UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
__X__ Quarterly Report Under Section 13 or 15(d) of The Securities Exchange Act
of 1934 for the quarterly period ended: June 30, 2008.
____ Transition Report Under Section 13 or 15(d) of the Exchange Act for the
transition period from ____ to ____
Commission file number: 0-24930
CTD HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
Florida 59-3029743
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
27317 N.W. 78th Avenue, High Springs, Florida 32643
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 386-454-0887
Former name, former address and former fiscal year, if changed since last
report: N/A.
Check whether the registrant (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act of 1934 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.
(x)Yes (_) No
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of 'large accelerated filer,'
'accelerated filer,' and 'smaller reporting company' in Rule 12b-2 of the
Exchange Act.
Large accelerated filer (_) Accelerated filer (_)
Non-accelerated filer (_) Smaller reporting company (X)
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act) (_)Yes (x)No
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
As of August 8, 2008, the Company had outstanding 20,930,764 shares of its
common stock.
PART I. Financial Information
Item 1. Financial Statements.
CTD HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
ASSETS
June 30, 2008 December 31, 2007
(Unaudited)
CURRENT ASSETS
Cash and cash equivalents $ 206,636 $ 209,981
Certificate of deposit - 100,000
Accounts receivable 55,770 85,434
Inventory 169,142 107,624
Deferred tax asset 75,000 75,000
Investment due from related party - 853
Other current assets 2,000 2,442
------------- -------------
Total current assets 508,548 581,334
------------- -------------
PROPERTY AND EQUIPMENT, NET 447,973 437,435
------------- -------------
OTHER ASSETS
Certificate of deposit - 163,985
Intangibles, net 84,759 40,967
Deferred tax asset 392,000 375,000
------------- -------------
Total other assets 476,759 579,952
------------- -------------
TOTAL ASSETS $ 1,433,280 $ 1,598,721
============= =============
The accompanying notes to consolidated financial statements are an integral part
of this statement.
F-2
CTD HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
(Continued)
LIABILITIES AND STOCKHOLDERS' EQUITY
June 30, 2008 December 31, 2007
(Unaudited)
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 57,643 $ 73,664
Current portion of long-term debt - 3,942
------------- -------------
Total current liabilities $ 57,643 77,606
------------- -------------
LONG-TERM LIABILTIES
Long-term debt, less current portion - 136,132
Loan from officer - 21,330
------------- -------------
Total long-term liabilities - 157,462
------------- -------------
STOCKHOLDERS' EQUITY
Common stock, par value $.0001 per share,
100,000,000 shares authorized, 23,365,956 and
20,824,291 shares issued and outstanding,
respectively 2,336 2,083
Preferred stock, par value $.0001 per share,
5,000,000 shares authorized; Series A, 1 share
issued and outstanding - -
Additional paid-in capital 3,118,667 3,030,737
Accumulated deficit (1,745,366) (1,669,167)
------------- -------------
Total stockholders' equity 1,375,637 1,363,653
------------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,433,280 $ 1,598,721
============ =============
The accompanying notes to consolidated financial statements are an integral part
of this statement.
F-3
CTD HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
----------------------- -----------------------
2008 2007 2008 2007
----------- ---------- ----------- ----------
PRODUCT SALES $ 160,655 $ 179,697 $ 229,125 $ 330,923
COST OF PRODUCTS SOLD 63,418 12,508 83,959 14,653
----------- ---------- ----------- ----------
GROSS PROFIT 97,237 167,189 145,166 316,270
----------- ----------- ----------- ----------
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 115,061 84,896 243,180 235,827
LITIGATION EXPENSE 929 - 7,344 -
----------- ---------- ----------- ----------
115,990 84,896 250,524 235,827
----------- ---------- ----------- ----------
OTHER INCOME (EXPENSE)
Investment and other
income 7,842 6,380 13,875 13,322
Interest expense - (3,564) (1,716) ( 5,343)
----------- ---------- ---------- ---------
Total other income
(expense) 7,842 2,816 12,159 7,979
----------- ---------- ----------- ---------
NET INCOME (LOSS) BEFORE
INCOME TAXES (10,911) 85,109 (93,199) 88,422
Income Tax Benefit 2,000 - 17,000 -
----------- ---------- ----------- ----------
NET INCOME (LOSS) $ (8,911) $ 85,109 $ (76,199) $ 88,422
=========== =========== ============ ==========
NET INCOME (LOSS) PER
COMMON SHARE
Net income (loss)
per share $ (.000) $ .005 $ (.003) .005
=========== =========== =========== ==========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 22,970,123 16,992,000 22,095,124 16,534,968
=========== =========== =========== ==========
The accompanying notes to consolidated financial statements are an integral part
of these statements.
F-4
CTD HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Increase (Decrease) in Cash and Cash Equivalents
(Unaudited)
Six months ended
June 30
2008 2007
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ (76,199) $ 88,422
----------- -----------
Adjustments to reconcile net income to net
cash provided by (used in) operating
activities:
Depreciation and amortization 12,950 10,658
Deferred Income Tax Benefit (17,000) -
Stock awarded to employees 88,183 53,490
Increase or decrease in:
Accounts receivable 29,664 30,654
Inventory (61,518) (14,817)
Other current assets 442 14,509
Accounts payable and accrued expenses (16,021) (38,504)
----------- ---------
Total adjustments 36,700 55,990
----------- ---------
Net cash provided by (used in)operating
activities (39,499) 144,412
----------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of equipment and building improvements (20,934) (12,846)
Redemption of certificate of deposit 263,985 -
Capitalization Patent database cost (42,818) ( 2,625)
Investment with related party 853 (123,411)
----------- ----------
Net cash provided by (used in) investing 201,086 (138,882)
activities ----------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES
Payments on long-term debt (140,074) (3,160)
Payments on stockholder's loan ( 24,858) 17,104
--------- ----------
NET CASH PROVIDED (USED IN)FINANCING
ACTIVITIES (164,932) 13,944
----------- ----------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (3,345) 19,474
CASH AND CASH EQUIVALENTS, beginning of period 209,981 23,629
------------ ----------
CASH AND CASH EQUIVALENTS, end of period $ 206,636 $ 43,103
============ ===========
F-5
CTD HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Increase (Decrease) in Cash and Cash Equivalents
(Continued)
(Unaudited)
Six months ended
June 30
2008 2007
------------ ------------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for interest $ 1,716 $ 5,343
========== ===========
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND
FINANCING ACTIVITY
Common stock awarded to officers $ 88,183 $ 53,490
=========== ============
The accompanying notes to consolidated financial statements are an integral part
of these statements.
F-6
CTD HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2008
(Unaudited)
The information presented herein as of June 30, 2008 and for the three and six
months ended June 30, 2008 and 2007, is unaudited.
(1) BASIS OF PRESENTATION:
The accompanying financial statements include CTD Holdings, Inc. and its
subsidiaries.
The accompanying financial statements have been prepared in accordance with
generally accepted accounting principles for interim financial information and
with the instructions to Form 10-QSB and Rule 10-01 of Regulations S-X.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting of normal recurring
adjustments) considered necessary for a fair presentation have been included.
Operating results for the three and six month periods ended June 30, 2008, are
not necessarily indicative of the results that may be expected for the year
ending December 31, 2008. For further information, refer to the financial
statements and footnotes thereto included in the Company's annual report of Form
10-KSB for the year ended December 31, 2007.
(2) 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. SFAS 128 eliminated the previous requirement that earnings per share
include the effect of any dilutive common stock equivalents in the calculation.
(3) INCOME TAXES
For 2008, the Company reported a net loss and also realized a net operating tax
loss for the three and six month periods ended June 30, 2008. The Company
recorded the future benefit of this tax loss as a deferred tax asset and an
income tax benefit of $2,000 and $17,000 for the three and six month periods
ended June 30, 2008, respectively. This was based on management's expectation
that it is more likely than not the Company will report net income and net
taxable income for 2008 and future years sufficient to utilize its net operating
loss carry forwards.
For 2007, the Company reported net income and no income tax expense was reported
for the three and six month periods ended June 30, 2007, due to the Company
utilizing the benefit of its net operating loss carry forward. In the fourth
quarter of 2007, the Company reduced the valuation allowance on the deferred tax
asset by $450,000.
(4) CONCENTRATIONS
Sales to two major customers was 39% of total sales for the six months ended
June 30, 2008. Sales to two major customers were 50% of total sales for the six
months ended June 30, 2007.
Substantially all 2008 and 2007 inventory purchases were from three vendors.
The Company has only one source for certain manufactured inventory. However, the
Company has manufactured these products in the past and could do so again, if
necessary. There are multiple sources for its other inventory products.
F-7
(5) COMMITMENTS AND CONTINGENCIES
For 2008, the Company has employment agreements with two officers for total
monthly salaries of $10,000. In addition, the officers are awarded shares of
common stock each month. The number of shares due is equal to $13,500 divided by
eighty percent of the closing price of the Company's common stock on that last
day of each month. The Company recognizes an expense equal to the fair value of
the stock determined using the average stock closing trading price for the month
multiplied by the number of shares awarded for that month. The stock is subject
to trading restrictions under Rule 144. Also, the Company issued shares to one
of its employees. The number of shares due is equal to $500 divided by eighty
percent of the closing price of the Company's common stock on the last day of
each month. For the three and six months ended June 30, 2008, the Company
awarded 791,666 and 2,541,665 shares and recognized an expense of $41,170 and
$88,183, respectively, for stock awarded under these agreements.
For 2007, the Company had employment agreements with two officers for total
monthly salaries of $5,000. In addition, the Company's president was awarded
shares of common stock each month. The number of shares due was equal to $6,500
divided by eighty percent of the closing price of the Company's common stock
price on the last day of each month. The Company recognizes an expense equal to
the fair value of the stock determined using the average stock closing trading
price for the month multiplied by number of shares awarded for that month. The
stock is subject to trading restrictions under Rule 144. For the three and six
months ended June 30, 2007, the Company awarded 1,083,333 and 1,828,125 shares
and recognized an expense of $28,438 and $53,490, respectively, for stock
awarded under the agreements.
On February 7, 2007, the Company and C.E. Rick Strattan filed suit in Circuit
Court in Palm Beach County, Florida, (Case Number 2007CA001818XXXXMB) seeking
the return of the Class A Preferred Share and damages from defendants Eline
Entertainment Group, Inc., Eline Holding Group, Inc., Yucatan Holding Company,
Steven T. Dorrough, Jayme Dorrough, and Barry Rothman, based on representations
made in connection with the Share Exchange Agreement dated August 11, 2005, as
amended and the enforcement of the agreement.
(6) CHANGE IN ACCOUNTING ESTIMATE
During 2007, the Company received a favorable price adjustment for inventory
acquired and resold in 2006, resulting in reduction in cost of goods sold for
2007 of $7,700 in the quarter ended March 31, 2007.
F-8
Item 2. Management's Discussion and Analysis or Plan of Operation.
Introduction
CTD Holdings, Inc. (referred to as the "Company," "CTD" or in the first person
notations of "we," "us," and "our") began operations in 1990. Our revenues are
principally derived from retail sales of cyclodextrins and cyclodextrin
complexes. Our sales are primarily to major chemical supply houses around the
world, pharmaceutical companies, and food companies for research and development
and to diagnostics companies. We acquire many of our products outside the United
States, from Japan, Germany, China and Hungary; but we are gradually finding
satisfactory supply sources in the United States. While we generally enjoy
better supply prices from outside the United States, rising shipping costs are
making domestic sources more competitively priced. To add value to our products,
we maintain a comprehensive database of patented and patent pending uses of
cyclodextrins from the United States Patent Trademark Office. We also maintain a
less comprehensive database that includes patents issued in many other countries
including Japan, Germany and others. This information is available to our
customers. We also offer our customers our knowledge of the properties and
potential new uses of cyclodextrins and cyclodextrin complexes.
As most of our customers use our cyclodextrin products in their research and
development activities, their ordering from us is unpredictable with regard to
timing, product mix and volume. We also have four major customers who have a
significant effect on our revenues when they increase or decrease their research
and development activities that use cyclodextrins. We keep in constant contact
with these customers as to their cyclodextrin needs so we can maintain the
proper inventory composition and quantity in anticipation of their needs. The
sales to major customers and the product mix and volume of products sold has a
significant effect on our revenues and gross profit. These factors contribute to
our significant revenue volatility from quarter to quarter and year to year.
We are engaged in litigation with Eline Entertainment Group, Inc. (Eline) over
breech of contract and the return of a stock power authorization of our one
share of Series A Preferred Stock.
In 2004, we amended the Company's Articles of Incorporation authorizing a series
of "blank check" preferred stock consisting of 5,000,000 shares and creating a
series of Series A Preferred Stock, setting forth its designations, rights and
preferences. The more significant right is Series A Preferred shareholders vote
with the holders of common stock on all matters submitted to a vote of our
shareholders. Shares of Series A Preferred Stock are entitled to one vote more
than one-half of all votes entitled to be cast by all holders of voting capital
stock of the Company on any matter submitted to holders of common shares so as
to ensure that the votes entitled to be cast by the holder of the Series A
Preferred Stock are equal to at least a majority of the total of all votes
entitled to be cast by the holders of common shares. In 2004, we issued one
share of Series A Preferred Stock to C.E. Strattan, our majority shareholder in
exchange for 1,029,412 shares of common stock held by him, which he voluntarily
surrendered to the Company and were cancelled. Effective August 11, 2005, C.E.
Strattan contractually transferred the one outstanding share of Series A
Preferred Stock to Eline Entertainment Group, Inc. (Eline). The agreement with
Eline provides for advances to the Company of up to an aggregate of $1,500,000
to acquire Cyclolab, at Eline's sole discretion. Eline is an SEC reporting
company currently not in reporting compliance. In September 2006, the Company's
President, Mr. Strattan, demanded, in accordance with the expired contract, the
return of the Series A Preferred Stock in the form of a stock power
authorization since the physical share never left the possession of its original
owner, Mr. Strattan. The demand letter was sent to the address given in the
contract and was never acknowledged nor responded to by Eline. The Company has
filed a legal action with regard to its agreement with Eline. See "Legal
Proceedings".
The Company's Board of Directors has decided to create an additional class of
preferred share to be referred to as the Series B Preferred Share. The Series B
Preferred Share would entitle the holder to vote, in addition to other shares
owned by the holder, the number of votes equal to the number of the authorized,
but unissued common shares of the Company. Action to approve the proposed
amendment would not occur until an Information Statement is filed and approved
by the Securities and Exchange Commission.
Liquidity and Capital Resources
Our cash and short-term investments and certificates of deposit decreased to
$206,000 as of June 30, 2008, compared to $474,000 as of December 31, 2007. The
decrease for the six months ended June 30, 2008, was due primarily to increasing
inventory $62,000, the $140,000 payoff of the mortgage on our property, and
$64,000 to develop our patent database and improve our physical facilities.
As of June 30, 2008, our working capital was $450,000 compared to $504,000 at
December 31, 2007. Our cash flows used in operations for the first six months of
2008 was $40,000 compared cash provided by operations of $144,000 for the same
period in 2007. This decrease was due primarily to a $100,000 decrease in sales,
a $62,000 increase in inventory in 2008 and normal timing differences in
accounts receivable and accounts payable.
We accumulated almost $500,000 in cash in January 2008, which is in excess of
our requirements for normal operations and capital projects. We determined the
best use of our additional cash was to pay off the $140,000 mortgage on our
property, which we did in February 2008. This reduces interest expense $850 per
month.
We believe our remaining working capital is sufficient to run our operations at
current expected future operating levels into the near future. We do not require
capital in the next twelve months for normal operations.
In April 2008, we ordered $80,000 of one inventory product (TRMB) in
anticipation of a large order from one of our major customers later in 2008.
This product has a three month or more lead time to acquire from the
manufacturer in the quantity purchased. If this large order does not
materialize, we can sell this product in the normal course of business.
Controlling cash expenses continues to be management's primary fiscal tool.
However, growth requires increased expenditures and we feel that it is
appropriate during the current growth stage to engage consultants that can help
the Company in financial areas outside its expertise, accepting that these fees
will act to reduce profitability. We are working hard to increase revenues to
balance these new expenses, but cannot be sure that such effort will be enough
in the short term to sustain profitable financial performance.
Beginning in 2003, we began improvements and renovations of our corporate office
and have invested $191,000 through December 31, 2007, including paving our
limerock driveway and completing our office renovation. During the six months
ended June 30, 2008, we capitalized $21,000 of improvements including paving the
first 300 feet of our driveway. Currently we are conducting an extensive survey
of our 40 acres of property and existing facilities in preparation for
developing a total site plan for our Research Park facility. In 2008, we plan to
renovate three existing structures to be an inventory warehouse and an
educational auditorium at a estimated cost of $60,000. These buildings have been
previously idle. Over the next five years, we plan to renovate or construct at
least six buildings for an estimated cost of $150,000.
Currently, we are developing a site plan for the research park including survey,
engineering and design. The progress of the site plan is contingent on the
Company's ability to fund our building plan from operating profits and cash
flow. At the conclusion of the site plan, we plan to sell additional stock to
finance the building construction of the research park.
During 2007, we began a major upgrade and update of our searchable cyclodextrin
patent database. This database will be the only database dedicated to issued and
applied for US patents regarding cyclodextrins capable of supporting the
anticipated deluge of litigation created by the sheer volume of cyclodextrin
patenting activities that have occurred over the last five (5) years. We have
capitalized $76,000 for this database through June 30, 2008. We expect the
initial project to cost $85,000 and to be completed by December 31, 2008. We
plan to begin selling subscriptions to customers in 2009. During the first
quarter of 2008, we expanded the project to include significant data
verification and increased the budget by $30,000. We plan to implement phase II
after revenue has been generated from Phase I. Phase II will include entering
U.S. patent applications into the database. On an ongoing basis, we will
continue to enhance the database for ease of use and completeness. We have not
budgeted Phase II at this time. We expect annual database enhancement and
maintenance costs to be at least $20,000 for the foreseeable future.
We issued 2,541,665 shares and 1,828,125 shares of our common stock to officers
and employees for compensation earned under employment agreements for the six
month periods ended June 30, 2008 and 2007, respectively.
We have no off-balance sheet arrangements at June 30, 2008.
Results of Operations
Total product sales to date in 2008 were $229,000 compared to $331,000 for the
same period in 2007. Our major customers continue to be repeat purchasers. In
2008, we had two major customers account for 39% of our sales. In 2007, we had
two major customers accounting for 50% of our sales. The decrease in sales was
due to less sales to our major customers and the normal sales volume volatility
we experience.
Our gross profit margin decreased to 63% for the six months ended JUne 30, 2008
from 96% for the six months ended June 30, 2007, compared to 85% for the year
ended December 31, 2007. This decrease is part of our normal volatility of sales
volume and mix of products. During 2007, we received a favorable price
adjustment for some inventory we acquired and resold in 2006, resulting in
reduction in our 2007 cost of goods sold of $7,700, which had a 5% favorable
gross profit effect. Changes in the product mix in sales also has a significant
effect on our overall gross profit percentage from period to period.
The decrease in the value of the U.S. dollar in relation to the Euro and other
foreign currencies has affected our cost of inventory, and will continue to do
so. We buy most of our products from outside the U.S. Our main supplier of fine
chemicals and complexes has raised its prices 10-15% in Euros. This increase
combined with the decline in the U.S dollar, has seen our costs for these
products increase 55-65%. The cost of our bulk inventory has also increased due
to the decline of the U.S. dollar. These products represent a significant
portion of our revenues. We are not able to raise our prices sufficient to
maintain our historical gross profit percentage and therefore, expect our gross
profit percentage to decline in future quarters.
Our SG&A expenses increased to $257,000 for the six months ended June 30, 2008,
from $236,000 for the six months ended June 30, 2007. We historically incur
significant auditing expenses in the first quarter of the year, which increase
our SG&A costs at the beginning of each year. During 2008, our stock
compensation expense increased to $88,000 from $53,000 in 2007. During 2008 we
increased the compensation to our President.
We continue to incur legal expenses and we may incur significant future legal
fees as the result of our lawsuit with Eline Entertainment Group, Inc.
We recognized a net loss of $(9,000) for the three months ended June 30, 2008,
compared to net income of $85,000 for the three months ended June 30, 2007. We
recognized a net loss of $(76,000) for the six months ended June 30, 2008,
compared to net income of $88,000 for the six months ended June 30, 2007.
We will continue to introduce new products that will increase sales revenue and
implement a strategy of creating or acquiring operational affiliates and/or
subsidiaries that will use cyclodextrins in herbal medicines, waste-water
remediation, pharmaceuticals, and foods. We also intend to pursue exclusive
relationships with major cyclodextrin manufacturer(s) and specialty cyclodextrin
labs to distribute their products. We continue to be the exclusive distributor
in North America of the cyclodextrin products manufactured by Cyclolab Research
Laboratories in Budapest, Hungary.
In keeping with its commitment to use the internet as a major advertising and
public relations outlet, the Company intends to apply greater human resources to
the updating and maintaining of its web site. This valuable asset has been
instrumental in creating and maintaining a worldwide leadership role for us in
the implementation of research and commercialization of cyclodextrin
applications. We believe the maintenance and growth of our web site will return
that investment many times.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Not applicable.
Items 4 and 4T. Controls and Procedures.
a. Management's quarterly report on internal control over financial reporting.
1. Our management is responsible for establishing and maintaining adequate
internal control over financial reporting as defined in Rules 13a-15(f) and
15d-15(f) under the Securities Exchange Act of 1934. Our internal control over
financial reporting is a process designed to provide reasonable assurance that
assets are safeguarded against loss from unauthorized use or disposition,
transactions are executed in accordance with appropriate management
authorization and accounting records are reliable for the preparation of
financial statements in accordance with generally accepted accounting
principles.
2. Internal control over financial reporting is a process tailored to the
Company's unique circumstances, designed under the supervision of the Company's
Chief Executive and Chief Operating Officer, and effected by the Company's Board
of Directors, its consultants and other personnel, taking into account the small
size of the Company, small number of employees and others involved in the
Company's finances. The process uses a system of checks and balances to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
generally accepted accounting principles and includes those policies and
procedures that:
- pertain to the maintenance of records that in reasonable detail accurately and
fairly reflect the transactions and dispositions of the Company's assets and the
review of those transactions and dispositions by the Company's compliance
officer;
- provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted
accounting principles, and that the Company's receipts and expenditures are
being made only in accordance with authorizations of management or the Company's
Board of Directors; and
- provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of the Company's assets that could
have a material adverse effect on the Company's financial statements.
3. As required by Rule 13a-15(b) under the Exchange Act, our Chief Executive
Officer who is also our Chief Operating Officer carried out an evaluation of the
effectiveness of the design and operation of our disclosure controls and
procedures as of the end of the period covered by this report. The Company's
Chief Executive Officer has concluded that the Company's internal control over
financial reporting, as of June 30, 2008 was effective.
4. This quarterly report does not include an attestation report of the Company's
registered public accounting firm regarding internal control over financial
reporting. Management's report was not subject to attestation by the Company's
registered public accounting firm pursuant to temporary rules of the Securities
and Exchange Commission that permit the Company to provide only management's
report in this quarterly report.
b. Changes in internal controls.
The Company made no changes in its internal control over financial reporting
that occurred during the Company's second fiscal quarter that has materially
affected, or which is reasonably likely to materially affect the Company's
internal control over financial reporting.
Part II. OTHER INFORMATION
Item 1. Legal Proceedings.
NONE
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
NONE
Item 3. Defaults Upon Senior Securities.
NONE
Item 4. Submission of Matters to a Vote of Security Holders.
NONE
Item 5. Other Information.
NONE
Item 6. Exhibits.
(2) Plan of purchase, sale, reorganization, arrangement,
liquidation or succession None
(3) Articles of Incorporation and By-Laws
(i) Articles of Incorporation filed August 9, 1990 *
(ii) By-Laws *
(iii) Certificates of Amendment to the Articles of
Incorporation filed November 18, 1993 and
September 24, 1993 *
(4) Instruments defining the rights of security holders,
including indentures
(a) Specimen Share Certificate for Common Stock. *
(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. *
(10.2) Lease Agreement dated July 7, 1994. **
(10.3) Consulting Agreement dated July 29, 1994 between
the Company and Yellen Associates. *
(10.4) License Agreement dated December 20, 1994 between
the Company and Herbe Wirkstoffe GmbH. *
(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. **
(10.6) Extension of Agreement between the Company and
Herbe Wirkstoffe GmbH. ***
(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 ++
(10.11) Employment Agreement of C.E. Rick Strattan
dated October 14, 2003 +++
(10.12) Employment Agreement of George L. Fails
dated October 14, 2003 ****
(10.13) Addendum to Share Exchange Agreement with Eline
Entertainment Group ++++
(10.14) Share Exchange Agreement with Eline Entertainment
Groups +++++
(11) Statement re: computation of per share earnings Note 2 to
Financial
Statements
(15) Letter on unaudited interim financial information ****
(18) Letter on change in accounting principles None
(19) Reports furnished to security holders None
(20) Other documents or statements to security holders or any
document incorporated by reference None
(22) Published report regarding matters submitted to vote of
security holders None
(23) Consents of experts and counsel None
(24) Power of Attorney None
(31) Rule 13a-14(a)/15d-14a(a) Certifications ****
(32) Section 1350 Certifications ****
(99) Additional exhibits None
(100)XBRL-Related Documents None
* 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.
**** Filed herewith.
+ Incorporated by reference to the Company's Form 10-KSB filed with the
Securities and Exchange Commission on April 2, 2001.
++ Incorporated by reference to the Company's Form 10-KSB filed with the
Securities and Exchange Commission on April 1, 2002.
+++ Incorporated by reference to Form S-8 filed December 1, 2003.
++++ Incorporated by reference to the Company's Form 8-K filed with the
Securities and Exchange Commission on September 21, 2005.
+++++Incorporated by reference to the Company's Form 8-K filed with the
Securities and Exchange Commission on August 15, 2005.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant has duly
caused this report to be signed on its behalf by the undersigned thereunto duly
authorized.
CTD HOLDINGS, INC.
Date: August 14, 2008 /s/ C.E. Rick Strattan
-----------------------------
C.E. Rick Strattan
Chief Executive Officer
Chief Financial Officer