Edgar Filing: CTD HOLDINGS INC

UNITED STATES
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

For the fiscal year ended December 31, 2006

( ) TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934

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 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 (_).

Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act. Yes (_) No (X)

State issuer's revenues for its most recent fiscal year: $512,313

State the aggregate market value of the voting and non-voting common equity
held by non-affiliates computed by reference to the price at which the common
equity was sold, or the average bid and asked price of such common equity, as of
a specified date within the past 60 days: $130,443.93 based on the average high
($.03) and low ($.03) price as of March 8, 2007, of $.03 per share.

Note: If determining whether a person is an affiliate will involve an
unreasonable effort and expense, the issuer may calculate the aggregate market
value of the common equity held by non-affiliates on the basis of reasonable
asumptions, if the assumptions are stated.

State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: 15,918,489 shares of
Common Stock as of March 22, 2007.

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. ("Us" or "the Company") was organized as a Florida
corporation on August 9, 1990, with operations beginning in July 1992. We sell
cyclodextrins ("Cyclodextrins" or "CDs") and related products to the food,
pharmaceutical and other industries. We also provide consulting services in the
area of commercialization of CD applications.

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
have developed 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.

We believe 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.

We provide consulting services for the commercial development of new
products containing CDs. Our revenues are derived from consulting, the
distribution of CDs, the manufacturing of selected CD complexes, and sales of
our own manufactured and licensed products containing CDs.

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 (NCDs).

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 ("CMCDs").
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.

Our 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.

We currently sell our 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 in place, the Company believes 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. In 1999 the economic impact of CD's on the Japanese economy was reported
to be $2.6 billion. 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 generally
recognized as safe (GRAS).

Applications of CDs in personal products and for industrial uses have
appeared in many patents and patent applications. Procter & Gamble uses CDs in
Bounce(R), a popular fabric softener and Febreze(R). 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 2001 Janssen Pharmaceutica, a subsidiary of
Johnson & Johnson received approval to market Sporanox(r), an oral and
injectable formulation containing hydroxypropyl BCD.

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 100 times that of the CD itself.

CD Products

Our CD products include Trappsol(R), Aquaplex(R), and AP(TM)-Flavor product
lines. The Trappsol product line consists of approximately 200 different
varieties of CDs and the Aquaplex product line includes more than 60 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 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 and are in use: Trappsol(R), and Aquaplex (R). These properties add to
the intangible asset value of the Company. Since 2000, our Web Site at
http://www.cyclodex.com, a major tangible asset has grown to be a leading
Cyclodextrin information site on the Internet.

CTD purchases CD's from commercial manufacturers around the world
including: Wacker Chemie - Munich, Germany; Nihon Shokuhin Kako - Tokyo, Japan;
Roquette Freres - Le Strem, France; Cerestar Inc. - Hammond IN, USA. At the end
of 2002, CTD became the exclusive distributor in North America of the CD
products manufactured by Cyclolab R&D Labs in Budapest, Hungary. The Company
does not manufacture cyclodextrins.

We have introduced many new products into our 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

Our strategy has been and will continue to be to generate profitable
revenue through sales of CD related products.

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 a majority 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. We have increased our list of major customers
from 3 to 4 thereby continuing to reduce our dependency on sales to a very small
core of repeat purchases.

We intend to increase our business development efforts in the food additive
and personal products industries while continuing to build on our 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
few equals.

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

We believe the failure of businesses to exchange information about CD
molecules has hindered a more rapid commercialization of CDs as safe excipients.
We believe our philosophy of partnering and sharing will act as a catalyst to
create momentum overcoming the inertia created by the previous conservatism and
secrecy.

Our 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,
that continues to diversify.

The Company has taken advantage of the propensity of researchers to use the
Internet to gather information about new products by establishing a website with
the unique and descriptive domain name "cyclodex.com".

We intend to work with clients in countries where 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.

We intend to generate additional revenue through obtaining rights to
certain patents that we will sublicense to appropriate organizations or that we
will use to develop our 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 CDs) and (naturally
modified CD's) NMCDs.

Competition

The Company is currently a leading consultant in determining manufacturing
standards and costs for CDs and CMCDs. 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.

In 2002 we became the exclusive North American distributor of the CD
products manufactured by Cyclolab. We intend to form additional business
relationships with Cyclolab in Hungary by creating a Cyclolab-USA laboratory
facility and thereby strengthen our competitive advantage. The Company believes
that it will be able to acquire, and is currently negotiating to acquire, all of
the outstanding equity interest in Cyclolab for a total purchase price of
$1,525,000. The Company anticipates that in connection with its acquisition of
Cyclolab, it would issue options to Cyclolab's current owners to purchase shares
of CTD Holdings for a purchase price of $0.01 per share.

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
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 to first introduce a product
that will not be regulated by the FDA as a drug because all of its ingredients
are natural products or is 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

The Company employed three 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 Property.

In 2000, the Company bought approximately 40 acres in western Alachua
County, Florida, (the "Property") 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. While the Company has
discontinued mushroom growing operations on the Property, the Company 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.

The Company holds title to the Property in fee simple, subject to a
purchase money mortgage securing repayment of a promissory note with a principal
balance due of $143,764 as of December 31, 2006. The principal amount due on the
note accrues interest at a rate of seven and one-quarter (7.25) percent per year
and neither the note nor the mortgage have a prepayment penalty. The maturity
date of the note is December 5, 2005. The Property is not subject to any lease,
option, purchase, or sales contracts, nor are there any immediate plans to
renovate, improve, or further develop the Property. The Property is in a region
that is experiencing moderate population and development growth which has
increased the market value of the Property. Management believes the limits of
insurance coverage are adequate for the Property.

The Property has a 6,000 sq.ft. facility from which the Company operates
its corporate offices. The anticipated remaining useful life of the facility is
undetermined, but in Management's estimate exceeds 25 years. The Property's
federal tax basis, rate, and method are, respectively, $162,000, 40 years, and
straight-line. The realty tax rate and annual realty taxes assessed on the
Property for the year ended December 31, 2006, are 23.2303 mils and $3,124.00,
respectively.

Item 3. Legal Proceedings.

On February 7, 2007, Registrant 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.

Item 4. Submission of Matters to a Vote of Security Holders.
None

Part II

Item 5. Market for 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. In
2000, CTDI did a 2 for 1 split of its common shares from approximately 2.3
million to 4.6 million issued and outstanding. In conjunction with that
restructuring, we changed the name of CTDI to CTD Holdings, Inc; CTDI was then
incorporated as a Florida corporation and became a wholly owned subsidiary of
CTD Holdings, Inc. In 2000 CTD Holdings, Inc. changed its trading symbol to
CTDH.OB and currently trades on the OTC Bulletin Board as CTDH.OB. 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

2005 First Quarter $ 0.075 $ 0.071
Second Quarter $ 0.074 $ 0.073
Third Quarter $ 0.076 $ 0.072
Fourth Quarter $ 0.049 $ 0.047

2006 First Quarter $ 0.09 $ 0.03
Second Quarter $ 0.07 $ 0.04
Third Quarter $ 0.05 $ 0.03
Fourth Quarter $ 0.05 $ 0.02

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 March 22, 2007, 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 77.

Dividend Policy

The Company will not pay any cash dividends on its common stock in 2006
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.

Recent Sales of Unregistered Securities

None.

Item 6. Management's Discussion and Analysis or Plan of Operation.

Introduction

CTD Holdings, Inc. (referred to as the "Company," "CTD," or "we," "us," and
"our") began operations in 1990. Our revenues are principally derived from the
resale of cyclodextrins and cyclodextrin complexes. Our sales are primarily to
major chemical supply houses around the world, pharmaceutical companies, food
companies for research and development and to diagnostics companies. We acquire
our products principally from outside the United States, largely from Japan and
Hungary, but are gradually finding satisfactory supply sources in the United
States. While we 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 database of patented and patent pending
uses of cyclodextrins as recorded by the United States Patent & Trademark
Office. We also maintain a database that includes patents issued in many other
countries of the World. This information is available to our customers. We also
offer our customers our knowledge of the properties and potential new uses of
cyclodextrins and complexes.

As most of our customers use our cyclodextrin products in their research and
development activities, the timing, product mix, and volume of their orders from
us are unpredictable. 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 potentially significant revenue volatility from quarter to quarter and year
to year.

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. Share 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".

Liquidity and Capital Resources

Our cash and short-term investments remained at approximately $159,000 as of
December 31, 2006 . Our cash flow from operations for 2006 was $26,000 compared
to $129,000 for 2005. The decreased cash flow from operations from 2005 is due
primarily to $112,000 of expenses related to the attempted acquisition of
Cyclolab. While we reported a net loss in 2006 of $102,000, we had $134,000 in
noncash expenses in 2006. The decreased loss is due a number of factors. We
realized a increase of $88,000 in revenue and a $150,000 decrease in selling,
general and administrative expenses (excluding $112,000 of costs related to the
attempted acquisition of Cyclolab) in 2006 compared to 2005. The largest
decrease in expenses was in stock compensation and bonuses ($38,000 decrease).
In 2006, we recorded a $50,000 impairment expense on the Collection; in 2005, we
reported a net $161,000 gain on the Collection (net of a $42,000 impairment
expense), and a $225,000 deferred tax valuation allowance expense.

We believe our working capital is sufficient to run our operations at current
and expected future operating levels into the near future. We do not require
capital in the next twelve months for normal operations. During 2005, we signed
a letter of intent to acquire a majority interest in Cyclolab, located in
Hungary . During 2006, we were unable to obtain the capital necessary to acquire
Cyclolab and discontinued our efforts to do so. We expensed $112,000 in legal,
accounting, and travel costs associated with the Cyclolab acquisition in 2006.

Controlling cash expenses continues to be management's primary fiscal tool.
However, growth requires increased expenditures and while we feel it is
appropriate during the current growth stage to engage consultants that can help
the Company in financial areas outside its expertise, these consulting fees will
act to reduce profitability. We are working hard to increase revenues to balance
these new expenses, but cannot be sure such effort will be enough in the short
term to sustain financial performance like that of the recent past.

During 2004, we acquired a sports memorabilia collection from our President. We
received $5,000 in 2005 and there have been no sales in 2006. We sold no
Collection items in 2006. Beginning in 2007 we plan to begin using E-Bay to list
items for sale. We have no prior experience in retail sales or in selling items
on E-Bay. During 2006 and 2005, we recorded a valuation allowance of $50,000 and
$42,000, respectively on the collection due to the lack of marketability.

Beginning in 2003, we began improvements and renovations of our corporate office
and have invested $123,000 through December 31, 2004. During 2005, we suspended
our improvement and renovations program to redirect our financial resources to
the Cyclolab acquisition. During 2006, we capitalized $17,000. We remain
committed to a Research Park facility for the 40-acre site. The office
renovations will be followed by improved security operations and modest guest
facilities. Contingent on the Company's ability to financially support modest
expansions that will lead to a formal site plan, we anticipate spending at least
another $100,000 over the next two years to position the Company to initiate a
5-year plan for a new Cyclodextrin Research Park.

In April 2004, we acquired a collection of sports memorabilia from our majority
shareholder and President in exchange for 1,029,412 shares of common stock.
While we received a $400,000 appraisal on the collection, we recorded this asset
for $106,000, which represents our majority shareholder's cost basis. We also
engaged a consultant under a one year contract to liquidate the collection for
not less than 75% of its book value as stated in any of the leading collectibles
industry guide books. This agreement expired in April 2005. The consultant was
issued 250,627 shares of common stock valued at $100,250, which we expensed in
2004. We also agreed to an option whereby the consultant could have acquire the
entire collection for $200,000. We recorded the fair value of this option
($204,000) as a liability and a charge to operations in 2004. In 2005, we
recorded a $204,000 gain when the option expired.

We issued 1,791,873 shares and 1,443,151 shares of our common stock to employees
for compensation earned under employment agreements for 2006 and 2005,
respectively.

We have no off-balance sheet arrangements as of December 31, 2006.

Results of Operations and Critical Accounting Policies and Estimates

The results of operations are based on the preparation of consolidated financial
statements in conformity with accounting principles generally accepted in the
United States. The preparation of consolidated financial statements requires
management to select accounting policies for critical accounting areas as well
as estimates and assumptions that affect the amounts reported in the
consolidated financial statements. The Company's accounting policies are more
fully described in Note 1 of Notes to Consolidated Financial Statements.
Significant changes in assumptions and/or conditions in our critical accounting
policies could materially impact the operating results. We have identified the
following accounting policies and related judgments as critical to understanding
the results of our operations.

Baseball Memorabilia Collection Asset

The recoverability of our baseball memorabilia collection asset is evaluated
annually or more frequently if impairment indicators exist. Indicators of
impairment include losses realized on sales and our future operating plans. If
impairment indicators exist, we evaluate the recoverability of the asset using
an overall collection basis based on undiscounted expected future cash flows
based on individual collection piece values published in auction-house
guidebooks and/or reputable trade publications and price guides, less estimated
costs to sell the collection. The recorded value for the collection is not
expected to be recovered through undiscounted future cash flows is written down
to current fair value, which is generally determined from estimated discounted
future net cash flows. We recorded an impairment allowance for $50,000 and
$42,000 as of December 31, 2006 and 2005, respectively. At December 31, 2006,
our valuation allowance equaled our recorded cost of the Collection.

Long-Lived Assets

The recoverability of long-lived assets is evaluated annually or more frequently
if impairment indicators exist. Indicators of impairment include historical
financial performance, operating trends and our future operating plans. If
impairment indicators exist, we evaluate the recoverability of long-lived assets
on an operating unit basis based on undiscounted expected future cash flows
before interest for the expected remaining useful life of the operating unit.
Recorded values for long-lived assets that are not expected to be recovered
through undiscounted future cash flows are written down to current fair value,
which is generally determined from estimated discounted future net cash flows
for assets held for use or net realizable value for assets held for sale.

At December 31, 2006, we have idle buildings located on the same property as our
corporate offices that were used in our former mushroom farming operation. The
carrying value of these idle long-lived assets is $77,000. We have determined
the fair value of these assets exceeds this carrying value based on recent real
estate appraisal. We continue to depreciate the assets over their estimated
useful life. Should the value of these assets decline, we may be required to
record an impairment charge that could be significant. During 2006, the Company
recorded an $12,500 impairment allowance for an autoclave not currently used in
the Company's operation.

Valuation Allowance on Deferred Tax Assets

SFAS 109, "Accounting for Income Taxes" requires that deferred tax assets be
evaluated for future realization and reduced by a valuation allowance to the
extent we believe a portion will not be realized. We consider many factors when
assessing the likelihood of future realization of our deferred tax assets
including our recent cumulative earnings experience, expectations of future
taxable income, the carry-forward periods available to us for tax reporting
purposes, and other relevant factors. At December 31, 2006, our net deferred tax
assets are $515,000, comprised principally of net operating loss carryforwards
(NOLs), with the remaining portion related to temporary timing differences
between tax and financial reporting. Classification of deferred tax assets
between current and long-term categories is based on the expected timing of
realization, and the valuation allowance is allocated on a prorata basis.

We reported a financial net loss of $(101,000), During 2006, we maintained our
deferred tax asset valuation allowance at 100% based on the Company's current
loss, its history of prior losses, and our sales volatility that collectively
reduces the chance of realization of our deferred tax assets. . In 2005, we
increased our valuation allowance to 100% from 48%, which resulted in income tax
expense of $225,000. The range of possible judgments relating to the valuation
of our deferred tax asset is very wide. For example, in 2005 we determined the
weight of available evidence did not support a decision that a portion of our
deferred tax assets will be realized, resulting in the income tax expense of
$225,000. Alternatively, if we had concluded that the weight of available
evidence supported a decision that substantially all of our deferred tax assets
may be realized, we would have a substantial income tax benefit in our statement
of operations.

Significant judgment is required in making this assessment, and it is very
difficult to predict when, if ever, our assessment may conclude our deferred tax
assets is realizable.

2006 Compared to 2005

Total product sales for 2006 were $542,000, a 19% increase over 2005 sales of
$454,000. Our major customers continue to be repeat purchasers. In 2006, our
four largest customers accounted for 58% of our sales; the largest accounted for
22% of sales. In 2005, our four largest customers accounted for 68% of our
sales; the largest accounted for 27% of sales.

Our gross profit margin of 77% for 2006 decreased significantly compared to 85%
for 2005. Changes in the product mix in sales has a significant effect on our
overall gross profit percentage. For 2006, we acquired more inventory from
Cyclolab due to our acquisition plan, which often was more expensive than other
suppliers. Management expects our gross profit to remain in the 70% range for
2007.

Our SG&A expenses decreased to $351,000 in 2006 from $500,000 in 2005 (excluding
$112,000 of costs in 2006 related to the attempted acquisition of Cyclolab),
primarily as a result of a reduction in stock based compensation to officers and
consultants. In 2006, we incurred $112,000 in direct expenses related to
consulting, legal and accounting fees incurred as a result of the Company's
attempted acquisition of Cyclolab.

For 2006 and 2005, the Company has employment agreements with two officers for
total monthly salaries of $4,900. In addition, each month the officers are
awarded shares of common stock restricted by Rule 144. The number of shares
awarded is equal to $6,000 divided by eighty percent of the closing price of the
Company's common stock 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
2006, the Company awarded 1,791,873 shares and recognized an expense of $84,000
for stock awarded under these agreements. For 2005, the Company awarded
1,443,151 shares and recognized an expense of $92,000 for stock awarded under
these agreements. We have executed new employment agreements for 2007.

In August 2005, the Company issued 1,000,000 shares of common stock registered
under Form S-8 to financial consultants and charged an expense of $60,000 in
2005, which equaled the fair value of the stock on the date of the award. The
Company also issued 500,000 shares of common stock registered under Form S-8 to
its President and majority shareholder and charged an expense of $30,000 in
2005, which equaled the fair value of the stock on the date of the award.

In April 2004, we acquired a collection of sports memorabilia from our majority
shareholder and President. We engaged a consultant to liquidate the collection.
The consultant was issued 250,627 shares of common stock valued at $100,250,
which was expensed. This contract expired in March 2005, and the unsold portion
of the Collection was returned to the Company. The Company continues to explore
its options regarding liquidation of the Collection. In 2004, we issued the
consultant an option to acquire the entire collection for $200,000. We recorded
the fair value of this option ($204,000) as a charge to operations during 2004.
In 2005, this option expired and we recorded a gain of $204,000. We received net
proceeds of $5,000 from the sales of items from the collection in 2005.

We expect an increase in our 2007 legal expenses as the result of our legal
actions related to Eline Entertainment, Inc.

For 2006, we maintained the valuation allowance of our deferred tax asset at
100%. In 2005, we increased the valuation allowance on our deferred tax asset to
100% from 48%, resulting in an income tax expense of $225,000 for 2005. This
increase was based primarily on net operating losses realized in 2005 and 2004.
Our deferred tax asset is based on our net operating loss carryforward.

We recognized a net loss for 2006 of $(101,000) compared to a net loss of
$(172,000) for 2005.

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 CD's in herbal medicines, waste-water remediation,
pharmaceuticals, and foods. We also intend to pursue exclusive relationships
with major CD manufacturer(s) and specialty CD labs to distribute their
products. We continue to be the exclusive distributor in North America of the CD
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, we continue to maintain our web site. This asset has
been instrumental in creating and maintaining a worldwide leadership role for us
in the implementation of research and commercialization of CD applications. We
believe the maintenance and growth of our web site will return that investment
many times.

Forward-looking Statement

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 Cyclodextrins; changes in governmental laws and regulations
surrounding various matters, such as labeling disclosures; production and
pricing levels of important raw materials; difficulties of delays in the
development, production, testing and marketing of products; and product margins
and customer product acceptance.

Item 7. Financial Statements.

BAUMANN, RAYMONDO & COMPANY, P.A.
405 NORTH REO STREET, SUITE 200
TAMPA, FL 33609

Report of Independent Registered Public Accounting Firm

To the Board of Directors
CTD Holdings, Inc.
High Springs, Florida

We have audited the consolidated balance sheet of CTD Holdings, Inc. and
subsidiary as of December 31, 2006, and the related consolidated statements of
operations, stockholders' equity and cash flows for the years ended December 31,
2006 and 2005. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). 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 audit provided 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.
and subsidiary as of December 31, 2006, and the results of their operations and
their cash flows for the years ended December 31, 2006 and 2005, in conformity
with U.S. generally accepted accounting principles.

\s\ Baumann, Raymondo & Company, P.A.

Baumann, Raymondo & Company PA
Tampa, Florida
February 12, 2007

CTD HOLDINGS, INC.
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 2006

ASSETS

CURRENT ASSETS
Cash and cash equivalents $ 23,629
Accounts receivable 59,109
Inventory 79,747
Investment due from related party 135,540
Other current assets 24,113
-------------
Total current assets 322,138
-------------
PROPERTY AND EQUIPMENT, NET 334,182
-------------
OTHER

Loan to officer 16,514
Intangibles, net of accumulated
amortization of $3,800 10,267
Idle property and equipment 77,361
-------------
Total other assets 104,142
-------------
TOTAL ASSETS $ 760,462
=============

The accompanying notes to consolidated financial statements are an integral part
of this statement.

F-2

CTD HOLDINGS, INC.
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 2006
(Continued)

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
Accounts payable and accrued expenses $ 52,166
Current portion of long-term debt 6,182
-------------
Total current liabilities 58,348
-------------
LONG-TERM LIABILTIES
Long-term debt, less current portion 142,002
-------------

STOCKHOLDERS' EQUITY
Common stock, par value $.0001 per share,
100,000,000 shares authorized, 15,705,541 shares issued
and outstanding 1,571
Preferred stock, par value $.0001 per share,
5,000,000 shares authorized; Series A, 1 share
issued and outstanding -
Additional paid-in capital 2,881,262
Accumulated deficit (2,322,721)
-------------
Total stockholders' equity 560,112
-------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 760,462
=============

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, 2006 AND 2005

2006 2005
------------- ------------
PRODUCT SALES $ 542,313 $ 454,360

COST OF PRODUCTS SOLD 125,188 66,657
------------- ------------
GROSS PROFIT 417,125 387,703
------------- ------------

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative 350,675 500,316
Acquisition costs - Cyclolab 112,353 -
------------- ------------
Total, selling, general and administrative 463,028 500,316
Expenses ------------- ------------

SPORTS MEMORABILIA COLLECTION
Gain on sales - 2,902
Other income (expense) (50,402) 161,470
------------- ------------
(50,402) 164,372
------------- ------------

OTHER INCOME (EXPENSE)
Investment and other income 19,365 14,736
Interest expense (11,049) (13,956)
Loss on disposal of equipment (13,836)
------------- -----------
Total other income (expense) (5,520) 780
------------- ------------
NET INCOME (LOSS) BEFORE INCOME TAXES (101,825) 52,539

INCOME TAXES - (225,000)
------------- ------------
NET INCOME (LOSS) $ (101,825) $ (172,461)
============= ============

NET INCOME (LOSS) COMMON SHARE: $ (.007) $ (.014)
============= ============

Weighted average number of
common shares outstanding 14,815,279 12,017,790
============= ============

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, 2006 AND 2005

COMMON STOCK PREFERRED STOCK ADDITIONAL TOTAL
PAID-IN ACCUMULATED STOCKHOLDERS'
SHARES PAR VALUE SHARES PAR VALUE CAPITAL DEFICIT EQUITY
------------ --------- ------ --------- ----------- ------------- -------------

Balance, December 31, 2004 10,956,517 $ 1,096 1 $ - $ 2,615,288 $ (2,048,435) $ 567,949

Employment agreements 1,943,151 194 - - 122,110 - 122,304

Shares issued for services 1,000,000 100 - - 59,900 - 60,000

Net loss - - - - - (172,461) (172,461)
------------ ---------- ------ -------- ----------- ------------- -------------
Balance,
December 31, 2005 13,899,668 1,390 1 - 2,797,298 (2,220,896) 577,792

Shares issued under
employment agreements 1,791,873 179 - - 83,406 - 83,585

Shares issued for services 14,000 2 - - 558 - 560

Net loss - - - - - (101,825) (101,825)

Balance, ------------ ---------- ------ -------- ----------- ------------- -------------
December 31, 2006 15,705,541 $ 1,571 1 $ - $ 2,881,262 $ (2,322,721) $ (560,112)
============ ========== ====== ======== =========== ============= =============

The accompanying notes to consolidated financial statements are an integral part
of these statements.

F-5

CTD HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Increase (Decrease) in Cash and Cash Equivalents
DECEMBER 31, 2006 AND 2005

2006 2005
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ (101,825) $ (172,461)
----------- -----------
Adjustments to reconcile net income to net
cash provided by (used in) operating
activities:
Depreciation and amortization 27,463 35,011
Gain on sale of sports memorabilia collection - (2,902)
Loss on disposal of equipment 13,836 -
Deferred income taxes - 225,000
Impairment adjustment-sports memorabilia coll. 50,402 42,000
Stock issued for services - 60,000
Expiration of call option-sports memorabilia coll. - (203,470)
Stock compensation to employees 84,145 122,304
Increase or decrease in:
Accounts receivable (22,707) 22,620
Inventory (25,162) (3,586)
Prepaid expenses (24,113) -
Accounts payable and accrued expenses 24,075 4,251
----------- -----------
Total adjustments 127,939 301,228
----------- -----------
Net cash provided by (used in)operating
activities 26,114 128,767
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of sports memorabilia coll. - 4,545
Purchase of property and equipment (27,628) (22,576)
Purchase of certificate of deposit - (91,048)
Redemption of certificate of deposit 131,381 -
Loan costs incurred - (3,872)
Investment with related party (110,540) (25,000)
----------- -----------
Net cash provided by (used in) investing
activities (6,787) (137,951)

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

CASH FLOWS FROM FINANCING ACTIVITIES

Payments on long-term debt (6,743) (6,114)
Payment on loan payable to stockholder (3,467) (50,131)
Loan to shareholder (16,514) -
Received from shareholder - 2,084
----------- -----------
Net cash used in financing activities (26,724) (54,161)
----------- -----------
Net increase (decrease) in cash and cash equivalents (7,397) (63,345)

CASH AND CASH EQUIVALENTS, beginning of period 31,026 94,371
----------- -----------
CASH AND CASH EQUIVALENTS, end of period $ 23,629 $ 31,026
=========== ===========

F-6

CTD HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Increase (Decrease) in Cash and Cash Equivalents
DECEMBER 31, 2006 AND 2005
(Continued)

2006 2005
------------ ------------

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for interest $ 11,049 $ 13,686
============ ============
Cash paid for income taxes $ - $ -
============ ============
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND
FINANCING ACTIVITY

Common stock issued for services $ 84,145 $ 182,304
============ ============

The accompanying notes to consolidated financial statements are an integral part
of these statements.

CTD HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2006 AND 2005

(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.

(b) BASIS OF PRESENTATION - The consolidated financial statements include
the Company and its wholly 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) ACCOUNTS RECEIVABLE - Accounts receivable are stated at the amount
management expects to collect from outstanding balances. Based on management's
assessment of the credit history with customers having outstanding balances and
current relationships with them, it has concluded that realization losses on
balances outstanding at year-end will be immaterial.

(e) 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. 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 periodically reviews its
long-lived assets to determine if the carrying value of assets may not be
recoverable. If an impairment is identified, the Company recognizes a loss for
the difference between the carrying amount and the estimated value of the asset.

(f) 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.

(g) INTANGIBLES - Intangible assets consist of loan costs and other
intangibles recorded at cost. Intangible are amortized using the straight-line
method over their respective estimated useful lives.

(h) SPORTS MEMORALBILIA COLLECTION - The sports memorabilia collection
(Collection) was acquired from the Company's President and majority shareholder
in 2004 in exchange for common stock of the Company (see Note 13). The
Collection consists principally of baseball cards, but also includes a variety
of other collectible sport memorabilia. The Collection was recorded at the cost
basis of the President and majority shareholder, which was less than the
estimated fair value. The Company records gains as the Collection is sold and
cash is received, net of expenses. The cost of the Collection is expensed at
26.5% of gross proceeds from the sale of the Collection. The 26.5% cost
allocation is based on the recorded cost of the Collection divided by the
estimated fair value of the Collection. The Company periodically reviews the
fair value of the Collection for impairment.

(i) REVENUE RECOGNITION - Revenues are recognized when products are
shipped.

(j) ADVERTISING - Advertising costs are charged to operations when
incurred.

(k) START-UP COSTS - Start-up costs are expensed as incurred.

(l) 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. For stock awarded under
employment agreements (see Note 2), the monthly stock awarded is treated as
issued on the 15th day of each month earned for purposes of computing the
weighted average outstanding shares.

(m) STOCK BASED COMPENSATION - The Company follows the requirements of
Statement of Financial Accounting Standard No. 123(R) "Share-Based Payment." The
Company has employment agreements which call for stock to be awarded to
employees 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 Company also
issues periodic stock bonuses to employees. The Company records an expense equal
to the fair value of the stock on the closing trading price of the stock on the
day awarded.

(n) RECLASSIFICATIONS - Certain amounts in the 2005 financial statements
have been reclassified for comparative purposes to conform with the 2006
presentation.

(o) NEW ACCOUNTING PRONOUNCEMENTS - The Financial Accounting Standards
Board ("FASB") has issued several new standards, which have implementation dates
subsequent to the Company's year end. Management does not believe that any of
these new standards will have a material impact on the Company's financial
position, results of operations or cash flows.

(p) 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) COMMITMENTS AND CONTINGENCIES

In August 2005, the Company issued 1,000,000 shares of common stock registered
under Form S-8 to financial consultants and charged an expense in 2005 for
$60,000, which equaled the fair value of the stock on the date of the award. The
Company also issued 500,000 shares of common stock registered under Form S-8 to
its President and majority shareholder and charged expense in 2005 for $30,000,
which equaled the fair value of the stock on the date of the award.

For 2006, the Company has employment agreements with two officers for total
monthly salaries of $4,900. In addition, the officers are awarded shares of
common stock each month. The number of shares due is equal to $6,000 divided by
eighty percent of the closing price of the Company's common stock 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 2006, the Company awarded 1,791,873
shares and recognized an expense of $83,585 for stock awarded under these
agreements. For 2005, the Company awarded 1,943,152 shares and recognized an
expense of $122,304 for stock awarded under these agreements. Both agreements
have been extended through December 31, 2007. The Company also awarded 14,000
shares of stock to its employees and recorded and expense of $560.

(3) PROPERTY AND EQUIPMENT

Property and equipment as of December 31, 2006, consists of:

Land $ 80,000
Buildings and improvements 241,312
Machinery and equipment 20,230
Office furniture and equipment 58,961
------------
400,503

Less: accumulated depreciation 83,769
------------
316,734

Construction in progress 17,448
------------

Property and equipment, net $ 334,182
============

The carrying value of remaining idle long-lived assets related to a former
mushroom farming operation was $77,361 at December 31, 2006.

(4) CONCENTRATIONS OF CREDIT RISK:

Significant concentrations of credit risk for all financial instruments owned by
the Company, are as follows:

(a) DEMAND AND CERTIFICATE OF DEPOSITS - The Company has demand and
certificate of deposits in financial institutions that are insured by the
Federal Deposit Insurance Corporation up to $100,000. At December 31, 2006, the
demand and certificate deposit bank balance was $24,000. 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 and the United Kingdom. Two customers accounted for 77% of
the accounts receivable balance at December 31, 2006. The Company has no policy
requiring collateral or other security to support its accounts receivable.

(c) INVESTMENT WITH RELATED PARTY - The Company has an oral agreement for
investment services with a nonprofit organization. The Company's president is
also the president of the nonprofit organization. The funds are invested by the
nonprofit in a money market account. The Company earns a proportional share of
the interest earned in the account. The Company has no policy of requiring
collateral or other security to support this amount.

F-8

CTD HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2006 AND 2005

(5) MAJOR CUSTOMERS AND SUPPLIERS:

In 2006, three major customers accounted for approximately 49% of total sales.
In 2005, three major customers accounted for approximately 58% of total sales.

Substantially all 2006 inventory purchases were from three vendors.
Substantially all 2005 inventory purchases were from two vendors.

The Company has only one source for certain manufacturing 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.

(6) LONG-TERM DEBT:

Long-term debt consists of the following as of December 31, 2006:

Mortgage note payable to bank, payments of $1,163
due monthly including principal and interest
at 7.25%, collateralized by land and buildings
with a cost of $210,000 $ 143,764

Note payable to financing company, payments of
$288 due monthly, including principal and interest,
at 6%, collateralized by vehicle with a cost
of $14,881 4,420
-----------

Total long-term debt 148,184

Less current portion (6,182)
-----------
Long-term debt, less current portion $ 142,002
===========

Maturities on long-term debt as of December 31, 2006 over the next five years
and thereafter are as follows:

Year ending
December 31, Amount
------------ ---------
2007 $ 6,182
2008 5,362
2009 4,238
2010 4,556
2011 4,897
2012 and thereafter 122,949
---------
$ 148,184
=========

(7) RELATED PARTY TRANSACTIONS:

The President (who is also the majority common stockholder) had previously
provided loans to the Company. The Company paid the loan off in full during the
year ended December 31, 2006. The loan was unsecured and interest accrued at
4.17%. Interest expense related to the loan totaled $43 and $1,301 for the years
ended December 31, 2006 and 2005, respectively.

During 2006, the President (who is also the majority common stockholder)
borrowed $16,514. The loan is unsecured and interest accrues at 5%. This loan
was a prohibited transaction under Section 402 of the Sarbanes-Oxley Act and was
repaid on February 2, 2007.

(8) 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 consolidated balance sheet. The fair value of all financial instruments
approximates carrying value due to the short-term maturity of the instruments.
The fair value of the financial instruments 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.

(9) INCOME TAXES:

The Company follows the provisions of Statement of Financial Accounting Standard
No. 109 "Accounting for Income Taxes." Differences between accounting rules and
tax laws cause differences between the basis of certain assets and liabilities
for financial reporting purposes and tax purposes. The tax effect of these
differences, to the extent they are temporary, is recorded as deferred tax
assets and liabilities. Income tax expense is the tax payable or refundable for
the period plus or minus the change during the period in deferred assets and
liabilities. Temporary differences which give rise to deferred tax assets and
liabilities consist of net operating loss carryforwards, accelerated
depreciation methods for income tax purposes and interest accrued to related
parties but not for tax purposes until paid.

The Company has available at December 31, 2006, unused operating loss
carryforwards totaling approximately $ 1,647,000 that may be applied against
future taxable income. If not used, the carryforwards will expire as follows:

Year Ending
December 31, Amount
------------ -----------

2009 $ 760,000
2010 195,000
2017 206,000
2020 280,000
2021 71,000
2024 66,000
2025 37,000
2026 32,000
-----------
Total $ 1,647,000
===========

If all of the operating loss carryforwards and temporary deductible differences
were used, the Company would realize a deferred tax asset of approximately
$515,000 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.

At December 31, 2002, management determined that a 100% valuation allowance was
appropriate. For 2003 and 2002, the Company realized net income and utilized
approximately $240,000 of its net operating loss carryforward to offset its
current income tax liabilities. In 2003, Management determined that a reduction
in the valuation allowance to 43% from 100% of the future tax benefit was
appropriate, which resulted in the recognition of a $225,000 deferred tax asset
and a income tax benefit. In 2004, Management increased it valuation allowance
percentage to 48% resulting in no income tax expense or benefit for change in
its deferred tax asset. At December 31, 2005, Management increased the valuation
allowance to 100% due primarily to net losses realized for 2004 and 2005. This
resulted in income tax expense of $225,000 for 2005. For 2006, management
continues to provide a 100% valuation allowance on its deferred tax asset.

Because of the inherent uncertainties in estimating the valuation allowance on
the deferred tax asset, it is at least reasonably possible that the company's
estimate deferred tax asset will change in the near term and be material to the
financial statements.

2006 2005
----------- -----------
Current income tax benefit (expense) $ 7,000 $ (7,000)

Tax benefit (expense) of temporary 13,000 (14,000)
differences

Tax benefit of operating loss carryforwards - 7,000

Decrease (increase) in valuation allowance (20,000) (211,000)

----------- -----------
Total net tax benefit (expense) $ - $ 225,000
=========== ===========

(10) ACQUISITIONS OF SPORTS MEMORABILIA COLLECTION

In April 2004, the Company finalized the acquisition of a sports memorabilia
collection (Collection), from it President and major shareholder. The Company
recorded the Collection at $106,000, which is the acquisition cost basis of the
President and controlling shareholder.

Concurrent with the acquisition of the Collection, the Company entered into a
one-year contract with a consultant to liquidate the Collection which expired in
March 2005. The Company continues to explore its options to continue its
liquidation of the collection.

In 2005, Management determined the sports memorabilia collection to be impaired
due to lack of marketability and recorded an impairment charge of $42,000.

The consultant has the option to purchase the Collection at any time during the
term of the agreement for $200,000 less any sale proceeds already paid to the
Company. The Company computed the fair value of this call option using the
Black-Scholes stock option pricing model. The following assumptions were made in
estimating fair value: risk-free interest rate of 3.5%; no dividend yield;
expected life of one year. The fair value calculated resulting from the issuance
of this option was determined to be $203,470 at December 31, 2004, which is
recorded as a liability in the accompanying balance sheet and charged operations
in the accompanying statement of operations. The Company recalculates the fair
value of the option at the end of each reporting period and recognize any change
as through operations and adjust its liability accordingly.

The consultant had the option to purchase the Collection at any time during the
term of the agreement for $200,000 less any sale proceeds already paid to the
Company. The Company computed the fair value of this call option using the
Black-Scholes stock option pricing model. The far value calculated resulting
from the issuance of this option was recorded as a liability and the expense was
charged to operations. The option expired in March 2005, and the Company
recorded the expiration of the option liability as a gain in the accompanying
statement of operations for the year end December 31, 2005.

(11) CORPORATE CHANGES

The Company amended its Articles of Incorporation authorizing a class of "blank
check" preferred stock consisting of 5,000,000 shares thus creating a series of
Series A Preferred Stock and set forth its designations, rights and preferences.
The more significant right is the Series A share votes together with the holders
of the common stock on all matters submitted to a vote of Company holders of
common stock, with the share of Series A Preferred Stock being 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 common
shareholders 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 common shareholders. Each share of Series A
Preferred Stock has a liquidation preference of $.0001. In 2004,the Company
issued one share of the Series A Preferred Stock to its majority common
shareholder in exchange for 1,029,412 shares of common stock held by the
majority common shareholder, which were surrendered to the Company and
cancelled. Effective August 11, 2005, the outstanding share of the Company's
Series A Preferred Stock was acquired by Eline Entertainment Group, Inc. In
September 2006, the Company's majority common shareholder demanded the transfer
to him of the one share of Series A preferred stock in exchange for 100,000
shares of Eline Entertainment Group, Inc. alleging breach of contract. The share
certificate of Series A Preferred Stock is in the possession of the Registrant.

(12) SIGNIFICANT FOURTH QUARTER ADJUSTMENTS

Management determined the sports memorabilia collection to be impaired due to
lack of marketability and recorded an impairment charge of $50,402 in the fourth
quarter of 2006.

F-12

Item 8. Changes In and Disagreements With Accountants on Accounting and
Financial Disclosure.

On July 19, 2005, the Company engaged Baumann, Raymondo & Company, P.A. as its
independent auditors for the year ending December 31, 2005, to replace the firm
of James Moore & Co., P.L. which was dismissed as its auditors effective July
19, 2005. The decision to change auditors was approved by the Company's Board of
Directors.

The reports of James Moore & Co. on the financial statements of the Company for
the years ended December 31, 2003, and December 31, 2004 did not contain an
adverse opinion or a disclaimer of opinion and were not qualified or modified as
to uncertainty, audit scope or accounting principles.

There were no disagreements with James Moore & Co., P.L., which disagreements,
if not resolved to the satisfaction of James Moore & Co., P.L., would have
caused it to make reference to the subject matter of the disagreement in the
report, on any matters of accounting principles or practices, financial
statement disclosure or auditing scope and procedures in connection with the
audits of the Company's consolidated financial statements for the two-year
period ended December 31, 2004, or with regard to the Company's most recent
10-QSB filed May 13, 2005.

Item 8A. Controls and Procedures.

(a) Evaluation of disclosure controls and procedures.

The Company's management, recognizes its responsibility for establishing and
maintaining internal control over financial reporting for the Company. After
evaluating the effectiveness of our "disclosure controls and procedures" (as
defined in the Securities Exchange Act of 1934 Rules 13a-15(e) and 15d-15(e)) as
of December 31, 2005 (the "Evaluation Date"), the Company's management has
concluded, as of the Evaluation Date, the Company's disclosure controls and
procedures were adequate and designed to ensure the information required to be
disclosed in the reports filed or submitted by us under the Securities Exchange
Act of 1934 is recorded, processed, summarized and reported with in the
requisite time periods. Although the Company's existing disclosure controls and
procedures are adequate, the Company's management acknowledges a material
weakness may exist in those controls and procedures in that i) the accountant
employed by the Company has no training regarding financial
reporting and presentation rules and regulations of the SEC; and ii) the
Company's President/CEO, who oversees all the accountants' work and provides all
internal control functions, while possessing a MBA from the University of
Florida, has no training in matters of accounting, financial reporting, or
presentation rules and regulations of the SEC.

(b) Effectiveness of Internal Control

The Company's management is reviewing the Company's internal controls over
financial reporting to determine the most suitable recognized control framework.
The Company will give great weight and deference to the product of the
discussions of the SEC's Advisory Committee on Smaller Public Companies (the
"Advisory Committee") and the Committee of Sponsoring Organizations' task force
entitled Implementing the COSO Control Framework in Smaller Businesses (the
"Task Force"). Both the Advisory Committee and the Task Force are expected to
provide practical, needed guidance regarding the applicability of Section 404 of
the Sarbanes-Oxley Act to small business issuers. The Company's management
intends to perform the evaluation required by Section 404 of the Sarbanes-Oxley
Act at such time as a framework is adopted by the Company. For the same reason,
the Company's registered accounting firm has not issued an "attestation report"
on the Company management's assessment of internal controls. Although the
Company's existing disclosure controls and procedures are adequate, the
Company's management acknowledges a material weakness may exist in those
controls and procedures in that i) the accountant employed by the Company has no
training regarding financial reporting and presentation rules and regulations of
the SEC; and ii) the Company's President/CEO, who oversees all the accountants'
work and provides all internal control functions, while possessing a MBA from
the University of Florida, has no training in matters of accounting, financial
reporting, or presentation rules and regulations of the SEC.

After evaluation by the Company's management, the Company's management has
determined there were no significant changes in the Company's internal controls
or in other factors that could significantly affect the Company's internal
controls subsequent to the Evaluation Date.

Item 8B. Other Information.

None.

PART III.

Item 9. Directors, Executive Officers, Promoters, Control Persons and Corporate
Governance; Compliance With Section 16(a) of the Exchange Act.

Two (2) directors, constituting the entire Board of Directors, serve until the
next Annual Meeting of shareholders, or until a successor shall be elected and
shall qualify:

Name Age Principal Occupation Year First Became
Director

C.E. Rick Strattan 59 President, CEO and Chairman 1990

George L. Fails 60 Operations Manager 2001

C.E. Rick Strattan, President, CEO and Director since its 1990. Mr. Strattan
served as treasurer of the Company from August, 1990, to May, 1995. From
November 1987 through July 1992, Mr. Strattan was with Pharmatec, Inc., where he
served as Director of Marketing and Business Development for CDs. Mr. Strattan
was responsible for CD sales and related business development efforts. From
November, 1985 through May, 1987, Mr. Strattan served as Chief Technical Officer
for Boots-Celltech Diagnostics, Inc. He also served as Product Sales Manager for
American Bio-Science Laboratories, a Division of American Hospital Supply
Corporation. Mr. Strattan is a graduate of the University of Florida receiving a
B.S. degree in chemistry and mathematics, and has also received an MS degree in
Pharmacology, and an MBA degree in Marketing/Computer Information Sciences, from
the same institution. Mr. Strattan has written and published numerous articles
and a book chapter on the subject of Cyclodextrins.

George L. Fails, Operations Manager CTD, Inc. since 2000. Mr. Fails currently
serves as Operations Manager for CTD, Inc. Prior to joining the Company, Mr.
Fails served as a Detective Sergeant with the Veterans Administration Hospital
in Gainesville, Florida, with special duties as a Predator Officer with the US
Marshall's Service. From 1965 until his retirement in 1986, Mr. Fails served
with the US Army Special Forces, including several tours in Vietnam, Salvador,
and Angola. Mr. Fails also served two years with a United States intelligence
arm. Mr. Fails received his BA from the University of the Philippines, and has
also received degrees from 43 Military schools, as well as the Federal police
Academy in Little Rock, Arkansas.

Directors, including directors also serving the Company in another capacity and
receiving separate compensation therefor shall be entitled to receive from the
Company as compensation for their services as directors such reasonable
compensation as the board may from time to time determine, and shall also be
entitled to reimbursements for any reasonable expenses incurred in attending
meetings of directors. To date, the Board of Directors has received no
compensation, and no attendance fees have been paid.

Audit Committee Financial Expert

No one on our Board of Directors can be deemed to be an audit committee
financial expert. Our business model is not complex and our accounting issues
are straightforward. Responsibility for our operations is centralized within our
executive management, which is comprised of two persons. We recognize that
having a person who possesses all of the attributes of an audit committee
financial expert would be a valuable addition to our Board of Directors,
however, we are not, at this time, able to compensate such a person therefore,
we may find it difficult to attract such a candidate.

Code of Ethics

We have adopted a code of ethics that applies to our principal executive
officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions. Our code of ethics will be
provided to any person without charge, upon request. Requests should be
addressed to Investor Relations Department, c/o CTD Holdings, Inc., 27317 N.W.
78th Avenue, High Springs, Florida 32643.

Item 10. Executive Compensation.

SUMMARY COMPENSATION TABLE

Long-term compensation
........................................................
Annual compensation Awards Payouts
-------------------------------------- ---------------------------- ---------

Securities
Other annual Restricted underlying LTIP All other
Name & principal Year Salary Bonus compensation stock awards options/SARs payouts compensation
($) ($) ($) ($) (#) ($) ($)
=================== ======== ======== =========== ============ ============== ============ ======= ============

C.E. Rick Strattan 2006 $ 36,000 -0- -0- $ 60,000.00 (6) -0- -0- -0-
President, CEO 2005 $ 36,000 $ 30,000 (5) -0- $ 76,290.00 (1) -0- -0- -0-
Chairman 2004 $ 36,000 -0- -0- $ 90,833.33 (2) -0- -0- -0-

George L. Fails 2006 $ 22,800 -0- -0- $ 12,000.00 (7) -0- -0- -0-
Operations Manager 2005 $ 16,478 -0- -0- $ 15,384.00 (3) -0- -0- -0-
2004 $ 22,800 -0- -0- $ 18,166.67 (4) -0- -0- -0-

(1) Reflects grant of 1,202,626 shares
(2) Reflects grant of 809,611 shares
(3) Reflects grant of 240,525 shares
(4) Reflects grant of 161,922 shares
(5) Reflects grant of 500,000 shares
(6) Reflects grant of 1,493,229 shares
(7) Reflects grant of 298,644 shares

On October 14, 2003, the Company entered into a one-year Employment
Agreement with C.E. Rick Strattan, the Company's president, with an annual
salary of $36,000 and $5,000 per month in restricted common shares of the
Company based on the closing value of the Company's shares on the last day of
the month in which the shares are awarded. The Company has agreed to register
Mr. Strattan's shares awarded pursuant to his employment contract. This contract
was extended through December 31, 2007.

Effective January 1, 2004, the Company entered into a one-year Employment
Agreement with George L. Fails to serve as Operations Manager. Mr. Fails is
compensated $1,900 monthly, plus $1,000 per month in restricted common shares of
the Company, based on the closing value of the Company's shares on the last day
of the month in which the shares are awarded. This contract was extended through
December 31, 2007.

Item 11. Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters.

The following table shows the ownership of the Common Stock of the Company
on March 22, 2007, by each person who, to the knowledge of the Company, owned
beneficially more than five percent (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 Amount and Nature of Approximate %
or Identity of Group Beneficial Ownership of Class

C.E. Rick Strattan ....................... 4,441,466 33.88%
4123 N.W. 46th Avenue
Gainesville, FL 32606

George L. Fails............................. 741,091 5.65%
2420 N.W. 142nd Avenue
Gainesville, FL 32609

Aspatuck Holdings, Inc. .................... 2,750,000 20.98%

All Officers and Directors as a group ...... 3,890,684 66.84%

Kiaran Nicole Brooks ...................... 830,000 6.33%
4123 N.W. 46th Avenue
Gainesville, FL 32606

Equity Compensation Plan Information

Number of Number of
securities to be securities remaining
issued upon exer- available for future
cise of outstand- Weighted-average issuance under equity
ing options, exercise price of compensation plans
warrants, and outstanding options, (excluding securities
Plan category and rights warrants and rights reflected in column (a))
(a) (b) (c)
-------------------- ------------------- -------------------- ------------------------

Equity compensation
plans approved by None Not Applicable Not Applicable
security holders

Equity compensation
plans not approved * * * * * * * * * * * See Note 1 to Table (below) * * * * * * * * * * *
by security holders
-------------------- -------------------- ------------------------
Total
==================== ==================== ========================

Notes to Equity Compensation Plan Table:

Note 1 -- The Company has employment agreements terminating on December 31, 2007
with two employees. These agreements require the Company to compensate these
employees, collectively, with $6,000 per month in restricted common shares of
the Company based on the closing value of the Company's shares on the last day
of the month in which the shares are awarded

Item 12. Certain Relationships and Related Transactions, and Director
Independence.

Mr. Strattan periodically advances the Company short-term loans and defers
receipt of salary. The Company owes the stockholder $3,467 at December 31, 2005.
The loan is unsecured and interest accrues at 5%. Interest expense related to
the loan totaled $1,301 and $3,031 for the years ended December 31, 2005 and
2004, respectively.

Item 13. Exhibits.

Exhibits Page

(2) Plan of purchase, sale, reorganization, arrangement,
liquidation, or succession

(3) Articles of incorporation and by-laws

(i) Articles of Incorporation filed August 9, 1990 * None

(ii) By-Laws. * None

(iii) 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 and amendments 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++

(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****

(11) Statement re: computation of per share earnings Note 1(k)
to Financial
Statements
(13) Annual report to security holders for the last
fiscal year, Form 10-Q or 10-QSB or quarterly report
to security holders

(14) Code of Ethics

(16) Letter on changes in certifying accountant*** None

(18) Letter on change in accounting principles None

(21) Subsidiaries of the small business issuer None

(22) Published Report regarding matters submitted to vote of
security holders None

(23) Consent 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

(100) XBRL-Related Documents

* 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.

Item 14. Principal Accountant Fees and Services.

Audit Fees

The aggregate fees billed for the last fiscal year for professional services
rendered by the principal accountant, Baumann, Raymondo & Company for the audit
of the Company's annual financial statements and review of financial statements
included in the Company's Form 10-QSB or services that are normally provided by
the accountant in connection with statutory and regulatory filings or
engagements for those fiscal years was $6,000.

The aggregate fees billed for each of the last two fiscal years for professional
services rendered by the principal accountant, James Moore & Co., P.L. for the
audit of the Company's annual financial statements and review of financial
statements included in the Company's Form 10-QSB or services that are normally
provided by the accountant in connection with statutory and regulatory filings
or engagements for those fiscal years was $37,155.

Audit-Related Fees

No fees were billed during the last fiscal year for any assurance and related
services by Baumann, Raymondo & Company that are not reported under the caption
"Audit Fees". The nature of the services comprising the fees disclosed under
this category was for accounting assistance with merger and acquisition
activities.

The aggregate fees billed in each of the last two fiscal years for assurance and
related services by James Moore & Co., P.L. that are reasonably related to the
performance of the audit or review of the Company's financial statements and are
not reported under the caption "Audit Fees" was $1,695. The nature of the
services comprising the fees disclosed under this category was for accounting
assistance with merger and acquisition activities.

Tax Fees

No fees were billed during the last fiscal year for professional services
rendered by Baumann, Raymondo & Company for tax compliance, tax advice, or tax
planning.

The aggregate fees billed in each of the last two fiscal years for professional
services rendered by James Moore & Co., P.L. for tax compliance, tax advice, and
tax planning was $3,610.

All Other Fees

No other fees were billed during the last fiscal year for professional services
provided by Baumann, Raymondo & Company.

The aggregate fees billed in each of the last two fiscal years for products and
services provided by James Moore & Co., P.L., other than the services reported
above were $356 in paragraphs (e)(1) through (e)(3) of this section. The
nature of the services comprising the fees disclosed under this category was
software training and assistance with payroll tax reporting.

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

CTD HOLDINGS, INC.

By: /s/ C.E. Rick Strattan
---------------------------------
C.E. RICK STRATTAN,
Chief Executive Officer
Chief Operating Officer
Principal Accounting Officer
Date: April 2, 2007

In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the registrant and in the capacities and on
the dates indicated.

By: /s/ C.E. Rick Strattan
---------------------------------
C.E. RICK STRATTAN
Chief Executive Officer
Chief Operating Officer
Principal Accounting Officer
Director
Date: April 2, 2007

By: /s/ George L. Fails
---------------------------------
GEORGE L. FAILS
Director
Date: April 2, 2007