NOTE 4 — EQUITY INVESTMENT

Investment in Gosling-Castle Partners Inc., consolidated

For the three months ended December 31, 2016 and 2015, GCP had pretax net income on a stand-alone basis of $1,016,217 and $950,481, respectively. The Company allocated 40% of this net income, or $406,487 and $380,193, to non-controlling interest for the three-month periods ended December 31, 2016 and 2015, respectively. For the nine months ended December 31, 2016 and 2015, GCP had pretax net income on a stand-alone basis of $2,657,241 and $3,635,312, respectively. The Company allocated 40% of this net income, or $1,062,896 and $1,454,125, to non-controlling interest for the nine-month periods ended December 31, 2016 and 2015, respectively. Combined with the effects of income tax expense, net, allocated to noncontrolling interests as described in Note 1.J Income Taxes, the cumulative balance allocated to noncontrolling interests in GCP was $4,203,961 and $3,353,191 at December 31 and March 31, 2016, respectively, as shown on the accompanying condensed consolidated balance sheets.

Investment in Copperhead Distillery Company, equity method

In June 2015, CB-USA purchased 20% of Copperhead Distillery Company (“Copperhead”) for $500,000. Copperhead owns and operates the Kentucky Artisan Distillery. The investment was part of an agreement to build a new warehouse to store Jefferson’s bourbons, provide distilling capabilities using special mash-bills made from locally grown grains and create a visitor center and store to enhance the consumer experience for the Jefferson’s brand. The investment has been used for the construction of a new warehouse in Crestwood, Kentucky dedicated to the storage of Jefferson’s whiskies. The Company has accounted for this investment under the equity method of accounting. For the three months ended December 31, 2016 and 2015, the Company recognized $26,362 and $4,500 of income from this investment, respectively, and for the nine months ended December 31, 2016 and 2015, the Company recognized $49,682 and $9,013 of income from this investment, respectively The investment balance was $568,349 and $518,667 at December 31 and March 31, 2016, respectively, as shown on the accompanying condensed consolidated balance sheets.