<SUBMISSION>
<ACCESSION-NUMBER>0001171520-08-000614
<TYPE>SC 13D
<PUBLIC-DOCUMENT-COUNT>1
<FILING-DATE>20081023
<DATE-OF-FILING-DATE-CHANGE>20081023
<SUBJECT-COMPANY>
<COMPANY-DATA>
<CONFORMED-NAME>Castle Brands Inc
<CIK>0001311538
<ASSIGNED-SIC>2080
<IRS-NUMBER>000000000
<FISCAL-YEAR-END>0331
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>SC 13D
<ACT>34
<FILE-NUMBER>005-82363
<FILM-NUMBER>081137760
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>570 LEXINGTON AVE
<CITY>NEW YORK
<STATE>NY
<ZIP>10022
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>570 LEXINGTON AVE
<CITY>NEW YORK
<STATE>NY
<ZIP>10022
</MAIL-ADDRESS>
</SUBJECT-COMPANY>
<FILED-BY>
<COMPANY-DATA>
<CONFORMED-NAME>I.L.A.R. S.p.A.
<CIK>0001448585
<IRS-NUMBER>000000000
<STATE-OF-INCORPORATION>L6
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>SC 13D
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>VIA TIBURTINA, 1314
<CITY>ROMA
<STATE>L6
<ZIP>00131
<PHONE>011-39-06-419-0344
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>VIA TIBURTINA, 1314
<CITY>ROMA
<STATE>L6
<ZIP>00131
</MAIL-ADDRESS>
</FILED-BY>
<DOCUMENT>
<TYPE>SC 13D
<SEQUENCE>1
<FILENAME>eps3154.htm
<DESCRIPTION>ILAR SPA
<TEXT>
<html>
  <head>
    <title>eps3154.htm</title>
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AND EXCHANGE COMMISSION</font></div>
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DC 20549</font></div>
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13D</font></div>
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TO BE INCLUDED IN STATEMENT FILED PURSUANT</font></div>
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&#167; 240.13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO</font></div>
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240.13d-2(a)</font></div>
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Brands Inc. </font>

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of Issuer)</font></div>
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Stock, par value $0.01 per share </font>

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</font>

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M. Pinter</font></div>
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Third Avenue, 26<font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: super">th</font>
Floor</font></div>
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York, New York 10022</font></div>
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(212) 573-0668 </font>

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Address and Telephone Number of Person</font></div>
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to Receive Notices and Communications)</font></div>
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20, 2008 </font>

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of Event Which Requires Filing of this Statement)</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 11.4pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, serif">If
the filing person has previously filed a statement on Schedule 13G to report the
acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of &#167;&#167; 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the
following box<a name="Check4">&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-SIZE: 12pt;" face="Wingdings">o</font></a></font></div>
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filed in paper format shall include a signed original and five copies of the
Schedule, including all exhibits.&#160;&#160;<font style="DISPLAY: inline; FONT-STYLE: italic">See</font> &#167; 240.13d-7 for other
parties to whom copies are to be sent.</font></div>
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remainder of this cover page shall be filled out for a reporting person&#8217;s
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter the
disclosures provided in a prior cover page.</font></div>
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information required on the remainder of this cover page shall not be deemed to
be &#8220;filed&#8221; for purpose of Section 18 of the Securities Exchange Act of 1934
(&#8220;Act&#8221;) or otherwise subject to the liabilities of that section of the Act but
shall be subject to all other provisions of the Act (however, <font style="DISPLAY: inline; FONT-STYLE: italic">see</font> the <font style="DISPLAY: inline; FONT-STYLE: italic">Notes</font>).</font></div>
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                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.95pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 11pt; FONT-FAMILY: times new roman, serif"><font style="DISPLAY: inline; FONT-SIZE: 12pt">CUSIP</font>
      No.&#160;&#160;148435100</font></div>
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                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 13.7pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: times new roman, serif">13D</font></div>
                  </td>
                  <td align="right" valign="top" width="20%" style="BORDER-TOP: black 0.5pt solid; BORDER-BOTTOM: black 0.5pt solid">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.95pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 11pt; FONT-FAMILY: times new roman, serif">Page&#160;2&#160;of
      8 Pages</font></div>
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        </div>
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    </div><br>
    <div>
      <table cellpadding="0" cellspacing="0" width="100%">
          <tr>
            <td align="left" valign="top" width="7%" style="BORDER-TOP: black 0.5pt solid; BORDER-BOTTOM: black 0.5pt solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.95pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: times new roman, serif">1</font></div>
            </td>
            <td align="left" colspan="4" valign="top" width="73%" style="BORDER-TOP: black 0.5pt solid; BORDER-BOTTOM: black 0.5pt solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.95pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: times new roman, serif">NAMES
      OF REPORTING PERSONS</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.95pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 11pt; FONT-FAMILY: times new roman, serif">I.L.A.R.
      S.p.A.</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" rowspan="3" valign="top" width="7%" style="BORDER-BOTTOM: black 0.5pt solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.95pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: times new roman, serif">2</font></div>
            </td>
            <td align="left" colspan="4" valign="top" width="73%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.95pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: times new roman, serif">CHECK
      THE APPROPRIATE BOX IF A MEMBER OF A GROUP</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" colspan="3" rowspan="2" valign="top" width="23%" style="BORDER-BOTTOM: black 0.5pt solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.95pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: times new roman, serif">(see
      instructions)</font></div>
            </td>
            <td align="right" valign="top" width="12%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.95pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: times new roman, serif">(a)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: wingdings">o</font></font></div>
            </td>
          </tr>
          <tr>
            <td align="right" valign="top" width="7%" style="BORDER-BOTTOM: black 0.5pt solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.95pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: times new roman, serif">(b)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: wingdings">o</font></font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="7%" style="BORDER-BOTTOM: black 0.5pt solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.95pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: times new roman, serif">3</font></div>
            </td>
            <td align="left" colspan="4" valign="top" width="73%" style="BORDER-BOTTOM: black 0.5pt solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.95pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: times new roman, serif">SEC
      USE ONLY</font></div>
              <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.95pt">&#160;</div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="7%" style="BORDER-BOTTOM: black 0.5pt solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.95pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: times new roman, serif">4</font></div>
            </td>
            <td align="left" colspan="4" valign="top" width="73%" style="BORDER-BOTTOM: black 0.5pt solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.95pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: times new roman, serif">SOURCE
      OF FUNDS (see instructions)</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.95pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 11pt; FONT-FAMILY: times new roman, serif">WC</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="7%" style="BORDER-BOTTOM: black 0.5pt solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.95pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: times new roman, serif">5</font></div>
            </td>
            <td align="left" colspan="4" valign="top" width="73%" style="BORDER-BOTTOM: black 0.5pt solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.95pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: times new roman, serif">CHECK
      IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED&#160;<font id="TAB2" style="LETTER-SPACING: 6pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 6pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 6pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 6pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 6pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 6pt">&#160;&#160;&#160;</font>&#160;<font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: wingdings">o</font></font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.95pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: times new roman, serif">PURSUANT
      TO ITEM 2(d) or 2(e)</font></div>
              <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.95pt">&#160;</div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="7%" style="BORDER-BOTTOM: black 0.5pt solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.95pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: times new roman, serif">6</font></div>
            </td>
            <td align="left" colspan="4" valign="top" width="73%" style="BORDER-BOTTOM: black 0.5pt solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.95pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: times new roman, serif">CITIZENSHIP
      OR PLACE OF ORGANIZATION</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.95pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 11pt; FONT-FAMILY: times new roman, serif">Italy</font></div>
            </td>
          </tr>
          <tr>
            <td colspan="2" rowspan="4" valign="top" width="17%" style="BORDER-BOTTOM: black 0.5pt solid">
              <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.95pt">&#160;</div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.95pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: times new roman, serif">NUMBER
      OF</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.95pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: times new roman, serif">SHARES</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.95pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: times new roman, serif">BENEFICIALLY</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.95pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: times new roman, serif">OWNED
      BY</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.95pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: times new roman, serif">EACH</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.95pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: times new roman, serif">REPORTING</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.95pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: center" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: times new roman, serif">PERSON
      WITH</font></div>
            </td>
            <td align="left" valign="top" width="7%" style="BORDER-BOTTOM: black 0.5pt solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.95pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: times new roman, serif">7</font></div>
            </td>
            <td align="left" colspan="2" valign="top" width="56%" style="BORDER-BOTTOM: black 0.5pt solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.95pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: times new roman, serif">SOLE
      VOTING POWER</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.95pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: times new roman, serif"><font style="DISPLAY: inline; FONT-WEIGHT: bold">8,571,432
      </font>(1)</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="7%" style="BORDER-BOTTOM: black 0.5pt solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.95pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: times new roman, serif">8</font></div>
            </td>
            <td align="left" colspan="2" valign="top" width="17%" style="BORDER-BOTTOM: black 0.5pt solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.95pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: times new roman, serif">SHARED
      VOTING POWER</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.95pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 11pt; FONT-FAMILY: times new roman, serif">0</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="7%" style="BORDER-BOTTOM: black 0.5pt solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.95pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: times new roman, serif">9</font></div>
            </td>
            <td align="left" colspan="2" valign="top" width="17%" style="BORDER-BOTTOM: black 0.5pt solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.95pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: times new roman, serif">SOLE
      DISPOSITIVE POWER</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.95pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: times new roman, serif"><font style="DISPLAY: inline; FONT-WEIGHT: bold">8,571,432
      </font>(1)</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="7%" style="BORDER-BOTTOM: black 0.5pt solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.95pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: times new roman, serif">10</font></div>
            </td>
            <td align="left" colspan="2" valign="top" width="17%" style="BORDER-BOTTOM: black 0.5pt solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.95pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: times new roman, serif">SHARED
      DISPOSITIVE POWER</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.95pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 11pt; FONT-FAMILY: times new roman, serif">0</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="7%" style="BORDER-BOTTOM: black 0.5pt solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.95pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: times new roman, serif">11</font></div>
            </td>
            <td align="left" colspan="4" valign="top" width="73%" style="BORDER-BOTTOM: black 0.5pt solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.95pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: times new roman, serif">AGGREGATE
      AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.95pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: times new roman, serif"><font style="DISPLAY: inline; FONT-WEIGHT: bold">8,571,432
      </font>(1)</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="7%" style="BORDER-BOTTOM: black 0.5pt solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.95pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: times new roman, serif">12</font></div>
            </td>
            <td align="left" colspan="4" valign="top" width="73%" style="BORDER-BOTTOM: black 0.5pt solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.95pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: times new roman, serif">CHECK
      IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES<font id="TAB2" style="LETTER-SPACING: 6pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 6pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 6pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 6pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 6pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 6pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 6pt">&#160;</font>&#160;<font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: wingdings">x</font></font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.95pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: times new roman, serif">CERTAIN
      SHARES (see instructions)</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.95pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 11pt; FONT-FAMILY: times new roman, serif">(2)</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="7%" style="BORDER-BOTTOM: black 0.5pt solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.95pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: times new roman, serif">13</font></div>
            </td>
            <td align="left" colspan="4" valign="top" width="73%" style="BORDER-BOTTOM: black 0.5pt solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.95pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: times new roman, serif">PERCENT
      OF CLASS REPRESENTED BY AMOUNT IN ROW 11</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.95pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: times new roman, serif"><font style="DISPLAY: inline; FONT-WEIGHT: bold">8.48%
  </font>(3)</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="7%" style="BORDER-BOTTOM: black 0.5pt solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.95pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: times new roman, serif">14</font></div>
            </td>
            <td align="left" colspan="4" valign="top" width="73%" style="BORDER-BOTTOM: black 0.5pt solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.95pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: times new roman, serif">TYPE
      OF REPORTING PERSON (see instructions)</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.95pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 11pt; FONT-FAMILY: times new roman, serif">CO</font></div>
            </td>
          </tr>
      </table>
    </div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.95pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.95pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Times New Roman, serif">(1)&#160;&#160;Issuable
upon conversion of 240,000 shares of Series A Convertible Preferred Stock of the
Issuer issued to the Reporting Person in connection with the transaction
described in Item 4 of this statement.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.95pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Times New Roman, serif">(2)&#160;&#160;Excludes
214,412 shares owned by Virgilio Pallini, an officer and director of, and holder
of shareholder voting rights in, the Reporting Person, as to which the Reporting
Person disclaims beneficial ownership pursuant to Rule 13d-4</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.95pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Times New Roman, serif">(3)&#160;&#160;The
calculation of the percentage is based on (i) 15,629,776 Common Shares
outstanding as of August 14, 2008, as reported in the Issuer&#8217;s Quarterly Report
on Form 10-Q for the fiscal quarter ended June 30, 2008 filed with the
Securities and Exchange Commission on August 14, 2008, and (ii) 85,403,988
Common Shares to be issued upon the conversion of 2,391,310.72 shares of Series
A Convertible Preferred Stock of the Issuer issued in connection with the
transaction described in Item 4 of this statement.</font></div><br>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman">&#160;
</font></div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">&#160;
</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman">&#160;
</font></div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right"><font style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman">&#160;
</font></div>
        <div style="WIDTH: 100%" align="left">
          <div>
            <table cellpadding="0" cellspacing="0" width="100%">
                <tr>
                  <td align="left" valign="top" width="21%" style="BORDER-TOP: black 0.5pt solid; BORDER-BOTTOM: black 0.5pt solid">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.95pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 11pt; FONT-FAMILY: times new roman, serif"><font style="DISPLAY: inline; FONT-SIZE: 12pt">CUSIP</font>
      No.&#160;&#160;148435100</font></div>
                  </td>
                  <td valign="top" width="38%" style="BORDER-TOP: black 0.5pt solid; BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 0.5pt solid">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 13.7pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: times new roman, serif">13D</font></div>
                  </td>
                  <td align="right" valign="top" width="20%" style="BORDER-TOP: black 0.5pt solid; BORDER-BOTTOM: black 0.5pt solid">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.95pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 11pt; FONT-FAMILY: times new roman, serif">Page&#160;3&#160;of
      8 Pages</font></div>
                  </td>
                </tr>
            </table>
          </div>
          <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 13.7pt"><br></div>
        </div>
      </div>
    </div><br>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 12.55pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 11pt; FONT-FAMILY: Times New Roman, serif">SCHEDULE
13D</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 12.55pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 12.55pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 11pt; FONT-FAMILY: Times New Roman, serif">Item
1. Security and Issues</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 12.55pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 12.55pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Times New Roman, serif"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>The class of equity securities to which
this statement relates is Common Stock, par value $0.01 per share of the Issuer
to be issued upon conversion of the Reporting Person&#8217;s Series A Convertible
Preferred Stock of the Issuer (the &#8220;Series A Preferred Stock&#8221;).</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 12.55pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 12.55pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Times New Roman, serif"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>The Issuer is Castle Brands Inc., a
Delaware corporation.&#160;&#160;The address of the Issuer&#8217;s principal executive
office is 570 Lexington Avenue, 29<font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: super">th</font> Floor,
New York, New York 10022</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 12.55pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 12.55pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 11pt; FONT-FAMILY: Times New Roman, serif">Item
2. Identity and Background</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 12.55pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 12.55pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Times New Roman, serif"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>The name of the Reporting Person is
I.L.A.R. S.p.A.&#160;&#160;It is a corporation organized under the laws of
Italy.&#160;&#160;The principal business of the Reporting Person is the
production of alcoholic beverages.&#160;&#160;The address of its principal
business and its principal office is via Tiburtina, 1314, 00131 Roma,
Italy.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 12.55pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 12.55pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Times New Roman, serif"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>During the last five years, the
Reporting Person has not been convicted in a criminal proceeding (excluding
traffic violations or similar misdemeanors).</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 12.55pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 12.55pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Times New Roman, serif"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>During the last five years, the
Reporting Person was not a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation with respect to such
laws.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 12.55pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 12.55pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 11pt; FONT-FAMILY: Times New Roman, serif">Item
3.&#160;&#160;&#160;Source and Amount of Funds or Other
Consideration</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 12.55pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 12.55pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Times New Roman, serif"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>The source of funds for the acquisition
of 240,000 shares of Series A Preferred Stock of the Issuer acquired by the
Reporting Person on October 20, 2008 for $3,000,000 pursuant to the Purchase
Agreement (as defined herein) was from the working capital of the Reporting
Person.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 12.55pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 12.55pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 11pt; FONT-FAMILY: Times New Roman, serif">Item
4.&#160;&#160;&#160;Purpose of Transaction</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 12.55pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 12.55pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Times New Roman, serif">On
October 11, 2008, the Issuer entered into a Series A Preferred Stock Purchase
Agreement (the &#8220;Purchase Agreement&#8221;) with each of the Frost Gamma Investment
Trust, Vector Group Ltd., the Reporting Person, Halpryn Group IV, LLC, Lafferty
Limited, Jacqueline Simkin Trust As Amended and Restated 12/16/2003, Hsu Gamma
Investment, L.P., MZ Trading LLC and Richard J. Lampen (collectively, the
&#8220;Purchasers&#8221; and collectively, without the Reporting Person, the &#8220;Other
Purchasers&#8221;), providing for the issuance and sale of $15,000,000 (the &#8220;Purchase
Price&#8221;) of the Series A Preferred Stock, an aggregate of 1,200,000 shares, at a
purchase price of $12.50 per share (which is, in effect upon conversion, $0.35
per Common Share). Each share of Series A Preferred Stock will, as described
below, be automatically converted into Common Shares at a rate of 35.7143 Common
Shares for each share of Series A Preferred Stock, subject to adjustment as set
forth in the Certificate of Designation of the Series A Preferred Stock (the
&#8220;Certificate of Designation&#8221;). The closing of the transactions contemplated by
the Purchase Agreement (the &#8220;Closing&#8221;) occurred on Monday, October 20, 2008. The
issuance of the shares of Series A Preferred Stock was made pursuant to Section
4(2) of the Securities Act of 1933, as amended.</font></div>
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                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.95pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 11pt; FONT-FAMILY: times new roman, serif"><font style="DISPLAY: inline; FONT-SIZE: 12pt">CUSIP</font>
      No.&#160;&#160;148435100</font></div>
                  </td>
                  <td valign="top" width="38%" style="BORDER-TOP: black 0.5pt solid; BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 0.5pt solid">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 13.7pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: times new roman, serif">13D</font></div>
                  </td>
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                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.95pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 11pt; FONT-FAMILY: times new roman, serif">Page&#160;4&#160;of
      8 Pages</font></div>
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        </div>
      </div>
    </div><br>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 12.55pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Times New Roman, serif"><font style="DISPLAY: inline; FONT-STYLE: italic">Board Composition</font>. In
connection with and as required by the Purchase Agreement, upon execution of the
Purchase Agreement, four of the Issuer&#8217;s nine directors, Keith Bellinger, Colm
Leen, Kevin Tighe and Robert Flanagan, resigned and the remaining five members
of the Board of Directors of the Issuer (the &#8220;Board&#8221;) appointed four directors
designated by the Purchasers, Dr. Phillip&#160;Frost, Glenn Halpryn, Richard J.
Lampen and Micaela Pallini, to serve on the Board to fill such
vacancies.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 12.55pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 12.55pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Times New Roman, serif"><a name="006"><font style="DISPLAY: inline; FONT-STYLE: italic">Management. </font>In
connection with the transaction, effective October 11, 2008, the Board appointed
new management to replace Donald L. Marsh, who had acted as the Issuer&#8217;s
President and Chief Operating Officer. Mr. Lampen was appointed to serve as the
Issuer&#8217;s interim President and Chief Executive Officer, and John Glover, the
Issuer&#8217;s Senior Vice President - Marketing, was promoted to the position of
Chief Operating Officer of US Operations.</a></font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 12.55pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 12.55pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Times New Roman, serif"><font style="DISPLAY: inline; FONT-STYLE: italic">Stockholder Meeting</font>. As
provided by the Purchase Agreement, the Issuer&#8217;s stockholders will be asked to
vote on the following at a special meeting that will be held on a date to be
announced by the Issuer:</font></div>
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      </font></div>
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            </td>
            <td>
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Times New Roman, serif">amendments
      to the Issuer&#8217;s charter to increase the authorized shares of the Issuer to
      250,000,000 shares, 225,000,000 shares of which will be designated as
      Common Shares and 25,000,000 shares of which will be designated as
      preferred stock, and to permit stockholders to act by written consent
      and</font></div>
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    <div>
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      </font></div>
            </td>
            <td style="WIDTH: 18pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Times New Roman, serif"><font style="DISPLAY: inline;" face="Symbol, serif">&#183;</font></font></div>
            </td>
            <td>
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Times New Roman, serif">the
      election of a to be determined number of directors designated by the
      Purchasers as the sole directors comprising the
  Board.</font></div>
            </td>
          </tr>
      </table>
    </div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 12.55pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 12.55pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Times New Roman, serif"><font style="DISPLAY: inline; FONT-STYLE: italic">Conversion of Series A Preferred
Stock</font>. As part of each Purchaser&#8217;s agreement with the Issuer, each
Purchaser will vote in favor of the foregoing proposals. After the amendment to
the Issuer&#8217;s charter to increase its authorized shares is approved by
stockholders, each outstanding share of Series A Preferred Stock will be
automatically converted into 35.7143 Common Shares.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 12.55pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 12.55pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Times New Roman, serif"><font style="DISPLAY: inline; FONT-STYLE: italic">Conversion and/or Amendment of
Notes</font>. Concurrently with the Closing, (a) all of the Issuer&#8217;s 6%
convertible notes, in the principal amount of $9 million, due March 1, 2010,
plus accrued interest, were converted into shares of Series A Preferred Stock at
a per share price of $23.21 (which is, in effect upon conversion, $0.65 per
Common Share) and (b) substantially all of the outstanding principal of the
Issuer&#8217;s 9% senior secured notes, in the principal amount of $10 million, due
May 31, 2009, plus accrued interest, were converted into shares of Series A
Preferred Stock at a per share price of $12.50 (which is, in effect upon
conversion, $0.35 per Common Share), and the remaining unconverted notes (in the
principal amount of $300,000) were amended so that, among other things, (i) the
maturity date was extended to May 31, 2014, (ii) the interest rate was reduced
to 3%, payable at maturity, and (iii) the security interest in the collateral of
the Issuer will be terminated. Following the Closing, holders of Series A
Preferred Stock (comprised of the Purchasers and the converting note holders,
many of which were stockholders of the Issuer prior to the transactions
contemplated by the Purchase Agreement) own, excluding their prior ownership,
approximately 85% of the Common Shares on an as-converted basis.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 12.55pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 12.55pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Times New Roman, serif"><font style="DISPLAY: inline; FONT-STYLE: italic">Representations and Warranties;
Covenants</font>. The Purchase Agreement contains customary representations and
warranties by the Issuer and each of the Purchasers. The Purchase Agreement also
contains customary covenants and agreements, including with respect to the
operation of the business of the Issuer and its subsidiaries between signing and
the conversion of the Series A Preferred Stock, governmental filings and
approvals, public disclosures and similar matters. Until the conversion of the
Series A Preferred Stock into Common Shares, the Issuer must conduct its
business in the ordinary course and use its best efforts to preserve its
business organization and significant business relationships. In addition, the
Issuer cannot (except in certain cases in the ordinary course and consistent
with past practice) take a number of specified actions that are customarily
prohibited pending a closing.</font></div>
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                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.95pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 11pt; FONT-FAMILY: times new roman, serif"><font style="DISPLAY: inline; FONT-SIZE: 12pt">CUSIP</font>
      No.&#160;&#160;148435100</font></div>
                  </td>
                  <td valign="top" width="38%" style="BORDER-TOP: black 0.5pt solid; BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 0.5pt solid">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 13.7pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: times new roman, serif">13D</font></div>
                  </td>
                  <td align="right" valign="top" width="20%" style="BORDER-TOP: black 0.5pt solid; BORDER-BOTTOM: black 0.5pt solid">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.95pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 11pt; FONT-FAMILY: times new roman, serif">Page&#160;5&#160;of
      8 Pages</font></div>
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        </div>
      </div>
    </div><br>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 12.55pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Times New Roman, serif"><font style="DISPLAY: inline; FONT-STYLE: italic">Indemnification</font>. The Issuer
must indemnify each Purchaser against losses relating to (i) any breach of the
Issuer&#8217;s representations or covenants or (ii) any claim brought against the
Purchasers by a third party, arising out of or resulting from the execution,
delivery, performance or enforcement of the transaction documents or the status
of the Purchasers as holders of the Issuer&#8217;s shares. No Purchaser will be
entitled to indemnification unless the amount of loss exceeds $50,000, and the
Issuer&#8217;s maximum liability will not exceed the Purchase Price.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 12.55pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 12.55pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Times New Roman, serif"><font style="DISPLAY: inline; FONT-STYLE: italic">Fees and Expenses</font>. The Issuer
must pay the Purchasers&#8217; expenses incurred in connection with the transactions
contemplated by the Purchase Agreement.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 12.55pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 12.55pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Times New Roman, serif"><font style="DISPLAY: inline; FONT-STYLE: italic">Termination of Credit Agreement.
</font>In connection with the transactions contemplated by the Purchase
Agreement, the Credit Agreement, dated October 22, 2007, by and between the
Issuer and the Nevada Trust (the &#8220;Frost Credit Agreement&#8221;), was terminated. The
terms of the Frost Credit Agreement enabled the Issuer to borrow up to $5.0
million. As of the execution of the Purchase Agreement, no amounts were
outstanding under the Frost Credit Agreement. The Frost Credit Agreement was
terminated in partial consideration of the Purchasers&#8217; execution and delivery of
the Purchase Agreement and the performance of the transactions contemplated
thereby.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 12.55pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 12.55pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Times New Roman, serif"><font style="DISPLAY: inline; FONT-STYLE: italic">Certificate of Designation.</font>
The Certificate of Designation, which was filed with and accepted by the
Secretary of State of the State of Delaware on October 9, 2008, establishes the
rights, designations, preferences, qualifications, privileges, limitations and
restrictions of the Series A Preferred Stock.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 12.55pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 12.55pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Times New Roman, serif"><font style="DISPLAY: inline; FONT-STYLE: italic">Dividends</font>. Dividends may be
paid on the Common Shares only if dividends are paid on the Series A Preferred
Stock in an amount for each such share of Series A Preferred Stock equal to or
greater than the aggregate amount of such dividends for all shares of the Common
Shares into which each such share of Series A Preferred Stock could then be
converted.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 12.55pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 12.55pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Times New Roman, serif"><font style="DISPLAY: inline; FONT-STYLE: italic">Preference on Liquidation</font>. In
the event of any liquidation, dissolution or winding-up of the Issuer, the
assets of the Issuer available for distribution to stockholders will be
distributed as follows:</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 12.55pt"><br></div>
    <div>
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      </font></div>
            </td>
            <td style="WIDTH: 18pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Times New Roman, serif"><font style="DISPLAY: inline;" face="Symbol, serif">&#183;</font></font></div>
            </td>
            <td>
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Times New Roman, serif">First,
      the holders of the Series A Preferred Stock will be entitled to receive,
      before any payment is made to holders of the Common Shares or any other
      junior securities, $0.01 per share of Series A Preferred
      Stock.</font></div>
            </td>
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      </table>
    </div>
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    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">
          <tr valign="top" style="LINE-HEIGHT: 12.55pt;">
            <td style="WIDTH: 18pt">
              <div><font style="DISPLAY: inline; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman">&#160;
      </font></div>
            </td>
            <td style="WIDTH: 18pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Times New Roman, serif"><font style="DISPLAY: inline;" face="Symbol, serif">&#183;</font></font></div>
            </td>
            <td>
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Times New Roman, serif">If
      the foregoing is insufficient to permit the payment to such holders of the
      full preferential amounts described above, then all of the Issuer&#8217;s assets
      will be distributed ratably among the holders of the Series A Preferred
      Stock in proportion to the amount of such Series A Preferred Stock owned
      by each such holder.</font></div>
            </td>
          </tr>
      </table>
    </div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 12.55pt"><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">
          <tr valign="top" style="LINE-HEIGHT: 12.55pt;">
            <td style="WIDTH: 18pt">
              <div><font style="DISPLAY: inline; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman">&#160;
      </font></div>
            </td>
            <td style="WIDTH: 18pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Times New Roman, serif"><font style="DISPLAY: inline;" face="Symbol, serif">&#183;</font></font></div>
            </td>
            <td>
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Times New Roman, serif">After
      paying in full the preferential amounts due the holders of Series A
      Preferred Stock, the remaining assets of the Issuer, if any, will be
      distributed among the holders of the shares of Series A Preferred Stock
      and Common Shares, pro rata based on the number of shares held by each
      such holder, on an as-converted
basis.</font></div>
            </td>
          </tr>
      </table>
    </div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 12.55pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 12.55pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Times New Roman, serif"><font style="DISPLAY: inline; FONT-STYLE: italic">Voting</font>. Holders of shares of
Series A Preferred Stock are entitled to vote on all matters submitted to a vote
of the Issuer&#8217;s stockholders on an as-converted basis. Except as otherwise
required by law, the holders of shares of Series A Preferred Stock and Common
Shares will vote together as a single class, and not as separate
classes.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 12.55pt"><br></div><br>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman">&#160;
</font></div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">&#160;
</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman">&#160;
</font></div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right"><font style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman">&#160;
</font></div>
        <div style="WIDTH: 100%" align="left">
          <div>
            <table cellpadding="0" cellspacing="0" width="100%">
                <tr>
                  <td align="left" valign="top" width="21%" style="BORDER-TOP: black 0.5pt solid; BORDER-BOTTOM: black 0.5pt solid">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.95pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 11pt; FONT-FAMILY: times new roman, serif"><font style="DISPLAY: inline; FONT-SIZE: 12pt">CUSIP</font>
      No.&#160;&#160;148435100</font></div>
                  </td>
                  <td valign="top" width="38%" style="BORDER-TOP: black 0.5pt solid; BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 0.5pt solid">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 13.7pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: times new roman, serif">13D</font></div>
                  </td>
                  <td align="right" valign="top" width="20%" style="BORDER-TOP: black 0.5pt solid; BORDER-BOTTOM: black 0.5pt solid">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.95pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 11pt; FONT-FAMILY: times new roman, serif">Page&#160;6&#160;of
      8 Pages</font></div>
                  </td>
                </tr>
            </table>
          </div>
          <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 13.7pt"><br></div>
        </div>
      </div>
    </div><br>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 12.55pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Times New Roman, serif"><font style="DISPLAY: inline; FONT-STYLE: italic">Automatic Conversion</font>. Each
share of Series A Preferred Stock will automatically be converted into Common
Shares, at the then effective conversion rate, upon the filing of an amendment
to the Issuer&#8217;s charter, which, once effective, makes available a sufficient
number of authorized but unissued and unreserved Common Shares to permit all
then outstanding shares of Series A Preferred Stock to be converted. The
conversion rate is 35.7143 Common Shares for each share of Series A Preferred
Stock, and is subject to customary adjustment for dilutive
issuances.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 12.55pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 12.55pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Times New Roman, serif">The
number of shares of Series A Preferred Stock purchased by each Purchaser and the
Purchase Price paid by such Purchaser are set forth in the table
below.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 12.55pt"><br></div>
    <div>
      <div>
        <div>
          <table cellpadding="0" cellspacing="0" width="100%">
              <tr>
                <td align="left" valign="top" width="30%" style="BORDER-TOP: black 0.5pt solid; BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 0.5pt solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.4pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: times new roman, serif"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Name</font></font></div>
                </td>
                <td valign="top" width="15%" style="BORDER-TOP: black 0.5pt solid; BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 0.5pt solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.4pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: times new roman, serif"><font style="DISPLAY: inline; TEXT-DECORATION: underline"># of Shares
      of</font></font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.4pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: times new roman, serif"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Series
      A</font></font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.4pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: times new roman, serif"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Preferred
      Stock</font></font></div>
                </td>
                <td valign="top" width="12%" style="BORDER-TOP: black 0.5pt solid; BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 0.5pt solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.4pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: times new roman, serif"><font style="DISPLAY: inline; TEXT-DECORATION: underline">% of
      Total</font></font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.4pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: times new roman, serif"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Shares
      under</font></font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.4pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: times new roman, serif"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Purchase</font></font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.4pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: times new roman, serif"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Agreement</font></font></div>
                </td>
                <td valign="top" width="11%" style="BORDER-TOP: black 0.5pt solid; BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 0.5pt solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.4pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: times new roman, serif"><font style="DISPLAY: inline; TEXT-DECORATION: underline">%
      of</font></font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.4pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: times new roman, serif"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Common</font></font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.4pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: times new roman, serif"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Shares
      As-</font></font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 14pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: times new roman, serif"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Converted</font><font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: super; FONT-FAMILY: times new roman">(1)</font></font></div>
                </td>
                <td valign="top" width="10%" style="BORDER-RIGHT: black 0.5pt solid; BORDER-TOP: black 0.5pt solid; BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 0.5pt solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.4pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: times new roman, serif"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Purchase</font></font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.4pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: times new roman, serif"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Price</font></font></div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="30%" style="BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 0.5pt solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.4pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman, serif">Frost
      Gamma Investment&#160;Trust</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.4pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                  <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 0pt">&#160;</div>
                </td>
                <td valign="top" width="15%" style="BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 0.5pt solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.4pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman, serif">397,200</font></div>
                  <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 0pt">&#160;</div>
                </td>
                <td valign="top" width="12%" style="BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 0.5pt solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.4pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman, serif">33.10%</font></div>
                  <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 0pt">&#160;</div>
                </td>
                <td valign="top" width="11%" style="BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 0.5pt solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.4pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman, serif">14.04%</font></div>
                  <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 0pt">&#160;</div>
                </td>
                <td valign="top" width="10%" style="BORDER-RIGHT: black 0.5pt solid; BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 0.5pt solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.4pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman, serif">$4,965,000</font></div>
                  <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 0pt">&#160;</div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="30%" style="BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 0.5pt solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.4pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman, serif">Vector
      Group Ltd.</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.4pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                  <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 0pt">&#160;</div>
                </td>
                <td valign="top" width="15%" style="BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 0.5pt solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.4pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman, serif">320,000</font></div>
                  <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 0pt">&#160;</div>
                </td>
                <td valign="top" width="12%" style="BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 0.5pt solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.4pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman, serif">26.67%</font></div>
                  <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 0pt">&#160;</div>
                </td>
                <td valign="top" width="11%" style="BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 0.5pt solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.4pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman, serif">11.31%</font></div>
                  <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 0pt">&#160;</div>
                </td>
                <td valign="top" width="10%" style="BORDER-RIGHT: black 0.5pt solid; BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 0.5pt solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.4pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman, serif">$4,000,000</font></div>
                  <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 0pt">&#160;</div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="30%" style="BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 0.5pt solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.4pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman, serif">I.L.A.R.
      S.p.A.</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.4pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                  <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 0pt">&#160;</div>
                </td>
                <td valign="top" width="15%" style="BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 0.5pt solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.4pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman, serif">240,000</font></div>
                  <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 0pt">&#160;</div>
                </td>
                <td valign="top" width="12%" style="BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 0.5pt solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.4pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman, serif">20.00%</font></div>
                  <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 0pt">&#160;</div>
                </td>
                <td valign="top" width="11%" style="BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 0.5pt solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.4pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman, serif">8.48%</font></div>
                  <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 0pt">&#160;</div>
                </td>
                <td valign="top" width="10%" style="BORDER-RIGHT: black 0.5pt solid; BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 0.5pt solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.4pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman, serif">$3,000,000</font></div>
                  <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 0pt">&#160;</div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="30%" style="BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 0.5pt solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.4pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman, serif">Halpryn
      Group IV, LLC</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.4pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                  <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 0pt">&#160;</div>
                </td>
                <td valign="top" width="15%" style="BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 0.5pt solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.4pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman, serif">80,000</font></div>
                  <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 0pt">&#160;</div>
                </td>
                <td valign="top" width="12%" style="BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 0.5pt solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.4pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman, serif">6.67%</font></div>
                  <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 0pt">&#160;</div>
                </td>
                <td valign="top" width="11%" style="BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 0.5pt solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.4pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman, serif">2.83%</font></div>
                  <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 0pt">&#160;</div>
                </td>
                <td valign="top" width="10%" style="BORDER-RIGHT: black 0.5pt solid; BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 0.5pt solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.4pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman, serif">$1,000,000</font></div>
                  <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 0pt">&#160;</div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="30%" style="BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 0.5pt solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.4pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman, serif">Lafferty
      Ltd.</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.4pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                  <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 0pt">&#160;</div>
                </td>
                <td valign="top" width="15%" style="BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 0.5pt solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.4pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman, serif">80,000</font></div>
                  <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 0pt">&#160;</div>
                </td>
                <td valign="top" width="12%" style="BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 0.5pt solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.4pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman, serif">6.67%</font></div>
                  <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 0pt">&#160;</div>
                </td>
                <td valign="top" width="11%" style="BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 0.5pt solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.4pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman, serif">2.83%</font></div>
                  <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 0pt">&#160;</div>
                </td>
                <td valign="top" width="10%" style="BORDER-RIGHT: black 0.5pt solid; BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 0.5pt solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.4pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman, serif">$1,000,000</font></div>
                  <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 0pt">&#160;</div>
                </td>
              </tr>
              <tr>
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                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.4pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman, serif">Jacqueline
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      and Restated 12/16/2003</font></div>
                  <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 0pt">&#160;</div>
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                <td valign="top" width="15%" style="BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 0.5pt solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.4pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman, serif">40,000</font></div>
                  <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 0pt">&#160;</div>
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                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.4pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman, serif">3.33%</font></div>
                  <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 0pt">&#160;</div>
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                <td valign="top" width="11%" style="BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 0.5pt solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.4pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman, serif">1.41%</font></div>
                  <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 0pt">&#160;</div>
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                <td valign="top" width="10%" style="BORDER-RIGHT: black 0.5pt solid; BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 0.5pt solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.4pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman, serif">$500,000</font></div>
                  <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 0pt">&#160;</div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="30%" style="BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 0.5pt solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.4pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman, serif">Hsu
      Gamma Investment, L.P.</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.4pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                  <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 0pt">&#160;</div>
                </td>
                <td valign="top" width="15%" style="BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 0.5pt solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.4pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman, serif">40,000</font></div>
                  <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 0pt">&#160;</div>
                </td>
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                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.4pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman, serif">3.33%</font></div>
                  <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 0pt">&#160;</div>
                </td>
                <td valign="top" width="11%" style="BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 0.5pt solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.4pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman, serif">1.41%</font></div>
                  <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 0pt">&#160;</div>
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                <td valign="top" width="10%" style="BORDER-RIGHT: black 0.5pt solid; BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 0.5pt solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.4pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman, serif">$500,000</font></div>
                  <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 0pt">&#160;</div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="30%" style="BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 0.5pt solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.4pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman, serif">MZ
      Trading LLC</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.4pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                  <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 0pt">&#160;</div>
                </td>
                <td valign="top" width="15%" style="BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 0.5pt solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.4pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman, serif">1,400</font></div>
                  <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 0pt">&#160;</div>
                </td>
                <td valign="top" width="12%" style="BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 0.5pt solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.4pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman, serif">0.12%</font></div>
                  <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 0pt">&#160;</div>
                </td>
                <td valign="top" width="11%" style="BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 0.5pt solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.4pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman, serif">0.05%</font></div>
                  <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 0pt">&#160;</div>
                </td>
                <td valign="top" width="10%" style="BORDER-RIGHT: black 0.5pt solid; BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 0.5pt solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.4pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman, serif">$17,500</font></div>
                  <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 0pt">&#160;</div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="30%" style="BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 0.5pt solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.4pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman, serif">Richard
      J. Lampen</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.4pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                  <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 0pt">&#160;</div>
                </td>
                <td valign="top" width="15%" style="BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 0.5pt solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.4pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman, serif">1,400</font></div>
                  <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 0pt">&#160;</div>
                </td>
                <td valign="top" width="12%" style="BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 0.5pt solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.4pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman, serif">0.12%</font></div>
                  <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 0pt">&#160;</div>
                </td>
                <td valign="top" width="11%" style="BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 0.5pt solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.4pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman, serif">0.05%</font></div>
                  <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 0pt">&#160;</div>
                </td>
                <td valign="top" width="10%" style="BORDER-RIGHT: black 0.5pt solid; BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 0.5pt solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.4pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman, serif">$17,500</font></div>
                  <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 0pt">&#160;</div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="30%" style="BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 0.5pt solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.4pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-FAMILY: times new roman, serif">Total:</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.4pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                  <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 0pt">&#160;</div>
                </td>
                <td valign="top" width="15%" style="BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 0.5pt solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.4pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-FAMILY: times new roman, serif">1,200,000</font></div>
                  <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 0pt">&#160;</div>
                </td>
                <td valign="top" width="12%" style="BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 0.5pt solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.4pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-FAMILY: times new roman, serif">100%</font></div>
                  <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 0pt">&#160;</div>
                </td>
                <td valign="top" width="11%" style="BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 0.5pt solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.4pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-FAMILY: times new roman, serif">42.42%</font></div>
                  <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 0pt">&#160;</div>
                </td>
                <td valign="top" width="10%" style="BORDER-RIGHT: black 0.5pt solid; BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 0.5pt solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.4pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-FAMILY: times new roman, serif">$15,000,000</font></div>
                  <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 0pt">&#160;</div>
                </td>
              </tr>
          </table>
        </div>
      </div>
    </div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 10.25pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 10.25pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman">(1)&#160;&#160;The
calculation of the percentage is based on 15,629,776 Common Shares outstanding
as of August 14, 2008, as reported in the Issuer&#8217;s Quarterly Report on Form 10-Q
for the fiscal quarter ended June 30, 2008 filed with the Securities and
Exchange Commission on August 14, 2008, and 85,403,988 Common Shares to be
issued upon the conversion of 2,391,310.72 shares of Series A Convertible
Preferred Stock of the Issuer issued in connection with the transaction
described in this Item 4.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 12.55pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 12.55pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Times New Roman, serif">The
foregoing description of each of the Purchase Agreement, the Certificate of
Designation and the Indemnification Agreements does not purport to be complete
and is qualified in its entirety by reference to the Purchase Agreement, the
Certificate of Designation and the Indemnification Agreements, as applicable,
copies of which are filed as Exhibits 1, 2 and 3 hereto, respectively, and are
incorporated in this report by reference.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 12.55pt"><br></div><br>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman">&#160;
</font></div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">&#160;
</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman">&#160;
</font></div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right"><font style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman">&#160;
</font></div>
        <div style="WIDTH: 100%" align="left">
          <div>
            <table cellpadding="0" cellspacing="0" width="100%">
                <tr>
                  <td align="left" valign="top" width="21%" style="BORDER-TOP: black 0.5pt solid; BORDER-BOTTOM: black 0.5pt solid">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.95pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 11pt; FONT-FAMILY: times new roman, serif"><font style="DISPLAY: inline; FONT-SIZE: 12pt">CUSIP</font>
      No.&#160;&#160;148435100</font></div>
                  </td>
                  <td valign="top" width="38%" style="BORDER-TOP: black 0.5pt solid; BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 0.5pt solid">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 13.7pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: times new roman, serif">13D</font></div>
                  </td>
                  <td align="right" valign="top" width="20%" style="BORDER-TOP: black 0.5pt solid; BORDER-BOTTOM: black 0.5pt solid">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 11.95pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 11pt; FONT-FAMILY: times new roman, serif">Page&#160;7&#160;of
      8 Pages</font></div>
                  </td>
                </tr>
            </table>
          </div>
          <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 13.7pt"><br></div>
        </div>
      </div>
    </div><br>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 12.55pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 11pt; FONT-FAMILY: Times New Roman, serif">Item
5.&#160;&#160;&#160;Interest in Securities of the Issuer</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 12.55pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 12.55pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Times New Roman, serif"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>The Reporting Person beneficially owns
Common Shares as follows:</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 12.55pt"><br></div>
    <div>
      <table cellpadding="0" cellspacing="0" width="100%">
          <tr>
            <td align="left" valign="top" width="24%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 10.25pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 9pt; FONT-FAMILY: times new roman">Name</font></div>
            </td>
            <td valign="top" width="14%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 10.25pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 9pt; FONT-FAMILY: times new roman">Number
      of <br>Common Shares</font></div>
            </td>
            <td valign="top" width="13%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 10.25pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 9pt; FONT-FAMILY: times new roman">Sole
      or Shared <br>Voting</font></div>
            </td>
            <td valign="top" width="12%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 10.25pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 9pt; FONT-FAMILY: times new roman">Sole
      or Shared <br>Dispositive</font></div>
            </td>
            <td valign="top" width="13%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 10.25pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 9pt; FONT-FAMILY: times new roman">%
      of Total <br>Outstanding</font></div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="24%"><font style="DISPLAY: inline; FONT-SIZE: 9pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
            <td valign="top" width="14%"><font style="DISPLAY: inline; FONT-SIZE: 9pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
            <td valign="top" width="13%"><font style="DISPLAY: inline; FONT-SIZE: 9pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
            <td valign="top" width="12%"><font style="DISPLAY: inline; FONT-SIZE: 9pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
            <td valign="top" width="13%"><font style="DISPLAY: inline; FONT-SIZE: 9pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
          </tr>
          <tr>
            <td align="left" valign="top" width="24%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 10.25pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 9pt; FONT-FAMILY: times new roman">I.L.A.R.
      S.p.A</font></div>
            </td>
            <td valign="top" width="14%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 13pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 9pt; FONT-FAMILY: times new roman">8,571,432<font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: super">(1)(2)</font></font></div>
            </td>
            <td valign="top" width="13%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 10.25pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 9pt; FONT-FAMILY: times new roman">Sole</font></div>
            </td>
            <td valign="top" width="12%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 10.25pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 9pt; FONT-FAMILY: times new roman">Sole</font></div>
            </td>
            <td valign="top" width="13%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 10.25pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 9pt; FONT-FAMILY: times new roman">8.48%<font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: super">(3)</font></font></div>
            </td>
          </tr>
      </table>
    </div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 10.25pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 10.25pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman">(1)&#160;&#160;Issuable
upon conversion of 240,000 shares of Series A Preferred Stock of the Issuer
issued to the Reporting Person in connection with the transaction described in
Item 4 of this statement.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 10.25pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman">(2)&#160;&#160;Excludes
214,412 shares owned by Virgilio Pallini, an officer and director of, and holder
of shareholder voting rights in, the Reporting Person, as to which the Reporting
Person disclaims beneficial ownership pursuant to Rule 13d-4</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 10.25pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman">(3)&#160;&#160;The
calculation of the percentage is based on 15,629,776 Common Shares outstanding
as of August 14, 2008, as reported in the Issuer&#8217;s Quarterly Report on Form 10-Q
for the fiscal quarter ended June 30, 2008 filed with the Securities and
Exchange Commission on August 14, 2008, and 85,403,988 Common Shares to be
issued upon the conversion of 2,391,310.72 shares of Series A Preferred Stock
issued in connection with the transaction described in Item 4 of this
statement.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 10.25pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 12.55pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Times New Roman, serif">There
does not exist any agreement between or among the Reporting Persons and any of
the Other Purchasers regarding the purchase, disposition, holding or voting of
any of the Issuer&#8217;s securities. Accordingly, the Reporting Persons disclaim
beneficial ownership of the shares of the Issuer&#8217;s securities held by each of
the Other Purchasers.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 12.55pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 12.55pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Times New Roman, serif">The
information contained in Item 4 of this statement is incorporated herein by
reference.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 12.55pt"><br></div>
    <div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman">&#160;
</font><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 11pt; FONT-FAMILY: Times New Roman, serif">Item
6.&#160;&#160;&#160;Contracts, Arrangements, Understandings or Relationships
With Respect to Securities of the Issuer</font></div>
    </div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 12.55pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 12.55pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Times New Roman, serif"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>The information contained in Item 4 of
this statement is incorporated herein by reference.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 12.55pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 12.55pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 11pt; FONT-FAMILY: Times New Roman, serif">Item
7.&#160;&#160;&#160;Material to be Filed as Exhibits</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 12.55pt"><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">
          <tr valign="top" style="LINE-HEIGHT: 12.55pt;">
            <td style="WIDTH: 36pt">
              <div><font style="DISPLAY: inline; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman">&#160;
      </font></div>
            </td>
            <td style="WIDTH: 72pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Times New Roman, serif">Exhibit
      1</font></div>
            </td>
            <td>
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Times New Roman, serif">Series
      A Preferred Stock Purchase Agreement, dated October 11, 2008 (incorporated
      herein by reference to Exhibit 10.1 to the Current Report on Form 8-K
      filed by the Issuer on October 14,
2008).</font></div>
            </td>
          </tr>
      </table>
    </div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 12.55pt"><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">
          <tr valign="top" style="LINE-HEIGHT: 12.55pt;">
            <td style="WIDTH: 36pt">
              <div><font style="DISPLAY: inline; FONT-SIZE: 9pt; FONT-FAMILY: Times New Roman">&#160;
      </font></div>
            </td>
            <td style="WIDTH: 72pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Times New Roman, serif">Exhibit
      2</font></div>
            </td>
            <td>
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Times New Roman, serif">Certificate
      of Designation of Series A Convertible Preferred Stock of Castle Brands
      Inc. (incorporated herein by reference to Exhibit 3.1 to the Current
      Report on Form 8-K filed by the Issuer on October 14,
    2008).</font></div>
            </td>
          </tr>
      </table>
    </div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 12.55pt"><br></div>
    <div align="center">
    </div><br>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman">&#160;
</font></div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">&#160;
</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman">&#160;
</font></div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right"><font style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman">&#160;
</font></div>
      </div>
    </div><br>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 12.55pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 11pt; FONT-FAMILY: Times New Roman, serif">SIGNATURE</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 12.55pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 30pt; LINE-HEIGHT: 12.55pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Times New Roman, serif">After
reasonable inquiry and to the best of my knowledge and belief, I certify that
the information set forth in this statement is true, complete and
correct.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 12.55pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 12.55pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Times New Roman, serif">Dated
as of October 21, 2008</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 12.55pt"><br></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 12.55pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 252pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 12.55pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Times New Roman, serif">I.L.A.R.
S.p.A</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 12.55pt"><br></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 12.55pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 252pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 12.55pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Times New Roman, serif">By:&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">/s/ Virgilio Pallini<font id="TAB2" style="LETTER-SPACING: 6pt">&#160;&#160;&#160;</font>&#160;</font></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 252pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 12.55pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Times New Roman, serif">Name:&#160;&#160;Virgilio
Pallini</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 252pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 12.55pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Times New Roman, serif">Title:&#160;&#160;Director</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 12.55pt"><br>&#160;</div>
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