U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

                 Quarterly Report under Section 13 or 15 (d) of
                         Securities Exchange Act of 1934

                     For the Period ended September 30, 2007

                        Commission File Number 333-143236


                                 CASTILLO, INC.
                 (Name of small business issuer in its charter)

        Nevada                                                  20-8441697
(State of incorporation)                                (IRS Employer ID Number)

                           9880 N. Magnolia Ave. #185
                                Santee, CA 92071
                                 (775) 352-4112
          (Address and telephone number of principal executive offices)

                           9880 N. Magnolia Ave. #185
                                Santee, CA 92071
                                 (775) 352-4112
            (Name, address and telephone number of agent for service)

                           Copies of Communication to:
                                 Joseph I. Emas
                             1224 Washington Avenue
                              Miami Beach, FL 33139
                     Phone: (305)531-1174 Fax: (305)531-1274

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes [X] No [ ]

Check whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act). Yes [X] No [ ]

There were 9,000,000 shares of Common Stock outstanding as of September 30,
2007.
<PAGE>
ITEM 1. FINANCIAL STATEMENTS

                                 Castillo, Inc.
                          (A Development Stage Company)
                                 Balance Sheet
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                           As of              As of
                                                                          Sept. 30,          March 31,
                                                                            2007               2007
                                                                          --------           --------
<S>                                                                       <C>                <C>
                                     ASSETS

CURRENT ASSETS
  Cash                                                                    $  5,499           $  8,925
                                                                          --------           --------
TOTAL CURRENT ASSETS                                                         5,499              8,925

OTHER ASSETS
  Organizational Costs                                                         300
  Deposits                                                                   2,145              2,145
                                                                          --------           --------
TOTAL OTHER ASSETS                                                           2,445              2,145
                                                                          --------           --------

      TOTAL ASSETS                                                        $  7,944           $ 11,070
                                                                          ========           ========

                       LIABILITIES & STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
  Accounts Payable                                                        $     --           $     --
  Loan from Director                                                         4,645              2,145
                                                                          --------           --------
TOTAL CURRENT LIABILITIES                                                    4,645              2,145

TOTAL LIABILITIES                                                            4,645              2,145

STOCKHOLDERS' EQUITY
  Common stock, ($0.001 par value, 50,000,000 shares authorized;
   9,000,000 and 3,000,000 shares issued and outstanding
   as of September 30 and March 31, 2007 respectively                        9,000              3,000
  Additional paid-in capital                                                18,000              6,000
  Deficit accumulated during Development stage                             (23,701)               (75)
                                                                          --------           --------
TOTAL STOCKHOLDERS' EQUITY                                                   3,299              8,925
                                                                          --------           --------

      TOTAL LIABILITIES & STOCKHOLDERS' EQUITY                            $  7,944           $ 11,070
                                                                          ========           ========
</TABLE>

                       See Notes to Financial Statements

                                       2
<PAGE>
                                 Castillo, Inc.
                          (A Development Stage Company)
                             Statement of Operations
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                                        February 2, 2007
                                                Three Months          Six Months          (inception)
                                                   Ended                Ended               through
                                                  Sept 30,             Sept 30,             Sept 30,
                                                    2007                 2007                 2007
                                                 ----------           ----------           ----------
<S>                                              <C>                  <C>                  <C>
REVENUES
  Revenues                                       $       --           $       --           $       --
                                                 ----------           ----------           ----------
TOTAL REVENUES                                           --                   --                   --

GENERAL & ADMINISTRATIVE EXPENSES                    17,292               23,626               23,701
                                                 ----------           ----------           ----------
TOTAL GENERAL & ADMINISTRATIVE EXPENSES             (17,292)             (23,626)             (23,701)
                                                 ----------           ----------           ----------

NET INCOME (LOSS)                                $  (17,292)          $  (23,626)          $  (23,701)
                                                 ==========           ==========           ==========

BASIC EARNINGS PER SHARE                         $    (0.00)          $    (0.01)
                                                 ==========           ==========
WEIGHTED AVERAGE NUMBER OF
 COMMON SHARES OUTSTANDING                        6,652,174            4,423,729
                                                 ==========           ==========
</TABLE>


                       See Notes to Financial Statements

                                       3
<PAGE>
                                 Castillo, Inc.
                          (A Development Stage Company)
                             Statement of Cash Flows
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                                      February 2, 2007
                                                                     Three Months        (inception)
                                                                        Ended             through
                                                                       Sept. 30,          Sept. 30,
                                                                         2007               2007
                                                                       --------           --------
<S>                                                                    <C>                <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net income (loss)                                                    $(23,626)          $(23,701)
  Adjustments to reconcile net loss to net cash
   provided by (used in) operating activities:

  Changes in operating assets and liabilities:
    (Increase) Decrease in Deposits                                        (300)              (300)
    Increase (Decrease) in Accounts Payables                              2,500              2,500
                                                                       --------           --------
          NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES           (21,426)           (21,501)

CASH FLOWS FROM INVESTING ACTIVITIES

          NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES                --                 --

CASH FLOWS FROM FINANCING ACTIVITIES
  Issuance of common stock                                                6,000              9,000
  Additional paid-in capital                                             12,000             18,000
                                                                       --------           --------
          NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES            18,000             27,000
                                                                       --------           --------

NET INCREASE (DECREASE) IN CASH                                          (3,426)             5,499

CASH AT BEGINNING OF PERIOD                                               8,925                 --
                                                                       --------           --------
CASH AT END OF PERIOD                                                  $  5,499           $  5,499
                                                                       ========           ========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

Cash paid during year for:
  Interest                                                             $     --           $     --
                                                                       ========           ========
  Income Taxes                                                         $     --           $     --
                                                                       ========           ========
</TABLE>

                       See Notes to Financial Statements

                                       4
<PAGE>
                                 CASTILLO, INC.
                          (A Development Stage Company)
                          Notes to Financial Statements
                               September 30, 2007


NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS

         Castillo,  Inc. (the "Company") was incorporated in the State of Nevada
         on February 2, 2007.  The Company is a  development  stage company that
         intends to open and operate retail  establishments  selling perfume and
         body products. On July 13, 2007, the SB-2 Registration  Statement filed
         by the  company  on May 24,  2007  with  the  Securities  and  Exchange
         Commission  registering  6,000,000 shares of common stock for sale, was
         declared effective. The offering was completed on July 31, 2007 selling
         6,000,000  shares to 36  un-affiliated  investors for total proceeds of
         $18,000.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         A. BASIS OF PRESENTATION

         The  accounting and reporting  policies of the Company  conform to U.S.
         generally  accepted  accounting  principles  applicable to  development
         stage enterprises.

         B. FISCAL PERIODS

         The Company's fiscal year end is December 31.

         C. USE OF ESTIMATES

         The  preparation  of  financial  statements  in  conformity  with  U.S.
         generally accepted  accounting  principles  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  amount  of
         revenues and expenses during the reporting period. Actual results could
         differ from those estimates.

         D. CASH AND CASH EQUIVALENTS

         Cash and cash  equivalents  include cash in banks,  money market funds,
         and  certificates  of term deposits with  maturities of less than three
         months from inception,  which are readily  convertible to known amounts
         of cash and which,  in the  opinion of  management,  are  subject to an
         insignificant risk of loss in value. The Company had $5,499 in cash and
         cash equivalents at September 30, 2007.

         E. START-UP COSTS

         In  accordance  with  the  American   Institute  of  Certified   Public
         Accountants  Statement  of Position  98-5,  "Reporting  on the Costs of
         Start-up  Activities",  the  Company  expenses  all costs  incurred  in
         connection with the start-up and organization of the Company.

                                       5
<PAGE>
                                 CASTILLO, INC.
                          (A Development Stage Company)
                          Notes to Financial Statements
                               September 30, 2007


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

         F.  FAIR  VALUE  OF  FINANCIAL  INSTRUMENTS  AND  DERIVATIVE  FINANCIAL
             INSTRUMENTS

         The Company has adopted  Statement  of Financial  Accounting  Standards
         ("SFAS") Number 119, "Disclosure About Derivative Financial Instruments
         and Fair  Value of  Financial  Instruments."  The  carrying  amount  of
         accrued  liabilities  approximates  its fair value because of the short
         maturity of this item.  Certain fair value  estimates may be subject to
         and involve,  uncertainties and matters of significant judgement,  and,
         therefore, cannot be determined with precision.  Changes in assumptions
         could significantly  affect these estimates.  The Company does not hold
         or  issue  financial  instruments  for  trading  purposes,  nor does it
         utilize  derivative  instruments  in  the  management  of  its  foreign
         exchange, commodity price or interest rate market risks.

         G. SEGMENTED REPORTING

         SFAS Number  131,  "Disclosure  About  Segments  of an  Enterprise  and
         Related   Information",   changed  the  way  public   companies  report
         information about segments of their business in their quarterly reports
         issued to shareholders.  It also requires entity-wide disclosures about
         the products and services an entity provides, the material countries in
         which it holds assets and reports revenues and its major customers. The
         company plans to open and operate its retail establishments in Mexico.

         H. FEDERAL INCOME TAXES

         Deferred income taxes are reported for timing differences between items
         of income or expense  reported in the  financial  statements  and those
         reported  for income tax purposes in  accordance  with SFAS Number 109,
         "Accounting   for  Income  Taxes",   which  requires  the  use  of  the
         asset/liability  method of accounting for income taxes. Deferred income
         taxes and tax benefits 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
         bases, and for tax loss and credit  carryforwards.  Deferred tax assets
         and  liabilities are measured using enacted tax rates expected to apply
         to taxable income in the years in which those temporary differences are
         expected to be recovered or settled.  The Company provides for deferred
         taxes for the estimated  future tax effects  attributable  to temporary
         differences and carryforwards when realization is more likely than not.

         I. EARNINGS (LOSS) PER SHARE

         The Company has adopted Financial  Accounting  Standards Board ("FASB")
         Statement  Number 128,  "Earnings per Share,"  ("EPS")  which  requires
         presentation  of  basic  and  diluted  EPS on the  face  of the  income
         statement for all entities with complex capital structures and requires
         a  reconciliation  of the  numerator and  denominator  of the basic EPS
         computation  to  the  numerator  and  denominator  of the  diluted  EPS
         computation.  In the  accompanying financial statements, basic earnings

                                       6
<PAGE>
                                 CASTILLO, INC.
                          (A Development Stage Company)
                          Notes to Financial Statements
                               September 30, 2007


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

         (loss)  per  share is  computed  by  dividing  net  income/loss  by the
         weighted  average number of shares of common stock  outstanding  during
         the period.

         J. FOREIGN CURRENCY TRANSACTIONS

         The  Company's  functional  currency  will  be the  Mexican  Peso.  The
         Company's  reporting  currency  is the U.S.  Dollar.  All  transactions
         initiated in Mexican Pesos are translated to U.S. Dollars in accordance
         with SFAS No. 52 "Foreign Currency Translation" as follows:

          (i)  Monetary assets and liabilities at the rate of exchange in effect
               at the balance sheet date;
          (ii) Equity at historical rates; and
          (iii)Revenue  and  expense  items  at the  average  rate  of  exchange
               prevailing during the period.

         Adjustments   arising  from  such   translations   are  deferred  until
         realization and are included as a separate  component of  stockholders'
         equity as a  component  of  comprehensive  income  or loss.  Therefore,
         translation  adjustments  are not  included in  determining  net income
         (loss) but reported as other comprehensive income.

         For foreign currency transactions, the Company translates these amounts
         to the Company's  functional currency at the exchange rate effective on
         the invoice  date.  If the exchange  rate  changes  between the time of
         purchase  and the time  actual  payment  is made,  a  foreign  exchange
         transaction  gain or loss results which is included in determining  net
         income for the period.

         No  significant  realized  exchange  gains or losses were recorded from
         inception (February 2, 2007) to September 30, 2007.

         K. STOCK-BASED COMPENSATION

         The Company adopted the provisions of Statement of Financial Accounting
         Standards ("SFAS") No. 123(R), "Share-Based Payment", which establishes
         accounting  for equity  instruments  exchanged  for employee  services.
         Under the provisions of SFAS 123(R),  stock-based  compensation cost is
         measured at the grant date,  based on the calculated  fair value of the
         award,  and is recognized as an expense over the  employees'  requisite
         service period (generally the vesting period of the equity grant).  The
         Company  accounts  for  share-based   payments  to  non-employees,   in
         accordance  with SFAS 123 (as  originally  issued) and Emerging  Issues
         Task force Issue No 96-18,  "Accounting for Equity Instruments That Are
         Issued to Other Than  Employees for Acquiring,  or in Conjunction  with
         Selling, Goods or Services".

                                       7
<PAGE>
                                 CASTILLO, INC.
                          (A Development Stage Company)
                          Notes to Financial Statements
                               September 30, 2007


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

         L. COMPREHENSIVE INCOME (LOSS)

         SFAS No. 130, "Reporting  Comprehensive Income",  establishes standards
         for reporting and display of comprehensive income and its components in
         a full set of  general-purpose  financial  statements.  For the  period
         ended   September  30,  2007,   the  Company  had  no  items  of  other
         comprehensive income. Therefore, net loss equals comprehensive loss for
         the period ended September 30, 2007.

         M. REVENUE RECOGNITION

         The Company  recognizes revenue from the sale of products in accordance
         with the Securities and Exchange  Commission Staff Accounting  Bulletin
         No. 104 ("SAB 104"),  "Revenue  Recognition  in Financial  Statements."
         Revenue will consist of retail sales income and will be recognized only
         when all of the following criteria have been met:

          (i)   Evidence of a retail sales ticket exists;
          (ii)  Delivery has occurred; and
          (iii) Revenue is reasonably assured.

NOTE 3 - CAPITAL STOCK

         A) AUTHORIZED STOCK:

         The Company has authorized 50,000,000 common shares with a par value of
         $0.001 per share. Each common share entitles the holder to one vote, in
         person or proxy,  on any matter on which action of the  stockholder  of
         the corporation is sought.

         B) SHARE ISSUANCE:

         From inception of the Company (February 2, 2007) to September 30, 2007,
         the  Company  issued  9,000,000  common  shares at $0.003 per share for
         total proceeds of $27,000 being $9,000 for par value shares and $18,000
         for  additional  paid in capital.  3,000,000  shares were issued to the
         director and officer of the Company and 6,000,000 shares were issued to
         36 un-affiliated investors pursuant to a SB-2 Registration Statement.

NOTE 4 - GOING CONCERN AND LIQUIDITY CONSIDERATIONS

         The accompanying  financial statements have been prepared assuming that
         the Company will continue as a going concern,  which  contemplates  the
         realization of assets and the  liquidation of liabilities in the normal
         course of  business.  As at  September  30,  2007,  the  Company has an
         accumulated  deficit  of  $23,701,  working  capital  of $5,499 and has
         earned  no  revenues  since   inception.   The  existing  cash  may  be
         insufficient  to fund its  capital  expenditures,  working  capital and
         other cash requirements for the year ending December 31, 2007.

                                       8
<PAGE>
                                 CASTILLO, INC.
                          (A Development Stage Company)
                          Notes to Financial Statements
                               September 30, 2007


NOTE 4 - GOING CONCERN AND LIQUIDITY CONSIDERATIONS(continued)

         The  ability of the  Company to emerge  from the  development  stage is
         dependent upon,  among other things,  revenues or obtaining  additional
         financing to continue operations.

         These  factors,   among  others,  raise  substantial  doubt  about  the
         Company's  ability to continue  as a going  concern.  The  accompanying
         financial  statements do not include any adjustments  that might result
         from the outcome of this uncertainty.

NOTE 5 - INCOME TAXES

         The  Company  has  incurred  operating  losses of  $23,701,  which,  if
         utilized, will begin to expire in 2027. Future tax benefits,  which may
         arise as a result of these  losses,  have not been  recognized in these
         financial statements, and have been off set by a valuation allowance.

         Details of future income tax assets are as follows:

                                                                  September 30,
                                                                      2007
                                                                    --------
         Future income tax assets:
         Net operating loss (from inception to June 30, 2007)       $ 23,701
         Statutory tax rate (combined federal and state)                  34%
                                                                    --------
         Non-capital tax loss                                          8,058
         Valuation allowance                                          (8,058)
                                                                    --------
                                                                    $     --
                                                                    ========

         The  potential  future  tax  benefits  of  these  losses  have not been
         recognized in these  financial  statements  due to uncertainty of their
         realization.  When  the  future  utilization  of  some  portion  of the
         carryforwards  is  determined  not to be  "more  likely  than  not,"  a
         valuation  allowance  is provided to reduce the  recorded  tax benefits
         from such assets.

NOTE 6 - NEW ACCOUNTING PRONOUNCEMENTS

         None of the following new pronouncements has current application to the
         Company,  but will be  implemented  in the Company's  future  financial
         reporting when applicable.

         In May 2005,  the FASB  issued SFAS No.  154,  "Accounting  Changes and
         Error  Corrections,  a  replacement  of APB  Opinion  No.  20 and  FASB
         Statement  No. 3." This  statement  changes  the  requirements  for the
         accounting  for and  reporting  of a change  in  accounting  principle.
         Previously,   Opinion  20  required  that  most  voluntary  changes  in
         accounting  principle be  recognized  by including in net income of the
         period of change the cumulative  effect of changing to a new principle.

                                       9
<PAGE>
                                 CASTILLO, INC.
                          (A Development Stage Company)
                          Notes to Financial Statements
                               September 30, 2007


NOTE 6 - NEW ACCOUNTING PRONOUNCEMENTS (continued)

         This  statement  requires  retrospective  application to prior periods'
         financial   statements  of  changes  in  accounting   principle,   when
         practicable.

         In February 2006, FASB issued Financial  Accounting  Standards No. 155,
         "Accounting for Certain Hybrid Financial  Instruments - an amendment of
         FASB Statements No. 133 and 140. This Statement  amends FASB Statements
         No. 133, Accounting for Derivative  Instruments and Hedging Activities,
         and No. 140, Accounting for Transfers and Servicing of Financial Assets
         and  Extinguishments  of  Liabilities.  This Statement  resolves issues
         addressed in Statement 133 Implementation Issue No. D1, "Application of
         Statement 133 to Beneficial Interests in Securitized Financial Assets."
         SFAS 155 is effective for all financial  instruments acquired or issued
         after the beginning of an entity's  first fiscal year that begins after
         September 15, 2006.

         In March 2006,  FASB issued  Financial  Accounting  Standards  No. 156,
         "Accounting  for  Servicing of Financial  Assets - an amendment of FASB
         Statement  No.  140." This  Statement  amends FASB  Statement  No. 140,
         Accounting  for  Transfers  and  Servicing  of  Financial   Assets  and
         Extinguishments  of  Liabilities,  with respect to the  accounting  for
         separately recognized servicing assets and servicing liabilities.  SFAS
         156 is effective  in the first fiscal year that begins after  September
         15, 2006.

         In September 2006, FASB issued Financial  Accounting Standards No. 157,
         "Fair  Value   Measurements."   This  Statement   defines  fair  value,
         establishes a framework for measuring fair value in generally  accepted
         accounting  principles (GAAP), and expands disclosures about fair value
         measurements.   This   Statement   applies   under   other   accounting
         pronouncements  that  require or permit  fair value  measurements,  the
         Board having  previously  concluded in those accounting  pronouncements
         that fair value is the  relevant  measurement  attribute.  Accordingly,
         this  Statement  does  not  require  any new fair  value  measurements.
         However,  for some  entities,  the  application  of this Statement will
         change current practice. SFAS 157 is effective in the first fiscal year
         that begins after November 15, 2007.

         In September 2006, FASB issued Financial  Accounting Standards No. 158,
         "Employers'   Accounting   for  Defined   Benefit   Pension  and  Other
         Postretirement Plans - an amendment of FASB Statements No. 87, 88, 106,
         and 132(R)." This Statement improves  financial  reporting by requiring
         an employer to recognize  the  overfunded  or  underfunded  status of a
         defined benefit  postretirement  plan (other than a multiemployer plan)
         as an asset or liability in its statement of financial  position and to
         recognize  changes  in that  funded  status  in the year in  which  the
         changes  occur  through  comprehensive  income of a business  entity or
         changes in unrestricted  net assets of a  not-for-profit  organization.
         This  Statement  also  improves  financial  reporting  by  requiring an
         employer to measure  the funded  status of a plan as of the date of its
         year-end statement of financial position, with limited exceptions. SFAS
         158 is effective. An employer with publicly traded equity securities is
         required to initially  recognize the funded status of a defined benefit

                                       10
<PAGE>
                                 CASTILLO, INC.
                          (A Development Stage Company)
                          Notes to Financial Statements
                               September 30, 2007


NOTE 6 - NEW ACCOUNTING PRONOUNCEMENTS (continued)

         postretirement  plan and to provide the required  disclosures as of the
         end of the first fiscal year ending after December 15, 2006.

         In February 2007, FASB issued Financial  Accounting  Standards No. 159,
         "The  Fair  Value   Option   for   Financial   Assets   and   Financial
         Liabilities--Including  an amendment of FASB  Statement  No. 115." This
         Statement   permits  entities  to  choose  to  measure  many  financial
         instruments and certain other items at fair value.  The objective is to
         improve financial  reporting by providing entities with the opportunity
         to mitigate volatility in reported earnings caused by measuring related
         assets and  liabilities  differently  without  having to apply  complex
         hedge accounting  provisions.  This Statement is expected to expand the
         use of fair value  measurement,  which is  consistent  with the Board's
         long-term   measurement   objectives   for   accounting  for  financial
         instruments.  SFAS 159 is effective as of the  beginning of an entity's
         first fiscal year that begins after November 15, 2007.

NOTE 7 - RELATED PARTY TRANSACTIONS

         While the company was in its  organizational  phase, Ms. Ochoa advanced
         funds to the company to pay for any costs  incurred by it.  These funds
         are interest  free.  The balance due Ms. Ochoa was $ 4,645 on September
         30, 2007.

                                       11
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

RESULTS OF OPERATIONS

We are still in our development stage and have generated no revenue to date.

We incurred operating expenses of $17,292 for the three-month period ended
September 30, 2007. These expenses consisted of general and administrative
expenses.

At September 30, 2007, we had cash on hand of $5,499. At the same date, our
liabilities were $4,645 consisting of a loan from our president.

Cash provided by financing activities from inception though September 30, 2007
was $27,000, $9,000 resulting from the sale of our common stock to our director,
Emilia Ochoa, who purchased 3,000,000 shares of our Common Stock at $0.003 per
share on March 13, 2007 and $18,000 from the sale of 6,000,000 shares pursuant
to our offering.

Our auditors have expressed their doubt about our ability to continue as a going
concern unless we are able to generate profitable operations.

LIQUIDITY AND CAPITAL RESOURCES

Our cash balance at September 30, 2007 was $5,499. In order to implement our
business plan we needed to complete our offering pursuant to our SB-2
registration statement to raise $18,000. The offering was completed on July 31,
2007. We currently have plans to hire one additional employee in the next twelve
months.

OFF-BALANCE SHEET ARRANGEMENTS

We do not have any off-balance sheet arrangements that have or are reasonably
likely to have a current or future effect on our financial condition, changes in
financial condition, revenues or expenses, results of operations, liquidity,
capital expenditures or capital resources that is material to investors.

PLAN OF OPERATION

We have generated no revenues since inception and have incurred $23,701 in
expenses as of September 30, 2007.

The following table provides selected financial data about our company for the
period from the date of incorporation through September 30, 2007.

                      Balance Sheet Data:          9/30/07
                      -------------------          -------

                      Cash                          $5,499
                      Total assets                  $7,944
                      Total liabilities             $4,645
                      Shareholders' equity          $3,299

                                       12
<PAGE>
Other than the shares offered pursuant to our Registration Statement, no other
source of capital has been identified or sought. Our director has verbally
agreed to loan the company funds to continue operations, if necessary, prior to
generating revenues from operations, but there is no formal commitment,
arrangement or legal obligation requiring her to advance or loan funds to us. As
of September 30, 2007 our director had loaned the company $4,645. The loan is
non-interest bearing and has no specific terms of repayment.

Our director determined the most suitable location for our retail store and
negotiated rental terms which commenced on the 1st day of June, 2007. The
determination of the suitability of the retail site was made primarily on the
following three factors: location, price and "move-in" ready condition. We will
be utilizing primarily free-standing merchandise displays for cost-efficiency so
the space needed to be open but also have an office area and workspace with
storage.

During the first year of operations, now that we have found our required
investment capital and applied to get our common stock listed on a national
exchange, we will make the necessary improvements to our rental property, source
the required inventory and supplies, and commence with production of our
products to sell to the public.

We estimate that we will not be able to generate significant revenues from sales
within the first year.

PROPOSED MILESTONES TO IMPLEMENT OUR PLAN OF OPERATIONS:

Our director has outlined the following milestones for our business plan. The
projected milestones are approximations only, and are subject to cost and
timetable adjustments based upon the requirements of the business.

MONTHS 1-6:

We have secured the necessary funding from the offering to implement our
proposed business plan and took the necessary steps to have our stock approved
for listing on the OTC Bulletin Board. Our director has spent time designing the
labels and packaging for our proprietary products, researching various
distributors of perfumes, body products and scent formulations, as well as
determining the layout and design of the retail space. We have been paying $300
per month for our retail space and paid $300 as a security deposit. Our director
has received compensation of $500 per month.

MONTHS 7-9:

We intend to complete the design of our retail space and begin preparing the
property for opening. We plan to utilize neutral color paint and fixtures with
clear glass display shelving and wall mirror placement that will showcase the
products and allow us to change out color schemes with relative ease. The
color-coordinated packaging of our products as well as the fresh flower
arrangements will be the focus of the space. Our director is aware of three
companies in the Tijuana and San Diego area who specialize in refurbished or

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"gently used" retail merchandizing displays and will attempt to purchase as many
of the required displays from one of them as it will lower set-up costs
significantly from having to purchase new. We estimate the following costs for
this time period:

         Rental payments of $900
         Property improvements (paint, fixtures, etc.) $1,000
         Merchandizing displays $3,000
         Officer Salary $1,500

MONTHS 10-11:

We will begin purchasing our retail inventory and also complete the formulation
of our proprietary products. Labels and packaging will be completed and gift
baskets will be designed and assembled. Final finishes will be completed on our
store set-up. We will contract with an outside vendor to provide the fresh
flowers we will have for purchase. Our director will decide on the best
marketing and advertising plan which could include grand opening
flyers/brochures, newspaper advertising, or possibly placement of some of our
gift baskets or brochures in other retail establishments such as spas, salons or
hotels in the area. We estimate the following costs for this time period:

         Rental payments of $600
         Inventory & Supplies $5,000
         Officer Salary $1,000

MONTH 12:

During the first two weeks we intend to conduct interviews with potential staff
and hire one person to assist our director with our store opening. We will begin
our marketing and advertising efforts and have our grand opening.

         Rental payment $300
         Advertising $750
         Supplies $350
         Staff Salary $500
         Officer Salary $500

Total estimated costs for opening our first retail location is $16,900. We have
also reserved $1,100 which includes $600 for two months rent payment and $500
for staff salary of one month after our opening as we realize that immediate
sales may not cover all of our expenses. Our director has also agreed to loan
the company funds in the event we have a shortfall in operating capital in our
start-up phase. Once revenues are sufficient we may consider hiring additional
staff to assist our director and one employee.

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CRITICAL ACCOUNTING POLICIES

The un-audited financial statements as of September 30, 2007 included herein
have been prepared without audit pursuant to the rules and regulations of the
U.S. Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with general accepted accounting procedures have been condensed or omitted
pursuant to such rules and regulations. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary for a
fair presentation have been included. It is suggested that these financial
statements be read in conjunction with our March 31, 2007 audited financial
statements and notes thereto, which can be found in our Form SB-2 Registration
Statement on the SEC website at www.sec.gov under our SEC File Number
333-143236.

Our financial statements have been prepared in accordance with generally
accepted accounting principles in the United States. Because a precise
determination of many assets and liabilities is dependent upon future events,
the preparation of financial statements for a period necessarily involves the
use of estimates which have been made using careful judgement.

The financial statements have, in management's opinion, been properly prepared
within reasonable limits of materiality and within the framework of the
significant accounting policies summarized below:

BASIS OF PRESENTATION

The accounting and reporting policies of the Company conform to U.S. generally
accepted accounting principles applicable to development stage enterprises.

FISCAL PERIODS

The Company's fiscal year end is December 31.

USE OF ESTIMATES

The preparation of financial statements in conformity with U.S. generally
accepted accounting principles 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 amount of revenues and expenses during the reporting
period. Actual results could differ from those estimates.

CASH AND CASH EQUIVALENTS

Cash and cash equivalents include cash in banks, money market funds, and
certificates of term deposits with maturities of less than three months from
inception, which are readily convertible to known amounts of cash and which, in
the opinion of management, are subject to an insignificant risk of loss in
value. The Company had $5,499 in cash and cash equivalents at September 30,
2007.

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<PAGE>
START-UP COSTS

In accordance with the American Institute of Certified Public Accountants
Statement of Position 98-5, "Reporting on the Costs of Start-up Activities", the
Company expenses all costs incurred in connection with the start-up and
organization of the Company.

FAIR VALUE OF FINANCIAL INSTRUMENTS AND DERIVATIVE FINANCIAL INSTRUMENTS

The Company has adopted Statement of Financial Accounting Standards ("SFAS")
Number 119, "Disclosure About Derivative Financial Instruments and Fair Value of
Financial Instruments." The carrying amount of accrued liabilities approximates
its fair value because of the short maturity of this item. Certain fair value
estimates may be subject to and involve, uncertainties and matters of
significant judgment, and, therefore, cannot be determined with precision.
Changes in assumptions could significantly affect these estimates. The Company
does not hold or issue financial instruments for trading purposes, nor does it
utilize derivative instruments in the management of its foreign exchange,
commodity price or interest rate market risks.

SEGMENTED REPORTING

SFAS Number 131, "Disclosure About Segments of an Enterprise and Related
Information", changed the way public companies report information about segments
of their business in their quarterly reports issued to shareholders. It also
requires entity-wide disclosures about the products and services an entity
provides, the material countries in which it holds assets and reports revenues
and its major customers. The company plans to open and operate its retail
establishments in Mexico.

FEDERAL INCOME TAXES

Deferred income taxes are reported for timing differences between items of
income or expense reported in the financial statements and those reported for
income tax purposes in accordance with SFAS Number 109, "Accounting for Income
Taxes", which requires the use of the asset/liability method of accounting for
income taxes. Deferred income taxes and tax benefits 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 bases, and for tax loss and credit carryforwards. Deferred tax
assets and liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary differences are expected to
be recovered or settled. The Company provides for deferred taxes for the
estimated future tax effects attributable to temporary differences and
carryforwards when realization is more likely than not.

EARNINGS (LOSS) PER SHARE

The Company has adopted Financial Accounting Standards Board ("FASB") Statement
Number 128, "Earnings per Share," ("EPS") which requires presentation of basic
and diluted EPS on the face of the income statement for all entities with
complex capital structures and requires a reconciliation of the numerator and

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<PAGE>
denominator of the basic EPS computation to the numerator and denominator of the
diluted EPS computation. In the accompanying financial statements, basic
earnings (loss) per share is computed by dividing net income/loss by the
weighted average number of shares of common stock outstanding during the period.

FOREIGN CURRENCY TRANSACTIONS

The Company's functional currency will be the Mexican Peso. The Company's
reporting currency is the U.S. Dollar. All transactions initiated in Mexican
Pesos are translated to U.S. Dollars in accordance with SFAS No. 52 "Foreign
Currency Translation" as follows:

     a.   Monetary assets and liabilities at the rate of exchange in effect at
          the balance sheet date;
     b.   Equity at historical rates; and
     c.   Revenue and expense items at the average rate of exchange prevailing
          during the period.

Adjustments arising from such translations are deferred until realization and
are included as a separate component of stockholders' equity as a component of
comprehensive income or loss. Therefore, translation adjustments are not
included in determining net income (loss) but reported as other comprehensive
income.

For foreign currency transactions, the Company translates these amounts to the
Company's functional currency at the exchange rate effective on the invoice
date. If the exchange rate changes between the time of purchase and the time
actual payment is made, a foreign exchange transaction gain or loss results
which is included in determining net income for the period.

No significant realized exchange gains or losses were recorded from inception
(February 2, 2007) to September 30, 2007.

STOCK-BASED COMPENSATION

The Company adopted the provisions of Statement of Financial Accounting
Standards ("SFAS") No. 123(R), "Share-Based Payment", which establishes
accounting for equity instruments exchanged for employee services. Under the
provisions of SFAS 123(R), stock-based compensation cost is measured at the
grant date, based on the calculated fair value of the award, and is recognized
as an expense over the employees' requisite service period (generally the
vesting period of the equity grant). The Company accounts for share-based
payments to non-employees, in accordance with SFAS 123 (as originally issued)
and Emerging Issues Task force Issue No 96-18, "Accounting for Equity
Instruments That Are Issued to Other Than Employees for Acquiring, or in
Conjunction with Selling, Goods or Services".

COMPREHENSIVE INCOME (LOSS)

SFAS No. 130, "Reporting Comprehensive Income", establishes standards for
reporting and display of comprehensive income and its components in a full set
of general-purpose financial statements. For the period ended September 30,

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<PAGE>
2007, the Company had no items of other comprehensive income. Therefore, net
loss equals comprehensive loss for the period ended September 30, 2007.

REVENUE RECOGNITION

The Company recognizes revenue from the sale of products in accordance with the
Securities and Exchange Commission Staff Accounting Bulletin No. 104 ("SAB
104"), "Revenue Recognition in Financial Statements." Revenue will consist of
retail sales income and will be recognized only when all of the following
criteria have been met:

     a.   Evidence of a retail sales ticket exists;
     b.   Delivery has occurred; and
     c.   Revenue is reasonably assured.

ITEM 3. CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

Under the supervision and with the participation of our management, including
our principal executive officer and the principal financial officer, we have
conducted an evaluation of the effectiveness of the design and operation of our
disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e)
under the Securities and Exchange Act of 1934, as of the end of the period
covered by this report. Based on this evaluation, our principal executive
officer and principal financial officer concluded as of the evaluation date that
our disclosure controls and procedures were effective such that the material
information required to be included in our Securities and Exchange Commission
reports is recorded, processed, summarized and reported within the time periods
specified in SEC rules and forms relating to our company, particularly during
the period when this report was being prepared.

Additionally, there were no significant changes in our internal controls or in
other factors that could significantly affect these controls subsequent to the
evaluation date. We have not identified any significant deficiencies or material
weaknesses in our internal controls, and therefore there were no corrective
actions taken.

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<PAGE>
                           PART II - OTHER INFORMATION

ITEM 6. EXHIBITS

The following exhibits are included with this quarterly filing. Those marked
with an asterisk and required to be filed hereunder, are incorporated by
reference and can be found in their entirety in our Form SB-2 Registration
Statement, filed under SEC File Number 333-143236, at the SEC website at
www.sec.gov:

  Exhibit No.                          Description
  -----------                          -----------
      3.1      Articles of Incorporation*
      3.2      Bylaws*
     31.1      Certification pursuant to Rule 13a-14(a) under the Securities
               Exchange Act of 1934
     31.2      Certification pursuant to Rule 13a-14(a) under the Securities
               Exchange Act of 1934
     32.1      Certification pursuant to 18 U.S.C. Section 1350, as adopted
               pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
     32.2      Certification pursuant to 18 U.S.C. Section 1350, as adopted
               pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

                                   SIGNATURES

Pursuant to the requirements of Section 13(a) or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                           Castillo, Inc., Registrant


November 9, 2007           By: /s/ Emilia Ochoa
                              --------------------------------------------------
                              Emilia Ochoa, Director, President, Chief Executive
                              Officer, Chief Financial Officer and
                              Principal Accounting Officer

In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.

                           Castillo, Inc., Registrant


November 9, 2007           By: /s/ Emilia Ochoa
                              --------------------------------------------------
                              Emilia Ochoa, Director, President, Chief Executive
                              Officer, Chief Financial Officer and
                              Principal Accounting Officer

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