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Delaware		2080		41-2103550
(State or Other Jurisdiction of Incorporation or Organization)		(Primary Standard Industrial Classification Code Number)		(I.R.S. Employer Identification Number)

John E. Schmeltzer, III, Esq. Andrew P. Beame, Esq. Patterson Belknap Webb & Tyler LLP 1133 Avenue of the Americas New York, NY 10036 Telephone: (212) 336-2000 Facsimile: (212) 336-2222		Elise M. Adams, Esq. Christin R. Cerullo, Esq. Blank Rome LLP 405 Lexington Avenue New York, NY 10174 Telephone: (212) 885-5000 Facsimile: (212) 885-5001

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		Proposed Maximum Aggregate		Amount of
Title of Each Class of Securities to Be Registered		Offering Price(1)(2)		Registration Fee
Common Stock, $.01 par value per share		$31,625,000		$3,722.26

(1)	Includes shares of common stock issuable upon exercise of underwriters’ over-allotment option.
(2)	Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(o) under the Securities Act of 1933, as amended.

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The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

		Per Share				Total
Initial public offering price		$				$
Underwriting discounts and commissions (1)		$				$
Proceeds to us (before the non-accountable expense allowance and other offering expenses)		$				$

(1)	Does not include a non-accountable expense allowance payable to the underwriters in the amount of $125,000.

	ThinkEquity Partners LLC

	Ladenburg Thalmann & Co. Inc.

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		Page
Prospectus Summary			1
Risk Factors			8
Forward-Looking Statements			22
Market Data and Forecasts			22
Use of Proceeds			23
Dividend Policy			24
Capitalization			25
Dilution			27
Selected Consolidated Financial Data			29
Management’s Discussion and Analysis of Financial Condition and Results of Operations			32
Business			48
Management			66
Certain Relationships and Related Party Transactions			80
Security Ownership of Certain Beneficial Owners and Management			83
Description of Securities			86
Shares Eligible for Future Sale			91
Underwriting			93
Legal Matters			97
Experts			97
Where You Can Find Additional Information			97
Index to Financial Statements			F-1
EX-3.1: FORM OF AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
EX-3.2: FORM OF AMENDED AND RESTATED BYLAWS
EX-4.2: SHAREHOLDERS AGREEMENT
EX-10.1: EXPORT AGREEMENT
EX-10.2: AMENDMENT NO. 1 TO EXPORT AGREEMENT
EX-10.3: NATIONAL DISTRIBUTION AGREEMENT
EX-10.4: SUBSCRIPTION AGREEMENT
EX-10.5: STOCKHOLDERS AGREEMENT
EX-10.6: PROMISSORY NOTE
EX-10.7: AGREEMENT
EX-10.8: SUPPLY AGREEMENT
EX-10.9: AMENDMENT NO. 1 TO SUPPLY AGREEMENT
EX-10.10: AMENDED AND RESTATED WORLDWIDE DISTRIBUTION AGREEMENT
EX-10.11: BOTTLING AND SERVICES AGREEMENT
EX-10.12: AMENDMENT TO BOTTLING AND SERVICES AGREEMENT
EX-10.13: AMENDED AND RESTATED CONVERTIBLE NOTE PURCHASE AGREEMENT
EX-10.14: AMENDED AND RESTATED CONVERTIBLE PROMISSORY NOTE
EX-10.15: AMENDED AND RESTATED CONVERTIBLE PROMISSORY NOTE
EX-10.16: CONVERTIBLE PROMISSORY NOTE
EX-10.17: LICENSE AGREEMENT
EX-10.20: EMPLOYMENT AGREEMENT WITH KEITH A. BELLINGER
EX-10.21: SUMMARY OF EMPLOYMENT AGREEMENT WITH MATTHEW F. MACFARLANE
EX-10.22: NON-COMPETITION DEED
EX-10.23: LETTER AGREEMENT
EX-10.24: LETTER AGREEMENT
EX-10.25: LETTER CONSULTING AGREEMENT
EX-10.26: LETTER CONSULTING AGREEMENT
EX-10.27: SUPPLY AGREEMENT
EX-10.28: AMENDMENT AND CONSENT TO SUPPLY AGREEMENT
EX-10.29: 2003 STOCK INCENTIVE PLAN, AS AMENDED
EX-10.30: AMENDMENT TO CASTLE BRANDS INC. 2003 STOCK INCENTIVE PLAN
EX-10.31: LETTER AGREEMENT
EX-10.32: SUBLEASE
EX-10.33: INDENTURE OF SUBLEASE
EX-10.34: OFFICE LEASE
EX-10.35: FIRST AMENDMENT TO OFFICE LEASE
EX-10.36: SECOND AMENDMENT TO OFFICE LEASE
EX-10.37: THIRD AMENDMENT TO OFFICE LEASE
EX-10.38: FOURTH AMENDMENT TO OFFICE LEASE
EX-10.39: FIFTH AMENDMENT TO OFFICE LEASE
EX-10.40: FIRST SUPPLEMENTAL TRUST INDENTURE
EX-10.41: FIRST AMENDED AND RESTATED TRUST INDENTURE
EX-10.42: 9% SECURED NOTE
EX-10.43: GENERAL SECURITY AGREEMENT
EX-10.44: FIRST AMENDMENT TO GENERAL SECURITY AGREEMENT
EX-10.45: GUARANTY PAYMENT AND PERFORMANCE
EX-10.46: FIRST AMENDMENT TO GUARANTEE OF PAYMENT AND PERFORMACE
EX-10.47: COLLATERAL AGREEMENT
EX-10.48: FIRST AMENDMENT TO COLLATERAL AGREEMENT
EX-10.49: CREDIT FACILITY AGREEMENT
EX-10.50: ACCOUNTS RECEIVABLE CREDIT FACILITY AGREEMENT
EX-10.51: CONTRACT
EX-16.1: LETTER FROM GRODSKY CAPORRINO & KAUFMAN, PC
EX-21.1: LIST OF SUBSIDIARIES OF THE REGISTRANT
EX-23.1: CONSENT OF EISNER LLP
EX-23.2: CONSENT OF BDO SIMPSON XAVIER
EX-23.3: CONSENT OF BDO SIMPSON XAVIER

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	•	difficulties in assimilating acquired operations or products;
	•	unanticipated costs that could materially adversely affect our results of operations;
	•	negative effects on reported results of operations from acquisition related charges and amortization of acquired intangibles;
	•	diversion of management’s attention from other business concerns;
	•	adverse effects on existing business relationships with suppliers, distributors and retail customers;
	•	risks of entering new markets or markets in which we have limited prior experience; and
	•	the potential inability to retain and motivate key employees of acquired businesses.

	•	seasonal purchasing patterns of distributors, retailers and consumers;
	•	our and our suppliers’ ability to handle increased orders;
	•	delays in shipments of product from international suppliers;

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	•	our ability to procure adequate shipping containers and ships to transport our products;
	•	our commencement or completion of a major marketing campaign;
	•	delays in obtaining raw materials such as bottles and packaging materials;
	•	changes in the U.S. or international economies;
	•	fluctuations in discretionary consumer spending;
	•	changes in consumer preferences;
	•	increases or decreases in U.S. or other federal excise taxes, or the aggregate effect of such tax changes in a number of U.S. states;
	•	changes in interest rates and terms of borrowing;
	•	significant fluctuations in the value of the U.S. dollar against other foreign currencies, which would affect the cost of product purchases and our cost of raw materials;
	•	fluctuations in commodity prices;
	•	new or revised regulatory requirements and accounting pronouncements;
	•	delays in the launch of new products, including the timing of government approvals;
	•	alcohol advertising restrictions, limitations on hours or places of sale or other measures adopted to restrict beverage sales (whether in the United States or abroad); and
	•	the loss or addition of a brand.

	•	the need to develop new distributor relationships;
	•	fluctuations in currency exchange rates and currency devaluations;
	•	differences and unexpected changes in the regulatory environment;
	•	varying tax regimes;
	•	exposure to different legal standards and enforcement mechanisms and associated compliance costs;
	•	tariffs, duties, import/export controls and other trade barriers;
	•	longer accounts receivable payment cycles and difficulties in collecting accounts receivable;
	•	limited legal protection and enforcement of intellectual property rights;
	•	difficulties in staffing and managing foreign operations;
	•	potentially higher incidences of fraud; and
	•	political instability and the possibility of wars and terrorist acts.

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	•	make it more difficult for us to satisfy our other obligations;
	•	require us to dedicate a substantial portion of any cash flow we may generate to payments on our debt obligations, which would reduce the availability of our cash flow to fund working capital, capital expenditures and other corporate requirements;
	•	impede us from obtaining additional financing in the future for working capital, capital expenditures, acquisitions and general corporate purposes; and
	•	make us more vulnerable in the event of a downturn in our business prospects and limit our flexibility to plan for, or react to, changes in our industry.

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	•	variations in our actual or anticipated operating results;
	•	our introduction of new brands or brand extensions and our ability to maintain existing brands;
	•	performance of our suppliers and distributors of our brands;
	•	increases in the amount and timing of operating costs and capital expenditures relating to expansion of operations;
	•	recruitment or departure of key operating personnel;
	•	changes in the estimates of our operating performance;
	•	changes in recommendations by securities analysts of our common stock;
	•	announcements of regulatory investigations of our operations or those of our suppliers;
	•	competition;
	•	changes in accounting principles; and
	•	changes in federal, state or foreign regulations and taxes that may affect our industry.

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	•	our history of losses and expectation of further losses;
	•	the effect of poor operating results on our company;
	•	the effect of growth on our infrastructure, resources, and existing sales;
	•	our ability to expand our operations in both new and existing markets and our ability to develop or acquire new brands;
	•	the impact of supply shortages and alcohol and packaging costs in general;
	•	our ability to raise capital;
	•	our ability to fully utilize and retain new executives;
	•	negative publicity surrounding our products or the consumption of beverage alcohol products in general;
	•	our ability to acquire and/or maintain brand recognition and acceptance;
	•	trends in consumer tastes;
	•	our ability to protect trademarks and other proprietary information;
	•	the impact of litigation;
	•	the impact of federal, state, local or foreign government regulations;
	•	the effect of competition in our industry; and
	•	economic and political conditions generally.

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	•	sales and marketing activities;
	•	capital commitments to our Gosling-Castle Partners Inc. strategic export venture (of the remaining $3.9 million of funding that we owe to Gosling-Castle Partners by April 2007, we will fund approximately $1.1 million in October 2005, an additional $1.0 million in each of April 2006 and October 2006 and $750,000 in April 2007), see “Business – Strategic brand-partner relationships”;
	•	hiring of additional employees;
	•	repayment of €521,646 ($629,418) of the principal amount of indebtedness owed by us to former stockholders of our Irish subsidiaries; and
	•	working capital needs.

	•	approximately $4.6 million of the net proceeds of this offering to repay the senior notes of Castle Brands (USA) Corp., our wholly owned subsidiary, which are held by 27 holders, including approximately $2.6 million held by six of our officers, directors and principal stockholders. This indebtedness bears interest at a rate of 9% per annum and is due May 31, 2009; and
	•	up to approximately $2.0 million of the net proceeds of this offering to repay the notes and other obligations held by Ulster Bank Ireland Limited and Ulster Bank Ltd. under various facilities extended to our Irish subsidiaries. This indebtedness consists of several facilities which bear interest at various rates ranging from 4.8% to 7.8% per annum. Each facility is payable on demand by the bank.

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	•	on an actual, historical basis, without any adjustments to reflect subsequent or anticipated events;
	•	on a “pro forma” basis, with adjustments to reflect the following subsequent events:

	•	our issuances in August 2005 of an additional 362,500 shares of our Series C convertible preferred stock and an additional $5.0 million principal amount of our 6% convertible notes, for aggregate net proceeds to us of approximately $7.5 million;
	•	our accrual of additional preferred stock dividends on our convertible preferred stock from July 1, 2005 through the estimated closing date of this offering in the aggregate amount of $145,246; and
	•	our issuance of an additional 5,343,827 shares of our common stock upon a the conversion of all of our preferred stock, including the additional shares of Series C convertible preferred stock issued in August 2005, into 4,089,465 shares of common stock, (b) our payment of all of the dividends accrued on our convertible preferred stock as of the estimated closing date of this offering, including those accrued since June 30, 2005, with 133,857 shares of common stock, and (c) the conversion of $7.7 million of our indebtedness, including all of our 5% euro denominated convertible notes and $6.0 million principal amount, including $2.0 million of the additional notes issued in August 2005 for 285,714 shares, of our 6% convertible notes, into an aggregate of 1,120,505 shares of common stock, all of which issuances will occur upon the consummation of this offering; and

	•	on a “pro forma as adjusted” basis, reflecting the foregoing pro forma adjustments as well as the following additional events:

	•	our adoption of an amendment to our certificate of incorporation that authorizes 45,000,000 shares of common stock and 5,000,000 shares of preferred stock upon the consummation of this offering;
	•	the sale of the 2,500,000 shares of common stock offered by us in this offering at an assumed public offering price of $            per share, the midpoint of the range set forth on the cover page of this prospectus; and
	•	our receipt of the estimated net proceeds from such sale, after deducting the estimated underwriting discounts and commissions and other expenses of this offering and giving effect to our repayment from such proceeds of $629,418 of our outstanding indebtedness as of June 30, 2005.

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						As of June 30, 2005
														Pro forma
						Actual				Pro forma				as adjusted
						(in thousands, except number of shares)
Cash and cash equivalents						$	5,031			$	12,547			$
Indebtedness:
	Current, and current maturities of, notes payable:
		Ulster Bank facilities				$	114			$	114			$
		Gosling’s Export agreement					565				565
		Roaring Water Bay stockholder loans(1)					147				147
	Long-term notes payable, less current maturities:
		9% senior notes					4,571				4,571
		Ulster Bank facilities					1,397				1,397
		6% convertible subordinated notes					10,000				9,000
		Gosling’s Export agreement					1,210				1,210
		5% euro denominated convertible
			subordinated notes				1,659				—
		Roaring Water Bay stockholder loans(1)					455				455
	Obligations under capital leases						15				15
			Total indebtedness			$	20,133			$	17,474			$
Redeemable convertible preferred stock(2):
	Series A convertible preferred stock, $1.00 par value, 550,000 shares authorized and 535,715 shares issued and outstanding (actual); no shares authorized, issued or outstanding (pro forma and pro forma as adjusted)						3,541				—
	Series B convertible preferred stock, $1.00 par value, 200,000 shares authorized and 200,000 shares issued and outstanding (actual); no shares authorized, issued or outstanding (pro forma and pro forma as adjusted)						1,086				—
	Series C convertible preferred stock, $1.00 par value, 3,375,000 shares authorized and 2,991,250 shares issued and outstanding (actual); no shares authorized, issued or outstanding (pro forma and pro forma as adjusted)						21,299				—
			Total preferred stock			$	25,926			$	—			$
Preferred stock dividends payable						$	753			$	—			$
Stockholders’ equity:
	Common stock, $0.01 par value, 20,500,000 shares authorized and 3,106,666 shares issued and outstanding (actual); 20,500,000 shares authorized and 8,450,493 shares issued and outstanding (pro forma); and 45,000,000 shares authorized and 10,950,493 shares issued and outstanding (pro forma as adjusted)						31				85
	Additional paid-in capital						17,965				54,011
	Accumulated deficit						(33,180	)			(33,180	)
	Accumulated other comprehensive loss						100				100
			Total stockholders’ equity (deficiency)			$	(15,084	)		$	21,016			$
				Total capitalization		$	31,728			$	38,490			$

(1)	Does not give effect to an aggregate of $50,000 in imputed interest ascribed to these non-interest bearing notes.
(2)	Amounts shown are net of transaction costs, including the value attributed to placement agent warrants.

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	•	our issuances in August 2005 of an additional $5.0 million principal amount of our 6% convertible notes and an additional 362,500 shares of our Series C convertible preferred stock, and our receipt of approximately $7.5 million in aggregate net proceeds therefrom;
	•	accrual of additional dividends on our preferred stock from July 1, 2005 through the estimated closing date of this offering in the amount of $145,246; and
	•	the conversion in connection with this offering of all of our preferred stock, $897,953 of preferred stock dividends accrued through the estimated closing of this offering and $7.7 million principal amount of our indebtedness, into an aggregate of 5,343,827 shares of our common stock.

Assumed initial public offering price per share							$
	Pro forma net tangible book value per share as of June 30, 2005		$
	Increase in net tangible book value per share attributable to this offering
Pro forma as adjusted net tangible book value per share after this offering
Dilution in pro forma as adjusted net tangible book value per share to investors in this offering							$

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			Shares purchased								Total consideration								Average
																			price per
			Amount				Percent				Amount				Percent				share
Existing stockholders				8,450,493				77.2%			$	58,204,126				%			$	6.89
Investors in this offering				2,500,000				22.8											$
	Total			10,950,493				100.0%			$					100.0%

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																							Three months ended
			Year ended March 31,																				June 30,
			2001				2002				2003				2004				2005				2004				2005
			(unaudited)																				(unaudited)
Consolidated statement of operations data (in thousands, except per share data):
	Sales, net		$	799			$	1,731			$	2,419			$	4,827			$	12,618			$	2,163			$	4,498
	Cost of sales			393				1,074				1,427				3,285				8,745				1,482				2,647
	Gross profit			406				657				992				1,542				3,873				681				1,851
	Selling expense			1,399				2,497				3,348				5,398				11,569				2,978				3,225
	General and administrative expense			657				1,013				818				1,960				3,637				795				1,138
	Depreciation and amortization			20				59				73				173				167				26				182
	Other (income)/expense, net			(11	)			3				11				166				(199	)			23				322
	Operating loss			(1,659	)			(2,915	)			(3,258	)			(6,155	)			(11,301	)			(3,142	)			(3,016	)
	Interest expense, net			(118	)			(92	)			(182	)			(304	)			(998	)			(466	)			(259	)
	Income tax benefit			–				–				–				–				–				–				37
	Minority interests			–				–				–				35				5				2				129
	Net loss		$	(1,777	)		$	(3,007	)		$	(3,440	)		$	(6,424	)		$	(12,294	)		$	(3,605	)		$	(3,109	)
	Less: preferred stock dividends			–				–				15				558				526				86				71
	Net loss attributable to common stockholders		$	(1,777	)		$	(3,007	)		$	(3,455	)		$	(6,982	)		$	(12,820	)		$	(3,691	)		$	(3,180	)
	Net loss per common share — basic and diluted		$	(2.60	)		$	(2.05	)		$	(1.88	)		$	(3.12	)		$	(4.13	)		$	(1.19	)		$	(1.02	)
	Weighted average common shares outstanding — basic and diluted			683				1,469				1,841				2,237				3,107				3,107				3,107
	Pro forma net loss per common share — basic and diluted(1)																			$(1.65	)		$	(0.47	)		$	(0.41	)
	Pro forma weighted average common shares outstanding-basic and diluted(1)																			7,781				7,781				7,781
Other data (unaudited):
	Number of case sales			3,844				9,053				21,708				64,013				170,060				32,377				60,628
	Net sales per case			$207.86			$	191.21			$	111.43			$	75.41			$	74.20			$	66.81			$	74.19
	Gross profit per case			$105.62			$	72.57			$	45.70			$	24.09			$	22.77			$	21.03			$	30.53
	Selling expense per case			$363.94			$	275.82			$	154.23			$	84.33			$	68.03			$	91.98			$	53.19

(1)

Assumes the conversion as of April 1, 2004 of: all shares of preferred stock outstanding as of June 30, 2005, including 535,715 shares of Series A convertible preferred stock, 200,000 shares of Series B convertible preferred stock and 2,991,250 shares of Series C convertible preferred stock, into an aggregate of 3,726,965 shares of common stock; the accrued and unpaid preferred stock dividends of $752,707 outstanding as of June 30, 2005 into 112,244 shares of common stock; the $1.7 million principal amount of our 5% euro denominated convertible notes outstanding as of June 30, 2005 into 263,362 shares of common stock; and $4.0 million of the $10.0 million principal amount of our 6% convertible notes that was outstanding as of June 30, 2005 into 571,429 shares of common stock; for an aggregate of 4,674,000 shares of common stock.

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																										As of June 30, 2005
		As of March 31,																				As of
																						June 30,												Pro forma
		2001				2002				2003				2004				2005				2004				Actual				Pro forma				as adjusted
		(unaudited)																				(unaudited)								(unaudited)
Cash and cash equivalents		$	71			$	170			$	236			$	3,461			$	5,676			$	3,482			$	5,031			$	12,547			$
Working capital (deficit)			(804	)			281				44				4,787				5,988				4,412				8,020				15,535
Total assets			2,045				3,822				4,528				27,759				43,255				29,035				43,955				51,470
Total debt			2,150				1,666				2,158				3,898				16,362				7,077				20,133				17,474
Total liabilities			2,588				2,835				3,674				8,259				26,173				13,143				29,912				27,253
Total stockholders’ equity (deficiency).			(543	)			988				(1,445	)			169				(12,207	)			(3,943	)			(15,084	)			21,016

	•	our issuances in August 2005 of 362,500 shares of our Series C convertible preferred stock and $5.0 million principal amount of our 6% convertible notes, for aggregate net proceeds to us of approximately $7.5 million;
	•	our accrual of additional preferred stock dividends on our convertible preferred stock from July 1, 2005 through the estimated closing date of this offering in the aggregate amount of $145,246; and
	•	our issuance of an additional 5,343,827 shares of our common stock upon the (a) conversion of all of our preferred stock, including the additional shares of Series C convertible preferred stock issued in August 2005, into 4,089,465 shares of common stock, (b) the payment of all of the preferred stock dividends accrued on our convertible preferred stock as of the estimated closing date of this offering, including those accrued since June 30, 2005, with 133,857 shares of our common stock, and (c) the conversion of $7.7 million of our indebtedness into 1,120,505 shares of our common stock; including $2.0 million of the additional notes issued in August 2005 for 285,714 shares; all of which issuances will occur upon the consummation of this offering.

	•	our sale of the 2,500,000 shares of common stock in this offering at an assumed initial public offering price of $           per share, the midpoint of the range set forth on the cover page of this prospectus; and
	•	our receipt of the estimated net proceeds therefrom, after deducting the underwriting discounts and commissions and other expenses of this offering and giving effect to our repayment from such proceeds of $629,418 of our outstanding indebtedness as of June 30, 2005.

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									Three months ended
			Year ended March 31,						June 30,
Case sales			2003		2004		2005		2004		2005
Cases
United States			18,482		29,116		74,190		10,181		32,684
International			3,226		34,897		95,870		22,196		27,944
	Total		21,708		64,013		170,060		32,377		60,628
Percentage of Cases
United States			85.1%		45.5%		43.6%		31.4%		53.9%
International			14.9		54.5		56.4		68.6		46.1
	Total		100.0%		100.0%		100.0%		100.0%		100.0%

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			As of March 31,								As of June 30,
			2004				2005				2004				2005
			(in thousands, except per share data)
Net loss attributable to common stockholders			$	(6,982	)		$	(12,820	)		$	(3,691	)		$	(3,180	)
Stock-based compensation expense determined under fair value method				–				(370	)			—				—
Pro forma net loss			$	(6,982	)		$	(13,190	)		$	(3,691	)		$	(3,180	)
Loss per share:
	Basic and diluted – as reported		$	(3.12	)		$	(4.13	)		$	(1.19	)		$	(1.02	)
	Basic and diluted – pro forma		$	(3.12	)		$	(4.25	)		$	(1.19	)		$	(1.02	)

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															Three months
			Year ended March 31,												ended June 30,
			2003				2004				2005				2004				2005
															(unaudited)
Sales, net				100.0	%			100.0	%			100.0	%			100.0	%			100.0	%
Cost of sales				59.0				68.1				69.3				68.5				58.8
Gross profit				41.0				31.9				30.7				31.5				41.2
Selling expense				138.4				111.8				91.7				137.7				71.7
General and administrative expense				33.8				40.6				28.8				36.8				25.3
Depreciation and amortization				3.0				3.6				1.3				0.9				4.1
Other (income)/expense, net				0.5				3.4				(1.6	)			1.1				7.2
Operating loss				(134.7	)			(127.5	)			(89.5	)			(145.0	)			(67.1	)
Interest expense, net				(7.5	)			(6.3	)			(7.9	)			(21.5	)			(5.8	)
Income tax benefit				—				—				—				—				0.8
Minority interests				0.0				0.7				0.0				0.1				2.8
Net loss				(142.2	)			(133.1	)			(97.4	)			(166.4	)			(69.3	)
Less:
	Preferred stock dividends			0.6				11.6				4.2				4.0				1.6
Net loss attributable to common stockholders				(142.8	)%			(144.7	)%			(101.6	)%			(170.4	)%			(70.9	)%

	Three months ended June 30, 2005 compared with three months ended June 30, 2004

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	Fiscal year ended March 31, 2005 compared with fiscal year ended March 31, 2004

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			Quarter ended
			June 30,				September 30,				December 31,				March 31,				June 30,				September 30,				December 31,				March 31,
			2002				2002				2002				2003				2003				2003				2003				2004
Consolidated Statement of Operations Data (in thousands, except per share data):
Sales, net			$	484			$	485			$	724			$	726			$	604			$	542			$	2,132			$	1,549
Cost of sales				270				272				434				452				396				364				1,446				1,081
Gross profit				214				213				290				274				208				178				686				468
Selling expense				673				735				972				968				755				809				1,729				2,105
General and administrative expense				149				130				234				305				348				406				536				670
Depreciation and amortization				11				11				24				26				38				43				51				41
Other (income)/expense, net				(2	)			(1	)			8				6				15				(4	)			372				(218	)
Operating loss				(617	)			(662	)			(948	)			(1,031	)			(948	)			(1,076	)			(2,002	)			(2,130	)
Interest expense, net				(30	)			(40	)			(56	)			(56	)			(57	)			(57	)			(97	)			(93	)
Income tax benefit				—				—				—				—				—				—				—				—
Minority interests				—				—				—				—				—				—				5				31
Net loss				(647	)			(702	)			(1,004	)			(1,087	)			(1,005	)			(1,133	)			(2,094	)			(2,192	)
Less: Preferred stock dividends				—				—				—				15				45				87				87				339
Net loss attributable to common stockholders			$	(647	)		$	(702	)		$	(1,004	)		$	(1,102	)		$	(1,050	)		$	(1,220	)		$	(2,181	)		$	(2,531	)
Net loss per common share:
	Basic		$	(0.38	)		$	(0.38	)		$	(0.50	)		$	(0.61	)		$	(0.58	)		$	(0.68	)		$	(0.97	)		$	(0.81	)
	Diluted		$	(0.38	)		$	(0.38	)		$	(0.50	)		$	(0.61	)		$	(0.58	)		$	(0.68	)		$	(0.97	)		$	(0.81	)
Weighted average shares used in computation:
	Basic			1,710				1,852				2,000				1,800				1,800				1,800				2,240				3,107
	Diluted			1,710				1,852				2,000				1,800				1,800				1,800				2,240				3,107

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			Quarter ended
			June 30,				September 30,				December 31,				March 31,				June 30,
			2004				2004				2004				2005				2005
Consolidated Statement of Operations Data (in thousands, except per share data):
Sales, net			$	2,163			$	2,997			$	4,496			$	2,962			$	4,498
Cost of sales				1,483				1,996				3,087				2,178				2,647
Gross profit				680				1,001				1,409				784				1,851
Selling expense				2,978				2,974				3,480				2,137				3,225
General and administrative expense				795				977				965				900				1,138
Depreciation and amortization				26				24				29				88				182
Other (income)/expense, net				8				104				(149	)			(161	)			322
Operating loss				(3,127	)			(3,078	)			(2,916	)			(2,180	)			(3,016	)
Interest expense, net				(466	)			(175	)			(196	)			(161	)			(259	)
Income tax benefit				—				—				—				—				37
Minority interests				2				—				—				3				129
Net loss				(3,591	)			(3,253	)			(3,112	)			(2,338	)			(3,109	)
Less: Preferred stock dividends				86				87				177				176				71
Net loss attributable to common stockholders			$	(3,677	)		$	(3,340	)		$	(3,289	)		$	(2,514	)		$	(3,180	)
Net loss per common share:
	Basic		$	(1.18	)		$	(1.07	)		$	(1.06	)		$	(0.81	)		$	(1.02	)
	Diluted		$	(1.18	)		$	(1.07	)		$	(1.06	)		$	(0.81	)		$	(1.02	)
Weighted average shares used in computation:
	Basic			3,107				3,107				3,107				3,107				3,107
	Diluted			3,107				3,107				3,107				3,107				3,107

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														Three months
														ended
		Year ended March 31,												June 30,
		2003				2004				2005				2004				2005
Net cash provided by (used in):
Operating activities		$	(3,833	)		$	(5,373	)		$	(13,198	)		$	(2,474	)		$	(4,524	)
Investing activities			(21	)			(6,723	)			(598	)			(457	)			(82	)
Financing activities			3,920				15,313				16,009				2,952				3,973
Net increase (decrease) in cash and cash equivalents		$	66			$	3,217			$	2,213			$	21			$	(633	)

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	Obligations and commitments

	Credit facilities

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		$1,025,000 was due April 1, 2005 and was paid;
		$1,125,000 is due October 1, 2005;
		$1,000,000 is due April 1, 2006;
		$1,000,000 is due October 1, 2006; and
		$750,000 is due April 1, 2007.

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For the years ending
March 31,		Amount
		(in thousands)
2006		$	3,032
2007			1,225
2008			30
2009			341
2010			9,662
Total		$	14,290
Less current portion			3,032
Non-current portion		$	11,258

			Payments due by year
			2006				2007				2008				2009				2010				Thereafter				Total
			(in thousands)
Long-term notes payable, including current portion			$	3,032			$	1,225			$	30			$	341			$	9,662			$	–			$	14,290
Stockholder notes payable				172				172				–				–				–				–				344
Operating leases				293				303				303				143				5				–				1,047
	Total		$	3,497			$	1,700			$	333			$	484			$	9,667			$	–			$	15,681

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	Predecessor operations

	•	obtained a federal license to import and wholesale liquor in the United States from the Alcohol and Tobacco Tax and Trade Bureau, a division of the U.S. Department of the Treasury;
	•	engaged MHW Ltd. to act as importer of record for it in the United States;
	•	created our premium Knappogue Castle single malt Irish whiskey to complement Knappogue Castle 1951 and entered into various agreements with respect to its production;
	•	established bottling arrangements with Terra Limited, which continues to act as one of our primary bottlers today;
	•	hired our first sales manager;
	•	acquired the last known existing stock of British Royal Navy Imperial Rum, one of the rarest and most historically significant commercially available rums today, upon which the flavor profile of our Sea Wynde rum was subsequently patterned; and
	•	raised $2.0 million of private equity financing, including $1.8 million of the approximately $7.2 million that has been invested in our company by Mr. Andrews and his affiliates as of the date of this prospectus.

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	Our formation and the acquisition of the Roaring Water Bay entities

	Recent developments

	•	in August 2004, we entered into an exclusive marketing agreement with I.L.A.R. S.p.A., a family owned Italian spirits company founded in 1875, pursuant to which we obtained the long-term exclusive U.S. distribution rights (excluding duty free sales) with respect to its Pallini Limoncello, a premium Italian liqueur, and related brand extensions;
	•	in January 2005, we became the exclusive U.S. distributor for Gosling’s rums, including Gosling’s Black Seal dark rum and related brands, all of which are produced by the Gosling family in Bermuda, where Gosling’s rums have been under continuous production for over 150 years. In February 2005, we expanded this relationship by acquiring a 60% controlling interest in Gosling-Castle Partners Inc., a global export venture owned by us and the Gosling family; and
	•	effective April 1, 2005, Gosling-Castle Partners secured the exclusive long-term export and distribution rights for the Gosling’s rum products for all countries other than Bermuda, including an assignment of the Gosling’s rights under our January 2005 distribution agreement with them. See “—Strategic brand-partner relationships.”

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	•	Gosling’s Black Seal – Gosling’s Black Seal is a premium dark rum, which is best known as an ingredient in the Gosling’s trademarked cocktail Dark ‘n Stormy – known as the “national drink of Bermuda.” To foster the promotion of the Dark ‘n Stormy, we also distribute its recommended mixture counterpart, Barritt’s Ginger Beer, a well known non-alcoholic ginger beer from Bermuda. Gosling’s Black Seal was awarded a Platinum Medal (the highest offered) in the World Spirits Competition, conducted by the Beverage Tasting Institute in 2000. In that competition, as part of a blind taste test conducted with respect to a selection of world class rums, Gosling’s Black Seal was rated “96” out of a possible “100” and a “Best Buy”;
	•	Gosling’s Gold Bermuda Rum – Gosling’s Gold Bermuda Rum, lighter in color than Gosling’s Black Seal, was introduced in 2004. It is often combined with Gosling’s Black Seal and fruit juices in the Rum Swizzle cocktail, a popular drink in Bermuda; and
	•	Gosling’s Old Rum – Gosling’s Old Rum is a premium “family reserve” rum that is produced in limited quantities. Gosling’s Old Rum was created based on the Gosling’s Black Seal formula and then further aged in oak barrels.

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	•	increasing consumer preference for liquor and cocktails across various age groups and demographics, as compared to wine and beer;
	•	increasing consumption of imported premium spirits; viewed as affordable luxury products, consumers appear willing to trade up and pay more for high-end quality spirits; and
	•	increasing consumer identification with a particular liquor brand to convey status and self image; consumers are more likely to have a preference for establishing a unique brand or drink to call their own and to be aspirational in their drinking behavior.

			Number of						Number of		Projected
			case sales		5-year				case sales		5-year
Spirits category (each includes both the			for 2004		growth				for 2010		growth
domestic and imported segments)			(estimated)		1999-2004				(projected)		2005-2010
Vodka			44.8			28.0%			55.0			18.3%
Rum			19.8			33.8%			22.6			10.8%
Liqueurs/cordials			20.3			21.6%			24.5			15.6%
Whiskey			42.0			(1.9%)			42.3			0.7%
Other categories			34.8			8.1%			39.5			10.3%
	Total U.S. distilled spirits		161.7			14.3%			183.9			10.8%

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				Number of						Number of		Projected
				case sales		5-year				case sales		5-year
				for 2004		growth				for 2010		growth
Imported spirits segment				(estimated)		1999-2004				(projected)		2005-2010
Imported vodka				12.5			81.2%			17.5			29.6%
Imported rum				2.3			64.3%			2.6			8.3%
Imported liqueurs/cordials				10.5			38.2%			14.0			23.9%
Irish whiskey				0.5			66.7%			0.6			20.0%
	Total for our segments			25.8			59.3%			34.7			25.3%
Other imported whiskey				22.8			(5.5%)			22.5			(5.3%)
Other imported spirits				16.0			15.1%			19.3			16.3%
		Total imported U.S. distilled spirits		64.6			20.5%			76.5			14.2%

	•	our diverse portfolio of high quality, premium branded spirits in growing categories of the spirits industry. This portfolio, with brands in four growing spirits categories, appeals to broad consumer tastes and enables us to penetrate various retail outlets and capitalize on varying regional preferences;

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	•	our extensive and established U.S. distribution network and growing international distribution network in Europe and elsewhere. We currently have distribution relationships with third-party distributors or brokers in all 50 states in the United States and in six other primary international markets. We believe that establishing domestic and international distribution such as ours is a significant barrier to entry for smaller spirits producers and that our distribution network is similar to that of our significantly larger competitors. We anticipate that our distribution network will also be a differentiating factor in enabling us to continue to partner with emerging brands seeking greater market penetration;
	•	our significant sales and marketing expertise and experience. We have dedicated a significant amount of resources to establish and develop a sales and marketing infrastructure both domestically and internationally. We believe this infrastructure provides us the capacity to accommodate our anticipated future growth. We currently have a total sales force of 28 people, including six regional U.S. sales managers and two international sales managers, with an average of over 15 years of industry experience with premium spirits brands;
	•	our highly qualified and experienced management team with successful track records relating to brand development, the spirits industry, mergers and acquisitions and public companies. Mark Andrews, our chairman, president and chief executive officer, founded our predecessor company in 1998. Prior thereto, he served as founder, chairman and chief executive officer of American Exploration Company, a publicly traded oil and gas company, from 1980 until its sale to Louis Dreyfus Natural Gas Corp. in 1997. During his 17-year tenure there, American Exploration completed over 50 acquisitions. Keith Bellinger, our executive vice president, chief operating officer and secretary, was formerly chief financial officer of the spirits division of Allied Domecq USA and served as president of the Northern Business Unit of Allied Domecq USA. T. Kelley Spillane, our senior vice president – U.S. sales, had significant roles while at Carillon Imports in helping that company grow its Absolut Vodka and Bombay Sapphire Gin brands;
	•	our flexible and efficient supply chain. We currently coordinate the production and delivery of all of our spirits through long-term arrangements with third-party distillers, producers and transportation companies. These arrangements enable us to operate without the need to own or invest in distilleries, bottling plants, storage or transportation equipment, allowing us to focus a majority of our resources on sales and marketing activities; and
	•	our recent track record in establishing strategic partnerships. We have experienced recent successes establishing strategic partnerships with the owners of spirits brands seeking to increase sales beyond their home markets, providing the opportunity for the brands to achieve global growth. We believe this track record will allow us to attract additional brands to our portfolio.

	•	increasing market penetration of our existing spirits brands. We intend to utilize our existing distribution relationships, sales expertise and targeted marketing activities to achieve growth and gain additional market share for our brands within

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		retail stores, bars and restaurants, and thereby with end consumers, both here and internationally; add experienced salespeople in selected markets; increase sales to national chain accounts; and expand our international distribution relationships;
	•	building brand awareness through innovative marketing, advertising and promotional activities. We place a significant emphasis on our bottle design, labeling and packaging, as well as on our advertising and promotional activities, to establish and reinforce the image of our brands and have invested significant capital over the last several years in developing our brands. We intend to continue developing compelling campaigns for our spirits brands through the coordinated efforts of our experienced internal marketing personnel and leading third-party design and advertising firms, principally using billboards, print advertisements and in-store promotional materials, to increase consumer brand awareness. For example, we intend to position Boru vodka as the leading and one of the few premium vodkas produced in Ireland and expand the market awareness of Gosling’s rum in global markets beyond its current loyal customer following in Bermuda and the eastern United States; and
	•	selectively adding new premium brands to our spirits portfolio. We intend to continue developing new brands and pursuing strategic relationships, joint ventures and acquisitions to selectively expand our portfolio of premium spirits brands, particularly by capitalizing on and expanding our already demonstrated partnering capabilities. The spirits industry is characterized by a relatively small number of very large companies, as a result of continuing industry consolidation, and a sizable number of smaller brands, many of which are family owned. We believe that by partnering with these smaller and family-owned companies, we provide them with the potential opportunity to achieve global growth and the other benefits of a larger organization while, in many cases, maintaining their local identities and traditional distillation and production businesses. In addition, we will seek to opportunistically acquire brands divested by our larger competitors that have market presence and significant growth potential.

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	Boru vodka

	Gosling’s rums

	Knappogue Castle and Clontarf Irish Whiskeys

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	Pallini Limoncello

	Brady’s Irish cream

	Celtic Crossing liqueur

	Sea Wynde rum

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	U.S. distribution

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	International distribution

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	•	New England – William Walsh (joined us in 1999) was previously with Southern Wine & Spirits, the largest wholesaler in the United States.
	•	East Coast – Robert Battipaglia (joined us in 2003) was previously the East Coast Regional Manager for the Advantage Brands division of Allied Domecq.
	•	Southeast – Louis Suffredini (joined us in 2004) was previously a Regional Sales Manager in the Southeast with Allied Domecq.
	•	Midwest – David Wyatt (joined us in 2004) was previously in charge of Control State sales for Pearl Vodka and prior to that was Central Region Manager for Allied Domecq.
	•	Southwest – Janell Eilers (joined us in 2004) was previously Texas State Sales Manager for the wine division of Diageo.
	•	West Coast – Bruce Smith (joined us in 2002) was previously with Southern Wine & Spirits, specializing in chain sales.

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	Gaelic Heritage Corporation Limited/Celtic Crossing

	I.L.A.R. S.p.A./Pallini Limoncello

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	Gosling-Castle Partners Inc./Gosling’s rums

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Name		Age				Position
Mark Andrews			55			Chairman of the Board, President and Chief Executive Officer
Keith A. Bellinger			47			Executive Vice President, Chief Operating Officer and Secretary
T. Kelley Spillane			43			Senior Vice President – U.S. Sales
Matthew F. MacFarlane			52			Senior Vice President and Chief Financial Officer
John Beaudette			48			Director(1)(2)
Robert J. Flanagan			49			Director(2)(3)
Phillip Frost, M.D.			68			Director
Colm Leen			42			Director(3)
Richard C. Morrison			65			Director(1)
Frederick M. R. Smith			63			Director(2)(3)
Kevin P. Tighe			61			Director(1)

(1)	Member of the nominating and corporate governance committee
(2)	Member of the compensation committee
(3)	Member of the audit committee

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	•	selecting the slate of nominees of directors to be proposed for election by the stockholders and recommending to the board of directors individuals to be considered by the board of directors to fill vacancies;
	•	developing and implementing policies regarding corporate governance matters and recommending any desirable changes to such policies to the board of directors;
	•	establishing criteria for selecting new directors; and
	•	reviewing and assessing annually the performance of the nominating and corporate governance committee and the adequacy of the nominating and corporate governance committee charter.

	•	appointing, overseeing and compensating the work of the registered independent public accounting firm;
	•	reviewing our quarterly financial statements and earnings releases;
	•	pre-approving all auditing services and permissible non-audit services provided by our registered independent public accounting firm;
	•	engaging in a dialogue with the registered independent public accounting firm regarding relationships which may impact the independence of the registered independent public accounting firm and being responsible for oversight of the independence of the registered independent public accounting firm;
	•	reviewing and approving the audit committee report to be filed with the SEC;
	•	reviewing with the outside auditor the adequacy and effectiveness of the internal controls over our financial reporting;
	•	establishing procedures for the submission of complaints, including the submission by our employees of anonymous concerns regarding questionable accounting or auditing matters;
	•	reviewing with our chief executive officer and chief financial officer any significant deficiencies in the design or operation of our internal controls and any fraud, whether or not material, that involves our management or other employees who have a significant role in our internal controls; and
	•	reviewing and assessing annually the adequacy of the audit committee charter.

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	•	reviewing and determining annually the compensation of our chief executive officer and other executive officers;
	•	preparing an annual report on executive compensation for inclusion in our annual proxy statement for each annual meeting of stockholders in accordance with applicable SEC rules and regulations;
	•	approving the form of employment contracts, severance arrangements, change in control provisions and other compensatory arrangements with executive officers;
	•	approving compensation programs and grants involving the use of our common stock and other equity securities; and
	•	reviewing and assessing annually, the compensation committee’s performance and the adequacy of the compensation committee charter.

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														Long-term
														compensation
		Annual compensation												Awards
														Number of
														securities
										Other annual				underlying				All other
Name and principal position		Salary				Bonus				compensation				options				compensation
Mark Andrews		$	169,998			$	50,000				—				50,000			$	—
Chairman, President and Chief Executive Officer
Keith Bellinger(1)			—				—				—				—				—
Executive Vice President, Chief Operating Officer and Secretary
T. Kelley Spillane		$	150,000			$	30,000				—				5,000			$	1,415	(2)
Senior Vice President, U.S. Sales
David Phelan(3)		$	152,875				—				—				—			$	27,788	(4)
Executive Vice President, International Sales
Matthew F. MacFarlane		$	147,177			$	22,500				—				10,000			$	2,369	(5)
Senior Vice President and Chief Financial Officer

(1)	Mr. Bellinger became our chief operating officer on May 2, 2005. His initial annual base salary is $270,000 and he is eligible to receive an annual incentive performance bonus of up to 100% of his annual base salary. Mr. Bellinger currently holds options to purchase a total of 150,000 shares of our common stock.
(2)	Represents the amounts of life insurance premiums paid by us for the benefit of Mr. Spillane.
(3)	As of the date of this prospectus, Mr. Phelan is no longer one of our executive officers, and he is engaged as a consultant to our company through March 31, 2007.
(4)	Represents $15,288 contributed by us to our pension plan on behalf of Mr. Phelan and patent royalty payments to Mr. Phelan in the amount of $12,500.
(5)	Represents the amounts of life insurance premiums paid by us for the benefit of Mr. MacFarlane.

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																		Potential realizable value
		Individual grants																at assumed annual rates
																		of stock price
						Percent of total												appreciation for option
		Number of securities				options granted to				Exercise								(1)
		underlying options				employees in fiscal				price per				Expiration
Name		granted				year				share (2)				Date				5%				10%
Mark Andrews			50,000				13.61%			$	8.00				1/27/15
Keith Bellinger (3)			—				—				—				—
T. Kelley Spillane			5,000				1.36%			$	8.00				1/27/15
David Phelan			—				—				—				—
Matthew F. MacFarlane			10,000				2.72%			$	8.00				1/27/15

(1)	Potential gains are net of the exercise price, but before taxes associated with the exercise. Amounts represent hypothetical gains that could be achieved for the respective options if exercised at the end of the option term. The potential realizable value assumes that the stock price appreciates from the midpoint of the proposed range of the initial public offering price of $           per share. The assumed 5% and 10% rates of stock price appreciation are provided in accordance with the rules of the SEC and do not represent our estimate or projection of the future price of our common stock. Actual gains, if any, on stock option exercises will depend upon the future market prices of our common stock.
(2)	The exercise prices of all stock options granted were at prices believed by our board of directors to be equal to the fair market value of our common stock on the date of grant.
(3)	Mr. Bellinger became our chief operating officer on May 2, 2005. On that date, Mr. Bellinger received options to purchase a total of 150,000 shares of our common stock at an exercise price per share of $8.00. The option vests at the rate of 25% per year commencing in May 2006 and expires on May 2, 2015.

										Number of shares								Value of unexercised
										underlying unexercised								in-the-money options
										options at fiscal year-end								at fiscal year-end
		Shares
		acquired on
Name		exercise				Value realized				Exercisable				Unexercisable				Exercisable				Unexercisable
Mark Andrews			—				—				10,000				90,000
Keith Bellinger (1)			—				—				—				—
T. Kelley Spillane			—				—				15,000				50,000
David Phelan			—				—				8,000				32,000
Matthew F. MacFarlane			—				—				12,500				47,500

(1)	Mr. Bellinger became our chief operating officer on May 2, 2005. On that date, Mr. Bellinger received options to purchase a total of 150,000 shares of our common stock at an exercise price per share of $8.00, which vest at the rate of 25% per year, commencing May 2006. As of the date hereof, Mr. Bellinger has not exercised any of his options.

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	Awards

	Administration

	Share reserve

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	Term of the plan

	Stock options

	Restricted stock

	Deferred stock

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	Stock appreciation rights

	Transferability of options and stock purchase rights

	Change in control

	•	all outstanding stock options and SARs will become immediately vested and fully exercisable; and
	•	all restrictions and deferral periods applicable to restricted stock awards and deferred stock awards shall lapse and will be fully vested.

	•	the reorganization, merger, consolidation of our company through which our stock is exchanged or converted into cash or property or securities not issued by us;
	•	the sale or disposition of all or substantially all of our property or assets or of more than 35% of our voting stock to any person or group, unless such person or group had a 10% beneficial ownership of the stock when this plan was established (with certain limited exceptions); or
	•	during any period of two consecutive years, a change in the composition of the majority of the board which is not supported by a 2/3 majority of the incumbent directors.

	Tax withholding

	Amendment and termination

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	•	Mr. Andrews, our chairman, president and chief executive officer and one of our principal stockholders, and his wife, Elizabeth Q. Andrews, purchased $250,000 of our senior notes and were issued a warrant to purchase 6,250 shares of our common stock. In addition, their children, Mark Andrews IV and Elizabeth Andrews, each purchased $125,000 of our senior notes and each were issued a warrant to purchase 3,125 shares of our common stock;
	•	CNF Investments LLC, one of our principal stockholders, purchased $500,000 of our senior notes and was issued a warrant to purchase 12,500 shares of our common stock. Robert Flanagan, one of our directors, is the manager of CNF Investments LLC. In addition, the Flanagan Family Limited Partnership purchased $100,000 of our senior notes and was issued a warrant to purchase 2,500 shares of our common stock. Mr. Flanagan is the general partner of the Flanagan Family Limited Partnership;
	•	Dr. Frost, one of our directors, is the trustee of the Frost Nevada Investment Trust, which purchased $1.0 million of our senior notes and was issued a warrant to purchase 25,000 shares of our common stock;
	•	Lafferty Limited, one of our principal stockholders, purchased $500,000 of our senior notes and was issued a warrant to purchase 12,500 shares of our common stock; and

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	•	Matthew MacFarlane, our senior vice president and chief financial officer, purchased $10,000 of our senior notes and was issued a warrant to purchase 250 shares of our common stock.

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	•	each of our directors;
	•	each of our named executive officers (see “Management – Executive compensation”);
	•	each person known by us to beneficially own 5% of our common stock; and
	•	all of our directors and executive officers as a group.

	•	the issuance of 4,089,465 shares of common stock upon the conversion of convertible preferred stock;
	•	the issuance of 1,120,505 shares of common stock upon conversion of the convertible notes; and
	•	the issuance of 136,208 shares of common stock in payment of accrued dividends on our preferred stock through the estimated closing date of this offering.

Shares of

Percentage beneficially owned

common stock

Name and address of

beneficially

Before

After

beneficial owner

owned

offering

offering

Mark Andrews (1)

1,214,012

14.3%

11.1%

Knappogue Corp.

1,183,699

14.0%

10.8%

Mellon HBV SPV LLC (2)

200 Park Avenue, Suite 3300

New York, NY 10166

1,321,429

15.6%

12.1%

Black River Global Credit Fund Ltd. (3)

623 Fifth Avenue, 27th Floor

New York, NY 10022

660,714

7.8%

6.0%

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				Shares of				Percentage beneficially owned
				common stock
Name and address of				beneficially				Before				After
beneficial owner				owned				offering				offering
Lafferty Limited (4)
		c/o Mr. Warren Roiter
		Roiter Zucker
		5-7 Broadhurst Gardens
		Swiss Cottage
		London NW6 3RZ, England			678,334				8.0%				6.2%
CNF Investments (5)
		c/o Clark Enterprises, Inc.
		7500 Old Georgetown Road
		15th Floor
		Bethesda, MD 20814			631,639				7.5%				5.8%
Massachusetts Mutual Life Ins. Company
		1295 State Street
		Springfield, MA 10111			500,000				5.9%				4.6%
Carbery Milk Products Limited
		Ballineen Co. Cork, Ireland			541,975				6.4%				5.0%
Keith A. Bellinger (6)					14,062				*				*
Matthew F. MacFarlane (7)					15,250				*				*
David Phelan (8)					325,885				3.9%				3.0%
T. Kelley Spillane (9)					12,000				*				*
John Beaudette (10)					19,199				*				*
Robert J. Flanagan (11)					648,139				7.6%				5.9%	*
Phillip Frost, MD (12)					520,603				6.1%				4.7%
Colm Leen (13)					12,000				*				*
Richard C. Morrison					—				—				—
Frederick M. R. Smith (14)					45,397				*				*
Kevin P. Tighe					125,000				1.5%				1.1%
All directors and executive officers as
	a group (11 persons) (15)				2,594,489				30.2%				23.4%

*	Less than one percent

(1)	Includes 1,183,699 shares held by Knappogue Corp. Knappogue Corp is controlled by Mr. Andrews and his family. Mr. Andrews disclaims beneficial ownership of these shares, except to the extent of his pecuniary interest. Also includes 10,000 shares of common stock issuable upon exercise of options exercisable within 60 days as of September 27, 2005; 12,500 shares held jointly by Mr. Andrews’ with his wife and 6,250 shares issuable upon exercise of warrants held jointly by Mr. Andrews with his wife that are exercisable within 60 days as of September 27, 2005. Does not include 90,000 shares of common stock underlying options that are not exercisable within 60 days as of September 27, 2005.
(2)	Includes 750,000 shares of common stock issuable upon conversion of $6.0 million principal amount of our 6% convertible notes that are convertible within 60 days of September 27, 2005.
(3)	Includes 375,000 shares of common stock issuable upon conversion of $3.0 million principal amount of our 6% convertible notes that are convertible within 60 days of September 27, 2005.

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(4)	Includes 12,500 shares of common stock issuable upon exercise of warrants exercisable within 60 days as of September 27, 2005.
(5)	Includes 12,500 shares of common stock issuable upon exercise of warrants exercisable within 60 days as of September 27, 2005.
(6)	Does not include 150,000 shares of common stock underlying options that are not exercisable within 60 days of September 27, 2005.
(7)	Includes 2,500 shares of common stock held jointly by Mr. MacFarlane and his wife. Also includes 12,500 shares of common stock issuable upon exercise of options exercisable with 60 days of September 27, 2005 and 250 shares of common stock issuable upon exercise of warrants exercisable within 60 days as of September 27, 2005. Does not include 47,500 shares of common stock underlying options that are not exercisable within 60 days as of September 27, 2005.
(8)	Includes 4,800 shares of common stock issuable upon exercise of options exercisable within 60 days as of September 27, 2005. Does not include 19,200 shares of common stock, underlying options that are not exercisable within 60 days as of September 27, 2005.
(9)	Includes 15,000 shares of common stock issuable upon exercise of options exercisable within 60 days as of September 27, 2005. Does not include 63,000 shares of common stock underlying options that are not exercisable within 60 days as of September 27, 2005.

(10)	Includes 7,199 shares held by BPW LLC, an entity of which Mr. Beaudette is a principal stockholder. Mr. Beaudette disclaims beneficial ownership of these shares except to the extent of his pecuniary interest. Also includes 12,000 shares of common stock issuable upon exercise of options exercisable within 60 days as of September 27, 2005.
(11)	Includes 14,000 shares of common stock issuable upon exercise of options exercisable within 60 days as of September 27, 2005. Also includes 2,500 shares of common stock issuable upon exercise of warrants exercisable within 60 days as of September 27, 2005 that are held by the Flanagan Family Limited Partnership, an entity of which Mr. Flanagan is the general partner. Mr. Flanagan disclaims beneficial ownership of these shares except to the extent of his pecuniary interest. Also includes 619,139 shares held by CNF Investments LLC and 12,500 shares of common stock issuable upon exercise of warrants held by CNF Investments LLC that are exercisable within 60 days as of September 27, 2005. Mr. Flanagan is a manager of CNF Investments LLC. Mr. Flanagan disclaims beneficial ownership of these shares except to the extent of his pecuniary interest.
(12)	Includes 25,000 shares of common stock issuable upon exercise of warrants exercisable within 60 days as of September 27, 2005 that are held by the Frost Nevada Investment Trust, an entity of which Dr. Frost is the trustee. Dr. Frost disclaims beneficial ownership of these shares except to the extent of his pecuniary interest.
(13)	Includes 12,000 shares of common stock issuable upon exercise of options exercisable within 60 days of September 27, 2005.
(14)	Includes 12,000 shares of common stock issuable upon exercise of options exercisable within 60 days of September 27, 2005.
(15)	Includes 89,300 shares of common stock issuable upon exercise of options, and 46,500 shares of common stock issuable upon exercise of warrants, exercisable within 60 days of September 27, 2005. Does not include 369,700 shares of common stock underlying options that are not exercisable within 60 days of September 27, 2005.

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	•	a stockholder who owns 15% or more of our outstanding voting stock (otherwise known as an interested stockholder);
	•	an affiliate of an interested stockholder; or
	•	an associate of an interested stockholder;

	•	our board of directors approves the transaction that made the stockholder an interested stockholder, prior to the date of that transaction;
	•	after the completion of the transaction that resulted in the stockholder becoming an interested stockholder, that stockholder owned at least 85% of our voting stock outstanding at the time the transaction commenced, excluding shares owned by our officers and directors; or
	•	on or subsequent to the date of the transaction, the business combination is approved by our board of directors and authorized at a meeting of our stockholders by an affirmative vote of at least two-thirds of the outstanding voting stock not owned by the interested stockholder.

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	•	beginning on the effective date of the registration statement of which this prospectus forms a part, the shares sold in this offering will be immediately available for sale in the public market; and
	•	beginning 180 days after the effective date of the registration statement of which this prospectus forms a part, approximately                        shares will be eligible for sale pursuant to Rule 144(k), none of which are held by affiliates, and approximately                        additional shares held by affiliates will be eligible for sale subject to volume, manner of sale, and other limitations under Rule 144.

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	•	1% of the number of shares of common stock then outstanding; or
	•	the average weekly trading volume of the common stock during the four calendar weeks preceding the filing of a notice on Form 144 with respect to such sale.

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Underwriters			Number of Shares
Oppenheimer & Co. Inc.
ThinkEquity Partners LLC
Ladenburg Thalmann & Co. Inc.
	Total			2,500,000

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		Total, with no				Total, with full
		over-allotment				over-allotment
Underwriting discount to be paid to the underwriters by us for the shares offered		$				$

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	•	the information set forth in this prospectus and otherwise available to the underwriters;
	•	our history and the history of the industry in which we compete;
	•	our past and present financial performance and an assessment of our management;
	•	estimates of our business potential and earnings prospects;
	•	the general condition of the securities market at the time of this offering;
	•	the recent market prices of, and demand for, publicly traded common stock of generally comparable companies; and
	•	other factors deemed relevant by us and the representative.

	•	over-allotment involves sales by the underwriters of shares of our common stock in excess of the number of shares the underwriters are obligated to purchase, which creates a syndicate short position. The short position may be either a “covered” short position or a “naked short” position. In a covered short position, the number of shares over-allotted by an underwriter is not greater than the number of shares that it may purchase in the over-allotment option. In a naked short position, the number of shares involved is greater than the number of shares in the over-allotment option. An underwriter may close out any short position by either exercising its over-allotment option, in whole or in part, or purchasing shares of our common stock in the open market;
	•	syndicate covering transactions involve purchases of shares in the open market after the distribution has been completed in order to cover syndicate short positions. In determining the source of shares needed to close out such short position, the representative of the underwriters will consider, among other things, the price of the shares available for purchase in the open market as compared to the price at which it may purchase the shares through the over-allotment option. If the underwriters sell more shares than could be covered by the over-allotment option, a naked short

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		position, the position can only be closed out by buying such shares in the open market. A naked short position is more likely to be created if the representative is concerned that there could be downward pressure on the price of the shares in the open market after pricing that could adversely affect investors who purchase in the offering;
	•	stabilizing transactions consist of various bids for or purchases of common stock made by the underwriters in the open market prior to the completion of the offering, which stabilizing bids may not exceed a specific maximum; and
	•	penalty bids permit the representative to reclaim a selling concession from a syndicate member when the shares originally sold by the syndicate member are purchased in a stabilizing or syndicate covering transaction to cover syndicate short positions.

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		Page
Report of Independent Registered Public Accounting Firm			F-2
Consolidated Balance Sheets as of March 31, 2004 and 2005 and as of June 30, 2005 (unaudited)			F-3
Consolidated Statements of Operations for each of the years in the three year period ended March 31, 2005 and for the three-months ended June 30, 2004 and 2005 (unaudited)			F-4
Consolidated Statements of Changes in Stockholders Equity (Deficiency) for each of the years in the three year period ended March 31, 2005 and for the three-months ended June 30, 2005 (unaudited)			F-5
Consolidated Statements of Cash Flows for each of the years in the three year period ended March 31, 2005 and for the three-months ended June 30, 2004 and 2005 (unaudited)			F-6
Notes to Consolidated Financial Statements			F-7
Report of Independent Registered Public Accounting Firm			F-45
Profit and Loss Accounts for the years ended December 31, 2003 and 2002 for The Castle Brands Spirits Company Limited (formerly known as The Roaring Water Bay Spirits Company Limited)			F-49
Balance Sheets as of December 31, 2003 and 2002 for The Castle Brands Spirits Company Limited (formerly known as The Roaring Water Bay Spirits Company Limited)			F-50
Cash Flow Statement for the years ended December 31, 2003 and 2002 for The Castle Brands Spirits Company Limited (formerly known as The Roaring Water Bay Spirits Company Limited)			F-51
Notes to Financial Statements			F-52
Report of Independent Registered Public Accounting Firm			F-70
Profit and Loss Accounts for the years ended December 31, 2003 and 2002 for The Roaring Water Bay Spirits Company (GB) Limited			F-73
Balance Sheets as of December 31, 2003 and 2002 for The Roaring Water Bay Spirits Company (GB) Limited			F-74
Notes to Financial Statements			F-75
Report of Independent Registered Public Accounting Firm			F-80
Reconciliation of Castle Brands Spirits Company Limited Financial Statements to U.S. GAAP			F-81
Reconciliation of the Roaring Water Bay Spirits Company (GB) Limited to U.S. GAAP			F-83

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															Pro Forma
			March 31,												Balance Sheet
											June 30,				June 30, 2005
			2004				2005				2005				(Note 1D)
											(Unaudited)				(Unaudited)
ASSETS
CURRENT ASSETS
	Cash and cash equivalents		$	3,461,441			$	5,676,398			$	5,031,442			$	12,546,535
	Accounts receivable - net of allowance for doubtful accounts of $57,772, $80,847 and $92,576			2,005,258				3,614,816				4,573,728				4,573,728
	Due from related parties			—				355,161				641,492				641,492
	Inventories			3,696,609				5,496,978				5,430,076				5,430,076
	Prepaid expenses and other current assets			371,372				326,736				663,090				663,090
	TOTAL CURRENT ASSETS			9,534,680				15,470,089				16,339,828				23,854,921
EQUIPMENT - net				258,446				350,139				336,089				336,089
OTHER ASSETS
	Intangible assets - net of accumulated amortization of $303,503, $318,698 and $459,478			6,447,540				14,475,116				14,351,681				14,351,681
	Goodwill			11,305,931				11,756,051				11,759,359				11,759,359
	Restricted cash			—				387,494				361,993				361,993
	Other assets			212,235				816,120				806,219				806,219
	TOTAL ASSETS		$	27,758,832			$	43,255,009			$	43,955,169				51,470,262
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIENCY)
CURRENT LIABILITIES
	Current maturities of notes payable and capital leases		$	1,335,361			$	3,032,383			$	1,965,391			$	1,965,391
	Accounts payable and accrued expenses			2,866,808				4,682,517				4,963,674				4,963,674
	Due to related parties			347,888				1,610,155				1,248,031				1,248,031
	Shareholder loans payable			197,782				156,865				142,366				142,366
	TOTAL CURRENT LIABILITIES			4,747,839				9,481,920				8,319,462				8,319,462
LONG TERM LIABILITIES
	Senior notes payable			—				4,561,472				4,570,706				4,570,706
	Notes payable, less current maturities and obligations under capital leases			595,958				6,678,203				11,644,031				10,644,031
	Shareholder loans payable			292,066				157,347				151,640				151,640
	Convertible shareholder loans payable			1,674,171				1,775,627				1,658,773				—
	Preferred stock dividends payable			319,819				681,280				752,707				752,707
	Deferred tax liability			629,444				2,851,666				2,814,629				2,814,629
	TOTAL LIABILITIES			8,259,297				26,187,515				29,911,948				27,253,175
REDEEMABLE CONVERTIBLE PREFERRED STOCK
	Redeemable convertible preferred stock Series A, B, C; 4,103,750 shares designated; 2,804,465 shares issued and outstanding at March 31, 2004, 3,741,965 at March 31, 2005 and 3,741,985 at June 30, 2005, liquidation preference of $21,731,285, $29,681,285 and $29,752,713			19,328,630				25,958,964				25,926,018				—
COMMITMENTS AND CONTINGENCIES
MINORITY INTERESTS				2,065				3,330,677				3,201,518				3,201,518
STOCKHOLDERS’ EQUITY (DEFICIENCY)
	Common stock, $.01 par value, 20,500,000 shares authorized, 3,106,666 shares issued and outstanding			31,067				31,067				31,067				85,000
	Additional paid in capital			17,956,680				18,012,645				17,965,084				54,011,035
	Accumulated deficiency			(17,776,961	)			(30,071,286	)			(33,180,489	)			(33,180,489	)
	Accumulated other comprehensive (loss)/ income			(41,946	)			(194,573	)			100,023				100,023
	TOTAL STOCKHOLDERS’ EQUITY (DEFICIENCY)			168,840				(12,222,147	)			(15,084,315	)		$	21,015,569
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIENCY)			$	27,758,832			$	43,255,009			$	43,955,169			$	51,470,262

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															Three Months Ended
			Years Ended March 31,												June 30,
			2003				2004				2005				2004				2005
															(Unaudited)
Sales, net			$	2,419,062			$	4,826,919			$	12,617,863			$	2,163,014			$	4,498,473
Cost of sales				1,427,486				3,285,467				8,744,859				1,482,492				2,647,272
Gross profit				991,576				1,541,452				3,873,004				680,522				1,851,201
Selling expense				3,348,279				5,397,919				11,568,997				2,977,621				3,225,382
General and administrative expense				817,837				1,960,374				3,636,626				795,373				1,137,477
Depreciation and amortization				72,621				173,414				167,086				26,310				182,385
Other (income)/expense, net				11,065				165,545				(198,755	)			22,999				322,426
Operating loss before interest expense, net, income tax benefit and minority interest				(3,258,226	)			(6,155,800	)			(11,300,950	)			(3,141,781	)			(3,016,469	)
Interest expense, net				(182,494	)			(303,516	)			(998,096	)			(465,740	)			(258,930	)
Income tax benefit				–				–				–				–				37,037
Minority interests				–				35,339				4,721				2,065				129,159
Net loss			$	(3,440,720	)		$	(6,423,977	)		$	(12,294,325	)		$	(3,605,456	)		$	(3,109,203	)
Preferred stock dividends				14,960				557,929				525,605				86,388				71,428
Net loss attributable to common stockholders			$	(3,455,680	)		$	(6,981,906	)		$	(12,819,930	)		$	(3,691,844	)		$	(3,180,631	)
Net loss attributable to common stockholders per common share
	Basic		$	(1.88	)		$	(3.12	)		$	(4.13	)		$	(1.19	)		$	(1.02	)
	Diluted		$	(1.88	)		$	(3.12	)		$	(4.13	)		$	(1.19	)		$	(1.02	)
Weighted average shares used in computation
	Basic			1,840,602				2,236,739				3,106,666				3,106,666				3,106,666
	Diluted			1,840,602				2,236,739				3,106,666				3,106,666				3,106,666

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			Membership																								Accumulated				Total
			Interests								Common Stock								Additional								Other				Stockholders’
																			Paid in				Accumulated				Comprehensive				Equity
			Shares				Amount				Shares				Amount				Capital				Deficiency				Income/(Loss)				(Deficiency)
BALANCE, MARCH 31, 2002				325,000			$	8,900,000															$	(7,912,264	)						$	987,736
Net loss																								(3,440,720	)							(3,440,720	)
Issuance of membership interests, net				75,000				2,109,040																								2,109,040
Conversion of common shares to Series B preferred shares				(40,000	)			(1,086,339	)																							(1,086,339	)
Accrued preferred dividends																			$	(14,960	)											(14,960	)
BALANCE, MARCH 31, 2003				360,000				9,922,701												(14,960	)			(11,352,984	)							(1,445,243	)
Comprehensive loss
	Net loss																							(6,423,977	)							(6,423,977	)
	Foreign currency translation adjustment																										$	(41,946	)			(41,946	)
Total comprehensive loss																																(6,465,923	)
Value ascribed to warrants issued in connection with asset based loan																				282,295												282,295
Exchange of LLC membership interests for common shares and 1-for-5 stock split				(360,000	)			(9,922,701	)			1,800,000			$	18,000				9,904,701												–
Warrants issued in connection with business acquisition																				9,500												9,500
Issuance of common shares in connection with business acquisition												1,306,666				13,067				7,826,933												7,840,000
Value ascribed to warrants issued in connection with redeemable preferred stock																				253,070												253,070
Accrued preferred dividends																				(304,859	)											(304,859	)
BALANCE, MARCH 31, 2004				—				—				3,106,666				31,067				17,956,680				(17,776,961	)			(41,946	)			168,840
Comprehensive loss
	Net loss																							(12,294,325	)							(12,294,325	)
	Foreign currency translation adjustment																											(152,627	)			(152,627	)
Total comprehensive loss																																(12,446,952	)
Warrants issued in connection with senior notes																				129,195												129,195
Imputed interest on note payable in connection with acquisition of intangible assets																				126,152												126,152
Value ascribed to warrants issued in connection with redeemable preferred stock																				164,144												164,144
Acquisition of minority interests																				(2,065	)											(2,065	)
Accrued preferred dividends																				(361,461	)											(361,461	)
BALANCES, MARCH 31, 2005				—				—				3,106,666				31,067				18,012,645				(30,071,286	)			(194,573	)			(12,222,147	)
Comprehensive loss
	Net loss																							(3,109,203	)							(3,109,203	)
	Foreign currency translation adjustment																											294,596				294,596
Total comprehensive loss																																(2,814,607	)
Vesting of stock options as compensation																				23,867												23,867
Accrued preferred dividends																				(71,428	)											(71,428	)
BALANCE, JUNE 30, 2005 (unaudited)				—			$	—				3,106,666			$	31,067			$	17,965,084			$	(33,180,489	)		$	100,023			$	15,084,315

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																	Three Months Ended
					Years Ended March 31,												June 30,
					2003				2004				2005				2004				2005
																	(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
	Net loss				$	(3,440,720	)		$	(6,423,977	)		$	(12,294,325	)		$	(3,605,456	)		$	(3,109,203	)
			Adjustments to reconcile net loss to net cash used in operating activities
			Depreciation and amortization			72,621				173,414				167,086				26,310				182,385
			Minority interest in net loss of consolidated subsidiary			–				(35,339	)			(4,721	)			(2,065	)			(129,159	)
			Loss on disposal of fixed assets			–				138,249				8,316				37,063				11,816
			Write-off of deferred financing costs			89,796				94,098				387,698				122,224				103,094
			Effect of changes in foreign currency rate			–				27,706				118,476				(3,247	)			(136,729	)
			Changes in operations, assets and liabilities, net of effects of business acquisition in 2004
			(Increase)/decrease in accounts receivable			(147,103	)			1,574,553				(1,775,404	)			(356,865	)			(1,030,374	)
			Increase/(decrease) in due from related parties - GXB			–				–				(355,161	)			–				(19,423	)
			(Increase in inventory			(444,491	)			(25,871	)			(1,569,612	)			(489,974	)			(220,758	)
			Decrease/(increase) in prepaid expenses and supplies			11,345				35,416				51,615				(100,904	)			(343,894	)
			(Increase)/decrease in other assets			(145,582	)			(85,678	)			(878,568	)			92,722				(25,357	)
			Increase/(decrease) in accounts payable and accrued expenses			331,479				(283,330	)			1,705,730				1,313,710				529,795
			(Decrease)/increase in due to related parties			–				(306,859	)			1,241,179				492,343				(336,042	)
			Decrease in brand acquisition payable			(159,911	)			(255,879	)			–				–				–
	Total adjustments					(391,846	)			1,050,480				(903,366	)			1,131,317				(1,414,646	)
NET CASH USED IN OPERATING ACTIVITIES						(3,832,566	)			(5,373,497	)			(13,197,691	)			(2,474,139	)			(4,523,849	)
CASH FLOWS FROM INVESTING ACTIVITIES
	Acquisition of property and equipment					(11,439	)			(47,443	)			(165,725	)			(22,460	)			(39,435	)
	Acquisition of intangible assets					(9,626	)			(8,269	)			(25,988	)			(7,338	)			(39,168	)
	Business acquisition - net of cash acquired					–				(6,667,105	)			(406,116	)			(426,985	)			(3,308	)
CASH USED IN INVESTING ACTIVITIES						(21,065	)			(6,722,817	)			(597,829	)			(456,783	)			(81,911	)
CASH FLOWS FROM FINANCING ACTIVITIES
	Repayment of notes payable					(3,190,394	)			(7,596,797	)			(6,694,880	)			(1,101,025	)			(989,180	)
	Proceeds from notes payable and warrants					4,070,418				5,556,725				16,288,887				4,052,867				5,000,000
	Payments of obligations under capital leases					–				(211,706	)			(1,823	)			–				(1,089	)
	Increase in restricted cash					–				–				(377,828	)			–				–
	Issuance of redeemable convertible preferred stock and warrants					3,249,170				21,500,005				7,500,000				–				–
	Payments for cost of stock issuance					(209,546	)			(3,935,228	)			(705,522	)			–				(36,929	)
NET CASH PROVIDED BY FINANCING ACTIVITIES						3,919,648				15,312,999				16,008,834				2,951,842				3,972,802
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS						66,017				3,216,685				2,213,314				20,920				(632,958	)
EFFECTS OF FOREIGN CURRENCY TRANSLATION						–				8,868				1,643				(405	)			(11,998	)
CASH AND CASH EQUIVALENTS - BEGINNING						169,871				235,888				3,461,441				3,461,441				5,676,398
CASH AND CASH EQUIVALENTS - ENDING					$	235,888			$	3,461,441			$	5,676,398			$	3,481,956			$	5,031,442
SUPPLEMENTAL DISCLOSURES
	Schedule of non-cash investing and financing activities
		Acquisition of intangible assets			$	–			$	–			$	(8,051,555	)		$	–			$	–
		Note payable - intangible assets			$	–			$	–			$	2,500,000			$	–			$	–
		Value ascribed to minority interests			$	–			$	–			$	3,329,333			$	–			$	–
		Investment in subsidiary			$	–			$	(9,824,710	)		$	–			$	–			$	–
		Issuance of common stock in business acquisition			$	–			$	7,840,000			$	–			$	–			$	–
		Debt issued in business acquisition			$	–			$	1,984,710			$	–			$	–			$	–
	Interest paid				$	92,700			$	132,056			$	343,236			$	196,729			$	55,161
	Income taxes paid				$	–			$	–			$	–			$	–			$	–

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NOTE 1 -	ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A.		Description of Business and Business Combination – Castle Brands Inc. (“CBI” or “the Company”) is the successor to Great Spirits Company, LLC, a Delaware limited liability company (“GSC”). The Company was formed in February 1998. In May 2003, Great Spirits Ireland, a wholly owned subsidiary of the Company began operations in Ireland to market the Company’s products internationally. In July 2003, Castle Brands Inc. and Castle Brands (USA) Corp. (“CB-USA”) were formed under the laws of Delaware in contemplation of a pending acquisition. On December 1, 2003, CBI acquired The Roaring Water Bay Spirits Group Limited. and The Roaring Water Bay Spirits Marketing and Sales Company Limited. The acquisition has been accounted for under purchase accounting. Simultaneously, Great Spirits Company, LLC was merged into CB-USA, and the Company issued stock to GSC’s shareholders in exchange for their shares of GSC. Subsequent to the acquisition, The Roaring Water Bay Spirits Group Limited (“RWB”) was renamed Castle Brands Spirits Group Limited (“CB Group”) and The Roaring Water Bay Spirits Marketing and Sales Company Limited was renamed Castle Brands Spirits Marketing and Sales Company Limited (“CB-UK”).
		The Company has experienced recurring operating losses and negative cash flows from operations and has a stockholders’ equity (deficiency) of $12,222,147 as of March 31, 2005 and $15,099,275 as of June 30, 2005. In June of 2005, the Company raised $5 million from the sale of the second tranche of its convertible notes. In August 2005, the Company raised $2.9 million from the sale of Series C preferred stock and a further $5 million from a sale of convertible notes to a second investor. The Company believes that it will be able to fund its operational cash requirements through a combination of sales of convertible notes and cash on hand through June 30, 2006.
B.		Principles of Consolidation - The March 31, 2004 and 2005 consolidated financial statements include the accounts of CBI, its wholly-owned subsidiaries, CB-USA and its wholly-owned foreign subsidiaries, CB Group and CB-UK, and its majority owned Gosling-Castle Partners, Inc. hereafter collectively referred to as the “Company”. The accounts of the subsidiaries have been included as of the date of acquisition. All significant intercompany transactions and balances have been eliminated.
C.		Unaudited Interim Information - The consolidated financial statements for the three months ended June 30, 2004 and 2005 are unaudited. The unaudited financial statements have been prepared on the same basis as the audited financial statements and, in the opinion of management, include all adjustments necessary for fair presentation, consisting of normal recurring adjustments. The results for the three months ended June 30, 2005 are not necessarily indicative of the results to be expected for the year ending March 31, 2006, or for any other interim period.
D.		Pro Forma Balance Sheet (unaudited) – The Company’s Board of Directors has authorized the filing of a registration statement with the Securities and Exchange Commission to register shares of its common stock in an initial public offering. If the initial public offering closed as presently anticipated in December 2005, all of the redeemable convertible preferred stock along with the related accrued dividends then outstanding would have converted into

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NOTE 1 -	ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

		4,201,709 shares of common stock and the entire principal amount of the 5% Euro denominated convertible notes into 263,362 shares of common stock and $6 million of the $15 million principal amount of the 6% convertible notes into 857,142 shares of common stock. The pro forma balance sheet (unaudited) at June 30, 2005 reflects the conversion of all outstanding redeemable convertible preferred stock and certain convertible notes payable into common stock as if such conversion had occurred at June 30, 2005.
E.		Organization and Operations - The Company is principally engaged in the manufacture, marketing and sale of fine spirit brands of vodka, Irish whiskey, rums and liqueurs (the “products”) in the United States, Europe, and the Caribbean.
F.		Cash and cash equivalents - The Company considers all highly liquid instruments with a maturity at date of acquisition of three months or less to be cash and cash equivalents.
G.		Trade accounts receivable – The Company records trade accounts receivable at net realizable value. This value includes an appropriate allowance for estimated uncollectible accounts to reflect any loss anticipated on the trade accounts receivable balances and charged to the provision for doubtful accounts. The Company calculates this allowance based on its history of write-offs, level of past due accounts based on contractual terms of the receivables and its relationships with and economic status of the Company’s customers.
H.		Revenue Recognition - Revenue from product sales is recognized when the product is shipped to a customer (generally a distributor or a control state), title and risk of loss has passed to the customer in accordance with the terms of sale (FOB shipping point or FOB destination), and collection is reasonably assured. Revenue is not recognized on shipments to control states until such time as product is sold through to the retail channel.
I.		Inventories - Inventories, which consists of distilled spirits, packaging and finished goods, is valued at the lower of cost or market, using the weighted average cost method. The Company assesses the valuation of its inventories and reduces the carrying value of those inventories that are obsolete or in excess of the Company’s forecasted usage to their estimated net realizable value. The Company estimates the net realizable value of such inventories based on analyses and assumptions including, but not limited to, historical usage, future demand and market requirements. Reductions to the carrying value of inventories are recorded in cost of goods sold.
J.		Equipment - Equipment consists of office equipment, computers and software, transportation equipment, and furniture and fixtures. When assets are retired or otherwise disposed of, the cost and related depreciation is removed from the accounts, and any resulting gain or loss is recognized in the statement of operations. Equipment is depreciated using the straight-line method over the estimated useful lives of the assets ranging from three to five years.
K.		Goodwill and other intangible assets. Goodwill represents the excess of purchase price and related costs over the value assigned to the net tangible and identifiable intangible assets of businesses acquired. As of March 31, 2004 and 2005, goodwill and other indefinite lived intangible assets that arose from acquisitions was $11.3 million and $11.8 million, respec-

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NOTE 1 -	ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

		tively. On April 1, 2004, the Company adopted SFAS No. 142, “Goodwill and Other Intangible Assets.” Under SFAS No. 142, goodwill and other intangible assets with indefinite lives are not amortized, but instead are tested for impairment annually, or more frequently if certain circumstances indicate a possible impairment may exist. The Company evaluates the recoverability of goodwill and indefinite lived intangible assets using a two-step impairment test approach at the reporting unit level. In the first step the fair value for the reporting unit is compared to its book value including goodwill. In the case that the fair value of the reporting unit is less than the book value, a second step is performed which compares the implied fair value of the reporting unit’s goodwill to the book value of the goodwill. The fair value for the goodwill is determined based on the difference between the fair value of the reporting unit and the net fair value of the identifiable assets and liabilities of such reporting unit. If the fair value of the goodwill is less than the book value, the difference is recognized as an impairment. SFAS No. 142 also requires that intangible assets with estimable useful lives be amortized over their respective estimated useful lives to the estimated residual values and reviewed for impairment in accordance with SFAS No. 144 (see Note 6). The Company performed its impairment assessment on long-lived assets, including intangible assets and goodwill, in accordance with the methods prescribed above. The Company concluded that no impairment existed during the years ended March 31, 2004 and 2005.
L.		Foreign Currency Translation - The functional currency for the Company’s foreign operations is the euro in Ireland and the British pound in the United Kingdom. The translation from the applicable foreign currencies to U.S. dollars is performed for balance sheet accounts using current exchange rates in effect at the balance sheet date and for revenue and expense accounts using a weighted average exchange rate during the period. The resulting translation adjustments are recorded as a component of capital deficit. Gains or losses resulting from foreign currency transactions are included in other income/expenses.
M.		Fair Value of Financial Instruments - SFAS No. 107, Disclosures About Fair Value of Financial Instruments, defines the fair value of a financial instrument as the amount at which the instrument could be exchanged in a current transaction between willing parties and requires disclosure of the fair value of certain financial instruments. The Company believes that there is no material difference between the fair value and the reported amounts of financial instruments in the balance sheets due to the short term maturity of these instruments, or with respect to the debt, as compared to the current borrowing rates available to the Company.
N.		Income Taxes - The Company follows SFAS No. 109, Accounting for Income Taxes. Under the asset and liability method of SFAS No. 109, deferred tax assets and liabilities are
		recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. A valuation allowance is provided to the extent a deferred tax asset is not considered recoverable.

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NOTE 1 -	ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

O.		Stock Based Awards - The Company accounts for stock-based compensation for its employees, officers and directors using the intrinsic value method prescribed in Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees”. Under the intrinsic value method, compensation costs for stock options, if any, are measured as the excess of the Company’s estimated value of the Company’s stock at the date of grant over the amount an employee must pay to acquire the stock. This method, which is permitted by SFAS No. 123 “Accounting for Stock Based Compensation”, has not resulted in employee compensation costs for stock options. The Company accounts for stock-based awards to non-employees using a fair value method in accordance with SFAS No. 123.
		Disclosure of pro forma net loss, as if all stock options were accounted for at fair value, is required by SFAS No. 123, under which compensation expense is based upon the fair value of each option at the date of grant using the Black-Scholes or a similar option pricing model. Had compensation expense for employee, officer and director options granted been determined based upon the fair value of the options at the grant date, the results would have been as follows as of:

			For the year then								For the quarter then
			ended								ended
			March 31,				March 31,				June 30,				June 30,
			2004				2005				2004				2005
Net loss attributable to common                      stockholders, as reported			$	(6,981,906	)		$	(12,819,930	)		$	(3,691,844	)		$	(3,180,631	)
Stock-based compensation expense                      determined under fair value method				–				(370,068	)			–				–
Pro forma net loss attributable to common stockholders			$	(6,981,906	)		$	(13,189,998	)		$	(3,691,844	)		$	(3,180,631	)
Loss per share:
	Basic and diluted - as reported		$	(3.12	)		$	(4.13	)		$	(1.19	)		$	(1.02	)
	Basic and diluted - pro forma		$	(3.12	)		$	(4.25	)		$	(1.19	)		$	(1.02	)

		FASB Statement 123 (Revision 2004), “Share-Based Payment,” was issued in December 2004 and is effective as of the beginning of the first interim or annual reporting periods that begin after June 15, 2005. The new statement requires all share-based payments to employees to be recognized in the financial statements based on their fair values on the grant date. Such cost is to be recognized over the period during which an employee is required to provide service in exchange for the award, which is usually the vesting period.

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NOTE 1 -	ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

		The pro forma disclosures previously permitted under FAS 123 no longer will be an alternative to financial statement recognition. The Company is required to adopt FAS 123R beginning April 1, 2006. The Company expects that the adoption of FAS 123R will have a material impact on its consolidated results of operations and earnings per share. The Company has not yet determined the method of adoption or the effect of adopting FAS 123R, and it has not determined whether the adoption will result in amounts that are similar to the current pro forma disclosures required under FAS 123. The Company has not yet determined the impact of FAS 123R on its compensation policies or plans, if any.
		The fair value of the stock options granted is estimated at the grant date using the Black Scholes option pricing model with the following weighted average assumptions: expected dividend yield 0.0%; risk free interest rate 4.4%; expected volatility 25%; and expected life of 7.2 years. The weighted average fair value of options granted in fiscal year 2004 and 2005 and for the three months ended June 30, 2005 was $2.17, $2.69 and $2.17, respectively.
P.		Research and Development Costs - The costs of research, development and product improvement are charged to expense as incurred.
Q.		Advertising – Advertising costs are expensed when the advertising first appears in its respective medium. Advertising expense, which is included in selling expense, was $720,183, $1,225,056 and $4,032,061, for the years ended March 31, 2003, 2004 and 2005, respectively, and $1,440,183 and $1,068,575 the three months ended June 30, 2004 and 2005, respectively.
R.		Impairment of Long-Lived Assets – The Company periodically reviews whether changes have occurred that would require revisions to the carrying amounts of its long-lived assets. When the sum of the expected future cash flows (undiscounted and without interest charges) is less than the carrying amount of the asset, an impairment loss is recognized based on the fair value of the asset.
S.		Use of Estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Estimates are used when accounting for certain items such as to determine whether any impairment is to be recognized, allowance for doubtful accounts, depreciation, amortization and expense accruals.

		Basic net loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding during the period. Diluted net loss per common share is computed giving effect to all dilutive potential common shares that were outstanding during the period. Diluted potential common shares consist of incremental shares issuable upon exercise of stock options and warrants, contingent conversion of debentures and preferred stock outstanding. In computing diluted net loss per share for fiscal 2005 and 2004, no adjustment has been made to the weighted average outstanding common shares as the

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NOTE 2  –	BASIC AND DILUTED NET LOSS PER COMMON SHARE (CONT’D)

		assumed exercise of outstanding options and warrants and the assumed conversion of preferred stock and convertible debentures is anti-dilutive.
		Potential common shares not included in calculating diluted net loss per share are as follows:

		March 31,				March 31,				June 30,				June 30,
		2004				2005				2004				2005
Stock options			563,000				745,500				594,000				899,500
Stock warrants			207,118				390,493				295,993				498,618
Convertible debentures			3,540,180				888,375				263,299				1,513,160
Convertible preferred stock			4,573,513				3,741,965				2,804,465				3,741,965
Total			8,883,811				5,766,333				3,957,757				6,653,243

		For the years ended March 31, 2003, the Company had issued 100,000 warrants for membership interests in GSC to a lender.
		Subsequent to June 30, 2005, the Company issued the following dilutive securities:
		In July 2005 the Company entered into an agreement with an investor to issue $5,000,000 of convertible notes. These notes can convert into common stock at $8 per share (see Note 15).
		In July 2005 in connection with the Series C Preferred Stock, the Company granted, to an advisor, warrants to acquire 100,000 shares of the Company’s common stock with an exercise price of $8.00. The Warrants are subject to anti-dilution provisions, vested immediately and are exercisable through December 31, 2009.

				March 31,
												June 30,
				2004				2005				2005
Inventories consist of:
	Raw materials			$	903,320			$	1,154,942			$	1,600,631
	Finished goods				2,793,289				4,342,036				3,829,445
		Total		$	3,696,609			$	5,496,978			$	5,430,076

		Inventories are stated at the lower of average cost or market. The Company assesses the valuation of its inventories and reduces the carrying value of those inventories that are obsolete or in excess of the Company’s forecasted usage to their estimated net realizable value. The Company estimates the net realizable value of such inventories based on analyses and assumptions including, but not limited to, historical usage, future demand and market requirements. Reductions to the carrying value of inventories are recorded in cost of goods sold.

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		Investment in Gosling-Castle Partners Inc.
		In February 2005, the Company entered into a stock subscription agreement for 60% of the stock of Gosling Partners Inc., whose name was subsequently changed to Gosling-Castle Partners Inc. (“GCP”). GCP had no operations prior to the Company entering into the stock subscription agreement. The original shareholders of GCP were E. Malcolm Gosling and Gosling’s Limited and after the Company’s purchase, ownership interests of the three parties in the venture were 60%, 20% and 20%, respectively. CB-USA had previously entered into an exclusive distribution agreement with Gosling’s Export (Bermuda) Limited (“GXB”) to distribute Gosling’s rum in the United States. Gosling Partners Inc. had originally been formed to acquire, and had acquired prior to the Company’s investment in GCP, the following:

	•	global distribution rights (excluding Bermuda) to the Gosling’s portfolio of products;
	•	appointment as the exclusive authorized global exporter for the GXB product line;
	•	an exclusive license for the use of GXB’s global trademarks for its brand portfolio;

		The Company agreed to pay GCP $5,000,000 for its 60% interest in the joint venture: $100,000 in cash and issuance of a promissory note of $4,900,000 to GCP for the balance owed. This promissory note is payable in five installments as follows:

	$1,025,000 on April 1, 2005
	$1,125,000 on October 1, 2005
	$1,000,000 on April 1, 2006
	$1,000,000 on October 1, 2006; and
	$750,000 on April 1, 2007

		Effective with the payment of the second installment on October 1, 2005, this promissory note accrues interest on the unpaid principal amount at the rate of 4% per annum until the note is repaid in full.
		The global distribution agreement commenced on April 1, 2005 and has a 15 year term. It is renewable for additional 15 year terms as long as GCP meets certain case sale targets during the initial term as set forth in the agreement. (See Note 19 – Gosling-Castle Partners Inc. Export Agreement with Gosling’s Export (Bermuda) Limited). The Company ascribed the entire purchase of $5,000,000 to the Gosling global distribution agreement described above. In conjunction with this transaction the Company recorded a deferred tax liability of $2,222,222 to reflect the fact that the distribution agreement has a zero basis for income tax purposes (See Note 14). This deferred tax liability was recorded as an increase to the value of the distribution agreement.
		Acquisition of CB Group and CB-UK
		On December 1, 2003, the Company acquired the CB Group, including 95% of its operating subsidiary CB-UK. CB Group is the producer and primary marketer of Boru Vodka, as well as Clontarf Irish Whiskey and several Irish cream liqueurs. CB-UK is the marketing company that operates primarily in Great Britain. As part of the acquisition, in May 2004, CB Group purchased the remaining shares of its operating subsidiary from minority shareholders

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		pursuant to the terms of a put option contained within its 1999 Business Expansion Scheme (“BES 1”). The total cost of this BES 1 share purchase of €317,491 was offset, in part, by the agreement of the four former shareholders of CB Group to contribute a total of €100,000 in the form of 15,000 shares of Castle Brands Inc. Series C preferred stock to defray the cost of this transaction to the Company which was recorded to goodwill. The aggregate net purchase price of the acquisition (as translated at the effective exchange rates) including $1,154,863 of acquisition costs consisting of investment banking and legal fees, was $17,048,946, which consisted of cash of $6,097,079, 1,306,666 shares of the Company’s common stock with a fair value of $7,840,000, $1,650,800 in convertible subordinated notes payable and $306,204 of other notes payable. The cash portion of the acquisition was financed with proceeds from the issuance of $16,550,000 of Series C convertible preferred stock.
		Assets were valued at their respective estimated fair values at the acquisition date. The valuation of identifiable intangible assets and goodwill acquired was based on management’s estimates supported by an independent third party consultant valuation report. The identifiable intangible assets include trade names, formulations, patents and distribution agreements. Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired.
		The following table summarizes the purchase price allocation for the acquisition of RWB:

Description		Amount
Net tangible assets acquired		$	210,185
Identifiable intangible assets (definite life)			825,000
Identifiable intangible assets (indefinite life)			4,840,000
Goodwill			11,756,051
Total consideration		$	17,631,236

		At the time of the acquisition, the net tangible assets acquired included cash, accounts receivable, inventory, manufacturing and transportation equipment, computers and furniture and fixtures accounts payable and contain other assumed liabilities. Identifiable intangible assets refer to the Boru and Clontarf Trinity design which is amortized over the fifteen year life of the patent which is deemed the economic life of the asset. Those identifiable intangible assets with indefinite lives include the trade names and formulations of the Company’s various products, together with the Company’s relationship with its distributor in Dublin and its supply relationship with the distiller of its vodka.
		On December 1, 2003, the Company has recorded $629,444 as a deferred tax liability as the amount ascribed to the difference between the book and tax basis of the tangible and intangible assets acquired. The Company allocated the fair value of the purchase price to the

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		tangible and intangible assets, the additional value ascribed above those fair values was recorded as additional goodwill.
		The changes in the carrying amount of goodwill for the years ended March 31, 2005 and 2004 were as follows:

			Amount
Balance as of March 31, 2003			$	–
	Acquisition			10,676,487
	Deferred tax liability			629,444
Balance as of March 31, 2004				11,305,931
	Acquisition of minority interests			450,120
Balance as of March 31, 2005				11,756,051
	Other			3,308
Balance as of June 30, 2005			$	11,759,359

		The results of CB Group and CB-UK have been included in the consolidated financial statements since the date of acquisition. Unaudited pro forma results of operations for the year ended March 31, 2004 are included below. Such pro forma information assumes that the acquisition had occurred as of April 1, 2003.

			March 31, 2004
Net sales			$	8,637,596
Gross profit			$	3,513,800
Net loss			$	(6,539,200	)
Net loss per common share –
	basic and diluted		$	(2.92	)

		These pro forma results have been prepared for comparative purposes only and are not necessarily indicative of the results of operations that actually would have resulted had the acquisition been in effect at the beginning of the period or of future results.

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		Equipment consists of the following as of:

		March 31,				March 31,				June 30,
		2004				2005				2005
Equipment and software		$	465,049			$	670,927			$	683,466
Transportation equipment			42,933				–				–
Furniture and fixtures			26,032				27,942				18,602
Leasehold improvements			–				4,733				4,733
			534,014				703,602				706,801
Less: accumulated depreciation			275,568				353,463				370,712
		$	258,446			$	350,139			$	336,089

		Depreciation expense for the years ended March 31, 2003, 2004, and 2005 and for the three months ended June 30, 2004 and 2005 totaled $6,904, $47,771, $81,724, and $12,560 and $27,856, respectively.

NOTE 6 -	INTANGIBLE ASSETS

		Intangible assets consist of the following as of:

		March 31,				March 31,				June 30,
		2004				2005				2005
Brands, trademarks and rights		$	1,086,043			$	9,128,814			$	9,146,159
Other identifiable intangible assets			5,665,000				5,665,000				5,665,000
			6,751,043				14,793,814				14,811,159
Less: accumulated amortization			303,503				318,698				459,478
Total		$	6,447,540			$	14,475,116			$	14,351,681

		The identifiable intangible assets consist of a patent, trade names and formulations of the various products and distribution and supplier relationships.
		Amortization expense for the years ended March 31, 2003, 2004, and 2005 and the three months ended June 30, 2004 and 2005 totaled $100,620, $90,829 and $85,362, $13,750 and $154,530 respectively.
		The Company periodically reviews whether changes have occurred that would require revisions to the carrying amounts of long-lived assets. When the sum of expected future cash flows (undiscounted and without interest charges) is less then the carrying amount of the asset, an impairment loss is recognized based on the fair value of the asset.

		In connection with the credit facilities as described in notes 8 and 9, personal guarantees of the two former managing directors of CB Group and CB-UK in the amount of €158,717 were cancelled and replaced with a deposit of cash collateral of €300,000, or $387,494 and

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	NOTE 7 - RESTRICTED CASH (CONT’D)

NOTE 8 -	ACCOUNTS PAYABLE AND ACCRUED EXPENSES

		Accounts payable and accrued expenses consist of the following as of:

		March 31,
		2004				March 31,				June 30,
						2005				2005
Accou payable		nts $	1,885,034			$	2,785,179			$	3,177,456
Accru expenses			ed 981,774				1,897,338				1,786,218
Total		$	2,866,808			$	4,682,517			$	4,963,674

		CB Group and CB-UK maintain overdraft coverages with a financial institution in Ireland of up to €400,000 ($508,000) and £20,000 ($16,400), respectively. Overdarft balances are included in accounts payable for the periods presented.

				March 31				March 31				June 30
				2004				2005				2005
		Notes payable consist of the following as of:
		The Company has arranged revolving credit facilities aggregating approximately €1,677,000 ($2,175,000) with a lender for working capital purposes. The facilities, which are payable on demand and renew annually subject to certain provisions, call for interest at rates ranging from prime plus 3% to 7.85%. The Company has also secured a €295,000 ($382,000) term note with the same lender. The note carries an interest rate of 5.2% and calls for monthly payments of principal and interest of €6,377 through 2006.		$	780,626			$	1,813,592			$	1,254,508
		The Company has arranged revolving credit facilities aggregating approximately £242,000 ($457,000). The facilities, which are payable on demand and renew annually subject to certain provisions, call for interest at rates ranging from prime plus 2% to prime plus 2.25%.			209,245				171,149				256,915

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				March 31				March 31				June 30
				2004				2005				2005
		Notes payable consist of the following as of:
		At March 31, 2004, the Company maintained a revolving credit facility with a lender which outstanding balance was paid, together with a loan termination fee of $60,000 and accrued interest and fees of $4,176. The line terminated simultaneously with the issuance of the senior notes in June 2004.			630,909				–				–
		In connection with the Company’s acquisition of CB Group, the Company issued to the former minority shareholders of CB Group €255,000 ($331,000) of subordinated notes, which mature on July 11, 2007. The notes accrue interest at the rate of 5.7% per annum with the aggregate interest payable being limited to €51,000 ($66,000). The total principal and interest on the notes are due at maturity.			310,539				329,358				307,683

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				March 31				March 31				June 30
				2004				2005				2005
		Notes payable consist of the following as of:
		On June 9, September 28 and October 13, 2004, the Company issued $3,555,000, $1,005,000 and $100,000, respectively, of senior notes collateralized by accounts receivable and inventories of CB-USA. As issued, these senior notes bore an interest rate of 8%, payable semi-annually on November 30th and May 31st, and matured on May 31, 2007. Effective August 15, 2005, the terms of these notes were modified with the consent of the note holders to mature on May 31, 2009 in exchange for an interest rate adjustment to 9%. In addition, each holder of $1,000 of senior notes received warrants to purchase 25 shares of the Company’s common shares. At March 31, 2005, there were 116,500 warrants issued and outstanding in conjunction with issuance of senior notes. These warrants have been valued at $129,195 in the aggregate and have been treated as a discount to the notes payable. Interest expense pertaining to this discount is recognized, and the notes payable accreted, over the original term of the notes with an original maturity of May 2007.			–				4,561,472				4,570,706

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				March 31				March 31				June 30
				2004				2005				2005
		Notes payable consist of the following as of:
		On March 1 2005, the Company entered into an agreement to issue up to $10,000,000 of subordinated convertible notes to a single investor. As of March 31, 2005, $5,000,000 of convertible notes were issued. The notes, which mature five years from the date of issuance, bear interest at the rate of 6% per annum which is payable quarterly. The company has the option for the first two years from the date of issuance to pay interest in kind at the rate of 7.5% per annum. The notes may be converted into common stock at $8 per share at any time, and shall be converted at the option of the holder automatically after the third year from the date of issuance on the 30th consecutive trading day on which the closing price of the common stock is no less than $20 per share. 40% of the notes convert automatically into common stock upon the completion of a public offering with gross proceeds of at least $15,000,000, at a price of $7.00 per share.			–				5,000,000				10,000,000
		On February 14, 2005, the Company, through its interest in GCP, entered into an agreement with Gosling’s Export (Bermuda) Limited (“GXB”) to acquire the global distribution rights (excluding Bermuda) to GXB’s portfolio of products in exchange for $2,500,000 in non-interest bearing notes due in four equal semi-annual installments.			–				2,380,487				1,775,407
		Total		$	1,931,319			$	14,256,058			$	18,165,219

		The Company financed the purchase of certain office equipment totaling $17,821 included in equipment. The leases call for monthly payments of $337 in principal and interest at the rate of 5% per annum, to be paid through July 2009. As of March 31, 2005 and June 30, 2005, the

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		Company owed $16,000 and $14,909, respectively, under this lease. Future minimum lease payments equal $17,872 including interest.
		Principal payments due over the next five years for the above listed notes payable and capital lease are due as follows (as translated at the exchange rate in effect on March 31, 2005):

For the years ending
March 31,				Amount
	2006			$	3,032,383
	2007				1,224,696
	2008				30,335
	2009				341,498
	2010				9,661,665
	Total				14,290,577
	Less current portion				3,032,383
	Non current portion			$	11,258,194

		In connection with the Company’s acquisition of CB Group, €444,389 ($576,372) of subordinated notes were issued by CB Group in substitution of subordinated notes of the same amount originally issued on April 1, 2001 by CB Group. The original notes had a maturity date of April 1, 2006 and were non-interest bearing. The replacement notes are non-interest bearing and the terms called for annual principal payments of €177,743, €133,323 and €133,323 on December 1, 2004, 2005 and 2006, respectively. Interest of 6% was imputed on these notes resulting in an increase to goodwill at the date of acquisition of $56,653. The note discount is accreted monthly by a charge to interest expense. For the years ended March 31, 2004 and 2005 and the three months ended June 30, 2005, the Company recorded interest expense on these notes of $6,360, $19,311, and $4,832, respectively.
		Principal payments over the remaining term of the notes are due as follows (as translated at the exchange rate in effect on March 31, 2005):

For the years ending
March 31,				Amount
	2006			$	172,200
	2007				172,200
	Total			$	344,400

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		In connection with the acquisition of CB Group and CB-UK in December 2003, the former principal shareholders received €1,374,750 of convertible subordinated notes in partial consideration for their shares in CB Group and CB-UK. These notes are convertible into common shares of the Company at the current conversion price of €5.22, which is subject to adjustment from time to time as set forth in the note agreement. These convertible notes mature on December 1, 2006 and bear an interest rate of 5% payable quarterly on March 31st, June 30th September 30th and December 31st. As of March 31, 2005 and June 30, 2005, the Company was indebted in the amount of $1,775,627 and $1,658,773, respectively, on the notes (as translated at the exchange rate in effect on March 31, 2005 and June 30, 2005).

NOTE 11 -	COMMON STOCK

		On March 31, 2002, Great Spirits LLC, the predecessor company to Castle Brands Inc. had 360,000 membership shares outstanding. On July 10, 2003, the Board of Directors declared a five-for-one stock split payable on December 1, 2003. The Company retained the current par value of $.01 for all common shares. On December 1, 2003 the Company, in connection with the acquisition of RWB, issued 1,306,666 shares of common stock in partial payment of the acquisition (See Note 4). At March 31, 2004 and 2005 and June 30, 2005, the Company had 3,106,666 common shares outstanding.

NOTE 12 -	REDEEMABLE CONVERTIBLE PREFERRED STOCK

		The Company had convertible preferred stock outstanding, as follows:

		March 31,								June 30,
Description		2004				2005				2005
Convertible Preferred Stock, Series A, $1 par value, 550,000 shares authorized, 535,715 shares issued and outstanding; cash dividends at 5% or accrued dividends at 7% at Company’s option paid semi-annually; 20% redemption per year commencing with sixth anniversary of issuance, automatic conversion to common stock at conversion price of $7 per share upon initial public offering of $10 million or more.		$	3,750,005			$	3,750,005			$	3,750,005

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NOTE 12 -	REDEEMABLE CONVERTIBLE PREFERRED STOCK (CONT’D)

		March 31,								June 30,
Description		2004				2005				2005
Convertible Preferred Stock, Series B, $1 par value, 200,000 shares authorized, issued and outstanding; cash dividends at 5% or accrued dividends at 7% at Company’s option paid semi- annually, 20% redemption per year commencing with sixth anniversary of issuance, automatic conversion to common stock at conversion price of $6 per share upon initial public offering of $10 million or more.			1,200,000				1,200,000				1,200,000
Convertible Preferred Stock, Series C, $1 par value, 3,353,750 shares authorized, 2,068,750 shares issued and outstanding at March 31, 2004 and 3,006,250 shares issued and outstanding at March 31, 2005 and June 30, 2005 cash dividends at 4% or accrued dividends at 6% at Company’s option paid semi-annually; 20% redemption per year commencing with sixth anniversary of issuance, automatic conversion to common stock at conversion price of $8 per share upon initial public offering of $10 million or more.			16,550,000				24,050,000				24,050,000
(See Note 15 for consideration given to warrant beneficial conversion features)
Total		$	21,500,005			$	29,000,005			$	29,000,005

		The following are the Series A, B, and C Preferred Stock transactions of the Company from April 1, 2002 through March 31, 2005:
		In February 2003, Great Spirits LLC, the predecessor to the Company exchanged 40,000 membership shares on a one-for-one basis with a shareholder for an equivalent number of Series B Preferred Stock and the elimination of certain shareholder preference rights. In December 2003, this issue was exchanged for comparable Castle Brands Inc. Series B Preferred Stock and is convertible into common shares at $6.00 per share at the option of the holder or in an automatic conversion upon initial public offering of $10 million or more.

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NOTE 12 -	REDEEMABLE CONVERTIBLE PREFERRED STOCK (CONT’D)

		In August 2003, Great Spirits LLC completed an offering of 535,715 shares of Series A preferred stock. In December 2003, this issue was exchanged for comparable CBI Series A preferred stock is convertible into common shares at $7 per share at the option of the holder or in an automatic conversion upon initial public offering of $10 million or more.
		In December, 2003, CBI raised $16,525,000 issuing 2,065,625 shares of Series C preferred stock in conjunction with the RWB acquisition. Series C preferred stock is convertible into common stock at the option of the holder at $8 per share or in an automatic conversion upon initial public offering of $10 million or more.
		In January 2004, CBI raised $25,000 issuing 3,125 shares of Series C preferred stock.
		In November 2004, CBI raised $5,001,178, less $184,434 in financing charges, issuing 625,147 shares of Series C preferred stock.
		In December 2004, CBI raised $888,400, less $86,845 in financing charges, issuing 111,050 shares of Series C preferred stock.
		In February 2005, CBI raised $1,000,000, less $20,000 in financing charges, issuing 125,000 shares of Series C preferred stock.
		In March 2005, CBI raised $610,422, less $15,958 in financing charges, issuing 76,303 shares of Series C preferred stock.
		Holders of Series A and Series B preferred stock are entitled to receive semi-annual dividends at an annual rate of 5%, if paid in cash, and 7%, if accrued. The accrual rate automatically takes effect if the dividends are not paid within 90 days after the end of the relevant accrual period or if the Board of Directors elects to accrue and not pay such dividends. However, in connection with the Series C preferred stock financing, the holders of Series A and Series B preferred shares agreed that no cash dividends would be paid unless the cash dividends are paid on all three issues. The holders of Series A and Series B preferred stock have the option, at any time, to convert their preferred shares into common shares at a conversion price of $7 per share and $6 per share, respectively. Series A preferred stock will automatically convert into common stock at the then applicable conversion price, in the event of either (a) the vote of the holders of at least two-thirds of the series A and B preferred shares, or (b) the closing of an underwritten public offering with aggregate gross proceeds of at least $10 million. The Series B preferred stock is held by a single investor and possesses similar automatic conversion features. For the years ended March 31, 2004 and 2005 and the three months ended June 30, 2005, dividends of $319,819, $681,280 and $767,668 in arrears, respectively, remain unpaid.
		Commencing December 1, 2005, holders of Series C preferred stock are entitled to receive semi-annual dividends at an annual rate of 4%, if paid in cash, and 6%, if accrued. In addition, the holders of such stock have the option, at any time, to convert their preferred shares into common shares at a conversion price of $8 per share. Commencing December 1, 2008, the Company may redeem the Series C preferred stock at any time, in whole or in part,

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NOTE 12 -	REDEEMABLE CONVERTIBLE PREFERRED STOCK (CONT’D)

		at the redemption price of $8 per share, as adjusted, plus accrued but unpaid dividends. The Series C preferred stock will automatically convert into common stock at the then applicable conversion price, in the event of either (a) the vote of a majority of the holders of the preferred shares, or (b) the closing of an underwritten public offering with aggregate gross proceeds of at least $10 million.
		On each of February 20, 2009, 2010, 2011, 2012 and 2013, the Company is obligated to redeem 20% of the outstanding shares of Series A and Series B preferred stock on a pro rata basis according to the number of such shares held by each stockholder and to pay for such stock at the redemption price. The redemption price equals $7 per share plus accrued and unpaid dividends for the Series A preferred stock and $6 per share plus accrued and unpaid dividends for the Series B preferred stock.
		On each of December 1, 2009, 2010, 2011, 2012 and 2013, the Company is obligated to redeem 20% of the outstanding shares of Series C preferred stock on a pro rata basis according to the number of such shares held by each stockholder and to pay for such stock at the redemption price. The redemption price equals $8 per share plus accrued and unpaid dividends.
		The holders of Series A, Series B and Series C preferred stock are entitled to the number of votes equal to the number of shares of common stock into which such shares of preferred stock could be converted. Each of the holders of the Series A, Series B and Series C preferred stock also have, in addition to other voting rights, the right, each such class voting together as a separate class, to elect one director of the Company.
		The Series A, Series B and Series C preferred stock rank in parity in liquidation, are subordinate to the senior notes, and have a liquidation value equal to the original investment plus any unpaid dividends. As of March 31, 2005, the liquidation preference of the Series A, Series B and Series C preferred stock are equal to $4,254,310, $1,376,975 and $24,050,000, respectively. As of June 30, 2005, the liquidation preference of the Series A, Series B and Series C preferred stock are equal to $4,319,755, $1,397,918 and $24,050,000, respectively.

NOTE 13 -	FOREIGN CURRENCY HEDGING

		The Company enters into forward contracts to attempt to limit its exposure to foreign currency cash flow fluctuations. The Company recognizes in the balance sheet derivative contracts at fair value, and reflects any net gains and losses currently in earnings. At March 31, 2005, the Company held outstanding forward exchange positions for the purchase of Euros, expiring through September 2005, in the amount of $1,357,030 with a weighted average conversion rate of €1 = $1.2924 as compared to the spot rate at March 31, 2005 of €1 = $1.2916. At June 30, 2005, the Company held outstanding forward exchange positions for the purchase of Euros, expiring through December 2005, in the amount of $798,476 with a weighted average conversion rate of €1 = $1.2730 as compared to the spot rate at June 30, 2005 of €1 = $1.2066. Gain or loss on foreign transactions is included in other income and expense.

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NOTE 14 -	PROVISION FOR INCOME TAXES

		Income taxes benefit (expense) for the years ended March 31, 2003, 2004 and 2005 consists of federal and state and local taxes attributable to GCP, which does not join in a consolidated income tax return with the Company, and foreign taxes. As of March 31, 2005, the company had federal net operating loss carryforwards of approximately $10,120,000 for U.S. tax purposes, which expire in 2025 and foreign net operating loss carryforwards of approximately $7,080,000 which carryforward without limit of time.
		The pre-tax income (loss), on a financial statement basis, from foreign sources totaled $0, ($1,062,885), and ($4,026,096), for the years ended March 31, 2003, 2004, and 2005, respectively.
		The Company does not have any undistributed earnings from foreign subsidiaries at March 31, 2004 and 2005 and June 30, 2005.
		The following table reconciles the income tax (benefit) expense and the federal statutory rate of 34%.

		For the
		year ended
		March 31,
		2004				2005
		%				%
Computed expected tax benefit, at 34%			34.00				34.00
Increase in valuation allowance			(23.73	)			(29.70	)
Effect of foreign rate differential			(11.08	)			(8.61	)
Non-deductible interest expense			(5.19	)			(1.69	)
Other			6.00				6.00
State and local taxes, net of federal benefit			–				–

		On December 1, 2003, the Company has recorded $629,444 as a deferred tax liability as the amount ascribed to the difference between the book and tax basis of the tangible and intangible assets acquired. The Company allocated the fair value of the purchse prict to the distribution agreement, the additional value ascribed above the fair value was recorded as additional goodwill.
		In connection with the investment in GCP, the company recorded a deferred tax liability on the ascribed value of the acquired intangible assets of $2,222,222, increasing the value of the asset. The deferred tax liability is being reversed and a deferred tax benefit is being recognized over the amortization period of the intangible asset (15 years). For the years ended March 31, 2004 and 2005 and the quarter ended June 30, 2005, the Company has recognized $0, $0 and $37,037 of deferred tax benefit.

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NOTE 14 -	PROVISION FOR INCOME TAXES (CONT’D)

		The tax effects of temporary differences that give rise to deferred tax assets and deferred tax liabilities are presented below.

			March 31,				March 31,				June 30,
			2004				2005				2005
Deferred income tax asset
	Foreign currency transactions		$	54,000			$	92,000			$	36,000
	Amortization of intangibles			250,000				296,000				282,000
	Net operating loss carryforwards – U.S.			852,000				4,062,000				4,844,000
	Net operating loss carryforwards – foreign			301,000				730,000				756,000
	Other			14,000				–				–
	Total gross assets			1,471,000				5,180,000				5,918,000
	Less: Valuation allowance			(1,471,000	)			(5,180,000	)			(5,918,000	)
	Net deferred asset		$	–			$	–			$	–
Deferred income tax liability
	Intangible assets acquired in acquisition of subsidiary		$	(629,444	)		$	(629,444	)		$	(629,444	)
	Intangible assets acquired in investment in joint-venture			–				(2,222,222	)			(2,185,185	)
	Net deferred income taxes		$	(629,444	)		$	(2,851,666	)		$	(2,814,629	)

		The Company has recorded a full valuation allowance against its deferred tax assets as it believes it is more likely that such deferred tax assets will not be realized. The valuation allowance for deferred tax assets as of March 31, 2004 and March 31, 2005 and June 30, 2005 was approximately $1,471,000, $5,180,000 and $5,918,000 respectively. The net change in the total valuation allowance for the years ended March 31, 2003, 2004 and 2005 and the three months ended June 30, 2005, was $0, $1,471,000, and $3,709,000, and $815,000, respectively. The Company’s deferred tax assets and liabilities are in different taxable entities, which do not join in consolidated returns.

NOTE 15 -	STOCK OPTIONS AND WARRANTS

	A.	Stock Options – In July 2003, the Company implemented the 2003 Stock Incentive Plan (“the Plan”) which provides for awards of incentive and non-qualified stock options, restricted stock and stock appreciation rights for its officers, employees, consultants and directors in order to attract and retain such individuals who contribute to the Company’s success by their ability, ingenuity and industry knowledge, and to enable such individuals to participate in the long-term success and growth of the Company by giving them an equity interest in the Company. There are 2,000,000 common shares reserved and

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NOTE 15 -	STOCK OPTIONS AND WARRANTS (CONT’D)

		available for distribution under the Plan. In January 2004, the Board of Directors approved the Plan and granted 553,000 options to its full-time U.S. and international employees at an exercise price of $6.00 per share. These options vest over a three, four or five year period and expire ten years after the grant date.
		In connection with the Company’s acquisition of CB Group and CB-UK, the Company granted to an individual the option to purchase up to 10,000 shares of common stock at an exercise price of $6.00 per share at any time through November 30, 2013.
		The Company continues to account for stock based compensation using the intrinsic value method prescribed in Accounting Principles Board No. 25, “Accounting for Stock Issued to Employees.” Compensation cost for stock options, if any, is measured as the excess of the quoted market price of the Company’s stock at the date of grant over the amount an employee must pay to acquire the stock.

		A summary of the stock option plan is as follows:

		Year Ended March 31,
																		Three Months
																		Ended
		2004								2005								June 30, 2005
						Weighted								Weighted								Weighted
						Average								Average								Average
						Exercise								Exercise								Exercise
		Shares				Price				Shares				Price				Shares				Price
Outstanding at beginning of year			—			$	0.00				563,000			$	6.00				745,500			$	6.47
Granted			563,000				6.00				248,500				7.17				150,000				8.00
Forfeited			—				—				(66,000	)			6.00				—				—
Outstanding at end of year			563,000				6.00				745,500				6.47				895,500				6.75
Options exercisable at year end			—			$	6.00				174,533			$	6.36				174,533			$	6.36
Weighted average fair value of options granted during the year						$	2.17							$	2.69							$	2.17

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NOTE 15 -	STOCK OPTIONS AND WARRANTS (CONT’D)

		The following table represents information relating to stock options outstanding at March 31, 2005:

				Options Outstanding								Options Exercisable
				Weighted				Weighted								Weighted
				Average				Average								Average
				Exercise				Remaining Life								Exercise
Shares				Price				in Years				Shares				Price
	563,000			$	6.00				8.88				143,533			$	6.00
	182,500				8.00				9.83				31,000				8.00
	745,500												174,533

		As of June 30, 2005, the total stock options outstanding was 895,500. The weighted average exercise price of these options was $6.73. The weighted average remaining life of these options was 8.95 years. Total stock options exercisable as of June 30, 2005 was 174,532. The weighted average exercise price of these options was $6.35.
		The fair value of options at date of grant was estimated using the Black-Scholes option-pricing model utilizing the following assumptions:

		March 31,
										June 30,
		2004				2005				2005
Risk-free interest rates			4.38%				4.38-4.59%				3.8%
Expected options life in years			6.42-6.50				6.83-7				6.42
Expected stock price volatility			25%				25%				25%
Expected dividend yield			0%				0%				0%

B.		Stock Warrants – The Company has entered into various warrant agreements.
		Common Stock Warrants Issued to the Financing Agent
		On December 1, 2003, in connection with the revolving credit facility, the Company granted to the lender warrants to acquire 100,000 shares of the Company’s common stock with an exercise price of $6. The warrants are subject to anti-dilution provisions, vest immediately and are exercisable through September 1, 2012. The Company was not obligated to register the warrants or the underlying shares, except to the extent if the Company elects to file a registration statement then the holders can request to have the underlying shares registered. The Company will assume all registration costs and other expenses in connection with such registration.
		The value assigned to the warrants was recorded as a reduction in the value assigned to the credit facility (discount amount) and an increase in long-term liabilities. The discount amount of $282,295 was accreted over the three-year life of the credit facility as additional interest

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NOTE 15 -	STOCK OPTIONS AND WARRANTS (CONT’D)

		expense. The Company has recorded interest expense for the years ended March 31, 2003, 2004 and 2005 and the three months ended June 30, 2004 and 2005 of $54,890, 94,098 and $133,306, respectively The facility was closed in June 2004 and the unaccreted balance was recognized as additional interest expense in that period.
		The warrants are exercisable at any time. The holder may convert the warrants, in whole or in part, into the number of common shares equal to the number of shares under this warrant to be converted multiplied by the amount by which (a) the fair market value of one share exceeds (b) the exercise price in effect immediately prior to such exercise of the conversion price divided by the fair market value of one share in effect immediately prior to such exercise of the conversion price. If the shares are not regularly traded in a public market, the Board of Directors in reasonable good faith judgment shall determine the fair market value as follows: the fair value of the warrant is computed at an amount equal to the Enterprise Value divided by the number of outstanding shares of common stock. If the shares are traded regularly in a public market, the fair market value of a share of common stock shall be the closing sales price of the shares reported for the business day immediately before the holder delivers its conversion notice.
		In addition, the warrants issued in connection with the credit facility have a put right. Commencing September 1, 2006, the put may be exercised by the holder at any time prior to the expiration date. The holder may require the Company to purchase in whole or in part, for an amount equal to the number of shares as to which the holder is exercising multiplied by the amount by which (a) the fair market value of one share exceeds (b) the exercise price in effect immediately prior to such exercise of the put right. The Company shall pay the put amount in immediately available funds on the date set; provided however, that if the put amount is greater than $300,000, the Company shall pay at least $300,000 on such date and shall have the option to pay the remainder of the put amount in four equal installments due at the end of each fiscal quarter thereafter, and bear interest at the prime rate as published by The Wall Street Journal, or in the event that The Wall Street Journal is not available at any time, such rate published in another publication as determined by the holder plus two hundred fifty (250) basis points per annum, or seven percent, or LIBOR plus (500) basis points.
		Common Stock Warrants Issued to the Placement Agents
		In connection with the Series C Preferred Stock, the Company granted, to the placement agents, warrants to acquire approximately 173,993 shares of the Company’s common stock with an exercise price of $8.00. The Warrants are subject to anti-dilution provisions, vest immediately and are exercisable through December 31, 2009. The Company is not obligated to register the warrants or the underlying shares, except to the extent if the Company elects to file a registration statement then the holders can request to have the underlying shares registered. The Company will assume all registration costs and other expenses in connection with such registration.

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NOTE 15 -	STOCK OPTIONS AND WARRANTS (CONT’D)

		The proceeds upon issuance of the Series C Preferred Stock were allocated as follows:

Face value of Preferred Stock		$	16,550,000
Beneficial conversion feature			(417,214	)
Relative fair value of preferred stock		$	16,132,786

		The beneficial conversion feature was calculated using the Black-Scholes method as the difference between the beneficial conversion price and the fair value of the Company’s common stock, multiplied by the number of shares into which the Preferred Stock were convertible in accordance with the Emerging Issues Task Force (“EITF”) Issue No. 00-27. The beneficial conversion feature was recorded immediately as a deemed dividend and reflected in the Net Loss Attributable to Common Stockholders and an increase in additional paid-in-capital.
		The warrants have conversion rights and can be converted at any time. The holder may convert in whole or in part, into a number of common shares equal to the number of shares under this warrant to be converted, multiplied by the amount by which (a) the fair market value of one share exceeds (b) the exercise price in effect immediately prior to such exercise of the conversion price divided by the fair market value of one share in effect immediately prior to such exercise of the conversion price. If the shares are not regularly traded in a public market, the Board of Directors in reasonable good faith judgment shall determine the fair market value as follows: the fair value of the warrant is computed at an amount equal to the Enterprise Value divided by the number of outstanding shares of common stock. If the shares are traded regularly in a public market, the fair market value of a share of common stock shall be the closing sales price of the shares reported for the business day immediately before the holder delivers its conversion notice.
		Common Stock Warrants Issued to Senior Note Holders
		In connection with the issuance of the senior notes, the Company entered into a warrant agreement to grant the right to purchase 116,500 shares of the Company’s common stock at
		an exercise price of $8.00 per share at any time through May 31, 2009. These warrants were fair and accounted for as a discount of the face value of the senior notes and a credit to additional paid-in capital of $129,195. This note discount will be accreted over the original term of the senior notes with a charge to interest expense and a credit to senior notes payable. For the years ended March 31, 2003, 2004 and 2005, and the three months ended June 30, 2004 and 2005, the Company recorded $0, $0, and $30,668 and $2,697 and $9,232 of senior note accretion as additional interest expense.

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NOTE 15 -	STOCK OPTIONS AND WARRANTS (CONT’D)

		The following is a summary of the company’s outstanding warrants:

							Weighted
							Average
							Exercise
							Price
			Warrants				Per Warrant
Warrants outstanding, April 1, 2003				–				–
	Granted			207,118			$	7.03
	Exercised			–				–
	Forfeited			–				–
Warrants outstanding, March 31, 2004				207,118				7.03
	Granted			183,375				8.00
	Exercised			–				–
	Forfeited			–				–
Warrants outstanding and exercisable, March 31, 2005				390,493				7.49
	Exercised			–				–
	Forfeited			–				–
Warrants outstanding and exercisable, June 30, 2005				390,493				7.49

A.		The Company is operating under an agreement with MHW, Ltd. (“MHW”) whereby MHW acts as the Company’s agent in the distribution of its products across the United States. MHW’s president also serves as a director of the Company and has a de minimus indirect ownership interest in the Company. In addition, MHW has a 10% ownership interest in the Celtic Crossing brand, one of the Company’s products, in the United States and its territories, Canada, Mexico, and the Caribbean.
		Pursuant to the MHW distribution agreement, MHW receives sales orders from the Company’s domestic wholesalers at prices agreed upon with the Company. MHW simultaneously purchases Company inventory necessary to fill those orders and ships that inventory to the various wholesalers. MHW then invoices, collects, and deposits remittances from those wholesalers into an MHW bank account designated for the Company. The funds are remitted to the Company on a bi-weekly basis. Although MHW is responsible for the billing function,

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		the collected funds are the property of the Company and MHW is not liable to the Company for any unpaid balances due from wholesalers.
		In addition to the distribution services provided for the Company, MHW also provides administrative and support services on behalf of the Company. For the years ended March 31, 2003, 2004 and 2005, and the three months ended June 30, 2004 and 2005, aggregate charges recorded for all services provided were approximately $61,518, $84,450 and $121,393, and $21,327 and $52,054, respectively, which have been included in general and administrative expenses.
B.		The Company had transactions with Knappogue Corp., a shareholder in the Company. Knappogue Corp. is controlled by the Company’s CEO and his family. The transactions primarily involved rental fees for use of Knappogue Corp.’s interest in the Knappogue Castle for various corporate purposes including Company meetings and to entertain customers. For the years ended March 31, 2003, 2004 and 2005, and the three months ended June 30, 2004 and 2005, fees incurred by the Company to Knappogue Corp. amounted to $28,009, $33,000, and $18,620, and $3,000 and $7,540, respectively.
C.		Prior to the acquisition of CB Group, the Company purchased inventory from CB Group of approximately $737,000 pursuant to a 2001 distribution agreement. In addition, for the years ended March 31, 2003, 2004 and 2005, and the three months ended June 30, 2004 and 2005, the Company made payments to CB Group of approximately $160,000, $256,000 and $0, and $0 and $0, respectively, pursuant to their 2001 brand acquisition agreement.
D.		In April 2004, the Company contracted with BPW, Ltd., for business development services including providing introductions for the Company to agency brands that would enhance the Company’s portfolio of products and assisting the Company in successfully negotiating agency agreement with targeted brands. BPW, Ltd. is controlled by a director of the Company. The contract provides for a monthly retainer to BPW, Ltd. of $3,500, a bonus payable to BPW Ltd. in equal quarterly installments upon the finalization of an agency brand agreement based upon estimated annual case sales by the Company during the first year of operations at the rate of $1 per 9-liter case of volume, less any retainer previously paid, and a commission based upon actual future sales of the agency brand while under the Company’s management. This contract is cancelable by either party, at their convenience, upon 30 days written notice. For the year ended March 31, 2005, and the three months ended June 30, 2005, BPW, Ltd. was paid $41,802 and $10,500, respectively, under this contract.
E.		For the years ended March 31, 2004 and 2005, and the three months ended June 30, 2004 and 2005, the Company purchased goods from Tanis Investments Limited (“Tanis”) and Carbery Milk Products Limited (“Carbery”), both shareholders in the Company, of approximately $595,250 and $2,501,600, and $637,000 and $529,000, respectively. The Company had assumed the underlying supplier agreements with Tanis and Carbery from the predecessor company. As of March 31, 2004 and 2005, and June 30, 2004 and 2005, the Company was indebted to these two shareholders approximately $348,000 and $369,000 and $839,000 and

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		$385,000, respectively, which is included in due to related parties on the accompanying consolidated balance sheet.
F.		For the years ended March 31, 2004 and 2005 and the three months ended June 30, 2004 and 2005, the Company made payments of approximately $25,000 and $37,500, and $9,000 and $9,500, respectively, for use of a patent, to an entity that is owned by two shareholders in the Company. The royalty agreement also includes the right to acquire the patent for the Trinity Bottle for €90,000 ($108,360) for the duration of the licensing period.
G.		In February and August 2005, the Company executed agreements with the two Co-Managing Directors of CB Group whereby, effective March 11, 2005 and October 1, 2005, respectively, these individuals resigned their positions and directorships in CB Group in exchange for a consultancy agreement consisting of fifteen monthly payments totaling €196,875, plus VAT. The balance due, net of payments made, was $233,772 and $160,901, at March 31 and June 30, 2005, respectively. In addition, under the terms of these agreements, the stock options of these individuals were deemed to have accrued two years’ vesting at the end of the consultancy period, the exercise period for their stock options was extended to December 1, 2008, and the Company agreed to pay off the outstanding balance of their 5% Convertible Subordinated Notes, each dated December 1, 2003, and each in the amount of €465,550 and their Subordinated Note, each dated December 1, 2003, and each in the amount of €133,323 at the earlier of one month following the completion of the Company’s initial public offering or in four quarterly installments beginning January 1, 2006. The Company also reimbursed these individuals the legal fees incurred in connection with their consultancy agreements in the amounts of €8,000 and €5,000, respectively, plus VAT. For the year ended March 31, 2005 and the three months ended June 30, 2005, the Company made payments of $20,000 and $60,059, respectively pursuant to this agreement.

A.		The Company has entered into a supply agreement with Irish Distillers Limited (“Irish Distillers”), which provides for the production of Irish whiskeys for the Company through 2014, subject to automatic five year extensions thereafter. Under this agreement, the Company is obligated to notify Irish Distillers annually of the amount of liters of pure alcohol it requires for the current year and commits to purchase that amount. For the calendar year ending December 31, 2005, the Company has committed to purchase approximately €461,000 in bulk Irish whiskey. The Company has not yet taken receipt of any of the commitment. During the term of this supply agreement Irish Distillers has the right to limit additional purchases above the commitment amount.
B.		The Company has entered into a distribution agreement with Gaelic Heritage Corporation, Ltd. (“Gaelic”), an international supplier, to be the sole-producer of Celtic Crossing, one of the Company’s products, for an indefinite period.
C.		In August 2004, Castle Brands entered into an agency agreement with I.L.A.R. S.p.A., the producer of Pallini Limoncello and its flavor extensions, to be the sole and exclusive importer of Pallini Limoncello throughout the United States and its territories and possessions. This agreement is subject to automatic renewal for as much as five years per renewal period upon

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		Castle Brands achievement of contractual case sale targets. The agreement expires on December 31, 2009.
		Under this agreement, Castle Brands is permitted to import Pallini Limoncello at a set price, updated annually, and is obligated to set aside a portion of the gross margin toward a marketing fund for Pallini. The agreement also encompasses the hiring of a Pallini Brand Manager at Castle Brands with Pallini reimbursing the costs of this position up to stipulated annual amount.
D.		In September 2004, CB-USA entered into an exclusive distribution agreement with Gosling’s Export (Bermuda) Limited (“GXB”) to be the sole and exclusive importer of Gosling’s rum brands within the United States. Under this agreement, CB-USA is guaranteed a net sales commission on each case. In February 2005, GXB sold its interest in the distribution agreement to Gosling-Castle Partners Inc. (See Note 19).
E.		CB-USA is guaranteed stipulated commission per case increasing annually provided certain sales are achieved case for all sales in calendar years, under the distribution agreement. The sales commission is net of agreed reimbursements, including taxes and payment to the marketing affiliate. This distribution agreement is for fifteen years, subject to extension.
F.		In June 2004, the Company executed subleases for office space in Dublin, Ireland and midtown Manhattan. The Dublin office lease commenced on June 1, 2004 and extends through February 28, 2009. Rent is payable quarterly in advance. The New York City lease commenced on August 15, 2004 and extends through March 30, 2008. The Company has also entered into non-cancelable operating leases for certain office equipment.
		Future minimum lease payments are as follows:

For the years ending
March 31,		Amount
2006		$	292,773
2007			302,634
2008			302,634
2009			143,021
2010			5,581
Total		$	1,046,643

		In addition to the above annual rental payments, the Company is obligated to pay its pro-rata share of utility and maintenance expenses on the leased premises. Rent expense under operating leases amounted to approximately $290,000, $70,000 and $60,000 and $90,000 and $50,000 for the years ended March 31, 2005, 2004 and 2003, and the three months ended June 30, 2005 and 2004, respectively.
G.		Pursuant to the distribution agreement signed in March 1998 between the Company and Gaelic, which has been amended and restated in April 2001, the Company, which currently

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		owns 60% of the Celtic Crossing brand in the United States, has the option to purchase 70% of the brand outside the United States from Gaelic.
		In the event of the sale of the brand rights by either the Company or Gaelic, the non-selling party shall have the right of first refusal to purchase the interest at the same price as the proposed sale and the right to sell alongside the other party.
		Pursuant to the agreement, the Company is required to pay royalties to Gaelic for each case purchased. In addition, the Company is required to expend a certain percentage of Celtic Crossing product case sales on marketing.
H.		The Company is subject to strict federal and state government regulations associated with the marketing, import, warehouse, transport, and distributions of spirits.

		The Company maintains its cash balances at various large financial institutions that, at times, may exceed federally and internationally insured limits. As of March 31, 2004 and 2005, and June 30, 2004 and 2005, the Company exceeded the insured limit by approximately $6,100,000 and $5,700,000, and $2,400,000 and $5,100,000, respectively. Management believes the Company is not exposed to any significant credit risk because the institutions are international money center banking institutions with strong financial positions.

NOTE 19 -	GOSLING-CASTLE PARTNERS INC. EXPORT AGREEMENT WITH GOSLING’S EXPORT (BERMUDA) LIMITED

		In February 2005, Gosling Partners Inc. secured the GXB global distribution rights under an Export Agreement (“the Agreement”) with GXB. This agreement calls for GCP to pay $2,500,000 to GXB for the assignment of its global distribution rights in four equal installments at April 1, 2005, October 1, 2005, April 1, 2006 and October 1, 2006. At March 31, 2005, this note is carried on the books at a discount of $126,152 resulting from interest imputed at 6%. For the year ended March 31, 2005 and the three months ended June 30, 2005, the Company recognized interest expense of $6,640 and $20,000, respectively, on this note.
		In addition, under the terms of the Export Agreement, GXB has agreed to sell all brands in its portfolio to GCP at its manufacturer’s cost plus a specified producer’s profit. For the years of the agreement, the producer’s profit is a stipulated amount per case, increasing over time.
		The Export Agreement gives GCP the right of first refusal to purchase, in the event GXB decides to sell any or all of its trademarks or other intellectual property, at the same price being offered by a bona fide third party offeror. In the event GCP waives its right of first refusal, the Company has an identical right of first refusal. Furthermore, in the event GXB should decide to sell any or all of its portfolio of products either directly or indirectly through the sale of stock of GXB or its parent company to a third party, the agreement contains a formula for GCP to share in the proceeds of the sale of the brand with such share in the sale

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NOTE 19 -	GOSLING-CASTLE PARTNERS INC. EXPORT AGREEMENT WITH GOSLING’S EXPORT (BERMUDA) LIMITED (CONT’D)

		proceeds up to a stipulated percentage depending upon the number of nine liter equivalent cases of product sold by GCP in the twelve months preceding the sale.
		The Export Agreement commenced on April 1, 2005 and has a 15 year term. It is renewable for additional 15 year terms as long as GCP meets certain case sale targets during the initial term as set forth in the Agreement.

		In connection with the Company’s 2005 agreement to issue up to $10,000,000 of subordinated convertible notes to an investor in order to fund Gosling-Castle Partners, Inc. and for working capital purposes, of which $5,000,000 of notes were issued as of March 31, 2005, the Company issued the remaining $5,000,000 of convertible note in June 2005.
		In July 2005, the Company entered into an agreement with an investor to issue $5,000,000 of subordinated convertible notes. The closing was completed in August 2005. The notes, which mature five years from the date of issuance, bear interest at the rate of 6% per annum. The Company has the option for the first two years from the date of issuance to pay interest in kind at the rate of 7.5% per annum. The notes may be converted into common stock at $8 per share at any time, and shall be converted automatically after the third year from the date of issuance on the 30th consecutive trading day on which the closing price of the common stock is no less than $20 per share. 40% of the notes convert automatically into common stock upon the completion of a public offering with gross proceeds of at least $15,000,000 at a price of $7.00 per share, with such discount based on the level of interest savings to the Company.
		In July 2005, the original $10,000,000 of convertible notes were amended to be equivalent in terms to those of the new $5,000,000 investor. If 40% of the combined $15,000,000 of convertible notes were to convert automatically, as a consequence of a qualified public offering, the $7.00 conversion price would result in the issuance of 107,143 more shares than would have been issued at the $8.00 conversion price. If such automatic conversion occurs, it is anticipated that the value of the incremental shares, valued at the initial public offering price, will be recorded as interest expense.
		In August 2005, the Company issued 362,500 shares of Series C Preferred Stock, convertible at $8 per share and raised $2.9 million in cash.
		In August 2005, the Company modified its senior note indenture to increase issuable notes to $10 million, extend the term two years until May 2009 and to increase the interest rate from 8% to 9%.
		On August 15, 2005, the Company, for prior services, authorized the issuance to a financial advisor a warrant to purchase up to 100,000 shares of common stock at $8.00 per share for a period of ten years.

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		The warrant issued on December 1, 2003 in connection with the Company’s revolving credit facility (See Note 15, B., above) was subsequently amended to amend the warrant holder’s registration rights with respect to the Company’s initial public offering, eliminate a cash put to the Company and provide certain penalties if the shares underlying the warrants have not been registered by June 2007 and June 2008.
		In connection with the acquisition of the Company’s interest in GCP it agreed to issue warrants to purchase 90,000 shares of common stock at $8.00 per share to three members of the Gosling family and an employee and issue options to purchase 20,000 shares of its common stock to employees of GCP.
		In connection with our amended and restated warrant agreement with Keltic Financial Partners, LP for the purchase of 100,000 shares of our common stock, we have agreed that if on either June 1, 2007 or June 1, 2008 (a) there are shares of common stock received or issuable upon the exercise of the warrant that have not been registered and (b) we have not filed a registration statement with respect to which Keltic had the opportunity to register the unregistered shares, we shall pay Keltic $100,000 within ten (10) days of such date.

NOTE 21 -	GEOGRAPHIC INFORMATION

		The consolidated financial statements include revenues and assets generated in or held in foreign countries. The following table sets forth the percentage of consolidated revenues from continuing operations and consolidated assets from foreign countries.

		Years Ended
																										Three
																										Months Ended
		March 31								March 31								March 31								June 30
		2003				%				2004				%				2005				%				2005				%
Consolidated Revenue:
Ireland, United Kingdom and Canada		$	603,596				25.0%			$	1,995,000				41.3%			$	5,891,000				46.7%			$	1,651,181				36.7%
United States			1,815,466				75.0%				2,831,919				58.7%				6,726,863				53.3%				2,847,292				63.3%
Total Consolidated Revenue		$	2,419,062				100%			$	4,826,919				100%			$	12,617,863				100%			$	4,498,473				100%
Consolidated Assets:
Ireland & United Kingdom		$	698,246				2.5%			$	3,032,000				10.9%			$	4,823,000				11.2%			$	5,521,615				12.6%
United States			26,924,680				97.5%				24,726,832				89.1%				38,432,009				88.8%				38,433,554				87.4%
Total Consolidated Assets		$	27,622,926				100%			$	27,758,832				100%			$	43,255,009				100%			$	43,955,169				100%

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NOTE 22 -	INITIAL PUBLIC OFFERING

		On September 15, 2005, the Company’s board of directors approved the filing of a registration statement with the Securities and Exchange Commission for an initial public offering of the Company’s common stock.

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Contents		Page
Directors’ report			F-42
Statement of directors’ responsibilities			F-44
Auditors’ report			F-45
Statement of accounting policies			F-47
Profit and loss account			F-49
Balance sheet			F-50
Cash flow statement			F-51
Notes on and forming part of the financial statements			F-52

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		€
The loss for the financial year amounted to			(46,887	)
Profit and loss account at beginning of year			(582,288	)
Profit and loss account at end of year			(629,175	)

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/s/  Patrick Rigney		/s/  David Phelan
Patrick Rigney Director		David Phelan Director

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	•	select suitable accounting policies and then apply them consistently
	•	make judgements and estimates that are reasonable and prudent
	•	prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business

/s/ Patrick Rigney		/s/ David Phelan
Patrick Rigney Director		David Phelan Director

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BDO Simpson Xavier		Date 3rd June 2004
Registered Auditors		Dublin, Ireland

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Buildings			25 years
Plant and equipment			7 years
Office equipment			4 years
Computer equipment			4 years
Motor vehicles			4 years

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		Note				2003				2002
						€				€
Turnover			1				5,569,866				6,726,551
Cost of sales							(2,848,965	)			(3,012,243	)
Gross profit							2,720,901				3,714,308
Administration expenses							(1,297,409	)			(1,542,813	)
Selling and distribution expenses							(1,362,634	)			(2,013,716	)
Operating profit							60,858				157,779
Interest payable and similar charges			2				(99,945	)			(111,360	)
(Loss)/profit on ordinary activities before taxation			3				(39,087	)			46,419
Tax on (loss)/profit on ordinary activities			4				(7,800	)			24,829
(Loss)/profit for the financial year							(46,887	)			71,248
Profit and loss account at beginning of year							(582,288	)			(653,536	)
Profit and loss account at end of year							(629,175	)			(582,288	)

/s/ Patrick Rigney		/s/ David Phelan
Patrick Rigney		David Phelan
Director		Director

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		Note				2003								2002
						€				€				€				€
Fixed assets			6				271,680								372,646
Tangible assets			7				24,215								34,562
Intangible assets			8				107,564								140,547
Deferred development expenditure			9				9								9
Financial assets											403,468								547,764
Current assets
Stocks			10				882,057								887,258
Debtors			11				3,166,138								3,442,843
Cash at bank and in hand							229,564								60,111
							4,277,759								4,390,212
Creditors: amounts falling due within one year			12				(3,328,775	)							(3,280,706	)
Net current assets											948,984								1,109,506
Total assets less current liabilities											1,352,452								1,657,270
Creditors: amounts falling due after one year			13								(632,986	)							(895,088	)
Deferred income			15								(7,593	)							(10,192	)
Provisions for liabilities and charges			16								(6,770	)							—
											705,103								751,990
Financed by:
Capital and reserves
Called up share capital			17								771,274								771,274
Capital conversion reserve			18								7,127								7,127
Share premium			18								555,877								555,877
Profit and loss account			18								(629,175	)							(582,288	)
Shareholders’ funds			19								705,103								751,990

/s/ Patrick Rigney		/s/ David Phelan
Patrick Rigney		David Phelan
Director		Director

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		Note				2003				2002
						€				€
Net cash inflow/(outflow) from operating activities			22				559,892				(474,948	)
Servicing of finance and returns on investments			23				(99,945	)			(111,360	)
Taxation			23				24,249				(62,907	)
Capital expenditures and financial investment			23				(77,502	)			(124,819	)
Net cash inflow/(outflow) before use of liquid resources and financing							406,694				(774,034	)
Financing			23				(99,987	)			878,120
Increase in cash							306,707				104,086

		Note				2003				2002
						€				€
Increase in cash			24				306,707				104,086
Decrease/(increase) in net debt							99,987				(623,120	)
Movement in net debt during the period							406,694				(519,034	)
Net (debt) at beginning of year			24				(2,178,125	)			(1,659,091	)
Net (debt) at end of year			24				(1,771,431	)			(2,178,125	)

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		Turnover is derived entirely from the sale of alcoholic spirits in Ireland and abroad, and includes royalty income from Great Spirits Company LLC, a distributor of the products of Castle Brands Spirits Company Limited.

		2003				2002
		€				€
Bank interest and charges			85,179				99,893
Finance lease interest			14,766				11,467
			99,945				111,360

		2003				2002
		€				€
Auditors’ remuneration, including expenses			17,500				17,500
Directors’ remuneration and other emoluments			184,158				170,596
Government grants received			-				(40,502	)
Depreciation and amortisation of:
Owned tangible fixed assets			52,041				49,242
Leased tangible fixed assets			63,299				67,634
Deferred development expenditure			88,677				77,538
Intangible assets			17,781				16,295
Media production			-				70,344
Capital grants received			(2,599	)			(2,681	)

		2003				2002
		€				€
Overprovision from previous year			-				(24,829	)
Deferred tax			6,770				-
Tax credit on medical insurance repayable			1,030				-
			7,800				(24,829	)

		There is no charge for corporation tax due to losses incurred in the year. The company is liable to corporation tax on profits from its operating activities at the reduced manufacturing rate of 10%. Manufacturing relief is due to expire on 31 December 2010.

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		The average number of persons employed by the company during the year, analysed by category, was as follows:

		Number of
		employees
		2003				2002
		No.				No.
Management			2				2
Administration			2				4
Selling and distribution			9				9
			13				15

		The aggregate payroll costs of these persons were as follows:

		2003				2002
		€				€
Salaries			492,204				661,024
Social welfare costs			38,582				42,930
Pension costs			36,621				34,006
			567,407				737,960

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NOTE 6 -	TANGIBLE FIXED ASSETS

		Land and				Plant and				Office				Computer				Motor
		buildings				equipment				equipment				equipment				vehicles				Total
		€				€				€				€				€				€
Cost
At beginning of year			5,116				238,431				6,290				64,556				253,198				567,591
Additions in year			-				7,602				305				6,467				-				14,374
At end of year			5,116				246,033				6,595				71,023				253,198				581,965
Depreciation
At beginning of year			980				83,272				4,209				39,706				66,778				194,945
Charge for year			205				36,905				901				14,030				63,299				115,340
At end of year			1,185				120,177				5,110				53,736				130,077				310,285
Net book value
At 31 December 2003			3,931				125,856				1,485				17,287				123,121				271,680
At 31 December 2002			4,136				155,159				2,081				24,850				186,420				372,646

		Included in the net book value of tangible assets are motor vehicles held under finance leases amounting to €123,121 (2002:€186,420). The depreciation charge in respect of these leased assets amounts to €63,299 (2002:€67,634).

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		Trademarks
		and patents
		€
Cost
At beginning of year			81,471
Additions in year			7,434
At end of year			88,905
Depreciation
At beginning of year			46,909
Charge for year			17,781
At end of year			64,690
Net book value
At 31 December 2003			24,215
At 31 December 2002			34,562

		Intangible assets represent patents and internally developed trademarks. The directors have elected to amortise intangible assets over a useful economic life of five years.

		2003				2002
		€				€
Balance at beginning of year			140,547				192,345
Development expenditure incurred during the year			55,694				25,740
Amortisation			(88,677	)			(77,538	)
Balance at end of year			107,564				140,547

		Expenditure for Boru Vodka, Clontarf Whiskey and O’Leary’s Cream brands, design, product development, market research, copyright, trademarks, patents, organization and tooling has been deferred and is amortised over a period of five years.

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		2003				2002
		€				€
Shares in
The Boru Vodka Company Limited			3				3
The Clontarf Irish Whiskey Company			3				3
Castle Brands Whiskey Company Limited			3				3
			9				9

		The Boru Vodka Company Limited, The Clontarf Irish Whiskey Company and Castle Brands Whiskey Company Limited all have their registered offices at 4 Herbert Place, Herbert Street, Dublin 2.
		Activities
		All three companies are 100% subsidiaries of Castle Brands Spirits Company Limited. At present all three are dormant.

		2003				2002
		€				€
Raw materials			289,590				686,770
Finished Goods			592,467				200,488
			882,057				887,258

		There are no material differences between the replacement cost of stock and the balance sheet amounts.

		2003				2002
		€				€
Trade debtors			1,612,657				2,366,228
Prepayments			139,248				171,639
Other debtors			51,421				64,616
Amounts owed by related companies (note 25)			1,191,483				656,635
VAT receivable			171,329				183,725
			3,166,138				3,442,843

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		2003				2002
		€				€
Trade creditors			1,429,819				1,196,665
Other creditors including tax and social welfare			47,139				50,384
Accruals			483,808				649,207
Amounts due under finance leases (note 14)			145,115				47,926
Amounts owned to related companies			–				41,302
Bank loan and overdraft (note 14)			552,244				290,141
Trade finance (note 14)			670,650				1,005,081
			3,328,775				3,280,706

		2003				2002
		€				€
Taxation creditors
Taxation and social welfare included in other creditors:
PAYE/PRSI			34,950				74,633
Corporation tax			–				(24,249	)
Withholding tax			12,189				–
			47,139				50,384

		2003				2002
		€				€
Amounts due under finance lease (note 14)			–				160,365
Shareholders’ loans (note 14)			444,408				419,775
Bank loan (note 14)			188,578				314,948
			632,986				895,088

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		Maturity analysis

				Within				Between one				Between two
				one year				& two years				& five years				Total
		€		€				€				€
		Repayable by installments
		Obligations under finance leases and hire purchase contracts			145,115				–				–				145,115
		Repayable other than by installments
		Bank loan and overdraft			552,244				68,368				120,210				740,822
		Trade finance			670,650				–				–				670,650
		Shareholders’ loans			–				–				444,408				444,408
					1,368,009				68,368				564,618				2,000,995

		Security
		The company has granted an All Monies Debenture dated 4 February, 2000 giving a first floating charge over the assets of the company including all intellectual property rights to Ulster Bank Limited. A Letter of Waiver over the trade debtors dated 31 October, 2000 was issued to Ulster Bank Commercial Services Limited in respect of facilities maintained with them.
		The company has granted an All Monies general counter indemnity dated 29 January, 2001 together with supporting resolution to Ulster Bank Limited.
		David Phelan and Patrick Rigney have signed a joint and several letter of guarantee in the amount of €158,717 in favour of Ulster Bank Limited.
		A deed of postponement dated 19 September, 1999 over the shareholders’ loans in the amount of €253,948 has been signed in favour of Ulster Bank Limited.
		Castle Brands Inc. has guaranteed the repayment of the shareholders’ loans under the terms of the Agreement of Merger and Acquisitions.

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		2003				2002
		€				€
Capital grants
At the beginning of the year			10,192				12,873
Amortised during the year			(2,599	)			(2,681	)
At end of year			7,593				10,192

		A liability may arise to repay, in whole or in part, revenue grants received to date amounting to €93,040, if certain events occur as detailed in the grant agreements. The terms of repayments are as follows:
		Feasibility Grant:
		• The company’s liability for repayment of feasibility study grant paid in any year shall terminate five years from the end of that year and;
		• The agreement shall terminate five years from the date of the last payment from the grants. The grant agreement start date was 23rd July 2000.

NOTE 16 -	PROVISIONS FOR LIABILITIES AND CHARGES

		2003				2002
		€				€
Deferred taxation
At the beginning of year			–				–
Charged to the profit and loss account			6,770				–
At end of year			6,770				–
Deferred taxation
The amounts provided for deferred taxation are set out below.

		2003				2002
		€				€
Difference between accumulated depreciation and amortisation and capital allowances			6,770				–
			6,770				–

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		2003				2002
		€				€
Authorised
796,000 (2001: 1,000,000) Ordinary shares of €1.25 each			995,000				995,000
20,000 Class “A” Ordinary shares of €0.01 each			200				200
Reclassification of 204,000 Ordinary shares
2,550,000 Class “B” Ordinary shares of €0.10 each			255,000				255,000
			1,250,200				1,250,200
Issued, allotted and fully paid
At 1 December 2003
412,947 ordinary shares of €1.25 each			516,184				458,515
(2002: 361,110 ordinary shares of €1.269738 each)
9,000 “A” ordinary shares of €0.01 each			90				–
2,550,000 “B” ordinary shares of €0.10 each			255,000				–
Issued during the year
Debenture converted			–				64,796
9,000 “A” ordinary shares of €0.01 each			–				90
2,550,000 “B” ordinary shares of €0.10 each			–				255,000
Renominalisation of share capital			–				(7,127	)
At 31 December 2003			771,274				771,274

		Rights of ordinary shares
		The “A” ordinary shares and the “B” ordinary shares rank pari passu in all respects.

		Capital conversion				Share				Profit and
		reserve				premium				loss account				Total
		€				€				€				€
At beginning of year			7,127				555,877				(582,288	)			(19,284	)
Loss for the financial year			–				–				(46,887	)			(46,887	)
At end of year			7,127				555,877				(629,175	)			(66,171	)

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		2003				2002
		€				€
Shareholders’ funds at beginning of year			751,990				425,742
(Loss)/profit for the financial year			(46,887	)			71,248
Debenture converted			–				(253,948	)
Ordinary shares issued			–				319,886
Renominalisation of share capital			–				(7,127	)
Capital conversion reserve			–				7,127
Increase in share premium			–				189,062
Shareholders’ funds at end of year			705,103				751,990

		Capital commitments
		There were no capital commitments of a significant nature authorised at the balance sheet date.
		Operating lease commitments
		Annual commitments exist under non-cancellable operating leases as follows:

		2003 Motor				2003				2002 Motor				2002
		vehicles				Other				vehicles				Other
		€				€				€				€
Expiring:
Between two and five years			–				5,577				7,359				6,747

		The company operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the company is an independently administered fund. The pension cost charge represents contributions payable by the company to the fund and amounted to €36,621 (2002: €34,006).

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		2003				2002
		€				€
Operating profit			60,858				157,779
Depreciation of tangible fixed assets, amortization of intangible                 assets, deferred development expenditure and government grants			219,199				208,028
Profit on disposal of leased assets			–				(13,257	)
Decrease/(increase) in stocks			5,201				(233,360	)
Decrease/(increase) in debtors			287,864				(782,154	)
(Decrease)/increase in creditors			(13,230	)			188,016
Net cash inflow/(outflow) from operating activities			559,892				(474,948	)

		2003				2002
		€				€
Returns on investment and servicing of finance
Interest paid			(85,179	)			(99,893	)
Interest element of finance lease repayments			(14,766	)			(11,467	)
Net cash (outflow) for returns on investment and servicing of                 finance			(99,945	)			(111,360	)
Taxation
Tax repaid/(paid)			24,249				(62,907	)
Capital expenditure and financial investment
Purchase of fixed assets			(77,502	)			(178,905	)
Disposal of fixed assets			–				54,086
Net cash outflow for capital expenditure and financial investment			(77,502	)			(124,819	)
Financing
Capital element of finance lease repayments			(63,176	)			(50,991	)
Loans received during year			–				674,111
Loans repaid during the year			(36,811	)			–
Share capital issue			–				255,000
Total financing cash flows			(99,987	)			878,120

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								Bank and				Tradefinance
				Cash at bank				shareholder				and bank				Finance
				and in hand				loans				overdrafts				lease				Total
				€				€				€				€				€
		At 1 January 2003			60,111				(734,723	)			(1,295,222	)			(208,291	)			(2,178,125	)
		Cash flows			169,453				36,811				137,254				63,176				406,694
		At 31 December 2003			229,564				(697,912	)			(1,157,968	)			(145,115	)			(1,771,431	)

		The following entities are considered to be related parties for the purposes of Financial Reporting Standard No. 8 - “Related Party Disclosures”:

Entity		Relationship
Castle Brands Inc (a Delaware Corporation)		Ultimate parent undertaking
Castle Brands Spirits Group Limited                 (Irish registered undertaking)		Immediate parent undertaking
The Boru Vodka Company Limited                 (Irish registered undertaking)		Subsidiary undertaking
The Clontarf Irish Whiskey Company                 (Irish registered undertaking)		Subsidiary undertaking
Castle Brands Whiskey Company Limited                 (Irish registered undertaking)		Subsidiary undertaking
Castle Brands Spirits Marketing and Sales Company Limited                 (Irish registered undertaking)		Under common control
The Roaring Water Bay Spirits Company (GB) Limited                 (UK registered undertaking)		Under common control
The Roaring Water Bay Spirits Company (NI) Limited                 (NI registered undertaking)		Under common control
Great Spirits Company LLC                 (a Delaware limited liability company)		Under common control

		Details of transactions with related parties during the year are as follows:

Entity		Transaction		Payable (receivable)
				€
The Roaring Water Bay Spirits Company		Sales			(365,790	)
(GB) Limited
Great Spirits Company LLC		Royalties			(288,934	)
Great Spirits Company LLC		Sales			(663,038	)

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		Director		Directors loan
								€
		David Phelan			At 1 Jan 2003				24,633
					Amounts repaid				24,633
					At 31 Dec 2003				–

		Disclosed to note 11 as amounts due from related undertakings at the balance sheet date are the following amounts:

		2003				2002
		€				€
Castle Brands Inc			861,544				–
Castle Brands Spirits Group Limited			2,613				2,613
The Roaring Water Bay Spirits Company (GB) Limited			–				654,022
Great Spirits Company LLC			327,326				–
			1,191,483				656,635

		The amounts due from The roaring Water Bay Spirits Company (GB) Limited to the company at 31 December 2003 of €836,912 was taken over by the Ultimate parent undertaking, Castle Brands, Inc.

		Comparatives have been regrouped where necessary, on a basis consistent with the current year.

		The board of directors approved these financial statements on June 2, 2004.

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F-65

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Contents		Page
Directors’ report			F-67
Statement of directors’ responsibilities			F-69
Auditors’ report			F-70
Statement of accounting policies			F-72
Profit and loss account			F-73
Balance sheet			F-74
Notes on and forming part of the financial statements			F-75

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		£
The loss for the financial year amounted to			(163,344	)
Profit and loss account at beginning of year			(545,627	)
Profit and loss account at end of year			(708,971	)

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/s/ Patrick Rigney		/s/ David Phelan
Patrick Rigney		David Phelan
Director		Director

F-68

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	•	select suitable accounting policies and then apply them consistently
	•	make judgements and estimates that are reasonable and prudent
	•	prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business

/s/ Patrick Rigney		/s/ David Phelan
Patrick Rigney		David Phelan
Director		Director

F-69

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F-70

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/s/ BDO Simpson Xavier
BDO Simpson Xavier		Date 3rd June 2004
Registered Auditors		Dublin, Ireland

F-71

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Motor vehicles		4 years

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		Note				2003				2002
						£				£
Turnover			1				465,945				518,137
Cost of sales							(395,005	)			(461,172	)
Gross profit							70,940				56,965
Administration expenses							(62,782	)			(24,509	)
Selling and distribution							(166,844	)			(98,612	)
Operating loss							(158,686	)			(66,156	)
Interest payable and similar charges			2				(4,658	)			(2,739	)
Loss on ordinary activities before taxation			3-4				(163,344	)			(68,895	)
Tax on loss on ordinary activities			5				–				–
Loss for the financial year							(163,344	)			(68,895	)
Profit and loss account at beginning of year							(545,627	)			(476,732	)
Profit and loss account at end of year							(708,971	)			(545,627	)

/s/ Patrick Rigney Patrick Rigney Director		/s/ David Phelan David Phelan Director

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		Note				2003								2002
						£				£				£				£
Fixed assets
Tangible assets			6								15,805								21,680
Current assets
Bank							33,592								–
Stocks			7				72,192								43,715
Debtors			8				173,760								218,707
							279,544								262,422
Creditors: amounts falling due within one year			9				(635,725	)							(500,322	)
Net current Liabilities											(356,181	)							(237,900	)
Total assets less current liabilities											(340,376	)							(216,220	)
Creditors: amounts falling due after one year			10								(368,593	)							(329,405	)
											(708,969	)							(545,625	)
Financed by:
Capital and reserves
Called up share capital			11								2								2
Profit and loss account			12								(708,971	)							(545,627	)
Shareholders’ deficit			13								(708,969	)							(545,625	)

/s/ Patrick Rigney Patrick Rigney Director		/s/ David Phelan David Phelan Director

F-74

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NOTE 1 -	TURNOVER

	Turnover is derived entirely from the sale of alcoholic spirits in Great Britain.

NOTE 2 -	INTEREST PAYABLE AND SIMILAR CHARGES

		2003				2002
		£				£
Interest and bank charges			4,658				2,739

NOTE 3 -	STATUTORY AND OTHER INFORMATION

		2003				2002
		£				£
Auditors’ remuneration, including expenses			4,000				4,000

NOTE 4 -	STAFF NUMBERS AND COSTS

	The average number of persons employed by the company during the year, analysed by category, was as follows:

		No.				No.
		2003				2002
Selling and distribution			1				1
			1				1

	The aggregate payroll costs of these persons were as follows:

		2003				2002
		£				£
Salaries			56,280				38,842

NOTE 5 -	TAX ON LOSS ON ORDINARY ACTIVITIES

	There is no provision for Corporation Tax due to trading losses incurred.

NOTE 6 -	TANGIBLE FIXED ASSETS

		Motor
		Vehicles				Total
		£				£
Cost
At beginning of year			23,500				23,500
Additions in year			–				–
At end of year			23,500				23,500

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		Motor
		Vehicles				Total
		£				£
Depreciation
At beginning of year			1,820				1,820
Charge for year			5,875				5,875
At end of year			7,695				7,695
Net book value
At 31 December 2003			15,805				15,805
At 31 December 2002			21,680				21,680

Included in the net book value of tangible fixed assets are motor vehicles held under finance leases amounting to £15,805. The depreciation charge in respect of these leased assets amounts to £5,875. This depreciation charge is charged to the profit and loss account of Castle Brands Spirits Company Limited as the vehicle is solely used by one of their employees, however the vehicle was financed leased by The Roaring Water Bay Spirits Company (GB) Limited.

NOTE 7 -	STOCKS

		2003				2002
		£				£
Finished goods			72,192				43,715

	There are no material differences between the replacement cost of stock and the balance sheet amounts.

NOTE 8 -	DEBTORS

		2003				2002
		£				£
Trade debtors			171,677				214,124
Prepayments			2,083				4,583
			173,760				218,707

F-76

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		2003				2002
		£				£
Trade creditors			30,353				2,016
PAYE/PRSI			10,521				7,605
Accruals			–				10,446
VAT			3,778				11,671
Amounts owed to related undertaking			516,038				425,312
Bank loans and overdraft			14,777				39,377
Memorandum discounting facility			57,072				–
Amounts due under finance lease obligations			3,186				3,895
			635,725				500,322

		2003				2002
		£				£
Amount owed to related undertaking			357,965				309,800
Amounts due under finance lease obligations			10,628				19,605
			368,593				329,405

		2003				2002
		£				£
Authorised
100 Ordinary shares of £1 each			100				100
Alloted, called up and fully paid
2 Ordinary shares of £1 each			2				2

		Profit and
		Loss Account
		£
At 1 January 2003			(545,627	)
Loss for the financial year			(163,344	)
At 31 December 2003			(708,971	)

F-77

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NOTE 13 -	RECONCILIATION OF MOVEMENT IN SHAREHOLDERS’ DEFICIT

		2003				2002
		£				£
Shareholders’ deficit at beginning of year			(545,625	)			(476,730	)
Loss for the financial year			(163,344	)			(68,895	)
Shareholders’ deficit at end of year			(708,969	)			(545,625	)

	Capital Commitments
	There were no capital commitments of a significant nature authorized at the balance sheet date.

	David Phelan and Patrick Rigney have granted a joint and several letter of guarantee in the amount of £40,000 each, in favour of Ulster Bank Limited.
	Ulster Bank Limited also holds an all monies General Counter Indemnity dated 29 January 2001 together with supporting resolution in respect of the C & D Guarantee in the amount of £40,000.

	The following entities are considered to be related parties for the purposes of Financial Reporting Standard No. 8 - “Related Party Disclosures”:

		Entity		Relationship
		Castle Brands Inc. (a Delaware Corporation)		Ultimate parent undertaking
		Castle Brands Spirits Marketing and Sales Company Limited (Irish registered undertaking)		Immediate parent undertaking
		The Roaring Water Bay Spirits Company (NI) Limited (NI registered undertaking)		Under common control
		Castle Brands Spirits Group Limited (Irish registered undertaking)		Under common control
		Castle Brands Spirits Company Limited (Irish registeredundertaking)		Under common control
		The Boru Vodka Company Limited (Irish registered undertaking)		Under common control
		The Clontarf Irish Whiskey Company (Irish registered undertaking)		Under common control
		Castle Brands Whiskey Company Limited (Irish registered undertaking)		Under common control
		Great Spirits Company LLC (a Delaware limited liability company)		Under common control

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NOTE 16 -	RELATED PARTY TRANSACTIONS (CONT’D)

	Details of transactions with related parties during the year are follows:

Entity		Transaction		Payable/(receivable)
				£
Castle Brands Spirits Company Limited		Purchases			255,391

	Disclosed in note 9 as amounts due within one year to related undertakings at the balance sheet date are the following amounts:

		2003				2002
		£				£
Castle Brands Inc.,			516,038				-
Castle Brands Spirits Company Limited			-				425,312
			516,038				425,312

	Disclosed in note 10 as amounts due after one year to related undertakings at the balance sheet date are the following amounts:

		2003				2002
		£				£
Castle Brands Spirits Marketing and Sales Company Limited			357,965				309,800

	The company has relied on specified exemptions contained in Financial Reporting Standard No. l on the grounds that the company is entitled to the benefit of those exemptions as a small company.

	Comparatives have been regrouped where necessary, on a basis consistent with the current year.

	The financial statements were approved by the board on June 3 2004.

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F-80

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			Year				Year
			ended				ended
			December 31,				December 31,
			2003				2003
Net (loss)/income as reported in accordance with Irish GAAP			$	(54,056	)			67,393
Adjustments:
	Deferred expenditures — R&D			(64,210	)			( 24,347	)
	Amortization — deferred expenditures			102,236				73,343
Net (loss)/income under U.S. GAAP			$	(16,030	)		$	116,389
Basic and diluted net loss per share under U.S. GAAP:			$	(.02	)		$	.19

		December 31,				December 31,
		2003				2002
Total assets under Irish GAAP		$	5,878,217			$	5,176,480
Adjustments to U.S. GAAP			17,285,983				(147,335	)
Total assets under U.S. GAAP		$	23,164,200			$	5,029,145
Total liabilities under Irish GAAP		$	4,992,819			$	4,388,169
Adjustments to U.S. GAAP			(   —	)			(   —	)
Total liabilities under U.S. GAAP		$	4,992,819			$	4,388,169
Total stockholders equity under Irish GAAP		$	885,398			$	788,311
Adjustments to U.S. GAAP			17,285,983				(147,335	)
Total stockholders equity under U.S. GAAP		$	18,171,381			$	640,976
Total liabilities and stockholders equity under U.S. GAAP		$	23,164,200			$	5,029,145

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			Year				Year
			ended				ended
			December 31,				December 31,
			2003				2003
Cash flows from operating activities under Irish GAAP
Net loss/income as reported in accordance with U.K. GAAP			$	( 54,056	)		$	67,393
Adjustments:
	Deferred expenditures — R&D			( 64,210	)			( 24,347	)
	Amortization — deferred expenditures			102,236				73,343
Net (loss)/income under U.S. GAAP			$	(16,030	)		$	116,389
Adjustments to reconcile net (loss)/income to net cash used in operating activities Depreciation and amortization				(102,236	)			(73,343	)
Net cash provided by (used in) operating activities under U.S. GAAP				( 102,236	)			( 73,343	)
Cash flows from investing activities under Irish GAAP Deferred expenditures — R&D				64,210				24,347
Net cash used in operating activities under U.S. GAAP				64,210				24,347

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F-83

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	ThinkEquity Partners LLC

	Ladenburg Thalmann & Co. Inc.

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Item 13.	Other Expenses of Issuance and Distribution

SEC registration fee			$	3,722.26
NASD filing fee				3,662.50
AMEX filing fee				55,000.00
Transfer agent and registrar fees				*
Accountants’ fees and expenses				*
Legal fees and expenses				*
Printing and engraving expenses				*
Miscellaneous fees and expenses				*
	Total		$	*

*	To be filed by amendment

Item 14.	Indemnification of Directors and Officers

II-1

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Item 15.	Recent Sales of Unregistered Securities

II-2

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II-3

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Item 16.	Exhibits and Financial Statement Schedules

	(a)	Exhibits

Exhibit Number				Exhibit
	1*			Form of Underwriting Agreement
	2	.1*		Agreement of Merger and Acquisitions, dated as of July 31, 2003, by and among GSRWB, Inc., The Roaring Water Bay Spirits Group Limited, The Roaring Water Bay Spirits Marketing and Sales Company Limited, Great Spirits Company LLC, Great Spirits Corp., Patrick Rigney, David Phelan, Carbery Milk Products Limited and Tanis Investments Limited
	2	.2*		Amendment to Agreement of Merger and Acquisitions, dated as of October 1, 2003, by and among GSRWB, Inc., The Roaring Water Bay Spirits Group Limited, The Roaring Water Bay Spirits Marketing and Sales Company Limited, Great Spirits Company LLC, Great Spirits Corp., Patrick Rigney, David Phelan, Carbery Milk Products Limited and Tanis Investments Limited
	3	.1		Form of Amended and Restated Certificate of Incorporation of the Registrant
	3	.2		Form of Amended and Restated Bylaws of the Registrant
	4	.1*		Form of Common Stock Certificate
	4	.2		Shareholders Agreement, dated as of December 1, 2003, by and among GSRWB, Inc. and the holders of shares of Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock and the Common Stockholders
	5	.1*		Opinion of Patterson Belknap Webb & Tyler LLP
	10	.1**		Export Agreement, dated as of February 14, 2005 between Gosling Partners Inc. and Gosling’s Export (Bermuda) Limited
	10	.2		Amendment No. 1 to Export Agreement, dated as of February 18, 2005, by and among Gosling-Castle Partners Inc. and Gosling’s Export (Bermuda) Limited
	10	.3**		National Distribution Agreement, dated as of September 3, 2004, by and between Castle Brands (USA) Corp. and Gosling’s Export (Bermuda) Limited
	10	.4		Subscription Agreement, dated as of February 18, 2005, by and between Castle Brands Inc. and Gosling-Castle Partners Inc.
	10	.5		Stockholders Agreement, dated February 18, 2005, by and among Gosling-Castle Partners Inc. and the persons listed on Schedule I thereto.
	10	.6		Promissory Note, dated February 18, 2005, issued by Castle Brands Inc. in favor of Gosling-Castle Partners Inc.
	10	.7**		Agreement, dated as of August 27, 2004, between I.L.A.R. S.p.A. and Castle Brands (USA) Corp.
	10	.8**		Supply Agreement, dated as of January 1, 2005, between Irish Distillers Limited and Castle Brands Spirits Group Limited and Castle Brands (USA) Corp.

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Exhibit Number				Exhibit
	10	.9		Amendment No. 1 to Supply Agreement, dated as of September 20, 2005, to the Supply Agreement, dated as of January 1, 2005, among Irish Distillers Limited and Castle Brands Spirits Group Limited and Castle Brands (USA) Corp.
	10	.10**		Amended and Restated Worldwide Distribution Agreement, dated as of April 16, 2001, by and between Great Spirits Company LLC and Gaelic Heritage Corporation Limited
	10	.11**		Bottling and Services Agreement, dated as of September 1, 2002, by and between Terra Limited and The Roaring Water Bay Spirits Company Limited
	10	.12		Amendment to Bottling and Services Agreement, dated as of March 1, 2005, by and between Terra Limited and Castle Brands Spirit Company Limited
	10	.13		Amended and Restated Convertible Note Purchase Agreement, dated as of August 16, 2005, by and between Castle Brands Inc., Mellon HBV SPV LLC and Black River Global Credit Fund Ltd.
	10	.14		Amended and Restated Convertible Promissory Note, dated March 1, 2005, issued by Castle Brands Inc. in favor of Mellon HBV SPV LLC.
	10	.15		Amended and Restated Convertible Promissory Note, dated June 27, 2005, issued by Castle Brands Inc. in favor of Mellon HBV SPV LLC.
	10	.16		Convertible Promissory Note, dated August 16, 2005, issued by Castle Brands Inc. in favor of Black River Global Credit Fund Ltd.
	10	.17		License Agreement, dated December 1, 2003, between The Roaring Water Bay (Research and Development) Company Limited and GSRWB, Inc.
	10	.18*		Amended and Restated Employment Agreement, effective as of May 4, 2005, by and between Castle Brands Inc. and Mark Andrews
	10	.19*		Amended and Restated Employment Agreement, effective as of July 19, 2005, by and between Castle Brands Inc. and T. Kelley Spillane
	10	.20		Employment Agreement, dated as of May 2, 2005 by and between Castle Brands Inc. and Keith A. Bellinger
	10	.21		Summary of employment agreement with Matthew F. MacFarlane
	10	.22		Non-Competition Deed, dated December 1, 2003, between GSRWB, Inc. and David Phelan
	10	.23		Letter Agreement, dated August 4, 2005, between Castle Brands Inc. and David Phelan
	10	.24		Letter Agreement, dated February 15, 2005, between Castle Brands Inc. and Patrick Rigney
	10	.25		Letter Consulting Agreement, dated August 4, 2005, between Castle Brands Inc. and David Phelan

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Exhibit Number				Exhibit
	10	.26		Letter Consulting Agreement, dated August 2, 2005, between Castle Brands Inc. and Patrick Rigney
	10	.27**		Supply Agreement, dated January 19, 1998, by and between Carbery Milk Products Limited and The Roaring Water Bay Spirits Company Limited
	10	.28**		Amendment and Consent, dated March 1, 2003, to Supply Agreement, dated January 19, 1998, by and between Carbery Milk Products Limited and Castle Brands Inc.
	10	.29		Castle Brands Inc. 2003 Stock Incentive Plan, as amended
	10	.30		Amendment to Castle Brands Inc. 2003 Stock Incentive Plan
	10	.31		Letter Agreement, dated as of December 1, 2004, between MHW, Ltd. and Castle Brands (USA) Corp.
	10	.32		Sublease, dated as of June 24, 2004, by and between Silvercrest Asset Management Group, LLC, as successor in interest to James C. Edwards & Co., Inc. and Castle Brands (USA) Corp.
	10	.33		Indenture of Sublease, dated June 2004, by and between Jennifer Dunne and Castle Brand Spirits Company Limited
	10	.34		Office Lease, dated as of February 24, 2000, by and between Great Spirits Company LLC and Crescent HC Investors L.P.
	10	.35		First Amendment to Office Lease, dated March 14, 2001
	10	.36		Second Amendment to Office Lease, dated January 30, 2002
	10	.37		Third Amendment to Office Lease, dated March 28, 2003
	10	.38		Fourth Amendment to Office Lease, dated March 23, 2004
	10	.39		Fifth Amendment to Office Lease, dated June 21, 2005
	10	.40		First Supplemental Trust Indenture, dated as of August 15, 2005, by and between Castle Brands (USA) Corp. and JPMorgan Chase Bank, as trustee and MHW Ltd., as collateral agent
	10	.41		First Amended and Restated Trust Indenture, dated as of August 15, 2005, by and between Castle Brands (USA) Corp., JPMorgan Chase Bank, as trustee and MHW Ltd., as collateral agent
	10	.42		9% Secured Note dated August 15, 2005 issued by Castle Brand (USA) Corp. in favor of JPMorgan Chase Bank, as trustee
	10	.43		General Security Agreement, dated as of June 1, 2004, by and between Castle Brands (USA) Corp. and JPMorgan Chase Bank, as trustee
	10	.44		First Amendment to General Security Agreement, dated as of August 15, 2005, by and between Castle Brands (USA) Corp. and JPMorgan Chase Bank, as trustee

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Exhibit Number				Exhibit
	10	.45		Guaranty of Payment and Performance, dated June 1, 2004, from Castle Brands Inc. to JPMorgan Chase Bank, as trustee
	10	.46		First Amendment to Guarantee of Payment and Performance, dated as of August 15, 2005, by and between Castle Brands Inc. to JPMorgan Chase Bank, as trustee
	10	.47		Collateral Agreement, dated as of June 1, 2004, by and among MHW Ltd., Castle Brands (USA) Corp. and JPMorgan Chase Bank, as trustee
	10	.48		First Amendment to Collateral Agreement, dated as of August 15, 2005, by and among MHW Ltd., Castle Brands (USA) Corp. and JPMorgan Chase Bank, as trustee
	10	.49		Credit Facility Agreement, dated as of December 16, 2004, by and among Ulster Bank Ireland Limited, Ulster Bank Ltd. and Castle Brands Spirits Company Limited
	10	.50		Accounts Receivable Credit Facility Agreement, dated as of April 4, 2005, by and among Ulster Bank Ireland Limited, Ulster Bank Ltd. and Castle Brands Spirits Company Limited
	10	.51		Contract, dated as of April 1, 2005, by and between Castle Brands Inc. and BPW LLC
	16	.1		Letter from Grodsky Caporrino & Kaufman, PC
	21	.1		List of Subsidiaries of the Registrant
	23	.1		Consent of Eisner LLP, Independent Registered Public Accounting Firm
	23	.2		Consent of BDO Simpson Xavier, Independent Registered Public Accounting Firm (The Castle Brands Spirits Company Limited (formerly known as The Roaring Water Bay Spirits Company Limited))
	23	.3		Consent of BDO Simpson Xavier, Independent Registered Public Accounting Firm (The Roaring Water Bay Spirits Company (GB) Limited)
	23	.4*		Consent of Patterson Belknap Webb & Tyler LLP (included in exhibit 5.1)
	24	.1		Power of Attorney (included on the Signature Page of the Registration Statement)

*	To be filed by amendment.

**	Confidential treatment requested for certain portions of this exhibit pursuant to Rule 406 under the Securities Exchange Act of 1934, as amended, which portions are omitted and filed separately with the Securities and Exchange Commission.

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						Additions
						Charged to
		Balance at				cost and								Balance at end
Description		beginning of period				expenses				Deductions				of period
Valuation reserve deducted in the balance sheet from the asset to which it applies (in thousands):
Accounts receivable:
6/30/05 Allowance for doubtful accounts		$	81				12				—			$	93
2005 Allowance for doubtful accounts			58				64				41				81
2004 Allowance for doubtful accounts			50				17				9				58
2003 Allowance for doubtful accounts			47				3				—				50
Inventory:
6/30/05 Allowance for excess and obsolescence		$	164				—				—			$	164
2005 Allowance for excess and obsolescence			90				74				—				164
2004 Allowance for excess and obsolescence			30				60				—				90
2003 Allowance for excess and obsolescence			—				30				—				30
Deferred Taxes:
6/30/05 Valuation reserve		$	5,180				815				—			$	5,918
2005 Valuation reserve			1,471				3,709				—				5,180
2004 Valuation reserve			—				1,471				—				1,471
2003 Valuation reserve			—				—				—				—

II-8

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Item 17.	Undertakings

II-9

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	CASTLE BRANDS INC.

	By:	/s/ Mark Andrews

	Mark Andrews
	Chairman of the Board, President and
	Chief Executive Officer

Signature		Title		Date
/s/ Mark Andrews   Mark Andrews		Chairman of the Board, President and Chief Executive Officer (Principal Executive Officer)		September 29, 2005
/s/ Keith A. Bellinger   Keith A. Bellinger		Executive Vice President, Chief Operating Officer and Secretary (Principal Financial Officer)		September 29, 2005
/s/ Matthew F. MacFarlane   Matthew F. MacFarlane		Senior Vice President and Chief Financial Officer (Principal Accounting Officer)		September 29, 2005
/s/ John F. Beaudette   John F. Beaudette		Director		September 29, 2005
/s/ Robert J. Flanagan   Robert J. Flanagan		Director		September 29, 2005

S-1

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Signature		Title		Date
/s/ Colm Leen   Colm Leen		Director		September 29, 2005
/s/ Phillip Frost, M.D.   Phillip Frost, M.D.		Director		September 29, 2005
/s/ Richard Morrison   Richard Morrison		Director		September 29, 2005
/s/ Frederick M.R. Smith   Frederick M.R. Smith		Director		September 29, 2005
/s/ Kevin P. Tighe   Kevin P. Tighe		Director		September 29, 2005

S-2

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Exhibit Number				Exhibit
	1*			Form of Underwriting Agreement
	2	.1*		Agreement of Merger and Acquisitions, dated as of July 31, 2003, by and among GSRWB, Inc., The Roaring Water Bay Spirits Group Limited, The Roaring Water Bay Spirits Marketing and Sales Company Limited, Great Spirits Company LLC, Great Spirits Corp., Patrick Rigney, David Phelan, Carbery Milk Products Limited and Tanis Investments Limited
	2	.2*		Amendment to Agreement of Merger and Acquisitions, dated as of October 1, 2003, by and among GSRWB, Inc., The Roaring Water Bay Spirits Group Limited, The Roaring Water Bay Spirits Marketing and Sales Company Limited, Great Spirits Company LLC, Great Spirits Corp., Patrick Rigney, David Phelan, Carbery Milk Products Limited and Tanis Investments Limited
	3	.1		Form of Amended and Restated Certificate of Incorporation of the Registrant
	3	.2		Form of Amended and Restated Bylaws of the Registrant
	4	.1*		Form of Common Stock Certificate
	4	.2		Shareholders Agreement, dated as of December 1, 2003, by and among GSRWB, Inc. and the holders of shares of Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock and the Common Stockholders
	5	.1*		Opinion of Patterson Belknap Webb & Tyler LLP
	10	.1**		Export Agreement, dated as of February 14, 2005 between Gosling Partners Inc. and Gosling’s Export (Bermuda) Limited
	10	.2		Amendment No. 1 to Export Agreement, dated as of February 18, 2005, by and among Gosling-Castle Partners Inc. and Gosling’s Export (Bermuda) Limited
	10	.3**		National Distribution Agreement, dated as of September 3, 2004, by and between Castle Brands (USA) Corp. and Gosling’s Export (Bermuda) Limited
	10	.4		Subscription Agreement, dated as of February 18, 2005, by and between Castle Brands Inc. and Gosling-Castle Partners Inc.
	10	.5		Stockholders Agreement, dated February 18, 2005, by and among Gosling-Castle Partners Inc. and the persons listed on Schedule I thereto.
	10	.6		Promissory Note, dated February 18, 2005, issued by Castle Brands Inc. in favor of Gosling-Castle Partners Inc.
	10	.7**		Agreement, dated as of August 27, 2004, between I.L.A.R. S.p.A. and Castle Brands (USA) Corp.
	10	.8**		Supply Agreement, dated as of January 1, 2005, between Irish Distillers Limited and Castle Brands Spirits Group Limited and Castle Brands (USA) Corp.

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Exhibit Number				Exhibit
	10	.9		Amendment No. 1 to Supply Agreement, dated as of September 20, 2005, to the Supply Agreement, dated as of January 1, 2005, among Irish Distillers Limited and Castle Brands Spirits Group Limited and Castle Brands (USA) Corp.
	10	.10**		Amended and Restated Worldwide Distribution Agreement, dated as of April 16, 2001, by and between Great Spirits Company LLC and Gaelic Heritage Corporation Limited
	10	.11**		Bottling and Services Agreement, dated as of September 1, 2002, by and between Terra Limited and The Roaring Water Bay Spirits Company Limited
	10	.12		Amendment to Bottling and Services Agreement, dated as of March 1, 2005, by and between Terra Limited and Castle Brands Spirit Company Limited
	10	.13		Amended and Restated Convertible Note Purchase Agreement, dated as of August 16, 2005, by and between Castle Brands Inc., Mellon HBV SPV LLC and Black River Global Credit Fund Ltd.
	10	.14		Amended and Restated Convertible Promissory Note, dated March 1, 2005, issued by Castle Brands Inc. in favor of Mellon HBV SPV LLC.
	10	.15		Amended and Restated Convertible Promissory Note, dated June 27, 2005, issued by Castle Brands Inc. in favor of Mellon HBV SPV LLC.
	10	.16		Convertible Promissory Note, dated August 16, 2005, issued by Castle Brands Inc. in favor of Black River Global Credit Fund Ltd.
	10	.17		License Agreement, dated December 1, 2003, between The Roaring Water Bay (Research and Development) Company Limited and GSRWB, Inc.
	10	.18*		Amended and Restated Employment Agreement, effective as of May 4, 2005, by and between Castle Brands Inc. and Mark Andrews
	10	.19*		Amended and Restated Employment Agreement, effective as of July 19, 2005, by and between Castle Brands Inc. and T. Kelley Spillane
	10	.20		Employment Agreement, dated as of May 2, 2005 by and between Castle Brands Inc. and Keith A. Bellinger
	10	.21		Summary of employment agreement with Matthew F. MacFarlane
	10	.22		Non-Competition Deed, dated December 1, 2003, between GSRWB, Inc. and David Phelan
	10	.23		Letter Agreement, dated August 4, 2005, between Castle Brands Inc. and David Phelan
	10	.24		Letter Agreement, dated February 15, 2005, between Castle Brands Inc. and Patrick Rigney

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Exhibit Number				Exhibit
	10	.25		Letter Consulting Agreement, dated August 4, 2005, between Castle Brands Inc. and David Phelan
	10	.26		Letter Consulting Agreement, dated August 2, 2005, between Castle Brands Inc. and Patrick Rigney
	10	.27**		Supply Agreement, dated January 19, 1998, by and between Carbery Milk Products Limited and The Roaring Water Bay Spirits Company Limited
	10	.28**		Amendment and Consent, dated March 1, 2003, to Supply Agreement, dated January 19, 1998, by and between Carbery Milk Products Limited and Castle Brands Inc.
	10	.29		Castle Brands Inc. 2003 Stock Incentive Plan, as amended
	10	.30		Amendment to Castle Brands Inc. 2003 Stock Incentive Plan
	10	.31		Letter Agreement, dated as of December 1, 2004, between MHW, Ltd. and Castle Brands (USA) Corp.
	10	.32		Sublease, dated as of June 24, 2004, by and between Silvercrest Asset Management Group, LLC, as successor in interest to James C. Edwards & Co., Inc. and Castle Brands (USA) Corp.
	10	.33		Indenture of Sublease, dated June 2004, by and between Jennifer Dunne and Castle Brand Spirits Company Limited
	10	.34		Office Lease, dated as of February 24, 2000, by and between Great Spirits Company LLC and Crescent HC Investors L.P.
	10	.35		First Amendment to Office Lease, dated March 14, 2001
	10	.36		Second Amendment to Office Lease, dated January 30, 2002
	10	.37		Third Amendment to Office Lease, dated March 28, 2003
	10	.38		Fourth Amendment to Office Lease, dated March 23, 2004
	10	.39		Fifth Amendment to Office Lease, dated June 21, 2005
	10	.40		First Supplemental Trust Indenture, dated as of August 15, 2005, by and between Castle Brands (USA) Corp. and JPMorgan Chase Bank, as trustee and MHW Ltd., as collateral agent
	10	.41		First Amended and Restated Trust Indenture, dated as of August 15, 2005, by and between Castle Brands (USA) Corp., JPMorgan Chase Bank, as trustee and MHW Ltd., as collateral agent
	10	.42		9% Secured Note dated August 15, 2005 issued by Castle Brand (USA) Corp. in favor of JPMorgan Chase Bank, as trustee

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Exhibit Number				Exhibit
	10	.43		General Security Agreement, dated as of June 1, 2004, by and between Castle Brands (USA) Corp. and JPMorgan Chase Bank, as trustee
	10	.44		First Amendment to General Security Agreement, dated as of August 15, 2005, by and between Castle Brands (USA) Corp. and JPMorgan Chase Bank, as trustee
	10	.45		Guaranty of Payment and Performance, dated June 1, 2004, from Castle Brands Inc. to JPMorgan Chase Bank, as trustee
	10	.46		First Amendment to Guarantee of Payment and Performance, dated as of August 15, 2005, by and between Castle Brands Inc. to JPMorgan Chase Bank, as trustee
	10	.47		Collateral Agreement, dated as of June 1, 2004, by and among MHW Ltd., Castle Brands (USA) Corp. and JPMorgan Chase Bank, as trustee
	10	.48		First Amendment to Collateral Agreement, dated as of August 15, 2005, by and among MHW Ltd., Castle Brands (USA) Corp. and JPMorgan Chase Bank, as trustee
	10	.49		Credit Facility Agreement, dated as of December 16, 2004, by and among Ulster Bank Ireland Limited, Ulster Bank Ltd. and Castle Brands Spirits Company Limited
	10	.50		Accounts Receivable Credit Facility Agreement, dated as of April 4, 2005, by and among Ulster Bank Ireland Limited, Ulster Bank Ltd. and Castle Brands Spirits Company Limited
	10	.51		Contract, dated as of April 1, 2005, by and between Castle Brands Inc. and BPW LLC
	16	.1		Letter from Grodsky Caporrino & Kaufman, PC
	21	.1		List of Subsidiaries of the Registrant
	23	.1		Consent of Eisner LLP, Independent Registered Public Accounting Firm
	23	.2		Consent of BDO Simpson Xavier, Independent Registered Public Accounting Firm (The Castle Brands Spirits Company Limited (formerly known as The Roaring Water Bay Spirits Company Limited))
	23	.3		Consent of BDO Simpson Xavier, Independent Registered Public Accounting Firm (The Roaring Water Bay Spirits Company (GB) Limited)
	23	.4*		Consent of Patterson Belknap Webb & Tyler LLP (included in exhibit 5.1)
	24	.1		Power of Attorney (included on the Signature Page of the Registration Statement)

*	To be filed by amendment.

**	Confidential treatment requested for certain portions of this exhibit pursuant to Rule 406 under the Securities Exchange Act of 1934, as amended, which portions are omitted and filed separately with the Securities and Exchange Commission.