UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

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

                       For the Period ended March 31, 2008

                        Commission File Number 333-143236


                                 Castillo, Inc.
             (Exact name of Registrant as specified in its charter)

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

                           771 Jamacha Road, Suite 191
                               El Cajon, CA 92019
                                 (775) 352-4112
          (Address and telephone number of principal executive offices)

                           9880 N. Magnolia Ave. #185
                                Santee, CA 92071
                 (Former Address of principal executive offices)

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

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 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 [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting company.

Large accelerated filer [ ]                        Accelerated Filer [ ]

Non-accelerated filer [ ]                          Smaller reporting company [X]
(Do Not Check if a Smaller Reporting Company)

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

As of March 31, 2008, the registrant had 9,000,000 shares of common stock,
$0.001 par value, issued and outstanding.
<PAGE>
ITEM 1. FINANCIAL STATEMENTS.

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

<TABLE>
<CAPTION>
                                                                    As of              As of
                                                                   March 31,         December 31,
                                                                     2008               2007
                                                                   --------           --------
<S>                                                                <C>                <C>
                                     ASSETS

CURRENT ASSETS
  Cash                                                             $    459           $  3,519
                                                                   --------           --------
TOTAL CURRENT ASSETS                                                    459              3,519

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

      TOTAL ASSETS                                                 $  2,904           $  5,964
                                                                   ========           ========

                       LIABILITIES & STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
  Accounts Payable                                                 $     --           $     --
  Loan from Director                                                 12,145              7,145
                                                                   --------           --------
TOTAL CURRENT LIABILITIES                                            12,145              7,145

      TOTAL LIABILITIES                                              12,145              7,145

STOCKHOLDERS' EQUITY
  Common stock, ($0.001 par value, 50,000,000 shares
   authorized; 9,000,000 shares issued and outstanding as
   of March 31, 2008 and December 31, 2007 respectively               9,000              9,000
  Additional paid-in capital                                         18,000             18,000
  Deficit accumulated during Development stage                      (36,241)           (28,181)
                                                                   --------           --------
TOTAL STOCKHOLDERS' EQUITY                                           (9,241)            (1,181)
                                                                   --------           --------

      TOTAL LIABILITIES & STOCKHOLDERS' EQUITY                     $  2,904           $  5,964
                                                                   ========           ========
</TABLE>


                       See Notes to Financial Statements

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

<TABLE>
<CAPTION>
                                                                                     February 2, 2007
                                            Three Months         Three Months          (inception)
                                               Ended                Ended                through
                                              March 31,            March 31,            March 31,
                                                2008                 2007                 2008
                                             ----------           ----------           ----------
<S>                                          <C>                  <C>                  <C>
REVENUES
  Revenues                                   $       --           $       --           $       --
                                             ----------           ----------           ----------

TOTAL REVENUES                                       --                   --                   --

GENERAL & ADMINISTRATIVE EXPENSES                 8,060                   75               36,241
                                             ----------           ----------           ----------

TOTAL GENERAL & ADMINISTRATIVE EXPENSES          (8,060)                 (75)             (36,241)
                                             ----------           ----------           ----------

NET INCOME (LOSS)                            $   (8,060)          $      (75)          $  (36,241)
                                             ==========           ==========           ==========

BASIC EARNINGS PER SHARE                     $    (0.00)          $    (0.00)
                                             ==========           ==========
WEIGHTED AVERAGE NUMBER OF
 COMMON SHARES OUTSTANDING                    9,000,000            3,000,000
                                             ==========           ==========
</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       Three Months        (inception)
                                                                   Ended              Ended              through
                                                                  March 31,          March 31,          March 31,
                                                                    2008               2007               2008
                                                                  --------           --------           --------
<S>                                                               <C>                <C>                <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net income (loss)                                               $ (8,060)          $    (75)          $(36,241)
  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)
    (Increase) Decrease in Organization Costs                           --                 --             (2,145)
    Increase (Decrease) in Loan from Director                        5,000                 --             12,145
                                                                  --------           --------           --------
          NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES       (3,060)               (75)           (26,541)

CASH FLOWS FROM INVESTING ACTIVITIES

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

CASH FLOWS FROM FINANCING ACTIVITIES
  Issuance of common stock                                              --              3,000              9,000
  Additional paid-in capital                                            --              6,000             18,000
                                                                  --------           --------           --------
          NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES           --              9,000             27,000
                                                                  --------           --------           --------

NET INCREASE (DECREASE) IN CASH                                     (3,060)             8,925                459

CASH AT BEGINNING OF PERIOD                                          3,519                 --                 --
                                                                  --------           --------           --------

CASH AT END OF PERIOD                                             $    459           $  8,925           $    459
                                                                  ========           ========           ========

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
                                 March 31, 2008


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 $459 in cash and
         cash equivalents at March 31, 2008.

         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
                                 March 31, 2008


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

                                       6
<PAGE>
                                 CASTILLO, INC.
                          (A Development Stage Company)
                          Notes to Financial Statements
                                 March 31, 2008


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

         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 March 31, 2008.

         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".

         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 March 31, 2008, the

                                       7
<PAGE>
                                 CASTILLO, INC.
                          (A Development Stage Company)
                          Notes to Financial Statements
                                 March 31, 2008


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

         Company had no items of other comprehensive income. Therefore, net loss
         equals comprehensive loss for the period ended March 31, 2008.

         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 December 31, 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  March  31,  2008,  the  Company  has  an
         accumulated deficit of $36,241,  working capital of $459 and has earned
         no revenues since  inception.  The Company  intends to fund  operations
         through equity  financing  arrangements,  which may be  insufficient to
         fund  its  capital   expenditures,   working  capital  and  other  cash
         requirements.

         The  ability of the  Company to emerge  from the  development  stage is
         dependent upon, among other things,  obtaining  additional financing to
         continue operations, and implementation of its business plan.

         These  factors,   among  others,  raise  substantial  doubt  about  the
         Company's  ability to continue  as a going  concern.  The  accompanying

                                       8
<PAGE>
                                 CASTILLO, INC.
                          (A Development Stage Company)
                          Notes to Financial Statements
                                 March 31, 2008


NOTE 4 - GOING CONCERN AND LIQUIDITY CONSIDERATIONS(continued)

         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  $36,241,  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:

                                                                      March 31,
                                                                        2008
                                                                      --------
         Future income tax assets:
           Net operating loss (from inception to March 31, 2008)      $ 36,241
           Statutory tax rate (combined federal and state)                  34%
                                                                      --------
           Non-capital tax loss                                         12,322
           Valuation allowance                                         (12,322)
                                                                      --------
                                                                      $     --
                                                                      ========

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

                                       9
<PAGE>
                                 CASTILLO, INC.
                          (A Development Stage Company)
                          Notes to Financial Statements
                                 March 31, 2008


NOTE 6 - NEW ACCOUNTING PRONOUNCEMENTS (continued)

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

                                       10
<PAGE>
                                 CASTILLO, INC.
                          (A Development Stage Company)
                          Notes to Financial Statements
                                 March 31, 2008


NOTE 6 - NEW ACCOUNTING PRONOUNCEMENTS (continued)

         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  is in its  organizational  phase,  Ms.  Ochoa  has
         advanced  funds to the company to pay for costs  incurred by it.  These
         funds are interest free. The balance due Ms. Ochoa was $12,145 on March
         31, 2008.

                                       11
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Some of the statements contained in this Form 10-Q that are not historical facts
are "forward-looking statements" which can be identified by the use of
terminology such as "estimates," "projects," "plans," "believes," "expects,"
"anticipates," "intends," or the negative or other variations, or by discussions
of strategy that involve risks and uncertainties. We urge you to be cautious of
the forward-looking statements, that such statements, which are contained in
this Form 10-Q, reflect our current beliefs with respect to future events and
involve known and unknown risks, uncertainties and other factors affecting our
operations, market growth, services, products and licenses. No assurances can be
given regarding the achievement of future results, as actual results may differ
materially as a result of the risks we face, and actual events may differ from
the assumptions underlying the statements that have been made regarding
anticipated events.

All written forward-looking statements made in connection with this Form 10-Q
that are attributable to us or persons acting on our behalf are expressly
qualified in their entirety by these cautionary statements. Given the
uncertainties that surround such statements, you are cautioned not to place
undue reliance on such forward-looking statements.

The safe harbours of forward-looking statements provided by the Securities
Litigation Reform Act of 1995 are unavailable to issuers not subject to the
reporting requirements set forth under Section 13(a) or 15(d) of the Securities
Exchange Act of 1934, as amended. As we have not registered our securities
pursuant to Section 12 of the Exchange Act, such safe harbours set forth under
the Reform Act are unavailable to us.

BUSINESS

We are a start-up company that intends to market and sell fragrance based
products. Our first location is in Tijuana, Mexico. We intend to open retail
locations and utilize the business experience of management to develop product
lines and marketing strategies for our stores. Our primary target market is
women seeking perfumes and other aromatic products for personal use. Our
secondary market is men seeking colognes for themselves, or gift items for loved
ones.

We have secured funding from our offering to implement our proposed business
plan and have taken 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 receives
compensation of $500 per month.

During the next twelve months, 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 "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 will purchase 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. Our director will decide on the best marketing and advertising plan

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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 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.

Total estimated costs for opening our first retail location is $16,900. 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.

LIQUIDITY AND CAPITAL RESOURCES

Our cash balance at March 31, 2008 was $459. We believe our existing cash
balance plus loans from our director will be sufficient to fund our operations
for the next twelve months during our development stage. Our director loaned the
company a total of $12,145 as of March 31, 2008 and will continue to loan the
company funds on a month by month basis as needed. In the event our director
does not provide such funding our business will likely fail, cease operations,
and investors will likely lose their money. We are a development stage company
and have generated no revenue to date. We have sold $27,000 in equity securities
to pay for our operations.

RESULTS OF OPERATIONS

We have generated no revenues since inception and have incurred $36,241 in
expenses through March 31, 2008. For the three month period ended March 31, 2008
we incurred $8,060 in expenses. These costs consisted of general and
administrative expenses.

The following table provides selected financial data about our company for the
period ended March 31, 2008.

                    Balance Sheet Data:            3/31/08
                    -------------------            -------

                    Cash                          $    459
                    Total assets                  $  2,904
                    Total liabilities             $ 12,145
                    Shareholders' equity          $ (9,241)

There was $5,000 cash provided from operating activities for the quarter ended
March 31, 2008, a loan from our director. From inception through March 31, 2008
the director has loaned the company $12,145, for which there are no specific
terms of repayment. Cash provided by financing since inception was $27,000,
consisting of $9,000 from the sale of shares to our officer and director and
$18,000 resulting from the sale of our common stock to 36 un-affiliated
investors.

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.

ITEM 4.  CONTROLS AND PROCEDURES

(a) Based on the evaluation of our "disclosure controls and procedures" (as
defined in the Securities Exchange Act of 1934 Rules 13a-15(e) or 15d-15(e))
required by paragraph (b) of Rules 13a-15 or 15d-15, our president and our chief
financial officer have concluded that, as of March 31, 2008, our disclosure
controls and procedures were effective in ensuring that information required to

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be disclosed by the Company in reports that it files under the Exchange Act is
recorded, processed, summarized and reported within the time periods required by
governing rules and forms.

(b) There have been no changes in our internal control over financial reporting
identified in connection with the evaluation required by paragraph (d) of
Exchange Act Rules 13a-15 or 15d-15 that occurred during our last fiscal quarter
that have materially affected, or are reasonably likely to materially affect,
our internal control over financial reporting.

                           PART II - OTHER INFORMATION

ITEM 1A. RISK FACTORS.

There have been no material changes to the risk factors previously discussed in
Item 1A of the Company's Form 10-K for the year ended December 31, 2007.

ITEM 6. EXHIBITS.

                                                      Incorporated by Reference/
Exhibit No.           Exhibit                              Filed Herewith
-----------           -------                              --------------
   3.1       Articles of Incorporation             Incorporated by reference
                                                   to the Registration Statement
                                                   on Form SB-2 filed with the
                                                   SEC on May 24, 2007, File No.
                                                   333-143236

   3.2       Bylaws                                Incorporated by reference to
                                                   the Registration Statement on
                                                   Form SB-2 filed with the SEC
                                                   on May 24, 2007, File No.
                                                   333-143236

   31.1      Section 302 Certification of Chief    Filed herewith
             Executive Officer

   31.2      Section 302 Certification of Chief    Filed herewith
             Financial Officer

   32        Section 906 Certification of Chief    Filed herewith
             Executive Officer and Chief
             Financial Officer

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                                   SIGNATURES

Pursuant to the requirements of the Securities and 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)


/s/ Emilia Ochoa
-----------------------------------
Emilia Ochoa
President, Chief Executive Officer,
Chief Financial Officer, Principal
Accounting Officer and Director

Date: May 8, 2008


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