U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-KSB
(Mark One)
(X) ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 (Fee Required)
For the fiscal year ended December 31, 2001
( ) TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 (No Fee Required)
For the transition period from _________ to _________
Commission file number 0-24930
CTD HOLDINGS, INC.
(Name of small business issuer in its charter)
FLORIDA 59-3029743
State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
27317 N. W. 78th Avenue, High Springs, FL 32643
(Address of principal executive offices) (Zip Code)
Issuer's telephone number: 386-454-0887
Securities registered under Section 12(b) of the Exchange Act:
Title of each class Name of each exchange on which registered
None
Securities registered under Section 12(g) of the Exchange Act:
Class A Common Stock
(Title of class)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes X No
----.
Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB ( )
State issuer's revenues for its most recent fiscal year: $289,425.
State the aggregate market value of the voting stock held by
non-affiliates computed by reference at the price at which the stock was
sold, or the average bid and asked prices of such stock, as of a specified
date within the past 60 days: $ 181,694. based on the average high and low
price (reflecting only one sale) as of March 5, 2002 of $.09 per share.
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practical date: 4,791,220 shares of Common Stock
as of March 5, 2002.
DOCUMENTS INCORPORATED BY REFERENCE
None
Transitional Small Business Disclosure Format (Check One): Yes No X
PART I
Item 1. Description of Business
CTD Holdings, Inc. ("the Company") was organized
as a Florida corporation on August 9, 1990, with operations beginning in July
1992. The Company sells cyclodextrins ("Cyclodextrins" or "CDs") and related
products to the food, pharmaceutical and other industries. The Company has
recently began growing and selling mushrooms. The Company also provides
consulting services.
CDs
Cyclodextrins are molecules that bring together oil and water and have
potential applications anywhere oil and water must be used together. Successful
applications have been made in the areas of agriculture, analytical chemistry,
biotechnology, cosmetics, diagnostics, electronics, foodstuffs, pharmaceuticals
and toxic waste treatment. Stabilization of food flavors and fragrances is the
largest current worldwide market for CD applications. The Company and others are
already developing CD-based applications in stabilization of flavors for food
products; elimination of undesirable tastes and odors; preparation of antifungal
complexes for foods and toiletries; stabilization of fragrances and dyes;
reduction of foaming in foods; cosmetics and toiletries; and the improvement of
quality, stability and storability of foods.
CDs can improve the solubility and stability of a wide range of drugs. Many
promising drug compounds are unusable or have serious side effects because they
are either too unstable or too insoluble in water. Strategies for administering
currently approved compounds involve injection of formulations requiring pH
adjustment and/or the use of organic solvents. The result is frequently painful,
irritating, or damaging. These side effects can be ameliorated by CDs. CDs also
have many potential uses in drug delivery for topical applications to the eyes
and skin.
The Company believes that the application of CDs in both OTC and ethical
ophthalmic products provides the greatest opportunity for the successful and
timely introduction of CD containing preparations for topical drug use.
The Company provides consulting services for the commercial development of
new products containing CDs. The Company's revenues are derived from consulting,
the distribution of CDs, the manufacturing of selected CD complexes, and sales
of its own manufactured and licensed products containing CDs.
Mushrooms
On May 7, 2000, the Company created Natural Spirit Mushroom Enterprise,
Inc., a Florida corporation, for the purpose of growing, developing and
marketing mushroom-based products, some of which would be combined with
cyclodextrin to be used in herbal, cosmetic and alternative medicines. Natural
Spirit acquired the rights to certain proprietary methods of exotic mushroom
cultivation from a defunct mushroom producing company. CTD issued 26,500 shares
of its common stock to investors and promoters of the defunct company for their
rights to certain processes expected to be used by Natural Spirit.
Natural Spirit's operations were financed by CTD. CTD made an initial
direct investment of approximately $80,000 to acquire approximately 40 acres of
land, building and equipment formerly used as a Mushroom Farm. The funds came
from profits from operations and $50,000 in new CTD stock sold between March and
June of 2000.
The Company discontinued mushroom growing operations in early 2001.
CD Product Background
CDs are donut shaped circles of glucose (sugar) molecules. CDs are formed
naturally by the action of bacterial enzymes on starch. They were first noticed
and isolated in 1891 by a French scientist, Villiers, as he studied rotting
potatoes. The bacterial enzyme naturally creates a mixture of at least three
different CDs depending on how many glucose units are included in the molecular
circle; six glucose units yield Alpha CD ("ACD"); seven units, beta CD ("BCD");
eight units, gamma CD ("GCD"). The more glucose units in the circle, the bigger
the circle, or donut. The inside of this "donut" provides an excellent resting
place for "oily" molecules while the outside of the donut is significantly
compatible with water enabling clear stable solutions of CDs to exist in aqueous
environments even when an "oily" molecule is carried within the donut hole. The
net result is a molecular carrier that comes in small, medium, and large sizes
with the ability to transport and deliver "oily" materials using water as the
primary vehicle.
CDs are manufactured in large quantities by mixing appropriate enzymes with
starch solutions, thereby reproducing the natural process. ACD, BCD and GCD can
be manufactured by an entirely natural process and therefore are considered to
be natural products. Additional processing is required to isolate and separate
the CDs. The purified ACD, BCD, and GCD are referred to collectively as natural
CDs (NCD's).
The chemical groups on each glucose unit in a CD molecule provide chemists
with ways to modify the properties of the CDs, i.e. to make them more water
soluble or less water soluble, thereby making them better carriers for a
specific chemical. The CDs that result from chemical modifications are no longer
considered "natural" and are referred to as chemically modified CDs ("CMCD's").
Since the property modifications achieved are often so advantageous to a
specific application, the Company does not believe the loss of the "natural"
product categorization will prevent its ultimate commercial use. It does,
however, create a greater regulatory burden.
The Company's strategy is to sell CDs and to introduce products with little
or no regulatory burden in order to minimize product expenses and create
profitable revenue.
The Company currently sells its products for use in the pharmaceutical,
food and industrial chemical industries.
CD Market
The food additive industry has been experimenting with CDs for many years.
Now that commercial supply of these materials can be assured and regulatory
approval is imminent, the Company believes that the food additive industry will
continue to increase its use of CDs.
CDs have been used in a variety of food products in Japan for over 25
years. The market for the use of CDs in food products in 1997 in Japan was
estimated at $150 million. Within the last five years, more European countries
have approved the use of CDs in food products. In the United States, major
starch companies are renewing their earlier interest in CDs as food additives.
Oral arguments for regulatory approval by the United States Food and Drug
Administration ("FDA") have been accepted. As of November 3, 1997, BCD use as a
food additive in 10 categories of food products was confirmed to be GRAS.
Applications of CDs in personal products and for industrial uses have
appeared in many patents and patent applications. Proctor & Gamble uses CDs in
Bounce(R), a popular fabric softener. Avon uses CDs in its dermal preparations
using its Age Protective System APS(R). These uses will grow as the price of the
manufactured CDs decrease or are perceived as acceptable in view of the value
added to the products.
In Japan at least twelve pharmaceutical preparations are now marketed which
contain CDs. The CDs permit the use of all routes of administration. Ease of
delivery and improved bioavailability of such well-known drugs as nitroglycerin,
dexamethasone, PGE(1&2), and cephalosporin permit these "old" drugs to command
new market share and sometimes new patent lives. Because of the value added, the
dollar value of the worldwide market for products containing CDs and for
complexes of CDs can be 2 to 3 to 4 times that of the CD itself.
CD Products
The Company's CD products include its Trappsol(R), Aquaplex(R), and
AP(TM)-Flavor product lines. The Trappsol product line consists of approximately
15 different varieties of CDs and the Aquaplex product line includes more than
three dozen different complexes of active ingredients with various CDs. In
addition to these product lines, the Company introduced Garlessence( R) in the
fourth quarter of 1995. Garlessence is the first ingestible product containing
CDs to be marketed in the U.S. The Company believes that by marketing
Garlessence it has demonstrated industry leadership. The Company also provides
consulting services, research coordination, and the use of CD Infobase(TM), a
comprehensive database of CD related information. The Company has protected its
service and trade marks by registering them with the U.S. Patent and Trademark
office. The following trademarks have been approved: Trappsol(R),
Garlessence(R), and Aquaplex (R). These properties add to the intangible asset
value of the Company.
CTD purchases CD's from commercial manufacturers around the world
including: Wacker Chemie - Munich, Germany; Ensuiko Sugar Refining Co., Ltd. -
Yokohama, Japan; Nihon Shokuhin Kako - Tokyo, Japan; Roquette Freres - Le Strem,
France; American-Maize Products - Hammond IN, USA. CTD purchases specialty CD's
on occasion from Cyclolab R&D Company in Budapest, Hungary. The Company does not
manufacture cyclodextrins.
The Company has also introduced new products into its basic line of CDs and
CD complexes--liquid preparations of CDs; relatively unprocessed, less expensive
mixtures of the natural CDs; naturally modified CDs (glucosyl and maltosyl); and
finally, excess production of custom complexes when those items are not
proprietary or restricted by the customer.
Business Strategy
The Company's strategy has been and will continue to be to generate
profitable revenue through sales of CD related goods and services.
From inception through the current year, sales of CDs and CD derivatives
have been sufficient to provide the necessary operational profitability to
sustain the Company. Since these materials were simply purchased and resold,
they had the least value-added attributes.
Presently, sales of CD complexes represent all of the Company's product
sales revenues. Transition to the more value-added complexes continues and is
desirable for increased profitability since higher margins can be maintained for
these products. However, it appears that the distribution oriented business of
CD sales has eroded. Combined with price reductions dictated by the market, the
revenues from the sales of distributed products have decreased as much as the
revenue from CD complexes has increased. The Company continues to be dependent
on just a few major customers for the majority of its revenue. In response to
this situation the Company has expanded its original business strategy of
parlaying its leadership position in the presently quite small CD industry as a
supplier of CDs, CD derivatives, CD complexes to include:
(1) Marketing and launching a dozen OTC and naturaceutical products (e.g.,
dietary supplements) utilizing CD delivery benefits. For example, by
extracting specific ingredients from the garlic clove and complexing these
ingredients with Trappsol(R) B (beta cyclodextrin) Garlessence(R) was
created. Similar products can be created with any of the other herbal
ingredients such as ginseng, echinacea, ginkgo, cat's claw, and melatonin.
(2) Licensing the use of the Trappsol(R)symbol for use by others wishing to use
CD delivery technology. This strategy is reflected in the Garlessence
package which, in addition to the Garlessence trademark, carries a
Trapposol trademark. This symbol will be promoted as an indication that a
Trappsol(R)cyclodextrin is used with the product within and thereby assures
the user of the quality of the aqueous delivery system. This symbol will be
licensed in the same way as the MLB (Major League Baseball) symbol is for
baseball related products and the Nutrasweet(R)symbol is for artificially
sweetened products containing Nutrasweet(R).
The Company intends to increase its business development efforts in the
food additive and personal products industries while continuing to build on its
successes in the pharmaceutical industry.
Business development on behalf of the Company's clients will include the
following: (i) negotiation of rights and/or licenses to CD-related inventions;
(ii) consultation with manufacturers to establish customized manufacturing
specifications; (iii) patentability assessments and strategic planning of patent
activities; (iv) trade secret strategies; (v) regulatory interface; and (vi)
strategic marketing planning.
The Company believes its competitive advantage lies in its experience and
know how in the use and application of CDs, areas in which it believes it has a
significant lead.
In addition to its licensing efforts, the Company intends to coordinate
research studies in which it will retain a portion of the rights created as a
result of the research work supported.
Assuming the availability of funds, the Company will negotiate licensing
rights to its own selected inventions. Because of its comprehensive technical
and patent database for CD-related inventions, the Company believes it is
uniquely positioned to take advantage of constantly evolving licensing
situations.
Marketing Plan
The Company believes that the failure of businesses to exchange information
about CD molecules has hindered a more rapid commercialization of CDs as safe
excipients. The Company believes that its philosophy of partnering and sharing
will act as a catalyst to create momentum overcoming the inertia created by the
previous conservatism and secrecy.
The Company's sales have always been direct, volatile and driven by the
acceptance of CD's as beneficial excipients. Arrangements with large laboratory
supply companies and several diagnostic companies have provided a strong sales
base, but at the price of dependency on a few customers.
The Company has taken advantage of the propensity of researchers to use the
Internet to gather information about new products by establishing a WEB Page and
"site" on the world-wide web and obtaining a unique and descriptive domain name:
"cyclodex.com".
Rather than trying to push companies to introduce CD products, the Company
intends to pull them into the market by launching approximately seven new CD
containing products of its own into the U.S. market over the next five years.
These products will address needs in the relatively unregulated areas of natural
medicine, topical OTC (over the counter) preparations, veterinary products, and
home gardening.
The Company intends to work with clients in countries whose current
regulatory views include CDs as natural products acting as excipients to
introduce beneficial pharmaceuticals improved by CDs.
Along with the new products themselves, the Company has created a
licensable mark that may be used by other manufacturers wishing to take
advantage of the improved aqueous delivery afforded by Trappsol CDs. This
protected mark has the capability of generating revenues in a manner similar to
the Nutrasweet(R) (artificial sweetener) and MLB(R) (major league baseball)
logos.
The Company intends to generate additional revenue through obtaining rights
to certain patents that it will sublicense to appropriate organizations or that
it will use to develop its own proprietary products. Revenue would then be
expected to result from sub-licensing royalties, sales of CD complexes to be
used in the newly developed pharmaceuticals, and finally from the sales of the
products to end users.
Assuming an ongoing successful process of development, approval and
adoption of CDs and CMCDs for pharmaceutical applications, the Company's
objective is to initiate dialogue and be well prepared for partnerships with
major food companies. Price is a primary concern in this market, but unlike
pharmaceuticals where FDA permission for clinical testing may be obtained before
actual FDA product approval, food companies cannot feed experimental
formulations to test panels of consumers until the ingredients, i.e., the CDs,
receive approval for human consumption. Therefore, the Company will work with
the food companies and key university food research groups to initially evaluate
non-taste applications. These questions will initially be explored using NCDs
since commercial adoption will depend heavily upon the price of the CD selected
and NCDs will always be the least expensive. The benefits derived from the use
of CDs with expensive ingredients (e.g., flavors, fragrances)have already become
accepted commercial uses for CMCDs (chemically modified CSk's) and (naturally
modified CD's) NMCDs.
Competition
The Company is currently a leading consultant in determining what the
manufacturing standards and costs for CDs and CMCDs are. However, there will
always exist the potential for competition in this area since no patent
protection can be comprehensive and forever exclusive. Nevertheless, there is a
perceived barrier to entry into the CD industry because of the lack of general
experience with CD complexation procedures. The Company has established a strong
business relationship with one of the experts in this field -- Cyclolab in
Hungary -- and has utilized the services and expertise of this laboratory. The
Company believes this relationship provides a significant marketing lead time,
and combined with a strong marketing presence, will give the Company a two to
three year lead time advantage over its competitors.
The Company intends to form a more formal business relationship with
Cyclolab in Hungary by creating a Cyclolab-USA laboratory facility and thereby
strengthen its competitive advantage. Discussions between the principals of
Cyclolab and CTD have been ongoing for more than 5 years. Potential
relationships which have been discussed include joint venture arrangements, the
Company's outright acquisition of Cyclolab and the employment of Cyclolab
personnel to create Cyclolab-USA. There is no assurance that the Company will be
able to reach a formal business relationship with Cyclolab.
Government Regulation
Under the Federal Food, Drug and Cosmetic Act ("Food and Drug Act"), the
Food and Drug Administration ("FDA") is given comprehensive authority to
regulate the development, production, distribution, labeling and promotion of
food and drugs. The FDA's authority includes the regulation of the labeling and
purity of the Company's food and drug products. In the event the FDA believes
that any company is not in compliance with the law, the FDA can institute
proceedings to detain or seize products, enjoin future violations or assess
civil and/or criminal penalties against that Company.
The FDA and comparable agencies in foreign countries impose substantial
requirements upon the introduction of therapeutic drug products through lengthy
and detailed laboratory and clinical testing procedures, sampling activities and
other costly and time consuming procedures. The extent of potentially adverse
government regulations which might arise from future legislation or
administrative action cannot be predicted.
Under present FDA regulations, FDA defines drugs as "articles intended for
use in the diagnosis, cure, mitigation, treatment or prevention of disease in
man." The Company's product development strategy is at first to introduce
products that will not be regulated by the FDA as drugs because all of its
ingredients are natural products or are generally regarded as safe (GRAS) by the
FDA. The Company is continually updated by counsel as to changes in FDA
regulations that might affect the use of and claims for these products. There is
no assurance that the FDA will not take the position that the Company's food and
nutritional supplement products are subject to requirements relating to drug
development and sale. The effect of such determination could be to limit or
prohibit distribution of such products.
Employees
In 2001 the Company employed four persons on a full time basis. None of
the Company's employees belong to a union. The Company believes relations with
its employees are good.
Item 2. Description of Properties.
On June 4, 2000, the Company bought approximately 40 acres in Alachua
County, Florida, for a purchase price of $210,000 which was paid for in
part by a new first mortgage of $150,000. The property had been developed
in part as a mushroom growing facility. The Company has discontinued
mushroom growing operations, but continues to use the property as its
corporate headquarters. Its present 6,000 sq.ft. facility is expected to be
adequate to house the Company's operations for the foreseeable future.
Item 3. Legal Proceedings.
None
Item 4. Submission of Matters to a Vote of Security Holders.
None
Part II
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters.
In October 1994, the Company's securities began trading on the OTC Bulletin
Board and in the over-the-counter market "pink sheets" under the symbol CTDI.
Since the commencement of trading of the Company's securities, there has been an
extremely limited market for its securities. The following table sets forth high
and low bid quotations for the quarters indicated as reported by the OTC
Bulletin Board.
High Low
1999 First Quarter $ 0.406 $ 0.115
Second Quarter $ 0.437 $ 0.156
Third Quarter $ 0.25 $ 0.187
Fourth Quarter $ 0.468 $ 0.156
2000 First Quarter $ $
Second Quarter $ 0.438 $ 0.313
Third Quarter $ 0.313 $ 0.203
Fourth Quarter $ 0.203 $ 0.203
2001 First Quarter $ 0.141 $ 0.141
Second Quarter $ 0.15 $ 0.11
Third Quarter $ 0.15 $ 0.07
Fourth Quarter $ 0.11 $ 0.10
Over-the-counter market quotations reflect inter-dealer prices, without
retail mark-up, mark-down or commissions and may not represent actual
transactions.
Holders
As of December 31, 2001, the number of holders of record of shares of
common stock, excluding the number of beneficial owners whose securities are
held in street name was approximately 56.
Dividend Policy
The Company does not anticipate paying any cash dividends on its common
stock in the foreseeable future because it intends to retain its earnings to
finance the expansion of its business. Thereafter, declaration of dividends will
be determined by the Board of Directors in light of conditions then existing,
including without limitation the Company's financial condition, capital
requirements and business condition.
Item 6. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Liquidity and Capital Resources
As of December 31, 2001, the Company's working capital was negative ($102,544)
compared to negative ($128,751) at the end of 2000. The improvement in working
capital was primarily the result of $38,476 in additional loans from the
majority shareholder, which are classified as long-term in the Company's
financial statements.
The Company no longer operates the mushroom cultivation company, NSME. The
losses attributable to this discontinued operation were $37,228 and $197,402 for
2001 and 2000, respectively.
The Company moved out of its previously leased office and lab space in November
of 2001 to the office complex on its 40-acre property in High Springs, FL.
Management believes that working capital will continue to improve in 2002 as the
result of normal sales and a continued emphasis to monitor and control expenses.
The Company has already experienced an increase in product orders for the first
quarter of 2002.
Results of Operations
Sales of cyclodextrin and related manufactured complexes are historically highly
volatile. In efforts to offset this volatility, the Company continues to expand
its revenue producing activities in CD related research and development services
for unrelated companies and expand its line of manufactured products. Product
sales of CTD are primarily to large pharmaceutical and food companies for
research and development purposes.
During 2001, the Company improved its dependency on major customers. In 2001,
three customers represented 63% of total sales. In 2000, one customer
represented 52% of sales. The result of this diversification in customers is
expected to have some stabilizing effect on the Company's annual revenue.
Total product sales for 2001 were $289,425, a decrease of 17% from 2000 sales of
$347,201. This change is due to the normal volatility of the Company's sales.
The Company's gross profit margin of 88% for the 2001 improved on 2000's GPM of
83%. The Company expects to realize a similar gross profit margin in 2002.
The Company's SG&A expenses decreased to $279,110 in 2001 from $381,398 in 2000.
With the greatly reduced expenses implemented for 2001, management has improved
the financial condition of the Company to begin 2002. Management will continue
to hold expenses to a minimum in 2002.
The Company and its subsidiaries will continue to introduce new products that
will enhance profitability and continue to implement its strategy of creating or
acquiring operational affiliates and/or additional subsidiaries that will use
CD's in herbal medicines, waste-water remediation, pharmaceuticals, and foods.
The Company also intends to pursue exclusive relationships with major CD
manufacturer(s) and specialty CD labs to distribute their products.
In keeping with its commitment to use the internet as a major advertising and
public relations outlet, the Company continues to utilize the local ISP and web
site managing Company, Live Wire. In April, 2000, the Company had Live Wire
upgrade the Company's Web Site. This $30,000 asset has been instrumental in
creating and maintaining a worldwide leadership role for the Company in the
implementation of research and commercialization of CD applications. The Company
believes that the maintenance and growth of its Web Site will return the
investment many times.
Forward-looking Statements
All statements other than statements of historical fact in this report are
"forward-looking statements" as defined in the Private Securities Litigation
Reform Act of 1995, and are based on management's current expectations of the
Company's near term results, based on current information available and
pertaining to the Company. The Company assumes no obligation to update publicly
any forward-looking statements. Actual results may differ materially from those
projected in the forward-looking statements. These forward-looking statements
involve risks and uncertainties, including, but not limited to, the following:
demand for cyclodextrin and mushrooms; changes in governmental laws and
regulations surrounding various matters, such as labeling disclosures;
production and pricing levels of important raw materials; and difficulties or
delays in the development, production, testing and marketing of products;
product margins and customer product acceptance.
Item 7. Financial Statements
[LETTERHEAD OF JAMES MOORE & CO.]
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholders of
CTD Holdings, Inc.:
We have audited the accompanying consolidated balance sheet of CTD Holdings,
Inc. as of December 31, 2001, and the related consolidated statements of
operations, stockholders' equity and cash flows for the years ended December 31,
2001 and 2000. These consolidated financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provides a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of CTD Holdings, Inc.
as of December 31, 2001, and the results of its operations and its cash flows
for the years ended December 31, 2001 and 2000, in conformity with accounting
principles generally accepted in the United States of America.
The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 2 to the
consolidated financial statements, the Company has experienced a significant
operating loss and has a working capital deficiency. These conditions raise
substantial doubt about its ability to continue as a going concern. Management's
plans regarding those matters also are described in Note 2. The consolidated
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
/s/James Moore & Company
January 24, 2002
Gainesville, Florida
F - 1
CTD HOLDINGS, INC.
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 2001
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 8,190
Accounts receivable 25,760
Inventory 31,965
Note receivable 10,456
Other 1,305
-------------
Total current assets 77,676
PROPERTY AND EQUIPMENT 387,025
INTANGIBLES 3,510
-------------
TOTAL ASSETS $ 468,211
=============
The accompanying notes to consolidated financial statements are an integral part
of this statement.
F-2
CTD HOLDINGS, INC.
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 2001
(Continued)
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 152,390
Current portion of long-term debt 8,199
Line of credit 19,631
-------------
Total current liabilities 180,220
-------------
LONG-TERM LIABILTIES
Long-term debt, less current portion 161,389
Due to shareholder 95,895
-------------
Total long-term liabilities 257,284
-------------
STOCKHOLDERS' EQUITY
Class A common stock, par value $.0001 per share, 9,900,000 shares authorized,
4,791,220 shares issued
and outstanding 480
Class B non-voting common stock, par
value $ .0001 per share, 10,000,000 shares -
authorized, 0 shares issued and outstanding
Additional paid-in capital 1,954,498
Accumulated deficit (1,924,271)
-------------
Total stockholders' equity 30,707
-------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 468,211
=============
The accompanying notes to consolidated financial statements are an integral part
of this statement.
F-3
CTD HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000
2001 2000
------------- -------------
PRODUCT SALES $ 289,425 $ 347,201
COST OF PRODUCTS SOLD 34,026 58,239
------------- -------------
GROSS PROFIT 255,399 288,962
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 279,110 381,398
------------- -------------
LOSS FROM OPERATIONS (23,711) (92,436)
------------- -------------
OTHER INCOME (EXPENSE)
Investment and other income 2,605 2,304
Interest expense (35,435) (28,294)
------------- -------------
Total other income (expense) (32,830) (25,990)
------------- -------------
LOSS FROM CONTINUINING OPERATIONS
BEFORE INCOME TAXES (56,541) (118,426)
INCOME TAX EXPENSE, net - (195,000)
------------- -------------
NET LOSS FROM CONTINUING OPERATIONS (56,541) (313,426)
Loss from discontinued operations (37,228) (197,402)
Impairment allowance on assets of
discontinued operations (20,113) -
------------- ------------
NET LOSS (113,882) (510,828)
============= =============
NET LOSS PER COMMON SHARE:
From continuing operations $ (.01) $ (.09
From discontinued operations $ (.01) $ (.05)
============ ============
Net Loss $ (.02) $ (.14)
============ ===========
Weighted average number of
Common shares outstanding 4,388,922 3,702,203
============ ===========
The accompanying notes to consolidated financial statements are an integral part
of these statements.
F-4
CTD HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000
COMMON STOCK ADDITIONAL TOTAL
PAID-IN ACCUMULATED STOCKHOLDERS'
SHARES AMOUNT CAPITAL DEFICIT EQUITY
----------- ----------- ------------ ------------- ------------
Balance, December 31, 1999 3,175,220 $ 316 $ 1,765,785 $ (1,299,561) $ 466,540
Shares issued for services 736,000 74 92,726 - 92,800
Shares issued to acquire
rights 40,000 4 29,996 - 30,000
Shares sold 40,000 4 9,996 - 10,000
Net loss - - - (510,828) (510,828)
----------- ----------- ----------- ----------- -----------
Balance, December 31, 2000 3,991,220 398 1,898,503 (1,810,389) 88,512
Shares issued for services 800,000 82 49,918 - 50,000
Shares issued for company expense - - 6,077 - 6,077
by stockholder
Net loss - - - (113,882) (113,882)
------------ ------------ ------------ ------------ ------------
Balance, December 31, 2001 4,791,220 $ 480 $ 1,954,498 $ (1,924,271) $ 30,707
============ ============ ============= ============ ============
The accompanying notes to consolidated financial statements are an integral part
of these statements.
F-5
CTD HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
DECEMBER 31, 2001 AND 2000
Increase (Decrease) in Cash and Cash Equivalents
2001 2000
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (113,882) $ (510,828)
----------- -----------
Adjustments to reconcile
net loss to net cash used
for operating activities:
Depreciation and amortization 51,293 26,414
Loss on disposal of equipment - 425
Valuation allowance - other - 4,111
Valuation allowance deferred income taxes - 195,000
Stock issued for services 50,000 78,330
Stock issued by stockholder for company expense 6,077 -
Decrease (increase) in accounts receivable (17,035) 12,539
Decrease in inventory 24,353 28,931
Increase in other current assets 5,793 5,593
Increase (decrease) in accounts payable
and accrued expenses (30,027) 130,783
----------- -----------
Total adjustments 90,454 482,126
----------- -----------
Net cash used for operating activities (23,428) (28,702)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment (9,295) (97,007)
Note receivable to employees - (910)
Collection of note receivable to employee 9,687 19,259
------------ -----------
Net cash provided by (used for) investing activities 392 (78,658)
------------ -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from (payments for) line of credit (5,561 21,898
Proceeds from loan to stockholder 38,128 32,096
Payment to stockholder on loan - (8,372)
Proceeds from sale of stock - 30,000
Payment on long-term debt (18,031) (24,997)
----------- -----------
Net cash provided by financing activities 14,536 50,625
------------ -----------
Net decrease in cash and cash equivalents (8,500) (56,735)
CASH AND CASH EQUIVALENTS, beginning of year 16,690 73,425
------------ ------------
CASH AND CASH EQUIVALENTS, end of year $ 8,190 $ 16,690
============ ============
F-6
CTD HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
DECEMBER 31, 2001 AND 2000
Increase (Decrease) in Cash and Cash Equivalents
(Continued)
2001 2000
------------ ------------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the year for interest $ 35,435 $ 28,294
=========== ============
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND
FINANCING ACTIVITY
Common stock issued for company expenses
paid by stockholder $ 6,077 $ -
=========== ============
Common stock issued for services $ 50,000 $ 78,330
============ ============
Common stock issued to acquire rights $ - $ 10,000
============ ============
Acquisition of property and equipment with debt $ - $ 12,845
============ ============
The accompanying notes to consolidated financial statements are an integral part
of these statements.
F-7
CTD HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31,2001 AND 2000
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
The following is a summary of the more significant accounting policies of CTD
Holdings, Inc. and Subsidiary (the Company) that affect the accompanying
consolidated financial statements:
(a) ORGANIZATION AND OPERATIONS - The Company was incorporated in August
1990, as a Florida corporation with operations beginning in July 1992. The
Company is engaged in the marketing and sale of cyclodextrins and related
products to food, pharmaceutical and other industries. The Company also provides
consulting services related to cyclodextrin technology. In 1999, the Company
formed Nature Spirit Mushroom Enterprises, Inc. (NSME), a 99% owned subsidiary,
to grow mushrooms and to develop and market a line of mushroom based products.
The Company discontinued its mushroom growing operation in the first quarter of
2001.
(b) BASIS OF PRESENTATION - The consolidated financial statements include
the Company and its 99% owned subsidiary. All intercompany accounts and
transactions have been eliminated.
(c) CASH AND CASH EQUIVALENTS - For the purposes of reporting cash flows,
the Company considers all highly liquid investments with an original maturity of
three months or less to be cash equivalents.
(d)PROPERTY AND EQUIPMENT - Property and equipment are recorded at cost.
Depreciation on property and equipment is computed using primarily the
straight-line method over the estimated useful lives of the assets, which range
from three to forty years. Depreciation on leasehold improvements is computed on
the straight-line method over the lesser of the term of the related lease or the
estimated useful lives of the assets.
(e) INVENTORY - Inventory consists of cyclodextrin products purchased for
resale and chemical complexes. Inventory is recorded at the lower of cost
(first-in, first-out) or market.
(f) INTANGIBLES - Intangible assets consist of loan costs recorded at cost.
Intangible assets are amortized using the straight-line method over their
respective estimated useful lives.
(g) REVENUE RECOGNITION - Revenues are recognized when products are
shipped.
(h) ADVERTISING - Advertising costs are charged to operations when
incurred.
(i) START - UP COSTS - The initial costs incurred to organize the Company's
subsidiary were expensed as incurred.
(j) NET INCOME (LOSS) PER COMMON SHARE - Net income (loss) per common share
is computed in accordance with the requirements of Statement of Financial
Accounting Standards No. 128 (SFAS 128). SFAS 128 requires net income (loss) per
share information to be computed using a simple weighted average of common
shares outstanding during the periods presented.
(k) RECLASSIFICATIONS - Certain amounts in the 2000 financial statements
have been reclassified for comparative purposes to conform with the 2001
presentation.
F-8
CTD HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2001 AND 2000
(l) USE OF ESTIMATES - The preparation of consolidated financial statements
in conformity with accounting principles generally accepted in the United States
of America requires management to make estimates and assumptions that affect
certain reported amounts and disclosures. Accordingly, actual results could
differ from those estimates.
(2) CONTINGENCIES:
As shown in the accompanying consolidated financial statements, the Company
incurred a net loss of $113,882 for the year ended December 31, 2001, and as of
that date, the Company's current liabilities exceeded its current assets by
$102,544. Those factors create an uncertainty about the Company's ability to
continue as a going concern. Management of the Company is reducing expenses and
attempting to increase revenues to return the Company to a profitable position.
Additionally, management is working with creditors to work out agreeable payment
plans, until the cash flow position improves. The ability of the Company to
continue as a going concern is dependent on the Company achieving these plans.
The financial statements do not include any adjustments that might be necessary
if the Company is unable to continue as a going concern.
(3) COMMITMENTS:
The future minimum lease payments under all operating leases are as follows:
YEAR ENDING
DECEMBER 31, AMOUNT
------------ -----------
2002 7,108
2003 3,947
2004 -
2005 -
2006 -
-----------
Total $ 11,055
===========
Rent expense under all operating leases was $30,868 and $28,606 for 2001 and
2000, respectively.
F-9
CTD HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2001 AND 2000
(3) COMMITMENTS: (Continued)
The Company issued 200,000 shares of common stock to its President in 2000, that
were awarded and expensed in 1999.
On March 1, 2000, the Company entered into a one year public relations contract
with a consultant. The Company issued the consultant 200,000 shares of common
stock. The Company valued the shares at $40,000, approximately 50% less than the
bid price on the contract date. The Company recorded a prepaid asset of $40,000,
which was amortized over one year, the life of the contract.
On April 1, 2000, the Company adopted a stock bonus plan for the Company's
president. The amount of stock due each month is equal to $5,000 divided by 50%
of the lowest stock trade amount for that month. The Company issued 75,566
shares and expensed $45,000 during 2000.The plan was discontinued at the end
of 2000 in favor of a new employment agreement with its president.
On May 31, 2001, the Company entered into a one-year employment contract with
its president with an annual salary of $30,000. In conjunction with the
employment agreement, the Company issued 800,000 shares of common stock valued
at $50,000 for salary earned under the agreement plus bonuses. At December 31,
2001, the Company owes it's president $9,687 of accrued salary.
During the third quarter of 2001, the Company entered into a financial services
agreement with a consultant. The Company paid $2,500 and the Company's president
issued 50,000 shares of common stock valued at $9,200 on behalf of the Company.
The value of the common stock was based on the trading value on the date of
award less a discount for lack of market float for the stock. The 50,000 shares
of common stock were obtained from the Company's president for $3,125, and the
difference of $6,075 was recorded as an increase to additional paid - in
capital. The Company charged the total consultant compensation of $11,700 to
expense in 2001.
(4) PROPERTY AND EQUIPMENT
Property and equipment as of December 31, 2001, consists of:
Land $ 80,000
Buildings and improvements 249,604
Machinery and equipment 131,772
Office furniture and equipment 59,247
------------
520,623
Less: accumulated depreciation 133,598
------------
Property and equipment, net $ 387,025
=============
F-10
CTD HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2001 AND 2000
(5) CONCENTRATIONS OF CREDIT RISK:
Significant concentrations of credit risk for all financial instruments owned by
the Company, are as follows:
(a) DEMAND DEPOSITS - The Company has demand deposits in a local branch
bank that is insured by the Federal Deposit Insurance Corporation up to
$100,000. At December 31, 2001, the bank balance was $14,211. The Company has no
policy of requiring collateral or other security to support its deposits.
(b) ACCOUNTS RECEIVABLE - The Company's accounts receivable consist of
amounts due primarily from food and pharmaceutical companies located primarily
in the United States. The Company has no policy requiring collateral or other
security to support its accounts receivable.
(6) MAJOR CUSTOMERS AND SUPPLIERS:
Sales to three customer in 2001 represented approximately 63% of total sales.
Sales to one customers in 2000 represented approximately 52% of total sales.
Purchases from two suppliers in 2001 represented approximately 24 % of total
costs of products sold. There were no major suppliers in 2000.
(7) LONG-TERM DEBT:
Long-term debt consists of the following as of December 31, 2001:
Mortgage note payable to bank, payments of $1,782 due monthly including
principal and interest at 7.95%, collateralized by land and buildings
with a cost of $210,000 $ 169,588
Less current portion 8,199
-----------
Long - term debt, less current portion $ 161,389
===========
Maturities on long-term debt as of December 31, 2001 over the next five years
are as follows:
Year ending
December 31, Amount
2002 $ 8,199
2003 8,876
2004 9,607
2005 10,400
2006 11,257
2007 and thereafter 121,249
---------
$ 169,588
=========
F-11
CTD HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2001 AND 2000
The Company has a $25,000 unsecured line of credit with a local bank. The
monthly minimum payment is calculated based on the outstanding balance. The
interest rate is prime plus 3%(7.75% at December 31, 2001). The credit line can
be canceled and payment of the outstanding amount due can be required on demand
by the bank at any time. At December 31, 2001, $ 19,631 was outstanding and owed
to the bank.
(8) RELATED PARTY TRANSACTIONS:
The Company has the following note receivable due from an employee at December
31, 2001:
Mortgage receivable, payments of $454 due semi-monthly including
principal and interest at 8%, collateralized by a personal
residence, maturing in 2002 $ 10,456
==========
The majority shareholder periodically advances the Company short-term loans and
defers receipt of salary. The Company owes the shareholder $ 95,895 at December
31, 2001. The loan is unsecured, due on demand, including interest at 10%.
Interest expense related to the loans totaled $ 8,652 for the year ended
December 31, 2001.
(9) FAIR VALUE OF FINANCIAL INSTRUMENTS:
Statement of Financial Accounting Standards No. 107 "Disclosures about Fair
Value of Financial Instruments" requires disclosure of fair value to the extent
practicable for financial instruments which are recognized or unrecognized in
the balance sheet. The fair value of the financial instruments disclosed herein
is not necessarily representative of the amount that could be realized or
settled, nor does the fair value amount consider the tax consequences of
realization or settlement. The following table summarizes financial instruments
by individual balance sheet account as of December 31, 2001:
CARRYING FAIR
AMOUNT VALUE
---------- ---------
FINANCIAL ASSETS
Cash and cash equivalents $ 8,190 $ 8,190
Accounts receivable 25,760 25,760
Note receivable 10,456 10,456
---------- ---------
Total financial assets $ 44,406 $ 44,406
========== =========
FINANCIAL LIABILITIES
Accounts payable and accrued expenses $ 152,390 $ 152,390
Line of credit 19,631 19,631
Long-term debt 169,588 169,588
Due to shareholder 95,895 95,895
---------- ---------
Total financial liabilities $ 437,504 $ 437,504
========== =========
F-12
CTD HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2001 AND 2000
The fair value of all financial instruments classified as current assets or
liabilities approximates carrying value due to the short-term maturity of the
instruments.
(10) INCOME TAXES:
The Company has available at December 31, 2001, unused operating loss
carryforwards totaling approximately $ 1,800,000 that may be applied against
future taxable income. If not used, the carryforwards will expire as follows:
Year Ending
December 31, Amount
----------------- -----------------
2009 $ 998,000
2010 195,000
2017 206,000
2020 281,000
2021 130,000
-----------------
Total $ 1,810,000
=================
If all of the operating loss carryforwards and temporary deductible differences
were used, the Company would realize a deferred tax asset of approximately
$447,000
based upon expected income tax rates. Under Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes", the deferred tax asset should
be reduced by a valuation allowance if it is likely that all or a portion of it
will not be realized. Realization depends on generating sufficient taxable
income before the expiration of the loss carryforwards. Management has
established a valuation allowance equal to the amount of the deferred tax asset
due to uncertainty of realization of the benefit of the net operating losses
against future taxable income.
2001 2000
----------- ------------
Current income tax expense $ - $ -
Tax benefit of temporary differences (56,000) (71,000)
Effect of increase (decrease) in valuation
allowance 56,000 266,000
----------- ------------
Total net tax expense $ - $ 195,000
=========== ============
F-13
CTD HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2001 AND 2000
(11) PRIVATE PLACEMENT OF STOCK:
Beginning in 1999, the Company began offering a total of 1,300,000 shares of
common stock under a private placement memorandum that expired on September 30,
2000. During 2000, 40,000 shares were sold for $30,000.
(12) DISCONTINUATION OF MUSHROOM FARMING OPERATIONS:
During the first quarter of 2001, the Company discontinued its mushroom growing
operation. In accordance with Statement of Financial Accounting Standards No.
121 "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of," the Company reviewed the long-lived assets related to
the mushroom farming operation to determine if the carrying value of the assets
may not be recoverable. When an impairment is identified, the Company recognizes
a loss for the difference between the carrying amount and the estimated value of
the asset. The fair values of the assets evaluated were based on an estimate of
discounted cash flow analysis or recent sales information of similar assets. As
of December 31, 2001, the Company determined there was no impairment of land,
property or equipment related to the mushroom farming operations. However, the
Company determined there was an impairment in the carrying value of goodwill and
other intangible assets related to the mushroom farming operations. Therefore,
the Company recorded an impairment expense of $20,113, which reduced the
carrying value of goodwill to zero at December 31, 2001.
The carrying value of the remaining idle long-lived assets related to the
mushroom farming operations was approximately $172,000 at December 31, 2001.
F-14
SUMMARY COMPENSATION TABLE
(three fiscal years ended December 31,
1999, 2000 and 2001)
Annual Long Term
Compensation Compensation
---------------------------------------------------------
Other All
Annual Other
Name and Principal Position Year Salary Bonus Compensation Compensation
C.E. Rick Strattan 2001 $ 835 -0- -0- $59,687(1)
Chief Executive Officer, President 2000 $32,918 -0- -0- $40,000(2)
1999 $42,000 -0- -0- $ 7,800(3)
(1) Reflects grants of 800,000 shares
(2) Reflects grants of 336,000 shares
(3) Reflects grants of 200,000 shares
On November 15, 1995, the Company adopted a non-qualified employee stock
purchase plan pursuant to which employees may purchase restricted shares of the
Company's common stock at a price of 50% of the current bid price of the shares
in amounts not to exceed the employee's gross pay. Pursuant to the plan,
employees have elected to purchase 33,400 shares, of which 15,800 shares have
been purchased by Mr. Strattan.
On May 31, 2001, the Company entered into a one-year employment agreement
with Mr. Strattan at an annual salary of $30,000 per year. The Agreement
authorized the payment of $100,000 of Mr. Strattan's accrued salary by the
issuance of the Company's common shares at a rate of $.125 per share.
Performance-Based Stock Compensation
On January 28, 2000, the Board of Directors authorized a bonus of $10,000
and 250,000 common shares to Mr. Strattan and 1,500 shares to Lisa Stephens for
their work in 1999. The Company believes Ms. Stephens shares were issued in
error.
On April 5, 2000, the Board of Directors approved the repurchase of 106,474
common shares from Burckhardt and Company for a total consideration of
$6,388.44.
On November 3, 2000, the Board of Directors authorized a bonus of 100,000
common shares to C.E. Rick Strattan in consideration of his work in 2000. These
shares were issued in 2000.
Item 11. Security Ownership of Certain Beneficial Owners and Management.
The following table shows the ownership of the Common Stock of the Company
on March 29, 2000, by each person who, to the knowledge of the Company, owned
beneficially more than five (5%) of such stock, the ownership of each director,
and the ownership of all directors and officers as a group. Unless otherwise
noted, shares are subject to the sole voting and investment power of the
indicated person.
Names and Address of Individual or .........Amount and Nature of Approximate %
Identity of Group ..........................Beneficial Ownership of Class
C.E. Rick Strattan(1)....................... 2,772,400 57.86%
4123 N.W. 46th Avenue
Gainesville, FL 32606
All Officers and Directors as a group ...... 2,772,400 57.86%
(1) Held by Strattan Associates, Ltd., of which Mr. Strattan is the general
partner. Strattan Associates, Ltd. is a limited partnership established by Mr.
Strattan for estate tax purposes and is not otherwise engaged in business.
Strattan Associates, Ltd. is the owner of the 500,000 shares of CTD stock. Mr.
Strattan is the President/CEO and Director of the Company.
Item 12. Certain Relationships and Related Transactions.
On March 10, 2000, the Company adopted a resolution whereby 10,000 shares
of the Company's common stock, issued in the name of Gregory V. DeLong, be
returned to the Company's treasury stock as authorized but unissued shares,
pursuant to a Stock Power retained by the Company.
On August 10, 2000, the Company purchased 10,000 shares of common stock
from Atlanta Syndication Network, Inc. for $5,000. The shares were originally
issued in April 1997. The shares were canceled after the Company bought them.
On November 24, 2000, the Company issued 106,474 shares to Burckhardt and
Co. for its services performed in 2000.
On January 28, 2000, the Board of Directors authorized a bonus of $10,000
and 250,000 common shares to Mr. Strattan and 1,500 shares to Lisa Stephens for
their work in 2000.
On April 5, 2000, the Board of Directors approved the repurchase of 106,474
common shares from Burckhardt and Company for a total consideration of
$6,388.44.
On November 3, 2000, the Board of Directors authorized a bonus of 100,000
common shares to C.E. Rick Strattan in consideration of his work in 2000. These
shares were issued in 2000.
On March 13, 2000, CTD entered into an agreement with Randy "Lazarus" McAtee
d/b/a "Small Potatoes" to provide financial public relations services for CTD
for one year. CTD has compensated Mr. McAtee by the transfer of 100,000
restricted shares.
PART IV.
Item 13. Exhibits and Reports on Form 8-K.
(a) Exhibits Page
(1) Reports of Independent Certified Accountants F-1
(2) Financial Statements F-2
Exhibits required by Item 601, Regulation S-B:
(3) Articles of incorporation and by-laws
(a) Articles of Incorporation filed August 9, 1990 * None
(b) By-Laws. * None
(c) Certificates of Amendment to the Articles of
Incorporation filed November 18, 1993 and
September 24, 1993. * None
(4) Instruments defining the rights of security
holders, including indentures
(a) Specimen Share Certificate for Common Stock. * None
(9) Voting Trust Agreement None
(10) Material Contracts
(10.1) Agreement of Shareholders dated November 11, 1993
by and among C.E. Rick Strattan, Garrison Enterprises,
Inc. and the Company. * None
(10.2) Lease Agreement dated July 7, 1994**. None
(10.3) Consulting Agreement dated July 29, 1994 between
the Company and Yellen Associates. * None
(10.4) License Agreement dated December 20, 1994 between
the Company and Herbe Wirkstoffe GmbH. * None
(10.5) Joint Venture Agreement between the Company and
Ocumed, Inc. dated May 1, 1995, incorporated by
reference to the Company's Form 10-QSB for the
quarter ended June 30, 1995.** None
(10.6) Extension of Agreement between the Company and Herbe
Wirkstoffe GmbH.*** None
(10.7) Lease Extension+
(10.8) Loan Agreement with John Lindsay+
(10.9) Small Potatoes Contract+
(10.10) Employment Agreement with C.E. Rick Strattan dated
May 30, 2001++
(11) Statement re: Computation of Per Share Earnings Note 1 to
Financial
Statements
(16) Letter on changes in certifying accountant*** None
(18) Letter on change in accounting principles None
(22) Subsidiaries of Registrant None
(23) Published Report re: Matters Submitted to Vote of
Security Holders None
(24) Consents of Experts and Counsel None
(25) Power of Attorney None
(27) Financial Data Schedule
(28) Additional Exhibits None
(29) Information from reports furnished to state insurance
regulatory authorities None
(b) Reports on Form 8-K:
No Form 8-K was filed for the quarter ended DECEMBER 31, 2000.
* Incorporated by reference to the Company's Form 10-SB filed with the
Securities and Exchange Commission on February 1, 1994.
** Incorporated by reference to the Company's Form 10-KSB filed with the
Securities and Exchange Commission on March 29, 1997.
*** Incorporated by reference to the Company's Form 10-KSB filed with the
Securities and Exchange Commission on March 28, 2000.
+ Incorporated by referenced to the Company's Form 10-KSB filed with the
Securities and Exchange Commission on April 2, 2001.
++ Filed herewith.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
(Registrant) CTD HOLDINGS, INC.
/S/ C.E. Rick Strattan
By (Signature and Title) _______________________________________
C.E. RICK STRATTAN, President,
Chief Executive Officer, Chief
Operating Officer and
Director
Date: March 29, 2002