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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, Dallas, Texas                   | 75240                                |
| (Address of principal executive offices)                       | (Zip Code)                           |
| Title of Each Class                    | Name of Each Exchange on Which Registered |
|----------------------------------------|-------------------------------------------|
| Common Stock, $.25 par value per share | The Nasdaq Global Select Market           |

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| PART I     |                                                                                                         | Page   |
|------------|--------------------------------------------------------------------------------------------------------------|--------|
| Item 1.    | Business                                                                                                     | 2      |
| Item 1A.   | Risk Factors                                                                                                 | 11     |
| Item 1B.   | Unresolved Staff Comments                                                                                    | 21     |
| Item 2.    | Properties                                                                                                   | 21     |
| Item 3.    | Legal Proceedings                                                                                            | 21     |
| Item 4.    | Mine Safety Disclosures                                                                                      | 21     |
|       |                                                                                                         |   |
| PART II    |                                                                                                         |   |
| Item 5.    | Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 21     |
| Item 6.    | Selected Financial Data                                                                                      | 23     |
| Item 7.    | Management's Discussion and Analysis of Financial Condition and Results of Operations                        | 24     |
| Item 7A.   | Quantitative and Qualitative Disclosures About Market Risk                                                   | 32     |
| Item 8.    | Financial Statements and Supplementary Data                                                                  | 34     |
| Item 9.    | Changes in and Disagreements With Accountants on Accounting and Financial Disclosure                         | 79     |
| Item 9A.   | Controls and Procedures                                                                                      | 79     |
| Item 9B.   | Other Information                                                                                            | 80     |
|       |                                                                                                         |   |
| PART III   |                                                                                                         |   |
| Item 10.   | Directors, Executive Officers and Corporate Governance                                                       | 80     |
| Item 11.   | Executive Compensation                                                                                       | 80     |
| Item 12.   | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters               | 80     |
| Item 13.   | Certain Relationships and Related Transactions, and Director Independence                                    | 81     |
| Item 14.   | Principal Accountant Fees and Services                                                                       | 81     |
|       |                                                                                                         |   |
| PART IV    |                                                                                                         |   |
| Item 15.   | Exhibits and Financial Statement Schedules                                                                   | 82     |
|       |                                                                                                         |   |
| Signatures |                                                                                                         | 83     |

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

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

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

|  | · | 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; |
|--|--------|-----------------------------------------------------------------|

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

|  | · | our ability to complete the anticipated spin-off on time or at all. |
|--|--------|---------------------------------------------------------------------|

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

|                               |   | CSWC   |       |
|------------------------------------|--------|--------|------------|
|                               |   | Cost   |       |   | Value |   |
|                               |   |        |       |   |  |   |
| The RectorSeal Corporation         |   | $      | 52,600     |   |   | $ | 358,200,000 |   |
| The Whitmore Manufacturing Company |   |   | 1,600,000  |   |   |   | 89,000,000 |   |
| Media Recovery, Inc.               |   |   | 5,415,000  |   |   |   | 26,000,000 |   |
| CapStar Holdings Corporation       |   |   | 4,703,619  |   |   |   | 10,871,000 |   |
| TitanLiner                         |   |   | 5,951,222  |   |   |   | 8,686,000 |   |
| Research Now Group, Inc.           |   |   | 6,895,231  |   |   |   | 6,895,231 |   |
| Balco, Inc.                        |   |   | 624,920    |   |   |   | 5,100,000 |   |
|                               |   | $      | 25,242,592 |   |   | $ | 504,752,231 |   |

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|  | · | 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 focus on companies located in the United States. Acquisition candidates for our existing portfolio companies may be located worldwide. |
|--|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | 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. |
|--|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|  | · | 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 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 execution 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 Chief Investment Officer, investment team and 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 with a 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 will 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, legal, and environmental diligence. |
|--|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | Document and Close:  Upon completion of a satisfactory due diligence review, our investment team presents its written findings to the CSWC 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 involvement 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~~ ~~and annual financial statements against the 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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~~ ~~

~~, ~~

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~~,~~

|  | · | 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.  Such 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 Securities Exchange Act of 1934 (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. |
|--|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | 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 such 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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~~,~~

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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% 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. |
|--|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|  | · | The source of income requirement will be satisfied if we obtain 90% of our income for each year from distributions, interest, gains from the sale of stock or securities or similar sources. |
|--|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | 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 acceptable securities.  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, of two or more issuers that are controlled, as determined under applicable Code rules, by us and that are engaged in the same or similar or related trades or businesses or of certain “qualified publicly traded partnerships.” |
|--|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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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. |
|--|--------|----------------|

|  | · | 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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|  | · | Portfolio companies may fail to satisfy financial, operating or other covenants imposed by us or other lenders, which could lead to a default and, potentially, termination of its loans and foreclosure on its secured assets.  These events could trigger cross-defaults under other agreements and jeopardize the portfolio company’s ability to meet its obligations, including under the debt or equity securities we hold.  We may also incur expenses to the extent necessary to recover upon a default or to negotiate new terms with the defaulting portfolio company. |
|--|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | 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. |
|--|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

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

| Quarter Ended      |   | High   |   |   | Low    |   |
|--------------------|--------|--------|--------|--------|--------|--------|
| 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 |   |
|               |   |   |   |   |   |   |   |   |
| March 31, 2014     |   | $      | 36.63  |   |   | $      | 33.23 |   |
| December 31, 2013  |   |   | 35.00  |   |   |   | 31.11 |   |
| September 30, 2013 |   |   | 37.11  |   |   |   | 32.97 |   |
| June 30, 2013      |   |   | 35.55  |   |   |   | 28.37 |   |

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| Payment Date      |   | Cash Dividend |   |
|-------------------|--------|---------------|--------|
| May 28, 2010      |   |          | 0.10   |   |
| November 30, 2010 |   |          | 0.10   |   |
| 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   |   |

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

| Financial Position(as of March 31)                          |   | 2015   |     |   | 2014   |   |    | 2013   |   |   | 2012    |   |   | 2011   |    |
|-------------------------------------------------------------|--------|--------|----------|--------|--------|--------|---------|--------|--------|--------|---------|--------|--------|--------|---------|
| Investments at cost                                         |   | $      | 64,960   |   |   | $      | 98,967  |   |   | $      | 88,266  |   |   | $      | 88,993  |   |   | $ | 98,355 |   |
| Unrealized appreciation                                     |   |   | 470,576  |   |   |   | 578,953 |   |   |   | 485,921 |   |   |   | 469,553 |   |   |   | 390,918 |   |
| Investments at market or fair value                         |   |   | 535,536  |   |   |   | 677,920 |   |   |   | 574,187 |   |   |   | 558,546 |   |   |   | 489,273 |   |
| Total assets                                                |   |   | 776,872  |   |   |   | 778,694 |   |   |   | 667,672 |   |   |   | 632,989 |   |   |   | 543,214 |   |
| Net assets                                                  |   |   | 767,418  |   |   |   | 770,388 |   |   |   | 659,777 |   |   |   | 628,706 |   |   |   | 539,233 |   |
| Shares outstanding                                          |   |   | 15,565   |   |   |   | 15,414  |   |   |   | 15,236  |   |   |   | 15,020  |   |   |   | 15,012 |   |
|                                                        |   |   |     |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
| Changes in Net Assets(years ended March 31)                 |   |   |     |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
| Net investment (loss) income                                |   | $      | (2,445   | )      |   | $      | 4,894   |   |   | $      | 1,907   |   |   | $      | 2,544   |   |   | $ | 1,804 |   |
| Net realized gain  on investments                      |   |   | 164,264  |   |   |   | 14,084  |   |   |   | 89,558  |   |   |   | 11,827  |   |   |   | 63,463 |   |
| Net (decrease) increase in unrealized appreciation          |   |   | (108,377 | )      |   |   | 93,032  |   |   |   | 16,367  |   |   |   | 78,635  |   |   |   | 12,999 |   |
| Increase in net assets from operations before distributions |   |   | 53,442   |   |   |   | 112,010 |   |   |   | 107,832 |   |   |   | 93,006  |   |   |   | 78,266 |   |
| Distributions from undistributed net investment income      |   |   | (3,083   | )      |   |   | (3,050  | )      |   |   | (80,326 | )      |   |   | (3,003  | ) |   |   | (2,994 | ) |
| Taxes incurred on deemed capital gain distributions         |   |   | (54,370  | )      |   |   | (3,787  | )      |   |   | (1,125  | )      |   |   | (1,249  | ) |   |   | (24,578 | ) |
| Proceeds from exercise of employee stock options            |   |   | 803      |   |   |   | 4,820   |   |   |   | 3,981   |   |   |   | 99      |   |   |   | 745 |   |
| Stock option and restricted awards (benefit) expense        |   |   | 1,027    |   |   |   | (632    | )      |   |   | 515     |   |   |   | 1,050   |   |   |   | 957 |   |
| Change in pension plan funded status                        |   |   | (789     | )      |   |   | 1,250   |   |   |   | 193     |   |   |   | (430    | ) |   |   | (88 | ) |
| (Decrease) Increase in net assets                           |   | $      | (2,969   | )      |   | $      | 110,611 |   |   | $      | 31,070  |   |   | $      | 89,473  |   |   | $ | 52,308 |   |
| Per share data(as of March 31)                              |   |   |     |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
| Net assets                                                  |   | $      | 49.30    |   |   | $      | 49.98   |   |   | $      | 43.30   |   |   | $      | 41.86   |   |   | $ | 35.92 |   |
| Closing market price                                        |   |   | 46.42    |   |   |   | 34.72   |   |   |   | 28.75   |   |   |   | 23.64   |   |   |   | 22.88 |   |
| Cash dividends paid                                         |   |   | .20      |   |   |   | .20     |   |   |   | 5.29    |   |   |   | .20     |   |   |   | .20 |   |

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

~~, ~~

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|                                  |   | For the fiscal year ended March 31,(in thousands) |    |
|---------------------------------------|--------|---------------------------------------------------|---------|
|                                  |   | 2015                                              |    |   | 2014 |   |   | 2013 |   |
| Cash & Temporary Investments |   | $                                                 | 4,687   |   |   | $ | 3,660 |   |   | $ | 4,586 |   |
| Total Assets                          |   |                                              | 146,296 |   |   |   | 133,229 |   |   |   | 107,475 |   |
| Capital Expenditures                  |   |                                              | 1,831   |   |   |   | 2,196 |   |   |   | 1,219 |   |
| Total Debt                            |   |                                              | 13,000  |   |   |   | 20,600 |   |   |   | 7,500 |   |
| Revenues                              |   |                                              | 134,623 |   |   |   | 109,311 |   |   |   | 90,339 |   |
| Net Income                            |   |                                              | 18,144  |   |   |   | 12,101 |   |   |   | 8,777 |   |
| EBITDA                                |   |                                              | 34,775  |   |   |   | 24,579 |   |   |   | 19,183 |   |
| CSWC Valuation                        |   | $                                                 | 253,600 |   |   | $ | 171,500 |   |   | $ | 150,100 |   |
|                             |   | For the fiscal year ended March 31, (in thousands) |    |
|----------------------------------|--------|----------------------------------------------------|---------|
|                             |   | 2015                                               |    |   | 2014 |   |   | 2013 |   |
| Cash & Temporary Investments |   | $                                                  | 20,779  |   |   | $ | 20,949 |   |   | $ | 21,177 |   |
| Total Assets                     |   |                                               | 51,756  |   |   |   | 53,682 |   |   |   | 50,395 |   |
| Capital Expenditures             |   |                                               | 2,058   |   |   |   | 2,162 |   |   |   | 1,451 |   |
| Total Debt                       |   |                                               | − |   |   |   | − |   |   |   | − |   |
| Revenues                         |   |                                               | 53,565  |   |   |   | 51,060 |   |   |   | 48,048 |   |
| Net Income                       |   |                                               | 5,471   |   |   |   | 6,344 |   |   |   | 5,146 |   |
| EBITDA                           |   |                                               | 8,706   |   |   |   | 9,592 |   |   |   | 7,438 |   |
| CSWC Valuation                   |   | $                                                  | 82,300  |   |   | $ | 82,200 |   |   | $ | 68,700 |   |

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|                             |   | For the fiscal year ended March 31, (in thousands) |    |
|----------------------------------|--------|----------------------------------------------------|---------|
|                             |   | 2015                                               |    |   | 2014 |   |   | 2013 |   |
| Cash & Temporary Investments |   | $                                                  | 3,959   |   |   | $ | 2,661 |   |   | $ | 7,102 |   |
| Total Assets                     |   |                                               | 86,677  |   |   |   | 84,163 |   |   |   | 69,665 |   |
| Capital Expenditures             |   |                                               | 4,775   |   |   |   | 10,334 |   |   |   | 12,681 |   |
| Total Debt                       |   |                                               | 13,705  |   |   |   | 24,497 |   |   |   | 15,848 |   |
| Revenues                         |   |                                               | 59,408  |   |   |   | 57,784 |   |   |   | 48,481 |   |
| Net Income                       |   |                                               | 5,740   |   |   |   | 6,132 |   |   |   | 7,273 |   |
| EBITDA                           |   |                                               | 11,243  |   |   |   | 13,000 |   |   |   | 11,814 |   |
| Total CSWC Valuation             |   |                                               | 111,300 |   |   |   | 110,600 |   |   |   | 100,600 |   |
| RectorSeal’s 20% Interest  |   |                                               | 22,300  |   |   |   | 22,100 |   |   |   | 20,100 |   |
| CSWC’s 80% Interest        |   | $                                                  | 89,000  |   |   | $ | 88,500 |   |   | $ | 80,500 |   |
|                 |   | For the fiscal year ended September 30, (in thousands) |   |
|----------------------|--------|--------------------------------------------------------|--------|
|                 |   | 2014                                                   |   |   | 2013 |   |   | 2012 |   |
| Cash                 |   | $                                                      | 78     |   |   | $ | 5 |   |   | $ | 185 |   |
| Total Assets         |   |                                                   | 36,330 |   |   |   | 43,284 |   |   |   | 46,624 |   |
| Capital Expenditures |   |                                                   | 927    |   |   |   | 538 |   |   |   | 726 |   |
| Total Debt           |   |                                                   | -      |   |   |   | − |   |   |   | 2,556 |   |
| Revenues             |   |                                                   | 21,300 |   |   |   | 92,926 |   |   |   | 104,632 |   |
| Net loss/ Income     |   |                                                   | (2,121 | )** |   |   | 1,405 |   |   |   | 842 |   |
| EBITDA               |   |                                                   | 3,128  |   |   |   | 3,248 |   |   |   | 3,062 |   |
| CSWC Valuation*      |   | $                                                      | 26,000 |   |   | $ | 23,900 |   |   | $ | 11,900 |   |

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|                               |   | Year Ended March 31, |      |
|------------------------------------|--------|----------------------|-----------|
|                               |   | 2015                 |      |   | 2014 |   |   | 2013 |   |
| Alamo Group, Inc.                  |   | $                    | 535,634   |   |   | $ | 793,192 |   |   | $ | 708,075 |   |
| Capital South Partners Fund III    |   |                 | –   |   |   |   | – |   |   |   | 198,647 |   |
| CapStar Holdings Corporation       |   |                 | 94,500    |   |   |   | 350,000 |   |   |   | – |   |
| Capitala Finance Corporation       |   |                 | 66,120    |   |   |   | 101,619 |   |   |   | – |   |
| Encore Wire Corporation            |   |                 | 45,386    |   |   |   | 131,250 |   |   |   | 160,485 |   |
| North American Energy Partners     |   |                 | 1,190     |   |   |   | – |   |   |   | – |   |
| The RectorSeal Corporation         |   |                 | 7,960,000 |   |   |   | 6,920,000 |   |   |   | 5,555,372 |   |
| TCI Holdings, Inc.                 |   |                 | –   |   |   |   | 78,110 |   |   |   | 81,270 |   |
| Wellogix. Inc.                     |   |                 | –   |   |   |   | 1,650,596 |   |   |   | – |   |
| The Whitmore Manufacturing Company |   |                 | 240,000   |   |   |   | 1,380,000 |   |   |   | 1,388,842 |   |
|                               |   | $                    | 8,942,830 |   |   | $ | 11,404,767 |   |   | $ | 8,092,691 |   |
|                              |   | Year Ended March 31, 2015 |        |
|-----------------------------------|--------|---------------------------|-------------|
|                              |   | Proceeds                  |        |   | Cost |   |   | Realized gain (loss) |   |
| Alamo Group, Inc.                 |   | $                         | 115,060,715 |   |   | $ | 2,190,937 |   |   | $ | 112,869,778 |   |
| Capitala Finance Corporation      |   |                      | 2,019,661   |   |   |   | 1,363,799 |   |   |   | 655,862 |   |
| Capital South Partners Fund III   |   |                      | 34,054      |   |   |   | 34,054 |   |   |   | - |   |
| Cinatra Clean Technologies, Inc.  |   |                      | 2,458,706   |   |   |   | 17,288,383 |   |   |   | (14,829,677 | ) |
| Discovery Alliance, LLC           |   |                      | 139,713     |   |   |   | 1,315,000 |   |   |   | (1,175,287 | ) |
| Encore Wire Corporation           |   |                      | 49,544,138  |   |   |   | 5,200,000 |   |   |   | 44,344,138 |   |
| KBI Biopharma, Inc.               |   |                      | 18,922,619  |   |   |   | 4,556,482 |   |   |   | 14,366,137 |   |
| North American Energy Partners    |   |                      | 588,577     |   |   |   | 236,986 |   |   |   | 351,591 |   |
| StarTech Seed Fund II             |   |                      | 131,544     |   |   |   | 131,544 |   |   |   | - |   |
| Trax Holdings, Inc.               |   |                      | 16,085,826  |   |   |   | 8,182,219 |   |   |   | 7,903,607 |   |
| Tristate Capital Holdings, Inc.   |   |                      | 706,927     |   |   |   | 928,486 |   |   |   | (221,558 | ) |
| Total realized gain               |   | $                         | 205,692,480 |   |   | $ | 41,427,890 |   |   | $ | 164,264,590 |   |
| Income taxes paid                 |   |                      |        |   |   |   |   |   |   |   | (54,370,006 | ) |
| Total realized gain, net of taxes |   |                      |        |   |   |   |   |   |   | $ | 109,894,584 |   |

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|                       |   | Years Ended March 31 |         |
|----------------------------|--------|----------------------|--------------|
|                       |   | 2015                 |         |   | 2014 |   |   | 2013 |   |
| Alamo Group, Inc.          |   | $                    | (151,633,592 | )* |   | $ | 45,546,429 |   |   | $ | 23,139,162 |   |
| Cinatra Clean Technologies |   |                 | 17,212,177   | * |   |   | (4,060,293 | ) |   |   | (5,590,390 | ) |
| Encore Wire Corporation    |   |                 | (58,390,625  | )* |   |   | 17,640,000 |   |   |   | (74,907,585 | )* |
| The RectorSeal Corporation |   |                 | 82,400,000   |   |   |   | 36,900,000 |   |   |   | 72,600,000 |   |
| TitanLiner, Inc.           |   |                 | 7,165,777    |   |   |   | (4,430,999 | ) |   |   | - |   |
| Trax Holdings, Inc.        |   |                 | (12,000,000  | )* |   |   | 1,600,000 |   |   |   | 8,800,000 |   |

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~~;~~

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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 | $1,689                               |   | $221 |   | $469 |   | $  999 |

~~ ~~

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| New Investment           |   | Purchase Amount |      |
|--------------------------|--------|-----------------|-----------|
| Research Now Group, Inc. |   | $               | 6,895,231 |   |
| Additions to Previous Investments  |   | Purchase Amount |    |
|-----------------------------------------|--------|-----------------|---------|
| Ballast Point Ventures II, L.P.         |   | $               | 300,000 |   |
| TitanLiner, Inc.                        |   |            | 1,222   |   |
| Cinatra Clean Technologies, Inc.        |   |            | 76,198  |   |
| iMemories, Inc.                         |   |            | 148,507 |   |
|                                    |   | $               | 525,927 |   |
|                                            |   | Proceeds |        |   | Cost   |   |       | Realized gain/(loss) |   |
|-------------------------------------------------|--------|----------|-------------|--------|--------|--------|------------|----------------------|--------|
| Alamo Group, Inc.                               |   | $        | 115,060,715 |   |   | $      | 2,190,937  |                 |   | $ | 112,869,778 |   |
| Encore Wire                                     |   |     | 49,544,138  |   |   |   | 5,200,000  |                 |   |   | 44,344,138 |   |
| KBI Biopharma, Inc.                             |   |     | 18,922,619  |   |   |   | 4,556,482  |                 |   |   | 14,366,137 |   |
| Trax Holdings, Inc.                             |   |     | 16,085,826  |   |   |   | 8,182,219  |                 |   |   | 7,903,607 |   |
| Capitala Finance Corporation                    |   |     | 2,019,661   |   |   |   | 1,363,799  |                 |   |   | 655,862 |   |
| North American Energy Partners                  |   |     | 588,577     |   |   |   | 236,986    |                 |   |   | 351,591 |   |
| StarTech See Fund II                            |   |     | 131,544     |   |   |   | 131,544    |                 |   |   | − |   |
| CapitalSouth Partners Fund III                  |   |     | 34,054      |   |   |   | 34,054     |                 |   |   | − |   |
| Tristate Capital Holdings, Inc.                 |   |     | 706,927     |   |   |   | 928,486    |                 |   |   | (221,559 | ) |
| Discovery Alliance, LLC                         |   |     | 139,713     |   |   |   | 1,315,000  |                 |   |   | (1,175,287 | ) |
| Cinatra Clean Technologies, Inc.                |   |     | 2,458,706   |   |   |   | 17,288,383 |                 |   |   | (14,829,677 | ) |
|                                            |   | $        | 205,692,480 |   |   | $      | 41,427,890 |                 |   | $ | 164,264,590 |   |
| Cash distributions from net realized gain       |   |     |        |   |   |   |       |                 |   |   | − |   |
| Undistributed realized gain before income taxes |   |     |        |   |   |   |       |                 |   | $ | 164,264,590 |   |

| 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                                       | 35   |
| Consolidated Statements of Assets and Liabilities as of March 31, 2015 and 2014                | 37   |
| Consolidated Statements of Operations for Years Ended March 31, 2015, 2014 and 2013            | 38   |
| Consolidated Statements of Changes in Net Assets for Years Ended March 31, 2015, 2014 and 2013 | 39   |
| Consolidated Statements of Cash Flows for Years Ended March 31, 2015, 2014 and 2013            | 40   |
| Consolidated Schedules of Investments as of March 31, 2014 and 2014                            | 42   |
| Notes to Consolidated Financial Statements                                                     | 52   |

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|                                                                                                                                              |   | March 31,2015 |    |   | March 31,2014 |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------|---------|--------|---------------|--------|
| Assets                                                                                                                                            |   |               |    |   |               |   |
| Investments at market or fair value                                                                                                               |   |               |    |   |               |   |
| Companies more than 25% owned (Cost: March 31, 2015 - $12,396, March 31, 2014 - $13,711)                                                          |   | $             | 489,415 |   |          | $      | 400,824 |   |
| Companies 5% to 25% owned (Cost: March 31, 2015 - $6,944, March 31, 2014 - $13,891)                                                               |   |          | 8,345   |   |          |   | 218,480 |   |
| Companies less than 5% owned (Cost: March 31, 2015 - $45,620, March 31, 2014 - $71,365)                                                           |   |          | 37,776  |   |          |   | 58,616 |   |
| Total investments (Cost: March 31, 2015 - $64,960, March 31, 2014 - $98,967)                                                                      |   |          | 535,536 |   |          |   | 677,920 |   |
| Cash and cash equivalents                                                                                                                         |   |          | 225,797 |   |          |   | 88,163 |   |
| Receivables                                                                                                                                       |   |          |    |   |          |   |   |   |
| Dividends and interest                                                                                                                            |   |          | 77      |   |          |   | 782 |   |
| Affiliates                                                                                                                                        |   |          | 4,246   |   |          |   | 422 |   |
| Income tax receivable                                                                                                                             |   |          | 95      |   |          |   | 167 |   |
| Net pension assets                                                                                                                                |   |          | 10,294  |   |          |   | 10,962 |   |
| Other assets                                                                                                                                      |   |          | 827     |   |          |   | 278 |   |
| Total assets                                                                                                                                      |   | $             | 776,872 |   |          | $      | 778,694 |   |
|                                                                                                                                              |   |          |    |   |          |   |   |   |
| Liabilities                                                                                                                                       |   |          |    |   |          |   |   |   |
| Other liabilities                                                                                                                                 |   | $             | 4,923   |   |          | $      | 3,263 |   |
| Accrued restoration plan liability                                                                                                                |   |          | 3,119   |   |          |   | 3,103 |   |
| Deferred income taxes                                                                                                                             |   |          | 1,412   |   |          |   | 1,940 |   |
| Total liabilities                                                                                                                                 |   |          | 9,454   |   |          |   | 8,306 |   |
|                                                                                                                                              |   |          |    |   |          |   |   |   |
| Net Assets                                                                                                                                        |   |          |    |   |          |   |   |   |
| Common stock, $0.25 par value: authorized, 25,000,000 shares; issued, 17,904,844 shares at March 31, 2015 and 17,753,044 shares at March 31, 2014 |   |          | 4,476   |   |          |   | 4,438 |   |
| Additional capital                                                                                                                                |   |          | 298,338 |   |          |   | 195,767 |   |
| Accumulated net investment (loss) income                                                                                                          |   |          | (4,390  | )      |          |   | 1,138 |   |
| Accumulated net realized gain                                                                                                                     |   |          | 22,355  |   |          |   | 14,029 |   |
| Unrealized appreciation of investments                                                                                                            |   |          | 470,576 |   |          |   | 578,953 |   |
| Treasury stock - at cost, 2,339,512 shares                                                                                                        |   |          | (23,937 | )      |          |   | (23,937 | ) |
| Total net assets                                                                                                                                  |   |          | 767,418 |   |          |   | 770,388 |   |
| Total liabilities and net assets                                                                                                                  |   | $             | 776,872 |   |          | $      | 778,694 |   |
| Net asset value per share (15,565,332 shares outstanding at March 31, 2015 and 15,413,532 shares outstanding at March 31, 2014)                   |   | $             | 49.30   |   |          | $      | 49.98 |   |

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|                                                                    |   | Years Ended March 31, |     |
|-------------------------------------------------------------------------|--------|-----------------------|----------|
|                                                                    |   | 2015                  |     |   | 2014 |   |   | 2013 |   |
| Investment income:                                                      |   |                       |     |   |  |   |   |  |   |
| Interest                                                                |   | $                     | 410      |   |   | $ | 577 |   |   | $ | 2,078 |   |
| Dividends                                                               |   |                  | 8,943    |   |   |   | 11,405 |   |   |   | 8,093 |   |
| Management fees from affiliates and other income                        |   |                  | 595      |   |   |   | 625 |   |   |   | 664 |   |
|                                                                    |   |                  | 9,948    |   |   |   | 12,607 |   |   |   | 10,835 |   |
| Operating expenses:                                                     |   |                  |     |   |   |   |   |   |   |   |   |   |
| Salaries                                                                |   |                  | 5,413    |   |   |   | 6,121 |   |   |   | 5,113 |   |
| Stock option expense (benefit)                                          |   |                  | 1,027    |   |   |   | (632 | ) |   |   | 515 |   |
| Net pension (benefit) expense                                           |   |                  | (280     | ) |   |   | 176 |   |   |   | (34 | ) |
| Professional fees                                                       |   |                  | 3,363    |   |   |   | 990 |   |   |   | 1,133 |   |
| Other operating expenses                                                |   |                  | 2,600    |   |   |   | 1,797 |   |   |   | 1,611 |   |
|                                                                    |   |                  | 12,123   |   |   |   | 8,452 |   |   |   | 8,338 |   |
| (Loss) income before income taxes                                       |   |                  | (2,175   | ) |   |   | 4,155 |   |   |   | 2,497 |   |
| Income tax (benefit) expense                                            |   |                  | 270      |   |   |   | (739 | ) |   |   | 590 |   |
|                                                                    |   |                  |     |   |   |   |   |   |   |   |   |   |
| Net investment (loss) income                                            |   | $                     | (2,445   | ) |   | $ | 4,894 |   |   | $ | 1,907 |   |
|                                                                    |   |                  |     |   |   |   |   |   |   |   |   |   |
| Proceeds from disposition of investments                                |   |                  | 205,692  |   |   |   | 15,990 |   |   |   | 99,542 |   |
| Cost of investments sold                                                |   |                  | 41,428   |   |   |   | 1,906 |   |   |   | 9,984 |   |
| Realized gain on investments before income tax                     |   |                  | 164,264  |   |   |   | 14,084 |   |   |   | 89,558 |   |
|                                                                    |   |                  |     |   |   |   |   |   |   |   |   |   |
| Net (decrease) increase  in unrealized appreciation of investments |   |                  | (108,377 | ) |   |   | 93,032 |   |   |   | 16,367 |   |
|                                                                    |   |                  |     |   |   |   |   |   |   |   |   |   |
| Net realized and unrealized gain on investments                         |   | $                     | 55,887   |   |   | $ | 107,116 |   |   | $ | 105,925 |   |
|                                                                    |   |                  |     |   |   |   |   |   |   |   |   |   |
| Increase in net assets from operations                                  |   | $                     | 53,442   |   |   | $ | 112,010 |   |   | $ | 107,832 |   |

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|                                                              |   | Years Ended March 31, |     |
|-------------------------------------------------------------------|--------|-----------------------|----------|
|                                                              |   | 2015                  |     |   | 2014 |   |   | 2013 |   |
| Operations:                                                       |   |                       |     |   |  |   |   |  |   |
| Net investment (loss) income                                      |   | $                     | (2,445   | ) |   | $ | 4,894 |   |   | $ | 1,907 |   |
| Net realized gain on investments                                  |   |                  | 164,264  |   |   |   | 14,084 |   |   |   | 89,558 |   |
| Net (decrease) increase in unrealized appreciation of investments |   |                  | (108,377 | ) |   |   | 93,032 |   |   |   | 16,367 |   |
| Increase in net assets from operations                            |   |                  | 53,442   |   |   |   | 112,010 |   |   |   | 107,832 |   |
| Distributions from:                                               |   |                  |     |   |   |   |   |   |   |   |   |   |
| Undistributed net investment income                               |   |                  | (3,083   | ) |   |   | (3,050 | ) |   |   | (3,025 | ) |
| Net realized gains                                                |   |                  | -        |   |   |   | - |   |   |   | (77,301 | ) |
| Taxes incurred on deemed capital gain distributions               |   |                  | (54,370  | ) |   |   | (3,787 | ) |   |   | (1,125 | ) |
| Capital share transactions:                                       |   |                  |     |   |   |   |   |   |   |   |   |   |
| Change in pension plan funded status                              |   |                  | (789     | ) |   |   | 1,250 |   |   |   | 194 |   |
| Exercise of employee stock options                                |   |                  | 803      |   |   |   | 4,820 |   |   |   | 3,981 |   |
| Stock option and restricted awards expense (benefit)              |   |                  | 1,027    |   |   |   | (632 | ) |   |   | 515 |   |
| (Decrease) increase in net assets                                 |   |                  | (2,970   | ) |   |   | 110,611 |   |   |   | 31,071 |   |
| Net assets, beginning of period                                   |   |                  | 770,388  |   |   |   | 659,777 |   |   |   | 628,706 |   |
| Net assets, end of period                                         |   | $                     | 767,418  |   |   | $ | 770,388 |   |   | $ | 659,777 |   |

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|                                                                                                          |   | Years Ended March 31, |     |
|---------------------------------------------------------------------------------------------------------------|--------|-----------------------|----------|
|                                                                                                          |   | 2015                  |     |   | 2014 |   |   | 2013 |   |
| Cash flows from operating activities                                                                          |   |                       |     |   |  |   |   |  |   |
| Increase in net assets from operations                                                                        |   | $                     | 53,442   |   |   | $ | 112,010 |   |   | $ | 107,832 |   |
| Adjustments to reconcile increase in net assets from operations to net cash provided by operating activities: |   |                  |     |   |   |   |   |   |   |   |   |   |
| Net proceeds from disposition of investments                                                                  |   |                  | 205,527  |   |   |   | 15,990 |   |   |   | 99,535 |   |
| Return of capital on investment                                                                               |   |                  | 165      |   |   |   | - |   |   |   | 767 |   |
| Purchases of securities                                                                                       |   |                  | (7,421   | ) |   |   | (12,607 | ) |   |   | (10,018 | ) |
| Depreciation and amortization                                                                                 |   |                  | 55       |   |   |   | 23 |   |   |   | 30 |   |
| Net pension (benefit) expense                                                                                 |   |                  | (530     | ) |   |   | 176 |   |   |   | (34 | ) |
| Realized gains on investments before income tax                                                               |   |                  | (164,264 | ) |   |   | (14,084 | ) |   |   | (89,558 | ) |
| Taxes incurred on deemed capital gain distribution                                                            |   |                  | (54,370  | ) |   |   | (3,787 | ) |   |   | (1,125 | ) |
| Net decrease (increase) in unrealized appreciation of investments                                             |   |                  | 108,377  |   |   |   | (93,032 | ) |   |   | (16,367 | ) |
| Stock option and restricted awards expense (benefit)                                                          |   |                  | 1,027    |   |   |   | (632 | ) |   |   | 515 |   |
| Decrease (increase) in dividend and interest receivable                                                       |   |                  | 705      |   |   |   | 1,683 |   |   |   | (724 | ) |
| Increase  in receivables from affiliates                                                                 |   |                  | (3,824   | ) |   |   | (131 | ) |   |   | (70 | ) |
| Decrease (increase) in tax receivable                                                                         |   |                  | 72       |   |   |   | (167 | ) |   |   | - |   |
| (Increase) decrease in other assets                                                                           |   |                  | (604     | ) |   |   | (100 | ) |   |   | 6 |   |
| (Decrease) increase in other liabilities                                                                      |   |                  | 2,085    |   |   |   | (513 | ) |   |   | 2,520 |   |
| Decrease in deferred income taxes                                                                             |   |                  | (528     | ) |   |   | (203 | ) |   |   | (92 | ) |
| Net cash provided by operating activities                                                                     |   |                  | 139,914  |   |   |   | 4,626 |   |   |   | 93,217 |   |
| Cash flows from financing activities                                                                          |   |                  |     |   |   |   |   |   |   |   |   |   |
| Distributions from undistributed net investment income                                                        |   |                  | (3,083   | ) |   |   | (3,050 | ) |   |   | (3,025 | ) |
| Dividends paid from capital gains                                                                             |   |                  | -        |   |   |   | - |   |   |   | (77,301 | ) |
| Proceeds from exercise of employee stock options                                                              |   |                  | 803      |   |   |   | 4,820 |   |   |   | 3,981 |   |
| Net cash (used in) provided by financing activities                                                           |   |                  | (2,280   | ) |   |   | 1,770 |   |   |   | (76,345 | ) |
| Net increase in cash and cash equivalents                                                                     |   |                  | 137,634  |   |   |   | 6,396 |   |   |   | 16,872 |   |
| Cash and cash equivalents at beginning of period                                                              |   |                  | 88,163   |   |   |   | 81,767 |   |   |   | 64,895 |   |
| Cash and cash equivalents at end of period                                                                    |   | $                     | 225,797  |   |   | $ | 88,163 |   |   | $ | 81,767 |   |
| Supplemental disclosure of cash flow information:                                                             |   |                  |     |   |   |   |   |   |   |   |   |   |
| Income taxes paid                                                                                             |   | $                     | 362      |   |   | $ | 350 |   |   | $ | 590 |   |

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| a. | In December 2012, the $3,200,000 investment in Trax Holdings, Inc. debt security and $800,000 accrued interest were converted into Series B Convertible Preferred Stock. |
|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| b. | 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. |
|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|

| c. | 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. |
|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| d. | 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. |
|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|              |   | 2015 |   |   | 2014   |   |   | 2013   |   |
|-------------------|--------|------|--------|--------|--------|--------|--------|--------|--------|
| Total Investments |   | $    | 1,261  |   |   | $      | 6,858  |   |   | $ | 4,000 |   |

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| Company (d)                                                                                                                                                                                                             | Equity (a)                                                                                                                                        | Investment (b) (d)                                                                                                                                            | Cost        | Value (c)   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------|-------------|
| ATLANTIC CAPITAL BANCSHARES, INCAtlanta, GeorgiaHolding company of Atlantic Capital Bank, a full service commercial bank.                                                                                               | 1.9%                                                                                                                                              | 300,000 shares of common stock (acquired 4-10-07)                                                                                                             | $ 3,000,000 | $ 3,779,000 |
| ¥BALCO, INC.Wichita, KansasSpecialty architectural products used in the construction and remodeling of commercial and institutional buildings.                                                                     | 100.0%                                                                                                                                            | 445,000 shares of common stock and 60,920 shares Class B non-voting common stock (acquired 10-25-83 and 5-30-02)                                              | 624,920     | 5,100,000   |
| *BOXX TECHNOLOGIES, INC.Austin, TexasWorkstations for computer graphic imaging and design.                                                                                                                              | 14.9%                                                                                                                                             | 3,125,354 shares of Series B Convertible Preferred Stock, convertible into 3,125,354 shares of common stock at $0.50 per share (acquired 8-20-99 thru 8-8-01) | 1,500,000   | 2,362,000   |
| ¥ CAPSTAR HOLDINGS CORPORATIONDallas, TexasAcquire, hold and manage real estate for potential development and sale.                                                                                                | 100%                                                                                                                                              | 500 shares of common stock (acquired 6-10-10) and 1,000,000 shares of preferred stock (acquired 12-17-12)                                                     | 4,703,619   | 10,871,000  |
| DEEPWATER CORROSION SERVICES, INC.    Houston, Texasfull-service corrosion control company providing the oil and gas industry with expertise in cathodic protection and asset integrity management. | 31.1%                                                                                                                                             | 127,004 shares of Series A convertible preferred stock, convertible into 127,004 shares of common stock at $1.00 per shares (acquired 4-9-13)                 | 8,000,000   | 2,532,000   |
| iMEMORIES, INC.Scottsdale, ArizonaEnables online video and photo sharing and DVD creation for home movies recorded in analog and new digital format.                                                                    | 24.5%                                                                                                                                             | 17,391,304 shares of Series B Convertible Preferred Stock, convertible into 19,891,304 shares of common stock at $0.23 per share (acquired 7-10-09)           | 4,000,000   | –     |
|                                                                                                                                                                                                                    | 4,684,967 shares of Series C Convertible Preferred Stock, convertible into 4,684,967 shares of common stock at $0.23 per share (acquired 7-20-11) | 1,078,479                                                                                                                                                     | –     |
|                                                                                                                                                                                                                    |                                                                                                                                              | Warrants to purchase 2,500,000  shares of common stock at $0.12 per share, expiring 1-21-21(acquired 9-13-10 thru 1-21-11)                               | –     | –     |
|                                                                                                                                                                                                                    |                                                                                                                                              | Warrants to purchase 616,000  shares of common stock at $0.01 per share, expiring 9-7-22 (acquired 9-7-12)                                               | –     | –     |
|                                                                                                                                                                                                                    |                                                                                                                                              | Warrants to purchase 5,280,000  shares of common stock at $0.01 per share, expiring 3-15-23 (acquired thru 3-15-13)                                      | –     | –     |
|                                                                                                                                                                                                                    |                                                                                                                                              | 10% convertible notes, $308,000 principal due 7-31-14 (acquired  9-7-12)                                                                                 | 308,000     | –     |
|                                                                                                                                                                                                                    |                                                                                                                                              | 10% convertible notes, $880,000 principal due 7-31-14 (acquired  3-15-13)                                                                                | 880,000     | –     |
|                                                                                                                                                                                                                    |                                                                                                                                              | 18% notes, $148,507 principal due 7-31-15 (acquired 11-3-14)                                                                                                  | 148,507     | 159,000     |

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|                                                                                                                                                                                                                                                                  |                                                |                                                                                                                                                                           | 6,414,986  | 159,000     |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|-------------|
| INSTAWARES HOLDING COMPANY, LLCAtlanta, GeorgiaProvides services to the  restaurant industry via its five subsidiary companies.                                                                                                                                  | 4.2%                                                | 3,846,154 Class D Convertible Preferred Stock (acquired 5-20-11)                                                                                                               | 5,000,000  | 5,000,000   |
| *kSEP HOLDINGS, INC.Durham, North CarolinaProvides single-use and scalable bioprocessing solutions in the area of recombinant therapeutics, cell therapy, and vaccine manufacturing.                                                                                  | 17.1%                                               | 861,591 shares of common stock (exchanged 03-24-15)                                                                                                                            | 443,518    | 1,863,000   |
| ¥MEDIA RECOVERY, INC.Dallas, TexasComputer datacenter and office automation supplies and accessories; impact, tilt monitoring and temperature sensing devices to detect mishandling shipments; dunnage for protecting shipments.                                 | 97.9%                                               | 800,000 shares of Series A Convertible Preferred Stock, convertible into 800,000 shares of common stock at $1.00 per share (acquired 11-4-97)                                  | 800,000    | 4,300,000   |
|                                                                                                                                                                                                                                                                  | 4,000,002 shares of common stock (acquired 11-4-97) | 4,615,000                                                                                                                                                                      | 21,700,000 |
|                                                                                                                                                                                                                                                                  |                                                |                                                                                                                                                                           | 5,415,000  | 26,000,000  |
| ¥THE RECTORSEAL CORPORATIONHouston, TexasSpecialty chemicals for plumbing, HVAC, electrical, construction, industrial, oil field and automotive applications; smoke containment systems for building fires; also owns 20% of The Whitmore Manufacturing Company. | 100.0%                                              | 27,907 shares of common stock (acquired 1-5-73 and 3-31-73)                                                                                                                    | 52,600     | 358,200,000 |
| RESEARCH NOW GROUP, INC.Plano, TexasProvides data collection through online and mobile surveys using proprietary consumer and business panels.                                                                                                                        | 0.0%                                                | Senior secured second lien debt, due 3-18-22 (acquired 3-18-15)                                                                                                                | 6,895,231  | 6,895,231   |
| TITANLINER, INC.Midland, TexasManufactures, installs and rents spill containment system for oilfield applications.                                                                                                                                                    | 28.7%                                               | 339,277 shares of Series A Convertible Preferred Stock convertible into 339,277 shares of Series A Preferred Stock at $14.76 per share (acquired 6-29-12)                      | 3,204,222  | 5,939,000   |
|                                                                                                                                                                                                                                                                  |                                                | 7%  senior subordinated secured promissory note, due 6-30-17 (acquired 6-29-12)                                                                                           | 2,747,000  | 2,747,000   |
|                                                                                                                                                                                                                                                                  |                                                |                                                                                                                                                                           | 5,951,222  | 8,686,000   |
| TRAX DATA REFINERY, INC.Scottsdale, ArizonaProvides a comprehensive set of solutions to improve the transportation validation, accounting, payment and information management process.                                                                                | 2.6%                                                | 211,368 shares of common stock (exchanged 3-19-15)                                                                                                                             | 817,781    | 2,296,000   |
| *WELLOGIX, INC.Houston, TexasDeveloper and supporter of software used by the oil and gas industry.                                                                                                                                                                    | 18.9%                                               | 4,788,371 shares of Series A-1 Convertible Participating Preferred Stock, convertible into 4,788,371 shares of common stock at $1.04 per share (acquired 8-19-05 thru 6-15-08) | 5,000,000  | 4,120,000   |

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| ¥THE WHITMORE MANUFACTURING COMPANYRockwall, TexasSpecialized surface mining, railroad and industrial lubricants; coatings for automobiles and primary metals; fluid contamination control devices. | 80.0%   | 80 shares of common stock (acquired 8-31-79)                                                             | 1,600,000    | 89,000,000          |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------|----------------------------------------------------------------------------------------------------------|--------------|---------------------|
|  MISCELLANEOUS                                                                                                                                                                                      | – | Ballast Point Ventures II, L.P.2.1% limited partnership interest (acquired 8-4-08 thru 11-6-14)          | 2,634,790    | 3,288,000           |
|                                                                                                                                                                                                     | – | BankCap Partners Fund I, L.P.5.5% limited partnership interest (acquired 7-14-06 thru 11-16-12)          | 5,071,514    | 4,771,000           |
|                                                                                                                                                                                                     | – | CapitalSouth Partners Fund III, L.P.1.9% limited partnership interest (acquired 1-22-08 and 11-16-11)    | 433,403      | 232,000             |
|                                                                                                                                                                                                     | – | Diamond State Ventures, L.P.1.4% limited partnership interest (acquired 10-12-99 thru 8-26-05)           | -            | 16,000              |
|                                                                                                                                                                                                     | – | First Capital Group of Texas III, L.P.3.0% limited partnership interest (acquired 12-26-00 thru 8-12-05) | 778,895      | 108,000             |
|                                                                                                                                                                                                     | 100%    | ¥ Humac Company1,041,000 shares of common stock (acquired 1-31-75 and 12-31-75)                     | –      | 244,000             |
|                                                                                                                                                                                                     | – | STARTech Seed Fund II3.2% limited partnership interest (acquired 4-28-00 thru 2-23-05)                   | 622,783      | 14,000              |
| TOTAL INVESTMENTS                                                                                                                                                                                        |    |                                                                                                     | $ 64,960,262 | $  535,536,231 |

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

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|                                                                                                                                                                                                                                |                                                                                                                                              | 9,891,578 shares of Series A Convertible Preferred Stock, convertible into 9,891,578 shares of common stock at $1.00 per share (acquired 7-14-08 thru 3-15-14) | 9,891,578  | 1          |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|------------|
|                                                                                                                                                                                                                                |                                                                                                                                              | Warrants to purchase 1,436,499 shares of common stock at $1.00 per share, expiring 10-31-2027 (acquired 5-9-11 thru 10-19-12)                                  | –    | –    |
|                                                                                                                                                                                                                                |                                                                                                                                              |                                                                                                                                                           | 17,212,185 | 8          |
| DEEPWATER CORROSION SERVICES, INC.    Houston, TexasFull-service corrosion control   company providing the oil and gas industry with expertise in cathodic protection and asset integrity management. | 31.3%                                                                                                                                             | 127,004 shares of Series A convertible preferred stock, convertible into 127,004 shares of common stock at $1.00 per shares (acquired 4-9-13)                  | 8,000,000  | 8,000,000  |
| ¥DISCOVERY ALLIANCE, LLCDallas, TexasProvides services related to intellectual property protection and development.                                                                                                            | 90%                                                                                                                                               | 90.0% limited liability company interest (acquired  9-12-08 thru 10-15-12)                                                                           | 1,315,000  | 400,000    |
| ‡†ENCORE WIRE   CORPORATIONMcKinney, TexasElectric wire and cable for residential, commercial and industrial construction use.                                                                           |    6.2%                                                                                                                            | ‡1,312,500 shares of common stock (acquired 9-10-92 thru 10-15-98)                                                                                       | 5,200,000  | 63,590,625 |
| iMEMORIES, INC.Scottsdale, ArizonaEnables online video and photo sharing and DVD creation for home movies and photos recorded in analog anddigital formats.                                                                         | 23.3%                                                                                                                                             | 17,391,304 shares of Series B Convertible Preferred Stock, convertible into 19,891,304 shares of common stock at $0.23 per share (acquired 7-10-09)            | 4,000,000  | 2          |
|                                                                                                                                                                                                                                | 4,684,967 shares of Series C Convertible Preferred Stock, convertible into 4,684,967 shares of common stock at $0.23 per share (acquired 7-20-11) | 1,078,479                                                                                                                                                      | 994,000    |
|                                                                                                                                                                                                                                |                                                                                                                                              | Warrants to purchase 8,396,000  shares of common stock at $0.12 per share, expiring 7-31-14 (acquired 9-13-10 thru 3-15-13)                               | –    | –    |
|                                                                                                                                                                                                                                |                                                                                                                                              | 10% convertible notes, $308,000 principal due 7-31-14 (acquired  9-7-12)                                                                                  | 308,000    | 308,000    |
|                                                                                                                                                                                                                                |                                                                                                                                              | 10% convertible notes, $880,000 principal due 7-31-14 (acquired  from 3-15-13 to 9-26-13)                                                                 | 880,000    | 880,000    |
|                                                                                                                                                                                                                                |                                                                                                                                              |                                                                                                                                                           | 6,266,479  | 2,182,002  |

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

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

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

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

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

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

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

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

~~”~~

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

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

|  | · | Level 1:  Investments whose values are based on unadjusted quoted prices in active markets for identical assets or liabilities that we have the ability to access.  We use Level 1 inputs for publicly traded unrestricted securities.  Such investments are valued at quoted prices from active markets. |
|--|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | Level 2: Investments whose values are based on observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly.  These inputs may include quoted prices for the identical instrument in non-active markets, quoted prices for similar instruments in active markets and similar data.  We did not value any of our investments using Level 2 inputs as of March 31, 2015 and 2014. |
|--|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|  | · | Level 3: Investments whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement.  These inputs reflect management’s own assumptions about the assumptions a market participant would use in pricing the investment.  We used Level 3 inputs for measuring the fair value of 100% of our investments as of March 31, 2015.  We used Level 3 inputs for measuring the fair value of approximately 67.5% of our investments as of March 31, 2014. See Note (c) in “Notes to Consolidated Schedule of Investments” for the investment policy used to determine the fair value of these investments. |
|--|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

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

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

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

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

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

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

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

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

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

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| Type                          | Valuation Technique | Fair Value at 3/31/2015 (in millions) | Unobservable Input                  | Range               | Weighted Average |
|-------------------------------|---------------------|---------------------------------------|-------------------------------------|---------------------|------------------|
| Preferred & Common Equity | Market Approach     | $494.1                                | EBITDA Multiple                     | 3.00x – 7.75x | 7.15x            |
|                          | Market Approach     | $4.2                                  | Recent Transaction Price            | NA                  | NA               |
|                          | Market Approach     | $15.0                                 | Cash and Asset Value                | NA                  | NA               |
|                          | Market Approach     | $3.8                                  | Multiple of Tangible Book Value     | 1.43x               | 1.43x            |
|                          | Market Approach     | $0.2                                  | Market Value of Held for Securities | NA                  | NA               |
|                          |                | $517.3                                |                                |                |             |
| Debt                          | Face Value          | $6.9                                  | Recent Transaction Price            | NA                  | NA               |
|                          | Market Approach     | $2.7                                  | Expected cash flow                  | NA                  | NA               |
|                          | Liquidation Value   | 0.2                                   |                                |                |             |
| Partnership or LLC Interests  |                | $9.8                                  |                                |                |             |
|                          | Net Asset Value     | $8.4                                  | Fund Value                          | NA                  | NA               |
|                          | Total               | $535.5                                |                                |                |             |
| Type                          | Valuation Technique      | Fair Value at 3/31/2014 (in millions) | Unobservable Input              | Range               | Weighted Average |
|-------------------------------|--------------------------|---------------------------------------|---------------------------------|---------------------|------------------|
| Preferred & Common Equity | Market Approach          | $404.1                                | EBITDA Multiple                 | 3.50x – 7.78x | 7.00x            |
|                          | Market Approach          | $22.0                                 | Revenue Multiple                | 1.53x – 2.50x | 2.46x            |
|                          | Market Approach          | $8.0                                  | Recent Transaction Price        | NA                  | NA               |
|                          | Market Approach          | $7.6                                  | Cash and Asset Value            | NA                  | NA               |
|                          | Market Approach          | $3.8                                  | Multiple of Tangible Book Value | 1.54x               | 1.54x            |
|                          | Market Approach          | $0.2                                  | Market Value of Held Securities | NA                  | NA               |
|                          |                     | $445.7                                |                            |                |             |
| Debt                          | Discounted Cash Flow     | $1.5                                  | Discount Rate                   | 11.69%              | 11.69%           |
|                          | Recent Transaction Price | $1.2                                  | Recent Transaction Price        | NA                  | NA               |
| Partnership Interests         |                     | $2.7                                  |                            |                |             |
|                          | Net Asset Value          | $9.5                                  | Fund Value                      | NA                  | NA               |
|                          | Total                    | $457.9                                |                            |                |             |
|                  |   |        |   |   | Fair Value Measurementsat March 31, 2015 Using                |   |
|-----------------------|--------|--------|--------|--------|---------------------------------------------------------------|--------|
| Asset Category        |   | Total  |   |   | Quoted Prices in Active Markets for Identical Assets(Level 1) |   |   | Significant Other Observable Inputs(Level 2) |   |   | Significant Unobservable Inputs(Level 3) |   |
| Debt                  |   | $      | 9.8    |   |                                                          | $      | − |   |   | $ | − |   |   | $ | 9.8 |   |
| Partnership Interests |   |   | 8.4    |   |                                                          |   | − |   |   |   | − |   |   |   | 8.4 |   |
| Preferred Equity      |   |   | 29.4   |   |                                                          |   | − |   |   |   | − |   |   |   | 29.4 |   |
| Common Equity         |   |   | 487.9  |   |                                                          |   | − |   |   |   | − |   |   |   | 487.9 |   |
| Total Investments     |   | $      | 535.5  |   |                                                          | $      | − |   |   | $ | − |   |   | $ | 535.5 |   |

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|                  |   |        |   |   | Fair Value Measurementsat March 31, 2014 Using                |   |
|-----------------------|--------|--------|--------|--------|---------------------------------------------------------------|--------|
| Asset Category        |   | Total  |   |   | Quoted Prices in Active Markets for Identical Assets(Level 1) |   |   | Significant Other Observable Inputs(Level 2) |   |   | Significant Unobservable Inputs(Level 3) |   |
| Debt                  |   | $      | 2.7    |   |                                                          | $      | − |   |   | $ | − |   |   | $ | 2.7 |   |
| Partnership Interests |   |   | 9.5    |   |                                                          |   | − |   |   |   | − |   |   |   | 9.5 |   |
| Preferred Equity      |   |   | 47.0   |   |                                                          |   | − |   |   |   | − |   |   |   | 47.0 |   |
| Common Equity         |   |   | 618.7  |   |                                                          |   | 220.0 |   |   |   | − |   |   |   | 398.7 |   |
| Total Investments     |   | $      | 677.9  |   |                                                          | $      | 220.0 |   |   | $ | − |   |   | $ | 457.9 |   |
|                  |   | Fair Value 3/31/14 |   |   | Net Unrealized Appreciation (Depreciation) |   |   | New Investments |   |   | Divestitures |   |   | Distributions |    |   | Fair Value at 3/31/15 |   |
|-----------------------|--------|--------------------|--------|--------|--------------------------------------------|--------|--------|-----------------|--------|--------|--------------|--------|--------|---------------|---------|--------|-----------------------|--------|
| Debt                  |   | $                  | 2.7    |   |                                       | $      | 0.1    |            |   | $      | 7.0          |   |   | $             | − |   |                  | $      | − |   |   | $ | 9.8 |   |
| Partnership Interests |   |               | 9.5    |   |                                       |   | 0.1    |            |   |   | 0.3          |   |   |          | (1.3    | )      |                  |   | (0.2 | ) |   |   | 8.4 |   |
| Preferred Equity      |   |               | 47.0   |   |                                       |   | 10.4   |            |   |   | −      |   |   |          | (28.0   | )      |                  |   | − |   |   |   | 29.4 |   |
| Common Equity         |   |               | 398.7  |   |                                       |   | 87.9   |            |   |   | 1.3          |   |   |          | − |   |                  |   | − |   |   |   | 487.9 |   |
| Total Investments     |   | $                  | 457.9  |   |                                       | $      | 98.5   |            |   | $      | 8.6          |   |   | $             | (29.3   | )      |                  | $      | (0.2 | ) |   | $ | 535.5 |   |
|                  |   | Fair Value 3/31/13 |   |   | Net Unrealized Appreciation (Depreciation) |   |   | New Investments |   |   | Divestitures |   |   | Conversion of Security from Debt to Equity |    |   | Transfer out of Level 3 |   |    | Fair Value at 3/31/14 |   |
|-----------------------|--------|--------------------|--------|--------|--------------------------------------------|--------|--------|-----------------|--------|--------|--------------|--------|--------|--------------------------------------------|---------|--------|-------------------------|--------|---------|-----------------------|--------|
| Debt                  |   | $                  | 6.6    |   |                                       | $      | (5.3   | )               |   | $      | 1.7          |   |   | $                                          | ( 1.9   | )      |                    | $      | 1.6     |                  |   | $ | − |   |   | $ | 2.7 |   |
| Partnership Interests |   |               | 12.2   |   |                                       |   | (2.6   | )               |   |   | 1.3          |   |   |                                       | − |   |                    |   | − |                  |   |   | (1.4 | ) |   |   | 9.5 |   |
| Preferred Equity      |   |               | 44.6   |   |                                       |   | (4.8   | )               |   |   | 8.0          |   |   |                                       | (0.8    | )      |                    |   | − |                  |   |   | − |   |   |   | 47.0 |   |
| Common Equity         |   |               | 343.1  |   |                                       |   | 55.6   |            |   |   | −      |   |   |                                       | − |   |                    |   | − |                  |   |   | − |   |   |   | 398.7 |   |
| Total Investments     |   | $                  | 406.5  |   |                                       | $      | 42.9   |            |   | $      | 11.0         |   |   | $                                          | (2.7    | )      |                    | $      | 1.6     |                  |   | $ | (1.4 | ) |   | $ | 457.9 |   |

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

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|                                                                |   | For the Tax Year Ended December 31 |        |
|----------------------------------------------------------------|--------|------------------------------------|-------------|
| Net Realized Gains on Transactions In Investment Securities of |   | 2014                               |        |   | 2013 |   |
| Control Investments                                            |   | $                                  | −     |   |   | $ | 20,861,458 |   |
| Affiliated Investments                                         |   |                               | 157,128,306 |   |   |   | − |   |
| Non-Control/Non-Affiliated Investments                         |   |                               | (1,189,983  | ) |   |   | 105,000 |   |
| Net realized gain on investments                               |   | $                                  | 155,938,323 |   |   | $ | 20,966,458 |   |
| Capital gain distribution                                      |   |                               | −     |   |   |   | (10,474,932 | ) |
| Taxes incurred on deemed capital gain distribution             |   |                               | 54,370,006  |   |   |   | 3,786,678 |   |
| Net realized gains on investments(after tax)                   |   | $                                  | 101,568,317 |   |   | $ | 6,704,848 |   |
| Net realized gains on investment (for tax purposes; after tax) |   | $                                  | 100,972,869 |   |   | $ | 7,032,401 |   |

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

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

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

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Table of Contents

|             |   |                             |   |   | Black-Scholes Pricing Model Assumptions |   |   |                         |   |
|------------------|--------|-----------------------------|--------|--------|-----------------------------------------|--------|--------|-------------------------|--------|
| Date of Issuance |   | Weighted Average Fair Value |   |   | Expected Dividend Yield                 |   |   | Risk-Free Interest Rate |   |   | Expected Volatility |   |   | Expected Life(in years) |   |
| 2009 Plan        |   |                             |   |   |                                         |   |   |                         |   |   |  |   |   |  |   |
| July 18, 2011    |   | $                           | 8.27   |   |                                    |   | 0.83   | %                       |   |   | 1.45 | % |   |   | 40.0 | % |   |   | 5 |   |
| July 19, 2010    |   | $                           | 7.15   |   |                                    |   | 0.91   | %                       |   |   | 1.73 | % |   |   | 37.5 | % |   |   | 5 |   |
| March 22, 2010   |   | $                           | 8.14   |   |                                    |   | 0.84   | %                       |   |   | 2.43 | % |   |   | 37.8 | % |   |   | 5 |   |
| October 19, 2009 |   | $                           | 6.34   |   |                                    |   | 1.04   | %                       |   |   | 2.36 | % |   |   | 37.6 | % |   |   | 5 |   |
| July 15, 2013    |   | $                           | 11.82  |   |                                    |   | 0.54   | %                       |   |   | 1.40 | % |   |   | 36.1 | % |   |   | 5 |   |
| January 20, 2014 |   | $                           | 8.37   |   |                                    |   | 0.60   | %                       |   |   | 1.64 | % |   |   | 27.0 | % |   |   | 5 |   |
| March 17, 2014   |   | $                           | 7.04   |   |                                    |   | 0.57   | %                       |   |   | 1.58 | % |   |   | 21.1 | % |   |   | 5 |   |
| Aug 28, 2014     |   | $                           | 5.79   |   |                                    |   | 0.55   | %                       |   |   | 0.95 | % |   |   | 22.7 | % |   |   | 3 |   |
| 1999 Plan        |   |                        |   |   |                                    |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |
| July 30, 2008    |   | $                           | 7.48   |   |                                    |   | 0.62   | %                       |   |   | 3.36 | % |   |   | 20.2 | % |   |   | 5 |   |
| July 21, 2008    |   | $                           | 6.84   |   |                                    |   | 0.67   | %                       |   |   | 3.41 | % |   |   | 20.2 | % |   |   | 5 |   |
| July 16, 2007    |   | $                           | 10.44  |   |                                    |   | 0.39   | %                       |   |   | 4.95 | % |   |   | 19.9 | % |   |   | 5 |   |
| July 17, 2006    |   | $                           | 8.26   |   |                                    |   | 0.61   | %                       |   |   | 5.04 | % |   |   | 21.2 | % |   |   | 7 |   |
| May 15, 2006     |   | $                           | 7.82   |   |                                    |   | 0.64   | %                       |   |   | 5.08 | % |   |   | 21.1 | % |   |   | 7 |   |
|                               |   | Number of Shares |     |   | Weighted Average Exercise Price |   |
|------------------------------------|--------|------------------|----------|--------|---------------------------------|--------|
| 2009 Plan                          |   |                  |     |   |                                 |   |
| Balance at March 31, 2012          |   |             | 335,000  |   |                            | $      | 21.44 |   |
| Granted                            |   |             | –  |   |                            |   | – |   |
| Exercised                          |   |             | (108,092 | )      |                            |   | 19.96 |   |
| Canceled/Forfeited                 |   |             | (56,000  | )      |                            |   | 21.44 |   |
| Balance at March 31, 2013          |   |             | 170,908  |   |                            |   | 22.37 |   |
| Granted                            |   |             | 85,000   |   |                            |   | 35.25 |   |
| Exercised                          |   |             | (69,108  | )      |                            |   | 22.27 |   |
| Canceled/Forfeited                 |   |             | (63,000  | )      |                            |   | 22.08 |   |
| Balance at March 31, 2014          |   |             | 123,800  |   |                            |   | 31.40 |   |
| Granted                            |   |             | 259,000  |   |                            |   | 36.60 |   |
| Exercised                          |   |             | (6,800   | )      |                            |   | 23.95 |   |
| Canceled/Forfeited                 |   |             | (4,000   | )      |                            |   | 23.95 |   |
| Balance at March 31, 2015          |   |             | 372,000  |   |                            | $      | 35.24 |   |
|                               |   |             |     |   |                            |   |   |   |
| 1999 Plan                          |   |             |     |   |                            |   |   |   |
| Balance at March 31, 2012          |   |             | 380,000  |   |                            |   | 28.41 |   |
| Granted                            |   |             | –  |   |                            |   | – |   |
| Exercised                          |   |             | (76,420  | )      |                            |   | 23.83 |   |
| Canceled/Forfeited                 |   |             | (57,580  | )      |                            |   | 27.79 |   |
| Balance at March 31, 2013          |   |             | 246,000  |   |                            |   | 33.00 |   |
| Granted                            |   |             | –  |   |                            |   | – |   |
| Exercised                          |   |             | (108,000 | )      |                            |   | 30.37 |   |
| Canceled/Forfeited                 |   |             | (100,000 | )      |                            |   | 38.25 |   |
| Balance at March 31, 2014          |   |             | 38,000   |   |                            | $      | 26.68 |   |
| Granted                            |   |             | –  |   |                            |   | – |   |
| Exercised                          |   |             | 22,000   |   |                            |   | 29.10 |   |
| Canceled/Forfeited                 |   |             | –  |   |                            |   | – |   |
| Balance at March 31, 2015          |   |             | 16,000   |   |                            |   | 23.37 |   |
| Combined Balance at March 31, 2015 |   |             | 388,000  |   |                            | $      | 35.24 |   |

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| March 31, 2015 | Weighted AverageRemaining Contractual Term |   | Aggregate IntrinsicValue |      |
|----------------|--------------------------------------------|--------|--------------------------|-----------|
| Outstanding    | 2.5 years                                  |   | $                        | 2,570,794 |   |
| Exercisable    | 1.4 years                                  |   | $                        | 389,447   |   |
|           |                                       |   |                     |      |   |

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| Restricted stock available for issuance as of March 31, 2014             |   |   | 154,240  |   |
|--------------------------------------------------------------------------|--------|--------|----------|--------|
| Restricted stock granted during the twelve months ended March 31 2015    |   |   | (127,000 | )      |
| Restricted stock forfeited during the twelve months ended March 31, 2015 |   |   | 4,000    |   |
| Restricted stock available for issuance as of March 31, 2015             |   |   | 31,240   |   |
| 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, 2013 |   |             | 29,280        |   |                                                | $      | 22.32  |                                               |   |   | 4.1 |   |
| Granted                    |   |             | 14,800        |   |                                                |   | 35.17  |                                               |   |   | 4.7 |   |
| Vested                     |   |             | (3,760        | )      |                                                |   | 22.28  |                                               |   |   | 3.1 |   |
| Forfeited                  |   |             | (15,640       | )      |                                                |   | 21.90  |                                               |   |   | − |   |
| Unvested at March 31, 2014 |   |             | 24,680        |   |                                                | $      | 30.30  |                                               |   |   | 4.1 |   |
| Granted                    |   |             | 127,0001 |   |                                                |   | 15.19  | 2                                                  |   |   | 2.5 | 3 |
| Vested                     |   |             | (4,720        | )      |                                                |   | 30.51  |                                               |   |   | − |   |
| Forfeited                  |   |             | (4,000        | )      |                                                |   | 22.98  |                                               |   |   | − |   |
| Unvested at March 31, 2015 |   |             | 142,960       |   |                                                | $      | 17.07  |                                               |   |   | 2.6 |   |

~~ ~~

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| Phantom Stock Awards       |   | Number of Shares |    |   | Weighted Average Grant Price Per Share |   |    | Weighted Average Remaining Vesting Term (in Years) |   |
|----------------------------|--------|------------------|---------|--------|----------------------------------------|--------|---------|----------------------------------------------------|--------|
| Unvested at March 31, 2014 |   |             | 95,000  |   |                                   | $      | 43.59   |                                               |   |   | 4.1 |   |
| Granted                    |   |             | − |   |                                   |   | − |                                               |   |   | − |   |
| Vested                     |   |             | 10,000  |   |                                   |   | 36.74   |                                               |   |   | − |   |
| Forfeited or expired       |   |             | 3,000   |   |                                   |   | 41.34   |                                               |   |   | − |   |
| Unvested at March 31, 2015 |   |             | 82,000  |   |                                   | $      | 45.40   |                                               |   |   | 3.3 |   |

| 8. | EMPLOYEE STOCK OWNERSHIP PLAN |
|----|-------------------------------|

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| 9. | RETIREMENT PLANS |
|----|------------------|

|                                          |   | Years ended March 31, |       |
|-----------------------------------------------|--------|-----------------------|------------|
|                                          |   | 2015                  |       |   | 2014 |   |   | 2013 |   |
| Net pension benefit                           |   |                       |       |   |  |   |   |  |   |
| Service cost-benefits earned during the year  |   | $                     | 199,097    |   |   | $ | 253,837 |   |   | $ | 259,672 |   |
| Interest cost on projected benefit obligation |   |                  | 347,933    |   |   |   | 291,699 |   |   |   | 286,639 |   |
| Expected return on assets                     |   |                  | (1,043,584 | ) |   |   | (906,816 | ) |   |   | (784,194 | ) |
| Net amortization                              |   |                  | 25,284     |   |   |   | 68,813 |   |   |   | 49,803 |   |
| Net pension benefit from qualified plan       |   | $                     | (471,270   | ) |   | $ | (292,467 | ) |   | $ | (188,080 | ) |
|                                    |   | Years ended March 31, |      |
|-----------------------------------------|--------|-----------------------|-----------|
|                                    |   | 2015                  |      |   | 2014 |   |   | 2013 |   |
| Change in benefit obligation            |   |                       |      |   |  |   |   |  |   |
| Benefit obligation at beginning of year |   | $                     | 7,149,380 |   |   | $ | 6,421,611 |   |   | $ | 5,136,555 |   |
| Service cost                            |   |                  | 199,097   |   |   |   | 253,837 |   |   |   | 259,672 |   |
| Interest cost                           |   |                  | 347,933   |   |   |   | 291,699 |   |   |   | 286,639 |   |
| Actuarial gain                          |   |                  | 930,588   |   |   |   | 306,173 |   |   |   | 818,784 |   |
| Benefits paid                           |   |                  | (298,444  | ) |   |   | (123,940 | ) |   |   | (80,039 | ) |
| Benefit obligation at end of year       |   | $                     | 8,328,554 |   |   | $ | 7,149,380 |   |   | $ | 6,421,611 |   |

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|                                           |   | Years ended March 31, |       |
|------------------------------------------------|--------|-----------------------|------------|
|                                           |   | 2015                  |       |   | 2014 |   |   | 2013 |   |
| Change in plan assets                          |   |                       |       |   |  |   |   |  |   |
| Fair value of plan assets at beginning of year |   | $                     | 18,112,073 |   |   | $ | 15,183,833 |   |   | $ | 12,485,876 |   |
| Actual return on plan assets                   |   |                  | 809,152    |   |   |   | 3,052,180 |   |   |   | 2,777,996 |   |
| Benefits paid                                  |   |                  | (298,444   | ) |   |   | (123,940 | ) |   |   | (80,039 | ) |
| Fair value of plan assets at end of year       |   | $                     | 18,622,781 |   |   | $ | 18,112,073 |   |   | $ | 15,183,833 |   |
|                                                                                      |   | Years ended March 31, |       |
|-------------------------------------------------------------------------------------------|--------|-----------------------|------------|
|                                                                                      |   | 2015                  |       |   | 2014 |   |
| Funded status and amounts recognized in consolidated statements of assets and liabilities |   |                       |       |   |  |   |
| Actuarial present value of benefit obligations: Accumulated benefit obligation            |   | $                     | (7,149,380 | ) |   | $ | (6,421,611 | ) |
| Projected benefit obligation for service rendered to date                                 |   |                  | (8,328,554 | ) |   |   | (7,149,380 | ) |
| Plan assets at fair value*                                                                |   |                  | 18,622,781 |   |   |   | 18,112,073 |   |
| Funded status                                                                             |   |                  | 10,294,227 |   |   |   | 10,962,693 |   |
| Unrecognized net (gain)loss                                                               |   |                  | (146,916   | ) |   |   | (1,296,029 | ) |
| Unrecognized prior service costs                                                          |   |                  | 103,825    |   |   |   | 113,202 |   |
| ASC 715 adjustment                                                                        |   |                  | 43,091     |   |   |   | 1,182,827 |   |
| Prepaid pension cost included in pension assets                                           |   | $                     | 10,294,227 |   |   | $ | 10,962,693 |   |
|                                          |   | Years ended March 31, |    |
|-----------------------------------------------|--------|-----------------------|---------|
|                                          |   | 2015                  |    |   | 2014 |   |   | 2013 |   |
| Net pension cost                              |   |                       |    |   |  |   |   |  |   |
| Service cost-benefits earned during the year  |   | $                     | 17,795  |   |   | $ | 106,199 |   |   | $ | 37,052 |   |
| Interest cost on projected benefit obligation |   |                  | 142,579 |   |   |   | 197,366 |   |   |   | 106,939 |   |
| Net amortization                              |   |                  | 31,154  |   |   |   | 164,649 |   |   |   | 9,731 |   |
| Net pension cost from restoration plan        |   | $                     | 191,528 |   |   | $ | 468,214 |   |   | $ | 153,722 |   |
|                                    |   | Years ended March 31, |      |
|-----------------------------------------|--------|-----------------------|-----------|
|                                    |   | 2015                  |      |   | 2014 |   |   | 2013 |   |
| Change in benefit obligation            |   |                       |      |   |  |   |   |  |   |
| Benefit obligation at beginning of year |   | $                     | 3,103,308 |   |   | $ | 2,649,966 |   |   | $ | 1,568,392 |   |
| Service cost                            |   |                  | 17,795    |   |   |   | 106,199 |   |   |   | 37,052 |   |
| Interest cost                           |   |                  | 142,579   |   |   |   | 197,366 |   |   |   | 106,939 |   |
| Actuarial gain                          |   |                  | 105,475   |   |   |   | 149,777 |   |   |   | 810,303 |   |
| Other adjustments                       |   |                  | (249,923  | ) |   |   | – |   |   |   | 127,280 |   |
| Benefit obligation at end of year       |   | $                     | 3,119,234 |   |   | $ | 3,103,308 |   |   | $ | 2,649,966 |   |

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|                                                                        |   | Years ended March 31, |       |
|-----------------------------------------------------------------------------|--------|-----------------------|------------|
|                                                                        |   | 2015                  |       |   | 2014 |   |
| Amounts recognized in our consolidated statements of assets and liabilities |   |                       |       |   |  |   |
| Projected benefit obligation                                                |   | $                     | (3,119,234 | ) |   | $ | (3,103,308 | ) |
| Unrecognized net gain                                                       |   |                  | 863,079    |   |   |   | 805,004 |   |
| Unrecognized prior service costs                                            |   |                  | (89,804    | ) |   |   | (106,050 | ) |
| ASC 715 adjustment                                                          |   |                  | (773,275   | ) |   |   | (698,954 | ) |
| Accrued pension cost included in pension liabilities                        |   | $                     | (3,119,234 | ) |   | $ | (3,103,308 | ) |
|                           |   | Years ended March 31, |   |
|--------------------------------|--------|-----------------------|--------|
|                           |   | 2015                  |   |   | 2014 |   |   | 2013 |   |
| Discount rate                  |   |                  | 4.25   | % |   |   | 5.00 | % |   |   | 4.50 | % |
| Rate of compensation increases |   |                  | 5.00   | % |   |   | 5.00 | % |   |   | 5.00 | % |
|                           |   | Years ended March 31, |   |
|--------------------------------|--------|-----------------------|--------|
|                           |   | 2015                  |   |   | 2014 |   |   | 2013 |   |
| Discount rate                  |   |                  | 5.00   | % |   |   | 4.50 | % |   |   | 5.25 | % |
| Expected return on plan assets |   |                  | 7.00   | % |   |   | 7.00 | % |   |   | 6.50 | % |
| Rate of compensation increases |   |                  | 5.00   | % |   |   | 5.00 | % |   |   | 5.00 | % |
| (In thousands)   |   | 2016 |   |   | 2017   |   |   | 2018   |   |   | 2019 |   |   | 2020 |   |   |   | 2021-2025 |   |
|------------------|--------|------|--------|--------|--------|--------|--------|--------|--------|--------|------|--------|--------|------|--------|--------|--------|-----------|--------|
| Qualified Plan   |   | $    | 307    |   |   | $      | 363    |   |   | $      | 372  |   |   | $    | 396    |   |   | $         | 394    |   |   | $ | 2,438 |   |
| Restoration Plan |   | $    | 199    |   |   | $      | 199    |   |   | $      | 202  |   |   | $    | 206    |   |   | $         | 207    |   |   | $ | 1,154 |   |

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Table of Contents

|                      |   | Percentage of Plan Assets atMarch 31 |   |
|---------------------------|--------|--------------------------------------|--------|
| Asset Category            |   | 2015                                 |   |   | 2014 |   |
| Equity securities         |   |                                 | 57.9   | % |   |   | 83.5 | % |
| Fixed income securities   |   |                                 | 35.7   | % |   |   | 11.9 | % |
| Other                     |   |                                 | 2.9    | % |   |   | - |   |
| Cash and cash equivalents |   |                                 | 3.5    | % |   |   | 4.6 | % |
|                      |   |                                 | 100.0  | % |   |   | 100.0 | % |
|                        |   |        |   |   | 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 |   |   | $ | – |   |

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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)       |   | $      | 50.2   |   |                                                         | $      | 32.7 |   |   | $ | 17.5 |   |   | $ | – |   |
| Fixed income securities (b) |   |   | 7.2    |   |                                                         |   | – |   |   |   | 7.2 |   |   |   | – |   |
| Cash and cash equivalents   |   |   | 2.8    |   |                                                         |   | 2.8 |   |   |   | – |   |   |   | – |   |
| Total                       |   | $      | 60.2   |   |                                                         | $      | 35.5 |   |   | $ | 24.7 |   |   | $ | – |   |

|  | (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 and 2014, our common stock represented 17.7% and 20.3% respectively, of the plan assets. |
|--|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

| 10. | COMMITMENTS |
|-----|-------------|

| Year ending March 31, |   | Rent Commitment |      |
|-----------------------|--------|-----------------|-----------|
| 2016                  |   |            | 220,720   |   |
| 2017                  |   |            | 229,982   |   |
| 2018                  |   |            | 239,243   |   |
| 2019                  |   |            | 248,504   |   |
| 2020                  |   |            | 257,765   |   |
| Total                 |   | $               | 1,196,214 |   |

| 11. | SOURCES OF INCOME |
|-----|-------------------|

|                                           |   | Investment Income |    |   | Realized Gain (Loss) on Investments before Income Taxes |   |
|------------------------------------------------|--------|-------------------|---------|--------|---------------------------------------------------------|--------|
| Year endedMarch 31, 2015                       |   | Interest          |    |   | Dividends                                               |   |   | Other Income |   |   |  |   |
| Companies more than 25% owned                  |   | $                 | − |   |                                                    | $      | 8,294,500 |   |   | $ | 484,800 |   |   | $ | (1,175,287 | ) |
| Companies 5% to 25% owned                      |   |              | − |   |                                                    |   | 581,021 |   |   |   | − |   |   |   | 157,213,916 |   |
| Companies less than 5% owned                   |   |              | 288,292 |   |                                                    |   | 67,309 |   |   |   | 75,000 |   |   |   | 8,225,962 |   |
| Other sources, including temporary investments |   |              | 122,225 |   |                                                    |   | − |   |   |   | 35,185 |   |   |   | − |   |
|                                           |   | $                 | 410,517 |   |                                                    | $      | 8,942,830 |   |   | $ | 594,985 |   |   | $ | 164,264,591 |   |
| Distribution from Realized Gain                |   |              | − |   |                                                    |   | − |   |   |   | − |   |   |   | − |   |
|                                           |   | $                 | 410,517 |   |                                                    | $      | 8,942,830 |   |   | $ | 594,985 |   |   | $ | 164,264,591 |   |

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Table of Contents

|                                           |   | Investment Income |    |   | Realized Gain (Loss) on Investments before Income Taxes |   |
|------------------------------------------------|--------|-------------------|---------|--------|---------------------------------------------------------|--------|
| Year endedMarch 31, 2014                       |   | Interest          |    |   | Dividends                                               |   |   | Other Income |   |   |  |   |
| Companies more than 25% owned                  |   | $                 | − |   |                                                    | $      | 8,650,000 |   |   | $ | 485,267 |   |   | $ | − |   |
| Companies 5% to 25% owned                      |   |              | 250,811 |   |                                                    |   | 2,575,038 |   |   |   | 48,800 |   |   |   | − |   |
| Companies less than 5% owned                   |   |              | 259,377 |   |                                                    |   | 179,728 |   |   |   | 89,189 |   |   |   | 14,084,087 |   |
| Other sources, including temporary investments |   |              | 66,949  |   |                                                    |   | − |   |   |   | 1,386 |   |   |   | − |   |
|                                           |   | $                 | 577,137 |   |                                                    | $      | 11,404,766 |   |   | $ | 624,642 |   |   | $ | 14,084,087 |   |
| Distribution from Realized Gain                |   |              | − |   |                                                    |   | − |   |   |   | − |   |   |   | − |   |
|                                           |   | $                 | 577,137 |   |                                                    | $      | 11,404,766 |   |   | $ | 624,642 |   |   | $ | 14,084,087 |   |
|                                           |   | Investment Income |      |   | Realized Gain (Loss) on Investments before Income Taxes |   |
|------------------------------------------------|--------|-------------------|-----------|--------|---------------------------------------------------------|--------|
| Year endedMarch 31, 2013                       |   | Interest          |      |   | Dividends                                               |   |   | Other Income |   |   |  |   |
| Companies more than 25% owned                  |   | $                 | −   |   |                                                    | $      | 6,944,214 |   |   | $ | 484,800 |   |   | $ | 20,861,458 |   |
| Companies 5% to 25% owned                      |   |              | 250,298   |   |                                                    |   | 868,560 |   |   |   | 66,950 |   |   |   | 66,037,485 |   |
| Companies less than 5% owned                   |   |              | 1,756,452 |   |                                                    |   | 279,917 |   |   |   | 111,963 |   |   |   | 2,658,871 |   |
| Other sources, including temporary investments |   |              | 71,136    |   |                                                    |   | − |   |   |   | 971 |   |   |   | − |   |
|                                           |   | $                 | 2,077,886 |   |                                                    | $      | 8,092,691 |   |   | $ | 664,684 |   |   | $ | 89,557,814 |   |
| Distribution from Realized Gain                |   |              | −   |   |                                                    |   | − |   |   |   | − |   |   |   | (77,300,714 | )* |
|                                           |   | $                 | 2,077,886 |   |                                                    | $      | 8,092,691 |   |   | $ | 664,684 |   |   | $ | 12,257,100 |   |

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Table of Contents

| 2015                                                              |   | FirstQuarter |    |   | SecondQuarter |   |    | ThirdQuarter |   |   | FourthQuarter |   |   | Total  |   |
|-------------------------------------------------------------------|--------|--------------|---------|--------|---------------|--------|---------|--------------|--------|--------|---------------|--------|--------|--------|--------|
| Net investment income (loss)                                      |   | $            | (1,483  | )      |          | $      | (1,239  | )            |   | $      | 4,429         |   |   | $      | (4,152 | ) |   | $ | (2,445 | ) |
| Net realized gain 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 increase (decrease) in net operations per share               |   |         | 1.19    |   |          |   | (2.38   | )            |   |   | (1.62         | )      |   |   | 2.13   |   |   |   | (0.68 | ) |
| 2014                                                              |   | FirstQuarter |   |   | SecondQuarter |   |   | ThirdQuarter |   |   | FourthQuarter |   |   | Total  |    |
|-------------------------------------------------------------------|--------|--------------|--------|--------|---------------|--------|--------|--------------|--------|--------|---------------|--------|--------|--------|---------|
| Net investment income (loss)                                      |   | $            | (1,202 | )      |          | $      | (1,191 | )            |   | $      | 6,260         |   |   | $      | 1,027   |   |   | $ | 4,894 |   |
| Net realized gain on investments                                  |   |         | 55     |   |          |   | -      |         |   |   | -             |   |   |   | 14,029  |   |   |   | 14,084 |   |
| Net increase (decrease) in unrealized appreciation of investments |   |         | 10,392 |   |          |   | 45,615 |         |   |   | 53,308        |   |   |   | (16,283 | ) |   |   | 93,032 |   |
| Net increase (decrease) in net assets from operations             |   |         | 9,245  |   |          |   | 44,424 |         |   |   | 59,569        |   |   |   | (1,228  | ) |   |   | 112,010 |   |
| Net increase (decrease) in net operations per share               |   |         | .50    |   |          |   | 2.91   |         |   |   | 3.54          |   |   |   | (.27    | ) |   |   | 6.68 |   |

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|                                                                        |   | Years Ended March 31 |    |
|-----------------------------------------------------------------------------|--------|----------------------|---------|
| Per Share Data                                                              |   | 2015                 |    |   | 2014 |   |   | 2013 |   |   | 2012 |   |   | 2011 |   |
| Investment income                                                           |   | $                    | .64     |   |   | $ | .82 |   |   | $ | .71 |   |   | $ | .62 |   |   | $ | .50 |   |
| Operating expenses                                                          |   |                 | (.78    | ) |   |   | (.55 | ) |   |   | (.55 | ) |   |   | (.44 | ) |   |   | (.37 | ) |
| Income taxes                                                                |   |                 | (.02    | ) |   |   | .05 |   |   |   | (.04 | ) |   |   | (.01 | ) |   |   | (.01 | ) |
| Net investment (loss) income                                                |   |                 | (.16    | ) |   |   | .32 |   |   |   | .12 |   |   |   | .17 |   |   |   | .12 |   |
| Distributions from undistributed net investment income                      |   |                 | (.20    | ) |   |   | (.20 | ) |   |   | (.20 | ) |   |   | (.20 | ) |   |   | (.20 | ) |
| Net realized gain, net of tax incurred on deemed capital gain distributions |   |                 | 7.06    |   |   |   | .66 |   |   |   | 5.81 |   |   |   | .70 |   |   |   | 2.59 |   |
| Dividends from capital gains                                                |   |                 | – |   |   |   | – |   |   |   | (5.07 | ) |   |   | – |   |   |   | – |   |
| Net increase (decrease) in unrealized appreciation of investments           |   |                 | (6.96   | ) |   |   | 6.04 |   |   |   | 1.08 |   |   |   | 5.23 |   |   |   | .86 |   |
| Exercise of employee stock options**                                        |   |                 | (.04    | ) |   |   | (.18 | ) |   |   | (.24 | ) |   |   | – |   |   |   | (.05 | ) |
| Forfeiture/ (Issuance) of restricted stock***                               |   |                 | (.40    | ) |   |   | – |   |   |   | (.10 | ) |   |   | – |   |   |   | – |   |
| Share based compensation expense                                            |   |                 | .07     |   |   |   | (.04 | ) |   |   | .03 |   |   |   | .07 |   |   |   | .07 |   |
| Net change in pension plan funded status                                    |   |                 | (.05    | ) |   |   | .08 |   |   |   | .01 |   |   |   | (.03 | ) |   |   | (.01 | ) |
| Treasury stock*                                                             |   |                 | – |   |   |   | – |   |   |   | – |   |   |   | – |   |   |   | – |   |
| Increase (decrease) in net asset value                                      |   |                 | (.68    | ) |   |   | 6.68 |   |   |   | 1.44 |   |   |   | 5.94 |   |   |   | 3.38 |   |
| Net asset value                                                             |   |                 |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Beginning of year                                                           |   |                 | 49.98   |   |   |   | 43.30 |   |   |   | 41.86 |   |   |   | 35.92 |   |   |   | 32.54 |   |
| End of year                                                                 |   | $                    | 49.30   |   |   | $ | 49.98 |   |   | $ | 43.30 |   |   | $ | 41.86 |   |   | $ | 35.92 |   |
|                                                                        |   |                 |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ratios and Supplemental Data                                                |   |                 |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ratio of operating expenses to average net assets                           |   |                 | 1.59    | % |   |   | 1.18 | % |   |   | 1.36 | % |   |   | 1.07 | % |   |   | 1.10 | % |
| Ratio of net investment income to average net assets                        |   |                 | (.32    | %) |   |   | .68 | % |   |   | .31 | % |   |   | .41 | % |   |   | .35 | % |
| Portfolio turnover rate                                                     |   |                 | 0.93    | % |   |   | 1.76 | % |   |   | 2.22 | % |   |   | 2.15 | % |   |   | 2.78 | % |
| Net asset total return                                                      |   |                 | 8.4     | % |   |   | 16.9 | % |   |   | 27.00 | % |   |   | 18.07 | % |   |   | 18.40 | % |
|                                                                        |   |                 |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares outstanding at end of period (000s) omitted                          |   |                 | 15,565  |   |   |   | 15,414 |   |   |   | 15,236 |   |   |   | 15,020 |   |   |   | 15,012 |   |

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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, 2014 |   |    | Gross Additions (3) |   |   | Gross Reductions (4) |   |   | Fair Value at March 31, 2015 |    |
|-----------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------|---------|--------|------------------------------|--------|---------|---------------------|--------|--------|----------------------|--------|--------|------------------------------|---------|
| Control Investments                                                                                                   |   |                                                              |    |   |                              |   |    |                     |   |   |                      |   |   |                              |    |
| The RectorSeal Corporation27,907 shares common stock                                                                  |   | $                                                            | 8,320   |   |                         | $      | 275,800 |                |   | $      | 82,400               |   |   |                         | − |   |   | $ | 358,200 |   |
| The Whitmore Manufacturing Company80 shares common stock                                                              |   |                                                         | 360     |   |                         |   | 88,500  |                |   |   | 500                  |   |   |                         | − |   |   |   | 89,000 |   |
| Media Recovery, Inc.800,000 shares Series A Convertible Preferred Stock, convertible into 800,000 shares common stock |   |                                                         | − |   |                         |   | 4,000   |                |   |   | 300                  |   |   |                         |    |   |   |   | 4,300 |   |
| 4,000,002 shares common stock                                                                                         |   |                                                         | − |   |                         |   | 19,900  |                |   |   | 1,800                |   |   |                         |    |   |   |   | 21,700 |   |
| Balco, Inc.445,000 shares common stock; 60,920 shares Class B non-voting common                                       |   |                                                         | − |   |                         |   | 4,500   |                |   |   | 600                  |   |   |                         | − |   |   |   | 5,100 |   |
| CapStar Holdings Corporation500 shares common stock;                                                                  |   |                                                         |    |   |                         |   | 5,916   |                |   |   | 2,644                |   |   |                         | -       |   |   |   | 8,560 |   |
| 1,000,000 shares preferred stock                                                                                      |   |                                                         | 94      |   |                         |   | 1,598   |                |   |   | 713                  |   |   |                         | -       |   |   |   | 2,311 |   |
| Discovery Alliance, LLC90.0% limited liability company                                                                |   |                                                         | − |   |                         |   | 400     |                |   |   |                 |   |   |                         | (400    | ) |   |   | - |   |
| Humac Company1,041,000 shares of common stock                                                                         |   |                                                         | 5       |   |                         |   | 210     |                |   |   | 34                   |   |   |                         | -       |   |   |   | 244 |   |
| Total Control Investments                                                                                             |   | $                                                            | 8,779   |   |                         | $      | 400,824 |                |   | $      | 88,991               |   |   | $                            | (400    | ) |   | $ | 489,415 |   |

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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, 2014 |   |    | Gross Additions (3) |   |   | Gross Reductions (4) |   |   | Fair Value at March 31, 2015 |     |
|----------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------|---------|--------|------------------------------|--------|---------|---------------------|--------|--------|----------------------|--------|--------|------------------------------|----------|
| Affiliated  Investments                                                                                                                       |   |                                                              |    |   |                              |   |    |                     |   |   |                      |   |   |                              |     |
| Alamo Group, Inc.                                                                                                                                  |   | $                                                            | 536     |   |                         |   | 153,824 |                |   |   | -                    |   |   |                         | (153,824 | ) |   |   | - |   |
| Encore Wire Corporation                                                                                                                            |   |                                                         | 45      |   |                         |   | 63,591  |                |   |   | -                    |   |   |                         | (63,591  | ) |   |   | - |   |
| 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 |   |                                                         | − |   |                         |   | 1,040   |                |   |   | 1,322                |   |   |                         | -        |   |   |   | 2,362 |   |
| kSEP Holdings, Inc.861,591 shares of common stock                                                                                                  |   |                                                         | − |   |                         |   | − |                |   |   | 1,863                |   |   |                         |     |   |   |   | 1,863 |   |
| 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      |   |                                                         | -       |   |                         |   | 25      |                |   |   | 4,095                |   |   |                         | −  |   |   |   | 4,120 |   |
| Total Affiliated Investments                                                                                                                       |   | $                                                            | 581     |   |                         | $      | 218,480 |                |   | $      | 7,280                |   |   | $                            | (217,415 | ) |   | $ | 8,345 |   |
| Total Control & Affiliated Investments                                                                                                         |   | $                                                            | 9,361   |   |                         | $      | 619,304 |                |   | $      | 96,271               |   |   | $                            | (217,815 | ) |   | $ | 497,760 |   |

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| (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 Non-Control/Non-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 included in decreases in the cost basis of investment resulting from principal payments 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. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

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

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| (c) | Attestation report of the registered public accounting firm |
|-----|-------------------------------------------------------------|

| (d) | Changes in internal control over financial reporting |
|-----|------------------------------------------------------|

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

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

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

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Table of Contents

| 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)     |   |                                                                                        | 388,000 |   |                                                                        | $      | 34.75   |                                                                                         |   |   | 4,000 |   |
|                                                       |   |                                                                                        |    |   |                                                                        |   |    |                                                                                         |   |   |   |   |
| Equity compensation plans not approved by shareholders (2) |   |                                                                                        | − |   |                                                                        |   | − |                                                                                         |   |   | − |   |
| Total                                                      |   |                                                                                        | 388,000 |   |                                                                        | $      | 34.75   |                                                                                         |   |   | 4,000 |   |

|  | 1) | Includes the 1999 Stock Option Plan and the 2009 Stock Incentive Plan and excludes restricted shares under 2010 Restricted Stock Award Plan.   For a description of both plans, please refer to Footnote 7 contained in our consolidated financial statements. |
|--|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

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

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

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

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

|                                                                                           | Page |
|------------------------------------------------------------------------------------------------|------|
| Reports of Independent Registered Public Accounting Firm                                       | 34   |
| Consolidated Statements of Assets and Liabilities as of March 31, 2015 and 2014                | 37   |
| Consolidated Statements of Operations for Years Ended March 31, 2015, 2014 and 2013            | 38   |
| Consolidated Statements of Changes in Net Assets for Years Ended March 31, 2015, 2014 and 2013 | 39   |
| Consolidated Statements of Cash Flows for Years Ended March 31, 2015, 2014 and 2013            | 40   |
| Consolidated Schedules of Investments as of March 31, 2015 and 2014                            | 42   |
| Notes to Consolidated Financial Statements                                                     | 52   |

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

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

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|   | CAPITAL SOUTHWEST CORPORATION |
|--------|-------------------------------|
|   | By:                           | /s/ Joseph B. Armes |
|   |                          | Joseph B. ArmesChairman of the BoardPresident and Chief Executive Officer |
| Signature              | Title                                | Date         |
|------------------------|--------------------------------------|--------------|
|                   |                                 |         |
| /s/ Joseph B. Armes    | Chairman of the Board and President  | June 3, 2015 |
| Joseph B. Armes        | (Chief Executive Officer)            |         |
|                   |                                 |         |
| /s/ David R. Brooks    | Director                             | June 3, 2015 |
| David R. Brooks        |                                 |         |
|                   |                                 |         |
| /s/ Jack D. Furst      | Director                             | June 3, 2015 |
| Jack D. Furst          |                                 |         |
|                   |                                 |         |
| /s/ Samuel B. Ligon    | Director                             | June 3, 2015 |
| Samuel B. Ligon        |                                 |         |
|                   |                                 |         |
| /s/ T. Duane Morgan    | Director                             | June 3, 2015 |
| T. Duane Morgan        |                                 |         |
|                   |                                 |         |
| /s/ William Thomas III | Director                             | June 3, 2015 |
| William Thomas III     |                                 |         |
|                   |                                 |         |
| /s/ John H. Wilson     | Director                             | June 3, 2015 |
| John H. Wilson         |                                 |         |
|                   |                                 |         |
| /s/ Kelly Tacke        | Chief Financial Officer              | June 3, 2015 |
| Kelly Tacke            | (Chief Financial/Accounting Officer) |         |

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Table of Contents

| Exhibit No. | Description                                                                                                                                                                                                                      |
|-------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|        |                                                                                                                                                                                                                             |
| 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).                                                                                                               |
|        |                                                                                                                                                                                                                             |
| 10.1        | The RectorSeal Corporation and Jet-Lube, Inc. Employee Stock Ownership Plan as revised and restated effective April 1, 2007 (filed as Exhibit 10.1 to form 10-K for the fiscal year ended March 31, 2007).                       |
|        |                                                                                                                                                                                                                             |
| 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       | Joseph B. Armes Revised Offer Letter (filed as Exhibit 99.2 to Form 8-K dated May 17, 2013).                                                                                                                                     |
|        |                                                                                                                                                                                                                             |
| 10.18       | Capital Southwest Corporation 2009 Stock Incentive Plan (filed as Exhibit 10.1 to Form 10-Q for the quarterly period ended June 30, 2011)                                                                                        |
|        |                                                                                                                                                                                                                             |
| 10.19       | 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                                                                                                                                                                                                     |
|-------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|        |                                                                                                                                                                                                            |
| 10.20       | 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)                                           |
|        |                                                                                                                                                                                                            |
| 10.21       | 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)                                    |
|        |                                                                                                                                                                                                            |
| 10.22       | 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)                          |
|        |                                                                                                                                                                                                            |
| 10.23       | 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)                             |
|        |                                                                                                                                                                                                            |
| 10.24       | Form of Cash Incentive Award Agreement (filed as Exhibit 10.1 to Form 10-Q for the quarterly period ended September 30, 2014)                                                                                   |
|        |                                                                                                                                                                                                            |
| 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.             |

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