

| Item 14. | Principal Accountant Fees and Services |
|----------|----------------------------------------|

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Table of Contents

| Item 15. | Exhibits and Financial Statement Schedules |
|----------|--------------------------------------------|

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

|                                                                                           | Page |
|------------------------------------------------------------------------------------------------|------|
| Reports of Independent Registered Public Accounting Firm                                       | 51   |
| Consolidated Statements of Assets and Liabilities as of March 31, 2016 and 2015                | 53   |
| Consolidated Statements of Operations for Years Ended March 31, 2016, 2015 and 2014            | 54   |
| Consolidated Statements of Changes in Net Assets for Years Ended March 31, 2016, 2015 and 2014 | 55   |
| Consolidated Statements of Cash Flows for Years Ended March 31, 2016, 2015 and 2014            | 56   |
| Consolidated Schedules of Investments as of March 31, 2016 and 2015                            | 58   |
| Notes to Consolidated Financial Statements                                                     | 64   |

| 2. | Schedule of Investments in and Advances To Affiliates |
|----|-------------------------------------------------------|

| 3. | Exhibits |
|----|----------|

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Table of Contents

|                      | CAPITAL SOUTHWEST CORPORATION |                                  |
|---------------------------|-------------------------------|---------------------------------------|
|                      | By:                           | /s/ Bowen S. Diehl                    |   |
|                      |                          | Bowen S. Diehl                        |   |
|                      |                          | President and Chief Executive Officer |   |
| Date:  June 14, 2016 |                          |                                  |   |

| Signature                    | Title                                 | Date          |
|------------------------------|---------------------------------------|---------------|
|  /s/ Joseph B. Armes    | Chairman of the Board                 | June 14, 2016 |
| Joseph B. Armes              |                                  |          |
|  /s/ David R. Brooks    | Director                              | June 14, 2016 |
| David R. Brooks              |                                  |          |
|  /s/ Jack D. Furst      | Director                              | June 14, 2016 |
| Jack D. Furst                |                                  |          |
|  /s/ T. Duane Morgan    | Director                              | June 14, 2016 |
| T. Duane Morgan              |                                  |          |
|  /s/ William Thomas III | Director                              | June 14, 2016 |
| William Thomas III           |                                  |          |
|  /s/ John H. Wilson     | Director                              | June 14, 2016 |
| John H. Wilson               |                                  |          |
|  /s/ Bowen S. Diehl     | President and Chief Executive Officer | June 14, 2016 |
| Bowen S. Diehl               |                                  |          |
|  /s/ Michael S. Sarner  | Chief Financial Officer               | June 14, 2016 |
| Michael S. Sarner            | (Chief Financial/Accounting Officer)  |          |

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| Exhibit No. | Description                                                                                                                                                                                                                      |
|-------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|        |                                                                                                                                                                                                                             |
| 2.1         | Distribution Agreement, dated September 8, 2015, between the Company and CSW Industrials, Inc. (filed as Exhibit 2.1 to Form 8-K dated September 14, 2015).                                                                      |
|        |                                                                                                                                                                                                                             |
| 3.1(a)      | Articles of Incorporation and Articles of Amendment to Articles of Incorporation, dated June 25, 1969 (filed as Exhibit 1(a) and 1(b) to Amendment No. 3 to Form N-2 for the fiscal year ended March 31, 1979).                  |
|        |                                                                                                                                                                                                                             |
| 3.1(b)      | Articles of Amendment to Articles of Incorporation, dated July 20, 1987 (filed as an exhibit to Form N-SAR for the six month period ended September 30, 1987).                                                                   |
|        |                                                                                                                                                                                                                             |
| 3.2         | By-Laws of the Company, as amended (filed as Exhibit 3.2 to Form 10-K for the fiscal year ended March 31, 2007).                                                                                                                 |
|        |                                                                                                                                                                                                                             |
| 4.1         | Specimen of Common Stock certificate (filed as Exhibit 4.1 to Form 10-K for the fiscal year ended March 31, 2002).                                                                                                               |
|        |                                                                                                                                                                                                                             |
| 10.3        | Capital Southwest Corporation and Its Affiliates Restoration of Retirement Income Plan as amended and restated effective January 1, 2008 (filed as Exhibit 10.3 to form 10-K for the fiscal year ended March 31, 2009).          |
|        |                                                                                                                                                                                                                             |
| 10.6        | Form of Indemnification Agreement which has been established with all directors and executive officers of the Company (filed as Exhibit 10.9 to Form 8-K dated February 10, 1994).                                               |
|        |                                                                                                                                                                                                                             |
| 10.7        | Capital Southwest Corporation 1999 Stock Option Plan (filed as Exhibit 10.10 to Form 10-K for the fiscal year ended March 31, 2000).                                                                                             |
|        |                                                                                                                                                                                                                             |
| 10.8        | Severance Pay Agreement with William M. Ashbaugh (filed as Exhibit 10.1 to Form 8-K dated July 18, 2005).                                                                                                                        |
|        |                                                                                                                                                                                                                             |
| 10.15       | Retirement Plan for Employees of Capital Southwest Corporation and its Affiliates as amended and restated effective April 1, 2011 (filed as Exhibit 10.15 to Form 10-K for the fiscal year ended March 31, 2012)                 |
|        |                                                                                                                                                                                                                             |
| 10.16       | Amendment One to Retirement Plan for employees of Capital Southwest Corporation and its affiliates as amended and restated effective April 1, 2011(filed as Exhibit 10.16 to Form 10-K for the fiscal year ended March 31, 2013) |
|        |                                                                                                                                                                                                                             |
| 10.17       | Amendment Four to Retirement Plan for employees of Capital Southwest Corporation and its Affiliates as amended and restated effective April 1, 2011 (filed as Exhibit 10.1 to Form 8-K dated August 6, 2015).                    |
|        |                                                                                                                                                                                                                             |
| 10.18       | Joseph B. Armes Revised Offer Letter (filed as Exhibit 99.2 to Form 8-K dated May 17, 2013).                                                                                                                                     |
|             |                                                                                                                                                                                                                             |
| 10.19       | Capital Southwest Corporation 2009 Stock Incentive Plan (filed as Exhibit 10.1 to Form 10-Q for the quarterly period ended June 30, 2011)                                                                                        |
|        |                                                                                                                                                                                                                             |
| 10.20       | Capital Southwest Corporation 2010 Restricted Stock Award Plan (filed as Exhibit 10.1 to Form 10-Q for the quarterly period ended June 30, 2011)                                                                                 |

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Table of Contents

| Exhibit No. | Description                                                                                                                                                                                                        |
|-------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|        |                                                                                                                                                                                                               |
| 10.21       | First Amendment to the Capital Southwest Corporation 2009 Stock Incentive Plan (filed as Exhibit 10.1 to Form 10-Q for the quarterly period ended September 30, 2014)                                              |
|        |                                                                                                                                                                                                               |
| 10.22       | Second Amendment to the Capital Southwest Corporation 2009 Stock Incentive Plan (filed as Exhibit 10.1 to Form 8-K dated August 12, 2015).                                                                         |
|        |                                                                                                                                                                                                               |
| 10.23       | First Amendment to the Capital Southwest Corporation 2010 Restricted Stock Award Plan (filed as Exhibit 10.1 to Form 10-Q for the quarterly period ended September 30, 2014)                                       |
|        |                                                                                                                                                                                                               |
| 10.24       | Second Amendment to the Capital Southwest Corporation 2010 Restricted Stock Award Plan (filed as Exhibit 10.2 to Form 8-K dated August 12, 2015).                                                                  |
|        |                                                                                                                                                                                                               |
| 10.25       | Form of Restricted Stock Award Agreement under the 2010 Restricted Stock Award Plan, as amended (filed as Exhibit 10.1 to Form 10-Q for the quarterly period ended September 30, 2014)                             |
|        |                                                                                                                                                                                                               |
| 10.26       | Form of Non-Qualified Stock Option Agreement under the 2009 Stock Incentive Plan, as amended (filed as Exhibit 10.1 to Form 10-Q for the quarterly period ended September 30, 2014)                                |
|        |                                                                                                                                                                                                               |
| 10.27       | Form of Cash Incentive Award Agreement (filed as Exhibit 10.1 to Form 10-Q for the quarterly period ended September 30, 2014)                                                                                      |
|        |                                                                                                                                                                                                               |
| 10.28       | Tax Matters Agreement, dated September 8, 2015, between the Company and CSW Industrials, Inc. (filed as Exhibit 10.1 to Form 8-K dated September 14, 2015).                                                        |
|        |                                                                                                                                                                                                               |
| 10.29       | Amended and Restated Employee Matters Agreement, dated September 4, 2015, between the Company and CSW Industrials, Inc. (filed as Exhibit 10.2 to Form 8-K dated September 14, 2015).                              |
|        |                                                                                                                                                                                                               |
| 10.30       | Form of Amended and Restated Non-Qualified Stock Option Agreement under the 2009 Stock Incentive Plan (CSWC Employee Form) (filed as Exhibit 10.3 to Form 10-Q for the quarterly period ended September 30, 2015). |
|        |                                                                                                                                                                                                               |
| 10.31       | Form of Amended and Restated Non-Qualified Stock Option Agreement under the 2009 Stock Incentive Plan (CSWI Employee Form) (filed as Exhibit 10.4 to Form 10-Q for the quarterly period ended September 30, 2015). |
|        |                                                                                                                                                                                                               |
| 10.32       | Form of Amended and Restated Incentive Stock Option Agreement under the 2009 Stock Incentive Plan (CSWC Employee Form) (filed as Exhibit 10.5 to Form 10-Q for the quarterly period ended September 30, 2015).     |
|        |                                                                                                                                                                                                               |
| 10.33       | Form of Amended and Restated Incentive Stock Option Agreement under the 2009 Stock Incentive Plan (CSWI Employee Form) (filed as Exhibit 10.6 to Form 10-Q for the quarterly period ended September 30, 2015).     |
|        |                                                                                                                                                                                                               |
| 10.34       | Form of Amended and Restated Non-Qualified Stock Option Agreement (Executive Compensation Plan – CSWC Employee Form) (filed as Exhibit 10.7 to Form 10-Q for the quarterly period ended September 30, 2015). |
|        |                                                                                                                                                                                                               |
| 10.35       | Form of Amended and Restated Non-Qualified Stock Option Agreement (Executive Compensation Plan – CSWI Employee Form) (filed as Exhibit 10.8 to Form 10-Q for the quarterly period ended September 30, 2015). |
|        |                                                                                                                                                                                                               |
| 10.36       | Form of Restricted Stock Agreement under the 2010 Restricted Stock Award Plan (CSWC Employee Form) (filed as Exhibit 10.9 to Form 10-Q for the quarterly period ended September 30, 2015).                         |

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Table of Contents

| Exhibit No. | Description                                                                                                                                                                                                      |
|-------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|        |                                                                                                                                                                                                             |
| 10.37       | Form of Amended and Restated Restricted Stock Agreement under the 2010 Restricted Stock Award Plan (CSWI Employee Form) (filed as Exhibit 10.10 to Form 10-Q for the quarterly period ended September 30, 2015). |
|        |                                                                                                                                                                                                             |
| 10.38       | Form of Amended and Restated Restricted Stock Award (Executive Compensation Plan – CSWC Employee Form) (filed as Exhibit 10.11 to Form 10-Q for the quarterly period ended September 30, 2015).            |
|        |                                                                                                                                                                                                             |
| 10.39       | Form of Amended and Restated Restricted Stock Award (Executive Compensation Plan – CSWI Employee Form) (filed as Exhibit 10.12 to Form 10-Q for the quarterly period ended September 30, 2015).            |
|        |                                                                                                                                                                                                             |
| 10.40       | Form of Amended and Restated Cash Incentive Award Agreement (Executive Compensation Plan) (filed as Exhibit 10.13 to Form 10-Q for the quarterly period ended September 30, 2015).                               |
|        |                                                                                                                                                                                                             |
| 10.41       | I-45 SLF LLC Agreement dated September 9, 2015 (filed as Exhibit 10.14 to Form 10-Q for the quarterly period ended September 30, 2015).                                                                          |
|        |                                                                                                                                                                                                             |
| 21.1 *      | List of subsidiaries of the Company.                                                                                                                                                                             |
|        |                                                                                                                                                                                                             |
| 23.1 *      | Consent of Independent Registered Public Accounting Firm – Grant Thornton LLP.                                                                                                                             |
|        |                                                                                                                                                                                                             |
| 31.1 *      | Certification of Chairman of the Board and President required by Rule 13a-14(a) or Rule 15d-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) or Rule 15d-14(a) of the Exchange Act, filed herewith.                                                                                       |
|        |                                                                                                                                                                                                             |
| 32.1 **     | Certification of Chairman of the Board and President required by Rule 13a-14(b) or Rule 15d-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) or Rule 15d-14(b) of the Exchange Act and Section 1350 of Chapter 63 of Title 18 of the United States Code, furnished herewith.              |
|        |                                                                                                                                                                                                             |
| 99.1        | Audited Consolidated Financial Statements of Media Recovery, Inc. as of and for the years ended September 30, 2016 and 2015.1                                                                                    |

| 1 | Media Recover, Inc. has a 2016 fiscal year to be ended September 30, 2016. These financial statements will be filed by amendment within 90 days of September 30, 2016. |
|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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