--------------------------------------------------------------------------------


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

                                    FORM 10-Q


              [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934


                  For the quarterly period ended June 30, 2005


                         Commission File Number: 1-16349


                        INVESTORS CAPITAL HOLDINGS, LTD.
             (Exact name of registrant as specified in its charter)


        MASSACHUSETTS                                             04-3284631
(State or other jurisdiction of                               (I.R.S. Employer
 incorporation or organization)                              Identification No.)

                                 230 Broadway E.
                         Lynnfield, Massachusetts 01940
                    (Address of principal executive offices)

                                 (781) 593-8565
              (Registrant's telephone number, including area code)

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 an  accelerated  filer (as
defined in Rule 12b-2 of the Exchange Act). Yes [X] No [ ]

Number of shares  outstanding of our only class of common stock as of August 11,
2005:

                                    5,758,978

--------------------------------------------------------------------------------




<PAGE>



                          PART I FINANCIAL INFORMATION


ITEM 1.  FINANCIAL STATEMENTS


                INVESTORS CAPITAL HOLDINGS, LTD. AND SUBSIDIARIES

                      CONDENSED CONSOLIDATED BALANCE SHEETS

                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                                        June 30,         March 31,
                                                                          2005             2005
                                                                      ------------    ------------
<S>                                                                   <C>             <C>
Assets

Current Assets

     Cash and cash equivalents ....................................   $  8,215,956    $  8,618,261
     Deposit with clearing organization, restricted ...............        175,000         175,000
     Accounts receivable ..........................................      3,293,926       3,361,509
     Loans receivable from registered representatives(current) ....        278,207         173,875
     Prepaid income taxes .........................................         25,645         100,889
     Marketable securities, at market value .......................        250,731         330,380
     Prepaid expenses .............................................        300,918         247,421
                                                                      ------------    ------------
                                                                        12,540,383      13,007,335

Property and equipment, net .......................................        702,619         571,198

Long Term Investments

     Loans receivable from registered representatives .............         34,330          77,270
     Equity investments, at cost ..................................         40,000          40,000
     Investments ..................................................        143,064         142,816
                                                                      ------------    ------------
                                                                           217,394         260,086
Other Assets
     Other assets .................................................        130,461         121,548
     Deferred tax asset, net ......................................        137,307         149,471
                                                                      ------------    ------------
                                                                           267,768         271,019

          TOTAL ASSETS ............................................   $ 13,728,164    $ 14,109,638
                                                                      ============    ============
Liabilities and Stockholders' Equity

Current Liabilities

     Accounts payable .............................................   $    722,317    $  1,045,314
     Accrued expenses .............................................        195,110         552,088
     Notes payable ................................................          2,386           9,433
     Unearned revenues ............................................         93,281         106,775
     Commissions payable ..........................................      2,380,543       1,885,340
     Securities sold, not yet purchased, at market value ..........        145,273         327,905
                                                                      ------------    ------------
                                                                         3,538,910       3,926,855



          TOTAL LIABILITIES .......................................   $  3,538,910    $  3,926,855
                                                                      ============    ============
Commitments and contingencies

Stockholders' Equity:
     Common stock, $.01 par value, 10,000,000
     shares authorized; 5,758,978 issued and  5,755,093 outstanding
     in  June 30,2005; 5,757,348  issued and 5,753,463  outstanding
     in March 2005 ................................................         57,590          57,573
     Additional paid-in capital ...................................      8,706,423       8,691,566
     Retained earnings ............................................      1,455,376       1,463,779
       less: Treasury stock, 3,885 shares at cost .................        (30,135)        (30,135)
                                                                      ------------    ------------

            Total stockholders' equity ............................     10,189,254      10,182,783
                                                                      ------------    ------------

          TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ..............   $ 13,728,164    $ 14,109,638
                                                                      ============    ============
</TABLE>


            See Notes to Condensed Consolidated Financial Statements.



<PAGE>


                INVESTORS CAPITAL HOLDINGS, LTD. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                   Three Months Ended
                                                                         June 30,
                                                               -------------------------
                                                                  2005           2004
Revenues                                                       -----------   -----------
<S>                                                            <C>           <C>

   Commission ..............................................   $13,368,068   $12,795,813
   Advisory fees ...........................................     1,155,982       799,509
   Other fee income ........................................       103,438       323,377
   Marketing revenue .......................................       435,224       304,779
   Other income ............................................       130,524        91,720
                                                               -----------   -----------
       Total Revenue .......................................    15,193,236    14,315,198

Commission and advisory fees expenses ......................    11,982,282    11,572,118
                                                               -----------   -----------
           Gross profit ....................................     3,210,954     2,743,080
                                                               -----------   -----------
Operating expenses:

   Advertising .............................................       242,607       204,599
   Communications ..........................................       155,508       131,575
                                                               -----------   -----------
       Total Selling Expenses ..............................       398,115       336,174
                                                               -----------   -----------

   Compensation and benefits ...............................     1,735,128     1,324,607
   Regulatory, legal and professional ......................       473,144       317,832
   Occupancy ...............................................       154,091       137,789
   Other administrative expenses ...........................       243,508       245,861
                                                               -----------   -----------
       Total Administrative Expenses .......................     2,605,871     2,026,089
                                                               -----------   -----------
       Total Operating Expenses ............................     3,003,986     2,362,263
                                                               -----------   -----------
           Operating income ................................       206,968       380,817
                                                               -----------   -----------
Other expense:

   Interest expense ........................................         3,334        16,157
                                                               -----------   -----------
       Total other expense .................................         3,334        16,157
                                                               -----------   -----------
Income before taxes ........................................       203,634       364,660

Provision for income taxes .................................        96,408       160,644
                                                               -----------   -----------
           Net income ......................................   $   107,226   $   204,016
                                                               ===========   ===========

Earnings per common share:

   Basic earnings per common share .........................   $       .02   $       .04

   Diluted earnings per common share .......................   $       .02   $       .03
                                                               ===========   ===========

Share data:

   Weighted average shares used in basic earnings per
     common share calculations .............................     5,754,015     5,727,914

   Incremental shares from assumed exercise of stock options       173,278       196,993
                                                               -----------   -----------
   Weighted average shares used in diluted earnings per
     common share calculations .............................     5,927,293     5,924,907
                                                               ===========   ===========
</TABLE>


            See Notes to Condensed Consolidated Financial Statements.



<PAGE>


                INVESTORS CAPITAL HOLDINGS, LTD. AND SUBSIDIARIES
      CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                    THREE MONTHS ENDED JUNE 30, 2005 AND 2004
                                   (UNAUDITED)



<TABLE>
<CAPTION>
                                                                                                   Accumulated
                                                               Additional   Retained                  Other
                                           Common Stock         Paid-In     Earnings     Treasury  Comprehensive
                                      ----------------------    Capital     (Deficit)      Stock    Income (Loss)   Total
                                        Shares       Amount
                                      ----------------------------------------------------------------------------------------


<S>              <C>                   <C>          <C>        <C>              <C>        <C>          <C>        <C>
Balance at April 1, 2004...........    5,731,598    $57,316    $8,520,931       844,670    $(30,135)    $12,157    $9,404,939

Stock based compensation...........                                 1,954                                               1,954

Exercise stock options.............          852          9         1,667                                               1,676

Comprehensive gain:

   Net income......................                                             204,016

   Net unrealized gain on securities.                                                                       569

   Comprehensive gain..............                                                                                   204,585

                                      ----------------------------------------------------------------------------------------

Balance at June 30, 2004............   5,732,450    $57,325    $8,524,552    $1,048,686    $(30,135)    $12,726    $9,613,154
                                      ========================================================================================

Balance at April 1, 2005...........    5,757,348    $57,573    $8,691,566    $1,463,779    $(30,135)         --   $10,182,783

Stock based compensation...........                                11,614                                              11,614

Exercise stock options.............        1,630         17         3,243                                               3,260



   Net income......................                                             107,226                               107,226

   Dividend payment to shareholders                                            (115,629)                            (115,629)



                                      ----------------------------------------------------------------------------------------

Balance at June 30, 2005...........    5,758,978    $57,590    $8,706,423    $1,455,376    $(30,135)         --    10,189,254
                                      ========================================================================================
</TABLE>



            See Notes to Condensed Consolidated Financial Statements.



<PAGE>


                INVESTORS CAPITAL HOLDINGS, LTD. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)



<TABLE>
<CAPTION>
                                                                                          Three Months Ended
                                                                                                June 30,
                                                                                     --------------------------
                                                                                         2005           2004
                                                                                     -----------    -----------

<S>                                                                                     <C>         <C>
Cash flows from operating activities:

     Net income...........................................................              107,226     $   204,016
     Adjustments  to  reconcile  net  income  to  net  cash  provided  by  (used
       in)operating activities:

         Depreciation and amortization...........................................        49,209          38,611
         Change in deferred taxes................................................        12,164           1,717
         Stock option compensation...............................................        11,614           1,954
         Change in marketable securities.........................................      (102,983)         (1,680)
         Loss on investment......................................................          (248)         (1,491)

Changes in operating assets and liabilities:

     Decrease in accounts receivable.............................................        67,583         817,910
    (Increase)Decrease prepaid expenses and other assets.........................       (62,409)         59,436
     Decrease in loans receivable from officers..................................            --           9,005
     Decrease in income taxes receivable.........................................        75,244              --
     Increase in taxes payable...................................................            --        (391,123)
    (Decrease) increase in accounts payable......................................      (322,997)        134,160
    (Decrease) increase in accrued expenses......................................      (356,978)       (195,096)
     Increase (decrease) in commissions payable..................................       495,203        (430,093)
     Payments on notes payable and NASD settlement...............................            --         (46,757)
    (Decrease) in unearned revenues..............................................       (13,494)             --
                                                                                     -----------    -----------

             Net cash (used)provided by operating activities.....................       (40,866)        200,569
                                                                                     -----------    -----------

Cash flows from investing activities:

     Purchases of property and equipment.........................................      (180,630)        (60,726)
     Loans receivable from registered representatives............................       (61,393)         19,306
                                                                                     -----------    -----------

             Net cash used in investing activities..................                   (242,023)        (41,420)
                                                                                     -----------    -----------

Cash flows from financing activities:

     Proceeds from exercise of stock options  ............................                3,260           1,676
     Principal payment notes payable......................................               (7,046)             --
     Payment of cash dividends..................... ......................             (115,630)             --
                                                                                     -----------    -----------

             Net cash used in financing activities..................                   (119,416)          1,676
                                                                                     -----------    -----------

Net (decrease)increase in cash and cash equivalents.................                   (402,305)        160,825

Cash and cash equivalents, beginning of period......................                  8,618,261       8,112,567
                                                                                     -----------    -----------

Cash and cash equivalents, end of period............................                 $8,215,956     $ 8,273,392
                                                                                     ===========    ===========

Supplemental disclosures of cash flow information:

     Interest paid..................................................                     $3,334     $    16,157
                                                                                     ===========    ===========
     Income taxes paid..................................................                 $9,000     $   550,000
                                                                                     ===========    ===========
</TABLE>


            See Notes to Condensed Consolidated Financial Statements.



<PAGE>


                INVESTORS CAPITAL HOLDINGS, LTD. AND SUBSIDIARIES
              CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                       FOR THE QUARTER ENDED JUNE 30, 2005
                                   (UNAUDITED)


NOTE 1. ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES


ORGANIZATION

  Incorporated  in July 1995,  Investors  Capital  Holdings,  Ltd.  ("ICH") is a
financial   services   holding  company  that  operates  through  three  of  its
subsidiaries,  Investors Capital  Corporation  ("ICC"),  Eastern Point Advisors,
Inc.  ("EPA") and ICC Insurance  Agency,  Inc., in two segments of the financial
services  industry.   These  two  segments  provide  for  the  offering  of  (1)
broker-dealer  services  in  support of  trading  in  corporate  equity and debt
securities,  U.S. Government  securities,  municipal  securities,  mutual funds,
variable  annuities and variable life insurance,  including  provision of market
information,   Internet   on-line  trading,   portfolio   tracking  and  records
management, and (2) investment advisory and asset management services, including
management of two retail mutual funds.  These  products and services are offered
throughout  the United  States  primarily  through  our  network of  independent
registered  representatives.  Investors Capital Holdings Securities  Corporation
("ICH  Securities"),  a new  subsidiary,  was formed in March 2005 to hold cash,
cash equivalents, interest income and dividend income for ICH.


BASIS OF PRESENTATION

  The accompanying  unaudited  condensed  consolidated  financial  statements of
Investors Capital Holdings,  Ltd. and its subsidiaries (the "Company") have been
prepared in accordance  with  accounting  principles  generally  accepted in the
United States of America (GAAP) for interim  financial  information and with the
instructions  to Form  10-Q.  In the  opinion  of  management,  these  financial
statements  contain all of the adjustments  necessary for a fair presentation of
the results of these interim  periods.  Certain  footnote  disclosures  normally
included in  financial  statements  prepared in  accordance  with GAAP have been
condensed or omitted,  although the Company  believes the  disclosures  in these
financial  statements  are  adequate  to  make  the  information  presented  not
misleading.  Operating  results for the three-month  period ending June 30, 2005
are not necessarily  indicative of the results that may be expected for the year
ended March 31, 2006.  The balance sheet at March 31, 2005 has been derived from
the audited  financial  statements at that date, but does not include all of the
information and footnotes  required by GAAP for complete  financial  statements.
These unaudited condensed  consolidated  financial  statements should be read in
conjunction with the Company's annual audited financial  statements  included in
the Company's  Form 10-K for the fiscal year ended March 31, 2005 filed with the
Securities and Exchange Commission.


USE OF ESTIMATES

  The  preparation  of financial  statements  in  conformity  with GAAP requires
management to make estimates and assumptions that affect the reported amounts of
assets  and  liabilities  as of the  date of the  financial  statements  and the
reported  amounts of revenues and expenses during the reporting  period.  Actual
results could differ from those estimates.


RECLASSIFICATIONS

  Certain  amounts  in the  prior  periods  have  been  reclassified  to  remain
consistent with the current fiscal year financial statement presentation.



<PAGE>


                INVESTORS CAPITAL HOLDINGS, LTD. AND SUBSIDIARIES
              CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                       FOR THE QUARTER ENDED JUNE 30, 2005
                                   (UNAUDITED)

NOTE 1. ORGANIZATION,  BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
        (continued)


SIGNIFICANT ACCOUNTING POLICIES


Revenue Recognition

  The Company  has  established  revenue  recognition  policies  for each of the
following income item areas: Mutual Funds/Variable Annuities,  Trading, Advisory
Fees,  Administration  Fees on Errors and Omissions  ("E&O") and  Renewals,  and
Marketing  Revenues on  production  and for  regional  and  national  events.  A
description  of the  revenue  recognition  process  related to each  category is
presented  below.  The revenue  recognition  policy the Company  maintains is in
compliance with SEC Staff Accounting  Bulletin ("SAB") 104 "Revenue  Recognition
in Financial Statements".

  Mutual Funds/Variable  Annuities. The Mutual Funds/Variable Annuity revenue is
recognized upon receipt of commissions  related to the sale,  which is generally
settled on the trade date. The earnings process is substantially complete at the
point that the respective fund company distributes payment to the Company.

  Trading.  The Company earns  commissions  through stock  purchases and sale
transactions,   mutual  fund   purchases,   government   and   corporate   bonds
transactions,  fee-based managed accounts,  and ticket charges. The Company also
earns  revenue in the form of 12b1 fees and  interest on account  balances.  The
earnings process is substantially  complete at trade date in accordance with the
rules  of the  National  Association  of  Securities  Dealers  ("NASD")  and the
Securities and Exchange Commissions ("SEC").

  The Company also receives credit  adjustments for clearing charge  adjustments
that are netted  against  any  clearing  charges  the  Company may incur for the
period. These adjustments are recognized as income in the period received unless
otherwise noted by the clearing firm.

  Unrealized  gains  and  losses  are  recorded  at the time  that  the  Company
reconciles its trading  positions with the market value. The unrealized gains or
losses are  adjusted  to market  until the  position  is settled or the trade is
cancelled.

  Advisory Fees.  Advisory fee income is recorded  quarterly based on the amount
of money managed during the period per the agreement between the advisor and the
client.  Any  uncollected  advisory  fees billed on these  managed  accounts are
charged against earnings in the subsequent quarter.

  Revenue is earned based on fees billed for assets managed during the period.

  Other  Advisory fees are recorded based on the average daily net assets of the
mutual funds as  disclosed  under the  Advisory  Agreement in the  prospectuses.
These fees are recognized monthly based on the fund's  administrative fee report
which reports the amounts that are earned for the period.  The Company can elect
and has  elected to waive  certain  fees to allow for the fund to  maintain  its
ceiling on administrative expenses. Based on the agreement, the waived fees have
a three-year recovery period. At the end of the recovery period,  these fees are
charged against earnings if uncollected.

  Administration  Fees.  Administration  fees on renewals and E&O  insurance are
recognized  as revenue upon  registration  of the  representative  with NASD and
listing of the registered  representative  with the E&O insurance  carrier.  The
funds  received from the  registered  representative  are initially  recorded as
unearned revenue. The


<PAGE>
                INVESTORS CAPITAL HOLDINGS, LTD. AND SUBSIDIARIES
              CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                       FOR THE QUARTER ENDED JUNE 30, 2005
                                   (UNAUDITED)


NOTE 1. ORGANIZATION,  BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
        (continued)

amounts,  if any, collected in excess of the E & O insurance premium and/or fees
due NASD are recognized as revenue.

  Marketing  Revenue.  Revenue from marketing  associated  with product sales is
recognized  quarterly based on production  levels.  Marketing event revenues are
recognized at the commencement of the event offset by its costs.


Accounts Receivable - Allowance for Doubtful Accounts

  Our policies for determining whether a receivable is considered  uncollectible
are as follows.

  Loans to  representatives.  In accordance with SFAS No. 5, we perform periodic
credit evaluations and provide allowance based on our assessment of specifically
identified   unsecured   receivables   and   other   factors,    including   the
representative's payment history. Once it is determined that it is both probable
that the loan  has  been  impaired  and the  amount  of loss can  reasonably  be
estimated, then the loan balance is classified an uncollectible and written off.

  Advisory fees from our mutual  funds.  As disclosed in the  respective  mutual
funds' prospectuses,  the Company attempts to recoup all waived advisory service
fees within a three-year  period. If management  believes that the likelihood of
collecting that receivable  within the three-year  period is doubtful,  then the
Company provides for an allowance in accordance with SFAS No. 5.  Determinations
whether to write off such fees are made annually.

  Trade receivables.  As prescribed by the SEC, trade receivables usually settle
within  three days.  If a trade  error  results,  then the  Company  will pursue
remedies  to  collect  on that  trade  error.  The  Company  does  not  record a
receivable  resulting  from a trade error that is in litigation or whose outcome
is otherwise not reasonably determinable. In such a case, the Company does apply
any proceeds from settlements or insurance against any trade losses incurred.


Income Taxes

  The Company  provides for income taxes at the end of each interim period based
on the  estimated  effective  tax  rate  for the full  fiscal  year.  Cumulative
adjustments  to the tax provision are recorded in the interim  period in which a
change in the estimated annual effective rate is determined.


NOTE 2. SEGMENT INFORMATION

  The  accounting  policies  of the  segments  are  described  in the summary of
significant  accounting  policies.  The Company  evaluates  performance based on
profit and loss from operations after income taxes.

  The  Company  accounts  for  intersegment  services  and  transfers  as if the
services or transfers were to third parties,  that is, at current market prices.
The  Company's  reportable  segments  are  strategic  business  units that offer
different  services.  They are managed separately because each business requires
different technology and marketing strategies.

  The Company's  reportable segments include investment services offered through
Investors  Capital  Corporation  (ICC) and  asset  management  services  offered
through Eastern Point Advisors,  Inc. (EPA).  This investment  services  segment
includes  securities,  insurance,  financial planning and related services.  ICC
earns  commissions  as a broker for its  customers  in the  purchase and sale of
securities on major exchanges.  Asset  management  services  generate  recurring
annual  revenue from fees received on the management of customer  accounts.  EPA
provides  asset  management and portfolio  design  services to a mutual fund and
money managed services to a variety of investors.


<PAGE>


                INVESTORS CAPITAL HOLDINGS, LTD. AND SUBSIDIARIES
              CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                       FOR THE QUARTER ENDED JUNE 30, 2005
                                   (UNAUDITED)



NOTE 2. SEGMENT INFORMATION (CONTINUED)

  The segment data presented  includes the allocation of all corporate  overhead
to each segment. Intersegment revenue and expense, and receivables and payables,
are eliminated  between segments.  Currently it is impractical to report segment
information using geographical concentration.

  Assets  are  allocated  among  ICH  and  its  subsidiaries  based  upon  legal
ownership.  Total  year-end  assets are in this Note 2 on a  stand-alone  basis,
i.e., without inter-company  eliminations.  Corporate items and eliminations are
presented in the following  table for the purpose of reconciling the stand-alone
asset amounts to total consolidated assets.




                                                   Three Months Ended
                                                        June 30,

                                               2005                  2004
                                         ----------------      ----------------


Inter-company eliminations               $      2,501,849      $      1,733,399
Deferred income taxes                              45,561                44,986
Income Taxes                                      (25,645)                   --
                                         ----------------       ---------------

Total Corporate items and eliminations   $      2,521,765      $      1,778,385




   We have changed our  approach to segment  reporting  going  forward as of the
prior period based on management's  determination that only reportable segments,
as defined in SFAS No. 131,  "Disclosures  about  Segments of an Enterprise  and
Related  Information"  ("SFAS  131"),  are to be  shown on a  stand-alone  basis
without intercompany eliminations. Since ICH does not generate operating revenue
(other than interest income) and does not meet the quantitative tests under SFAS
131 as a reportable segment,  going forward only ICH items required to reconcile
segment   information  with  our  consolidated   financial   statements   (i.e.,
non-intercompany items) are reported when presenting segment information.


<PAGE>


                INVESTORS CAPITAL HOLDINGS, LTD. AND SUBSIDIARIES
              CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                       FOR THE QUARTER ENDED JUNE 30, 2005
                                   (UNAUDITED)


NOTE 2. SEGMENT INFORMATION (CONTINUED)

  Segment reporting is as follows:




                                                       Three Months Ended
                                                             June 30,
                                                    ---------------------------
                                                       2005           2004
                                                    ------------   ------------

    Non-interest revenues:

      ICC, investment services..................... $14,440,573    $13,736,735
      EPA, asset management services...............     632,140        486,743
      ICH investments (loss)gain                           (141)         1,491
                                                    ------------   ------------
           Total........................            $15,072,572    $14,224,969
                                                    ============   ============

    Revenues from transactions with other operating
    segments:
      ICC...............................            $   408,438    $   336,605
      EPA...............................                 45,382         37,401
                                                    ------------   ------------

           Total........................            $   453,820    $   374,006
                                                    ============   ============

    Interest and dividend income,net:
      ICC...............................            $    79,218    $    52,295
      ICH...............................                  5,335         37,934
      ICH Securities ...................                 36,111             --
                                                    ------------   ------------
           Total........................            $   120,664    $    90,229
                                                    ============   ============

    Depreciation and amortization expense:
      ICC...............................            $    46,650    $    36,709
      EPA...............................                  2,559          1,901
                                                    ------------   ------------

           Total........................            $    49,209    $    38,610
                                                    ============   ============



   <PAGE>




                INVESTORS CAPITAL HOLDINGS, LTD. AND SUBSIDIARIES
              CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                       FOR THE QUARTER ENDED JUNE 30, 2005
                                   (UNAUDITED)


NOTE 2. SEGMENT INFORMATION (CONTINUED)





                                                         Three Months Ended
                                                             June 30,
                                                    ---------------------------
                                                        2005           2004
                                                    ------------   ------------

    Income tax provision (benefit):

      ICC...............................            $   139,488    $   195,050
      EPA...............................                (55,800)       (58,003)
      ICH...............................                 12,720         23,597
                                                    ------------   ------------

           Total........................            $    96,408    $   160,644
                                                    ============   ============


    Income (loss):
      ICC...............................            $   279,220    $   274,359
      EPA...............................               (200,569)       (86,171)
      ICH...............................                 (7,525)        15,828
      ICH Securities....................                 36,100             --
                                                    ------------   ------------

           Total........................            $   107,226    $   204,016
                                                    ============   ============

    Period end total assets:
      ICC...............................            $ 9,686,174    $ 8,465,163
      EPA...............................                791,597        460,290
      ICH...............................                982,415      5,616,141
      ICH Securities....................            $ 4,789,743              --
      Corporate items and eliminations               (2,521,765)    (1,778,385)
                                                    ------------   ------------

           Total........................            $13,728,164    $12,763,209
                                                    ============   ============



<PAGE>



                INVESTORS CAPITAL HOLDINGS, LTD. AND SUBSIDIARIES
              CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                       FOR THE QUARTER ENDED JUNE 30, 2005
                                   (UNAUDITED)



NOTE 3. LITIGATION

  The Company is involved with various  judicial,  regulatory,  and  arbitration
proceedings  concerning  matters  arising in connection  with the conduct of its
business.  At June  30,  2005,  the  Company  was the  co-defendant  in  various
lawsuits.  Management believes,  based on currently available information,  that
the results of such  proceedings,  in the  aggregate,  will not have a material,
adverse  effect on the firm's  financial  condition.  The Company has Errors and
Omissions  ("E&O")  insurance to protect  itself from  potential  damages and/or
legal costs associated with the aforementioned lawsuits, and as a result, in the
majority of cases,  the  Company`s  exposure  is limited to between  $75,000 and
$100,000 per case, subject to policy  limitations and exclusions.  In accordance
with Financial  Accounting Standards Board ("FASB") Statement No. 5, "Accounting
for Contingencies",  the Company had accrued expenses of approximately  $258,000
for the quarter ended June 30, 2005 related to legal fees and estimated probable
settlement costs relating to the Company's defense in various lawsuits.


NOTE 4. STOCK-BASED COMPENSATION

  The Company applies Accounting Principles Board Opinion No. 25, Accounting for
Stock Issued to Employees,  and related  interpretations  in accounting  for its
stock option plans. During the first quarter of fiscal 2005, the Company adopted
the  disclosure   provisions  of  SFAS  No.  148,   Accounting  for  Stock-Based
Compensation  -Transition  and Disclosure.  The following table  illustrates the
effect on net earnings and earnings per share,  had the Company adopted the fair
value-based method of accounting for stock-based  employee  compensation for all
periods presented.




                                                          Three Months Ended
                                                     ---------------------------
                                                         2005           2004
                                                     ------------   ------------


Net income, as reported                              $  107,226     $  204,016

Deduct:  Total stock-based employee
compensation expense determined
under fair value-based method for
all awards, net of related tax
effects                                                      --             --
                                                     ------------   ------------
Pro forma net income                                 $  107,226    $   204,016
                                                     ============   ============

Earnings per share:
    Basic- as reported                                       .02           .04
    Diluted-as reported                                      .02           .03

    Basic   - pro forma                                      .02           .04
    diluted - pro forma                                      .02           .03



<PAGE>


ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

  Management's  discussion  and  analysis  reviews  our  consolidated  financial
condition as of June 30, 2005 and March 31, 2005,  the  consolidated  results of
operations  for the  three  months  ended  June 30,  2005 and  2004  and,  where
appropriate,   factors  that  may  affect  future  financial  performance.   The
discussion  should  be read  in  conjunction  with  the  consolidated  financial
statements  and  related  notes,  included  elsewhere  in the Form 10-Q.  Unless
context requires otherwise, as used in this Management's Discussion and Analysis
(i) the "current  period" means the fiscal quarter ended June 30, 2005, (ii) the
"prior period" means the fiscal  quarter ended June 30, 2004,  (iii) an increase
and  decrease  compares  the current  period to the prior  period,  and (iv) all
non-comparative amounts refer to the current period.

  The statements,  analyses,  and other information contained herein relating to
trends in our  operations and financial  results,  the markets for our products,
the future development of our business,  and the contingencies and uncertainties
to which we may be subject, as well as other statements  including words such as
"anticipate,"   "believe,"  "plan,"  "estimate,"   "expect,"  "intend,"  "will,"
"should," "may," and other similar expressions, are "forward-looking statements"
under the Private Securities  Litigation Reform Act of 1995. Such statements are
made based upon management's  current expectations and beliefs concerning future
events  and their  effects  on the  Company  and are  subject  to many risks and
uncertainties.  Our  actual  results  may  differ  materially  from the  results
anticipated  in  these  forward-looking  statements.  Readers  are  directed  to
discussions  of risks and  uncertainties  that may be found in this  report  and
other  documents  filed by the Company  with the United  States  Securities  and
Exchange Commission. We specifically disclaim any obligation to update or revise
any forward-looking information,  whether as a result of new information, future
developments or otherwise.


OVERVIEW

  We are a financial  services holding company that,  through our  subsidiaries,
provides  investment  advisory,   insurance,   financial  planning  and  related
services.  We operate in a highly  regulated  and  competitive  industry that is
influenced by numerous external factors such as economic conditions, marketplace
liquidity and volatility, monetary policy, global and national political events,
regulatory developments, competition, and investor preferences. Our revenues and
net earnings may be either  enhanced or diminished  from period to period by any
one of or by a multiple of these external factors.


RESULTS OF OPERATIONS

Revenues

  Revenues  rose  6.1% to $15.2  million.  The $0.9  million  increase  resulted
primarily  from a $0.57  million  increase  in  commissions  revenue and a $0.36
million  increase in advisory  services.  The  increase in  commissions  reflect
growth in revenues from trading,  sales of mutual funds and variable  annuities,
and sales of  insurance  products  of $0.23  million,  $0.28  million  and $0.05
million,  respectively.  Sales increases from advisory  services chiefly reflect
additional  revenues from our advisor  directed  asset managed  program of $0.20
million,  our money-managed  program of $0.12 million,  and advisory services in
our mutual funds "The Capital Appreciation Fund" and "The Rising Dividend Growth
Fund" of $.03 million.

  A key component of our business strategy is to recruit and provide  productive
support to independent  representatives who generate large sales volumes and are
motivated  to  continually  grow their  business by  offering a wide  variety of
services  and a  diversified  range of  investment  products  to their  clients.
Consistent  with the  Company's  marketing  theme of being "in the  business  of
building   your   business",   we  focus  on   providing   added  value  to  our
representatives  to  enable  them to be more  productive,  particularly  in high
margin   lines  such  as   advisory   services.   Support   provided  to  assist
representatives  in pursuing  consistent and profitable  sales growth takes many
forms.   These  forms  include  hi-tech  trading  systems,   targeted  financial
assistance  and  a  network  of  communication  links  with  investment  product
companies  including  regional and national  conventions that provide forums for
interaction to improve products, sales and client satisfaction.



<PAGE>


<TABLE>
<CAPTION>
                                                              Percent of Revenue
                                                                 Quarter Ended           Percent
                                 Quarter Ended June 30,             June 30,             Change
                               -------------------------------------------------------------------
                                                                                          2005
                                   2005         2004          2005            2004       vs. 2004
                               ------------  ------------  ----------      ----------   ----------
<S>                            <C>            <C>               <C>          <C>           <C>
Revenues:

  Commission                   $ 13,368,068   $ 12,795,813      88.0%        89.4%         4.5%
  Advisory                        1,155,982        799,509       7.6%         5.6%        44.6%
  Other fee income                  103,438        323,377       0.7%         2.3%       -68.0%
  Marketing revenue                 435,224        304,779       2.9%         2.1%        42.8%
  Other income                      130,524         91,720       0.9%         0.6%        42.3%
                               ------------   ------------

    Total Revenue                15,193,236     14,315,198     100.0%       100.0%         6.1%
                               ============   ============

Commission and advisory
 expenses                        11,982,282     11,572,118      78.9%        80.8%         3.5%

        Gross Profit              3,210,954      2,743,080      21.1%        19.2%        17.1%

Operating Expenses:

  Advertising                       242,607        204,599       1.6%         1.4%        18.6%
  Communications                    155,508        131,575       1.0%         0.9%        18.2%
                               ------------   ------------

    Total Selling Expense  s        398,115        336,174       2.6%         2.3%        18.4%

  Compensation and benefits       1,735,128      1,324,607      11.4%         9.3%        31.0%
  Regulatory, legal
   and professional                 473,144        317,832       3.1%         2.2%        48.9%
  Occupancy                         154,091        137,789       1.0%         1.0%        11.8%
  Other administrative
   expenses                         243,508        245,861       1.6%         1.7%        -1.0%
                               ------------   ------------

    Total
     Administrative
      Expenses                    2,605,871      2,026,089      17.2%        14.2%        28.6%

  Total Operating
   Expenses                       3,003,986      2,362,263      19.8%        16.5%        27.2%
                               ============   ============

        Operating Income            206,968        380,817       1.4%         2.7%       -45.7%

Other Expense:

  Interest expense                    3,334         16,157       0.0%         0.1%       -79.4%

    Total Other Expense               3,334         16,157       0.0%         0.1%       -79.4%

Income before taxes                 203,634        364,660       1.3%         2.5%       -44.2%

Provision for income taxes           96,408        160,644       0.6%         1.1%       -40.0%

    Net Income                      107,226        204,016       0.7%         1.4%       -47.4%
                               ============   ============
</TABLE>



Gross margin

  Gross margin rose by $0.47  million to $3.21  million for the current  period.
Most notably on a comparative  basis,  the increase  included $0.27 million from
trading and $0.16 million from advisory  services.  It should be noted also that
during the prior period the Company reported a net trade error of $0.36 million.
This year the  Company,  along  with its  clearing  firm,  implemented  enhanced
controls to reduce the risk of this from recurring,  contributing to an increase
in profit margin from trading during the current period.

  The majority of the increase in profit margin from  advisory  services was the
result of an increase in sales volume from our  advisor-directed,  asset-managed
programs.  This program  allows the  representative  to manage the account while
trading directly on-line for the client utilizing an automated  trading platform
provided by the Company.  Resulting  increases in the  representative's  trading
sales  volume  effectively  boost the  Company's  commission  revenues and gross
margin. Additionally,  by processing more transactions at stable fixed cost, the
enhanced trading technology fosters economies of scale that help limit increases
in operating expenses required to process the increased trade volume.

  Profit  margins from mutual fund and variable  annuity  sales  contributed  to
39.0% of the total gross margin or about $1.2  million  compared to 44.4% of the
total profit margin or about $1.2 million during the prior period.  As presented
in the  following  gross  margin  table,  the growth in profit  margin  resulted
predominantly from trading and advisory services.



<PAGE>


<TABLE>
<CAPTION>
                                                             Gross Margin   Percent of Total
                                                               Retention      Gross Margin    Gross Margin
                                     Gross Margin            Quarter Ended   Quarter Ended      Percent
                                 Quarter Ended June 30,         June 30,        June 30,         Change
                                 ----------------------- -------------------------------------------------
                                                                                                 2005
                                     2005         2004       2005     2004    2005    2004     vs. 2004
                                 -----------  -----------   ------   ------  ------  ------  -------------
<S>                              <C>          <C>            <C>      <C>     <C>     <C>        <C>

Gross Margin:

     Commission - Mutual Funds
      and Variable Annuities     $ 1,252,582  $ 1,216,578    13.0%    13.0%   39.0%   44.4%      3.0%

     Commission - Trading            714,655      442,774    19.8%    13.1%   22.3%   16.1%     61.4%

     Commission - Insurance
      Products                       115,587       69,852    99.0%    99.7%    3.6%    2.5%     65.5%

     Commission - Underwriting         1,200          600    10.0%    10.0%    0.0%    0.0%    100.0%

     Advisory Services and
      Administration Fees            523,872      359,200    43.3%    42.4%   16.3%   13.1%     45.8%

     Licensing                        33,815      253,315   100.0%   100.0%    1.1%    9.2%    -86.7%

     Marketing                       435,224      304,779    49.6%    54.5%   13.6%   11.1%     42.8%

     Other income                    134,019       95,982    90.8%    99.0%    4.2%    3.5%     39.6%
                                 -----------  -----------

     Total Gross Margin            3,210,954   2,743,080     21.1%    19.2%  100.0%  100.0%     17.1%
                                 ============ ===========
</TABLE>


Commission Expenses

  Commission payouts to our independent  representatives decreased from 83.1% to
81.9%  of  commissioned   revenues.   This  improvement   reflects  progress  in
management's continuing efforts to improve commission retention rates, including
refinement   of  our  business   model   emphasizing   recruitment   of  quality
representatives.


Operating Expenses

  Operating  expenses,  which  experienced  a $641,723  or 27.2%  increase,  are
discussed in detail below:

  Compensation  and  benefits.  The largest  component  of  operating  expenses,
compensation  and benefits,  rose by $410,521 or 31.0%,  including  increases in
general and  officer  salaries of $208,000  and  $142,000,  respectively.  These
increases reflect pay increases to members of our management team and staff, and
from the hiring of additional personnel.  In addition,  bonuses were paid to the
officers on a discretionary basis. Health insurance costs also rose by $36,000.

  Regulatory,  legal  and  professional.   Regulatory,  legal  and  professional
expenses grew by $155,312 or 48.9%.  Legal and accounting  expenses increased by
over  $80,000  and  lawsuit   settlements   rose  by  over  $42,000.   Dues  and
subscriptions  expenses  also  experienced  an  incline of over  $40,000.  In an
industry   embedded  with  regulation,   the  Company  will  continue  to  incur
significant  costs of this  nature to promote  accuracy  and proper  operational
technique and to provide appropriate compliance measures and legal defense.

  Advertising.  Advertising  expenses  rose by $38,008 or 18.6%,  largely due to
increases   in  general   marketing   and  meals  and   entertainment   expenses
approximating $16,000 and $32,000, respectively.


<PAGE>


  Communications.  Communications  expenses  increased  18.2%  primarily  due to
increases in printing  and website  expenses  approximating  $6,000 and $17,000,
respectively.  These  costs  are  incurred  to target  new  revenue  streams  by
providing  access  to  information  via the  Internet  and  other  publications.
Communication efforts and expense, which also include investor/public relations,
conferences  and telephone,  are believed to be heavily  correlated with overall
growth of the Company's business.

  Occupancy.  Occupancy  expenses  increased by $16,302 or 11.8%.  Rent expenses
grew by over  $5,000 due in part to  leasing  our  newest  investment  center in
Portsmouth, New Hampshire. Depreciation costs also increased by over $10,000 due
to the Company's acquisition of additional fixed assets.

  Other administrative.  Other administrative  expenses,  which includes various
insurance, postage, office and computer-related expenses, decreased by $2,353 or
1.0%.


Operating Income

  Operating  income  decreased  by $173,849 or 45.7% due to a 27.2%  increase in
operating  expenses  that was only  partially  offset  by a 17.1%  rise in gross
margin.   Substantial  investments  in  selling  and  administrative  functions,
including additions to management,  personnel and service  infrastructure,  have
been  made  as  part  of  a  concerted   strategy  to  increase   revenues   and
profitability. This business platform will accelerate recruitment of independent
representatives  that are  focused on  growing  revenues,  particularly  in high
margin lines such as advisory and trading services.  As part of this effort, the
Company  continued its  investment in an automated  trading  system that enables
sophisticated representatives to enhance client base and activity.


Net Income

  Net income  decreased by  approximately  $97,000  thousand,  or $.02 per basic
share and $.01 per diluted share,  due to the decrease in operating  income that
was only  partially  offset by a related  decrease in the  provision  for income
taxes.  The  decrease  is a result  of  incurring  more  operating  expenses  to
accommodate  the increase in revenues and profit margins on a comparative  basis
to June 30,2004.


LIQUIDITY AND CAPITAL RESOURCES

  The Company  believes that  achieving its return on equity goals  requires the
efficient  use of  capital.  We have  financed  our  operations  primarily  with
internally generated cash flow.

  Historically  cash  inflows  have come  mainly from the  profitability  of the
Company's  core  services and  investment  products.  For the last several years
profitability  typically  has  followed an annual  cycle of  relatively  average
profitability  during  the first  and  third  fiscal  quarters,  relatively  low
profitability  during the second fiscal quarter (when many  representatives  and
their clients are on summer vacation),  and relatively high profitability during
the fourth fiscal quarter (when many  representatives  and their clients start a
new business and investment year).

  In addition to the annual  profitability  cycle,  uncertainty in the financial
markets can have a negative  impact on cash flow.  The Company works to minimize
this impact by aggressively  recruiting  sophisticated  representatives  who can
offer  diversified  products  that  continue to meet the needs of their  clients
despite changing market conditions.

  The Company takes a proactive approach to minimizing,  if not preventing,  the
occurrence of other events that may lead to unexpected cash outflows,  including
lawsuits,  trade errors and fines from regulatory bodies such as the NASD or the
SEC.  A key to this  approach  is  ensuring  that  adequate  controls  over  our
operations and those of our  representatives  are implemented  and  periodically
updated.  As part of this effort,  substantial  resources have been committed to
enhancing the  capabilities of our compliance team, whose tasks include assuring
that our  representatives  give proper weight to the circumstances and interests
of  their  clients  when  recommending  investment  options.  The  Company  also
allocates  resources  to stay  current  with  the  many  rules  and  regulations
applicable to our business  when  assisting in the education and training of our
sales representatives and staff.


  As of June 30,  2005,  cash and  cash  equivalents  totaled  $8.2  million  as
compared to $8.6  million as of March 31, 2005.  Working  capital as of June 30,
2005 was $9.0  million as compared  to $9.1  million as of March 31,  2005.  The
ratio of current assets to current liabilities was 3.54 to 1 as of June 30, 2005
as compared to 3.31 to 1 as of March 31, 2005.

  As of June  30,  2005,  the net  capital  ratio  for  ICC,  the  broker-dealer
subsidiary,  was 3.63 to 1 as compared  to a 2.43 to 1 ratio at March 31,  2005.
The SEC Uniform Net Capital  Rule (Rule  15c3-1)  requires  that we maintain net
capital of $100,000 and a ratio of aggregate  indebtedness to net capital not to
exceed 15 to 1.


<PAGE>


This SEC  requirement is also referred to as the "net capital ratio" or the "net
capital rule." Indebtedness  generally includes all money owed by a company, and
net capital  includes cash and assets that are easily  converted  into cash. SEC
rules  also  prohibit  "equity  capital"  (which,  under the net  capital  rule,
includes  subordinated  loans) from being  withdrawn,  cash dividends from being
paid and other specified  actions of similar effect from being taken,  if, among
other specified contingencies,  our net capital ratio would exceed 10 to 1 or if
we would have less than 120% of our minimum required net capital. As of June 30,
2005,  the Company had net capital of $1.2 million as compared to net capital of
approximately  $1.7  million as of March 31, 2005.  This  resulted in excess net
capital of $0.92  million and $1.4  million,  respectively,  for the  applicable
periods.

  Cash used by  operations  was $0.04  million for quarter ended June 30,2005 as
compared to cash  provided by  operations of $0.2 million for quarter ended June
30,2004.  Cash  outflows  for the  current  period  included  $0.18  million for
purchasing equipment,  technology,  and leasehold improvements and $0.68 million
for paying current  liabilities  (accounts payable and accrued  expenses).  Cash
disbursements contributing to these current cash outflows included $0.24 million
for legal related matters,  $0.10 million for insurance and  professional  fees,
$0.14  million  for  membership  and NASD dues,  $0.11  million  for mutual fund
administration  costs, and $0.29 million for payroll related items.  Finally,  a
$0.12 million cash dividend was paid on May 16, 2005 to  shareholders  of record
as of May 2, 2005.

  Cash  outflows  for quarter  ended June  30,2004  included  $0.39  million for
payments  of taxes,  $0.43  million  for payment of  commissions  due,  and $0.2
million  in  accrued  expenses.  The  Company  also  paid out $0.06  million  in
equipment and technology and $0.05 million to the NASD to pay down a note.

  ICC  made a  business  decision  in  fiscal  year  2005  to  conclude  an NASD
investigation into supervisory procedures relating to the period of January 2000
through July of 2002. While we considered  disputing the allegations in a formal
proceeding, we estimated the cost of doing so to be prohibitive. Furthermore, we
sought  to  avoid  disruption  of our  operations.  Accordingly,  while  neither
admitting nor denying the  allegations,  we consented to a number of findings in
order to resolve the matter in its initial stages.

  Repayment  of the  settlement  note to NASD did not have a material  effect on
cash flow at any time during the current period. There was no payment during the
current  period as the note was fully paid on August 19,  2004.  The Company has
implemented  and  maintains an adequate  system of  supervisory  and  regulatory
procedures and does not foresee any material  deficiencies in the future in this
regard.


CONTRACTUAL OBLIGATIONS


<TABLE>
<CAPTION>
Contractual Obligations                Payments Due by period
-----------------------------------------------------------------------------------------------------------------
                               Total       Less than 1 year    1-3 years     4-5 years        After 5 years
-----------------------------------------------------------------------------------------------------------------
                                                 2006          2007-2009     2009-20010     2011 and thereafter
<S>                         <C>               <C>                  <C>           <C>               <C>

Short-term loans and
 notes payable:             $  2,386          $  2,386             0             0                  0



Operating leases:            650,753           231,315          419,438



                        -----------------------------------------------------------------------------------------
Total Contractual
 Obligations                $653,139          $233,701         $419,438          0                  0
                        -----------------------------------------------------------------------------------------
</TABLE>


NOTES PAYABLE

  At June 30, 2005 and 2004 notes payable consisted of debt to finance insurance
premiums.  The annual rate of interest on the outstanding loan, which matures on
July 15, 2005, was 6% at June 30,2005 and 2004.



<PAGE>


COMMITMENTS AND CONTINGENCIES

  The Company is obligated under various lease  agreements  covering offices and
equipment.  These agreements are considered to be operating leases in accordance
with the  requirements  under FASB 13 "Accounting for Leases".  The terms of the
leases expire between fiscal year 2005 and 2008. Options to renew for additional
terms are included under the lease  agreements.  The total minimum rental due in
future  periods  under these  existing  agreements  is as follows as of June 30,
2005:

          Year ending March 31, 2006                        231,315
          Year ending March 31, 2007                        243,639
          Year ending March 31, 2008                        175,799
                                                          ---------

          Total minimum lease payments                     $650,753
                                                          =========

  Certain  leases  contain  provisions  for  minimum  lease  payments  that  are
contingent  upon  increases  in real  estate  taxes.  The total  lease  expenses
amounted to $99,931 for quarter ended June 30 2005 and $95,337 for quarter ended
June 30 2004.  The related  party  leases  amounted to $56,418 for the  Arlsburg
Trust and Investors Realty, LLC for the quarter ended June 30 2005.


RISK MANAGEMENT

  Risk is an  inherent  part of the  Company's  business  and  activities.  Risk
management is critical to the Company's financial strength and profitability and
requires robust  auditing,  constant  communications,  judgment and knowledge of
financial trends and the economy as a whole.  Senior  management takes an active
role in the  risk  management  process.  The  principal  risks  involved  in the
Company's business activities are market, operational, regulatory and legal.


MARKET RISK

  Market risk is the risk attributable to common  macroeconomic  factors such as
gross domestic product, employment,  inflation,  interest rates, budget deficits
and sentiment.  Consumer and producer sentiment is critical to our business. The
level of consumer  confidence  determines  an investor's  willingness  to spend,
especially  in the financial  markets.  It is this  willingness  to spend in the
financial markets that is key to our business.  A shift in spending in this area
could negatively  impact the Company.  However,  senior management is constantly
monitoring  these economic trends in order to enhance the product line to offset
any potential negative impact.


OPERATIONAL RISK

  Operational  risk  refers  to the risk of loss  resulting  from the  Company's
operations,  including,  but not limited to, improper or unauthorized execution,
processing  of  transactions,   deficiencies  in  the  Company's  technology  or
financial  operating  systems,  and  inadequacies  or breaches in the  Company's
control  processes.  Managing  these risks is critical,  especially in a rapidly
changing environment with increasing transaction volume. Failure to manage these
risks could result in financial  loss to the Company.  To mitigate  these risks,
the Company has developed specific policies and procedures  designed to identify
and manage  operational  risk.  These  policies and  procedures are reviewed and
updated on a continuing basis to ensure that this risk is minimized.


REGULATORY AND LEGAL RISK

  Regulatory and legal risk includes  non-compliance  with applicable  legal and
regulatory  requirements  and the risk of a large number of customer claims that
could result in adverse judgments against the Company. The Company is subject to
extensive regulation in all jurisdictions in which it operates.  In this regard,
the Company has  instituted  comprehensive  procedures to address issues such as
regulatory  capital   requirements,   sales  and  trading  practices,   use  and
safekeeping  of  customer  funds,   credit  granting,   collection   activities,
money-laundering, and record-keeping.


EFFECTS OF INFLATION

  The Company's assets primarily are liquid in nature and are not  significantly
affected by inflation. Management believes that the replacement cost of property
and equipment will not materially affect operating results. However, the rate of
inflation affects our expenses,  including  employee  compensation and benefits,
communications,  and  occupancy,  which may not be readily  recoverable  through
charges for services provided.


<PAGE>


ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

  The information required by this item is contained in "Management's Discussion
and Analysis of Financial Condition and Results of Operations" under the caption
"Market Risk" of this Form 10-Q.


ITEM 4. CONTROLS AND PROCEDURES

  Based on an evaluation by our  management in which they or persons  performing
similar functions  participated,  our principal executive and financial officers
have concluded that reasonably  effective  controls and procedures were in place
as of the end of the period  covered by this report to ensure  that  information
required to be disclosed in our reports filed under the Securities  Exchange Act
of 1934 is recorded, processed,  summarized and reported within the time periods
specified in the rules and forms of the Securities and Exchange Commission.


                            PART II OTHER INFORMATION


ITEM 1. LEGAL PROCEEDINGS

  The Company  operates in a highly  litigious  and  regulated  business and, as
such,  is a  defendant  or  codefendant  in various  lawsuits  and  arbitrations
incidental to its securities business.  The Company is vigorously contesting the
allegations  of the  complaints  in these  cases  and  believes  that  there are
meritorious  defenses  in each.  Counsel  is unable to  respond  concerning  the
likelihood of an outcome, whether favorable or unfavorable,  because of inherent
uncertainty  routine in these matters.  For the majority of pending claims,  the
Company's  errors and omissions (E&O) policy limits the maximum  exposure in any
one case to between  $75,000 and $100,000  and, in certain of these  cases,  the
Company  has the  contractual  right to seek  indemnity  from  related  parties.
Management,  in consultation  with counsel,  believes that resolution of pending
litigation will not have a material adverse effect on the consolidated financial
results of the Company.

ITEMS 2 - 5.  Not applicable.


<PAGE>


ITEM 6.  EXHIBITS


Exhibit
Number                   Description                                    Location
------                   -----------                                    --------

3.1      Articles of Organization, as amended . . . . . . . . . . .(2)(Exh. 3.1)

3.2      By-Laws . . . . . . . . . . . . . .  . . . . . . . . . . .(2)(Exh. 3.2)

4.1      Form of Stock Certificate . . . . . . . . . . . . . . . . (2)(Exh. 4.1)

10.1     Employment Agreement with Theodore E. Charles  . . . . . (2)(Exh. 10.1)

10.2     Employment Agreement with Timothy B. Murphy . . . . . . .(2)(Exh. 10.2)

10.3     The 1994 Stock Option Plan . . . . . . . . . . . . . . . (3)(Exh. 10.3)

31.1     Certification of Theodore E. Charles pursuant to
         Rule 13a-14(a) . . . . . . . . . . . . . . . . . . . . . . . . . . .(1)

31.2     Certification of Timothy B. Murphy pursuant to
         Rule 13a-14(a) . . . . . . . . . . . . . . . . . . . . . . . . . . .(1)

32.1     Certification of Theodore E. Charles pursuant to 18
         U.S.C. Section 1350 . . . . . . . . . . . . . . . . . . . . . . . . (1)

32.2     Certification of Timothy B. Murphy pursuant to 18
         U.S.C. Section 1350 . . . . . . . .  . . . . . . . . . . . . . . . .(1)

----------------------------

(1)      Filed herewith.

(2)      Incorporated by reference to the indicated  exhibit to the Registrant's
         Registration  Statement on Form SB-2 (File No.  333-05327) filed August
         14, 2000.

(3)      Incorporated by reference to the indicated  exhibit to the Registrant's
         Annual Report on Form 10-K for the year ended March 31, 2005.

  Any  exhibit  not  included  with  this Form  10-K  will be  furnished  to any
shareholder  of record upon  written  request and payment of up to $.25 per page
plus postage.  Such requests should be directed to Investors  Capital  Holdings,
LTD., 230 Broadway East, Lynnfield, MA 01940-2320.


<PAGE>


                                   SIGNATURES

  Pursuant to the  requirements  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.


                                                INVESTORS CAPITAL HOLDINGS, LTD.

                                                By: /s/ Timothy B. Murphy

                                                Chief Financial Officer


                                                Date: August 12, 2005