<PAGE>


================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

                QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                  FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2008

                        COMMISSION FILE NUMBER 0001-22563

                               CDSI HOLDINGS INC.
        (Exact name of small business issuer as specified in its charter)


        DELAWARE                                            95-4463937
(State or other jurisdiction of                           (I.R.S. Employer
incorporation or organization)                          Identification Number)


100 S.E. SECOND STREET, 32ND FLOOR
             MIAMI, FL                                           33131
(Address of principal executive offices)                      (Zip Code)

                                 (305) 579-8000
                (Issuer's telephone number, including area code)

     INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS
REQUIRED TO BE FILED BY SECTION 13 OR 15(d) OF THE EXCHANGE ACT DURING THE
PRECEDING 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 [ ]


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
DEFINITION OF "LARGE ACCELERATED FILER", "ACCELERATED FILER" AND "SMALLER
REPORTING COMPANY" IN RULE 12B-2 OF THE EXCHANGE ACT.

[ ] LARGE ACCELERATED FILE                       [ ] ACCELERATED FILER

[ ] NON-ACCELERATED FILER                        [X] SMALLER REPORTING COMPANY

INDICATE BY CHECK MARK WHETHER THE REGISTRANT IS A SHELL COMPANY (AS DEFINED IN
RULE 12B-2 OF THE EXCHANGE ACT).                          YES  [X]   NO [ ]

     AS OF AUGUST 14, 2008, THERE WERE OUTSTANDING 3,120,000 SHARES OF THE
ISSUER'S COMMON STOCK, $.01 PAR VALUE.


===============================================================================


<PAGE>






                               CDSI HOLDINGS INC.
                          QUARTERLY REPORT ON FORM 10-Q
                  FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2008


                                TABLE OF CONTENTS


<Table>
<Caption>

                                                                                          Page
                                                                                          ----

<S>                 <C>                                                                   <C>
PART I. FINANCIAL INFORMATION




Item 1.             Condensed Financial Statements (Unaudited):

                    Condensed Balance Sheets as of June 30, 2008
                        and December 31, 2007.........................................     2

                    Condensed Statements of Operations for the
                        three months and six months ended June 30, 2008 and
                        2007..........................................................     3

                    Condensed Statements of Cash Flows for the
                        six months ended June 30, 2008 and 2007.......................     4

                    Notes to the Condensed Quarterly Financial
                        Statements....................................................     5

Item 2.             Management's Discussion and Analysis of Financial
                        Condition and Results of Operations...........................     8

Item 4.             Controls and Procedures...........................................    11


PART II. OTHER INFORMATION


Item 1.             Legal Proceedings.................................................    12

Item 2.             Unregistered  sales of equity securities and use of proceeds......    12

Item 6.             Exhibits  ........................................................    12

SIGNATURE.............................................................................    13
</Table>



<PAGE>





                               CDSI HOLDINGS INC.

                            CONDENSED BALANCE SHEETS
                                   (UNAUDITED)


<Table>
<Caption>

                                                                       June 30,         December 31,
                                                                    --------------    ---------------
                                                                         2008               2007
                                                                    --------------    --------------
<S>                                                                 <C>               <C>
                                ASSETS:


Current assets:


    Cash and cash equivalents ...................................   $       29,338    $       50,288
                                                                    --------------    --------------

         Total assets ...........................................   $       29,338    $       50,288
                                                                    ==============    ==============

                 LIABILITIES AND STOCKHOLDERS' EQUITY:

Current liabilities:

    Accounts payable and accrued expenses .......................   $        5,251    $        6,650
                                                                    --------------    --------------

         Total current liabilities ..............................            5,251             6,650
                                                                    --------------    --------------

Commitments and contingencies ...................................               --                --

Stockholders' equity:

    Preferred stock, $.01 par value.  Authorized 5,000,000
       shares; no shares issued and outstanding .................               --                --
    Common stock, $.01 par value.  Authorized 25,000,000
       shares; 3,120,000 shares issued and outstanding ..........           31,200            31,200
    Additional paid-in capital ..................................        8,209,944         8,209,944
    Accumulated deficit .........................................       (8,217,057)       (8,197,506)
    Accumulated other comprehensive income ......................               --                --
                                                                    --------------    --------------


         Total stockholders' equity .............................           24,087            43,638
                                                                    --------------    --------------

         Total liabilities and stockholders' equity .............   $       29,338    $       50,288
                                                                    ==============    ==============

</Table>


            See accompanying Notes to Condensed Financial Statements





                                       2
<PAGE>



                               CDSI HOLDINGS INC.

                       CONDENSED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)


<Table>
<Caption>

                                                                 Three Months Ended             Six Months Ended
                                                             --------------------------    --------------------------
                                                              June 30,        June 30,       June 30,        June 30,
                                                                2008           2007           2008            2007
                                                             -----------    -----------    -----------    -----------

<S>                                                          <C>            <C>            <C>            <C>
Revenues .................................................   $        --    $        --    $        --    $        --

Cost and expenses:

     General and administrative ..........................         7,805          8,691         19,915         18,642
                                                             -----------    -----------    -----------    -----------
                                                                   7,805          8,691         19,915         18,642
                                                             -----------    -----------    -----------    -----------

Operating loss ...........................................        (7,805)        (8,691)       (19,915)       (18,642)
                                                             -----------    -----------    -----------    -----------

     Other income:
     Gain on sale of Dialog common stock .................            --            204             --            204
     Recovery of unclaimed property ......................            --         18,624             --         18,624
     Interest income .....................................           105            558            364          1,270
                                                             -----------    -----------    -----------    -----------
     Total other income ..................................           105         19,386            364         20,098
                                                             -----------    -----------    -----------    -----------

Net (loss) income ........................................   $    (7,700)   $    10,695    $   (19,551)   $     1,456
                                                             ===========    ===========    ===========    ===========

Net (loss) income per share (basic and diluted) ..........   $     (0.00)   $      0.00    $     (0.01)   $      0.00
                                                             ===========    ===========    ===========    ===========

Shares used in computing net (loss) income per share .....     3,120,000      3,120,000      3,120,000      3,120,000
                                                             ===========    ===========    ===========    ===========

</Table>





            See accompanying Notes to Condensed Financial Statements




                                       3
<PAGE>


                               CDSI HOLDINGS INC.

                       CONDENSED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<Table>
<Caption>

                                                                                        Six Months Ended
                                                                                    ------------------------
                                                                                     June 30,      June 30,
                                                                                       2008          2007
                                                                                    ----------    ----------
<S>                                                                                 <C>           <C>
Cash flows from operating activities:

   Net (loss) income ............................................................   $  (19,551)   $    1,456


   Adjustments to reconcile net (loss) income to net cash used in operations:
   Gain on sale of Dialog common stock ..........................................           --          (204)
   Changes in assets and liabilities:
   Increase in unclaimed property receivable ....................................           --       (18,624)
   Decrease in accounts payable and accrued expenses ............................       (1,399)       (2,875)
                                                                                    ----------    ----------

Net cash used in operating activities ...........................................      (20,950)      (20,247)
                                                                                    ----------    ----------

Net cash flows provided from investing activities:
Sale of investment securities ...................................................           --           204
                                                                                    ----------    ----------
Net cash from investing activities ..............................................           --           204
                                                                                    ----------    ----------

Net cash from financing activities ..............................................           --            --
                                                                                    ----------    ----------

Net decrease in cash and cash equivalents .......................................      (20,950)      (20,043)
Cash and cash equivalents at beginning of period ................................       50,288        61,812
                                                                                    ----------    ----------

Cash and cash equivalents at end of period ......................................   $   29,338    $   41,769
                                                                                    ==========    ==========


</Table>


            See accompanying Notes to Condensed Financial Statements



                                       4
<PAGE>




                               CDSI HOLDINGS INC.

                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                                   (UNAUDITED)




 (1)   BUSINESS AND ORGANIZATION

       CDSI Holdings Inc. (the "Company" or "CDSI") was incorporated in Delaware
       on December 29, 1993. On January 12, 1999, the Company's stockholders
       voted to change the corporate name of the Company from PC411, Inc. to
       CDSI Holdings Inc. Prior to May 8, 1998, the Company's principal business
       was an on-line electronic delivery information service that transmits
       name, address, telephone number and other related information digitally
       to users of personal computers (the "PC411 Service"). On May 8, 1998, the
       Company acquired Controlled Distribution Systems, Inc. ("CDS"), a company
       engaged in the marketing and leasing of an inventory control system for
       tobacco products. In February 2000, CDSI announced CDS will no longer
       actively engage in the business of marketing and leasing the inventory
       control system. Effective November 12, 2003, the Company and its
       wholly-owned subsidiary CDS merged with the Company as the surviving
       corporation.

       At June 30, 2008, the Company had an accumulated deficit of approximately
       $8,217,057. The Company has reported an operating loss in each of its
       fiscal quarters since inception and it expects to continue to incur
       operating losses in the immediate future. The Company has reduced
       operating expenses and is seeking acquisition and investment
       opportunities. There is a risk the Company will continue to incur
       operating losses.

       CDSI intends to seek new business opportunities. As CDSI has only limited
       cash resources, CDSI's ability to complete any acquisition or investment
       opportunities it may identify will depend on its ability to raise
       additional financing, as to which there can be no assurance. There can be
       no assurance that the Company will successfully identify, complete or
       integrate any future acquisition or investment, or that acquisitions or
       investments, if completed, will contribute favorably to its operations
       and future financial condition.


 (2)   PRINCIPLES OF REPORTING


       The condensed financial statements of the Company as of June 30, 2008
       presented herein have been prepared by the Company and are unaudited. In
       the opinion of management, all adjustments, consisting only of normal
       recurring adjustments, necessary to present fairly the financial position
       as of June 30, 2008 and the results of operations and cash flows for all
       periods presented have been made. Results for the interim periods are not
       necessarily indicative of the results for the entire year.

       These condensed financial statements should be read in conjunction with
       the audited financial statements and notes thereto for the year ended
       December 31, 2007 included in the Company's Form 10-KSB, filed with the
       Securities and Exchange Commission (Commission File No. 0001-22563).



                                       5
<PAGE>




                               CDSI HOLDINGS INC.

              NOTES TO CONDENSED FINANCIAL STATEMENTS - (CONTINUED)
                                   (UNAUDITED)



       USE OF ESTIMATES

       The preparation of the condensed financial statements in conformity with
       generally accepted accounting principles requires management to make
       estimates and assumptions that affect the reported amounts of assets and
       liabilities and disclosure of contingent assets and liabilities at the
       date of the condensed financial statements and the reported amounts of
       revenue and expenses during the reporting period. Actual results could
       differ from those estimates.


(3)    RELATED PARTY TRANSACTIONS


       Certain accounting and related finance functions are performed on behalf
       of the Company by employees of the parent of the Company's principal
       stockholder, Vector Group Ltd. ("Vector"). Expenses incurred relating to
       these functions are allocated to the Company and paid as incurred to
       Vector based on management's best estimate of the cost involved. The
       amounts allocated were immaterial for all periods presented herein.

(4)    NET LOSS PER SHARE

       Basic loss per share of common stock is computed by dividing net loss
       applicable to common stockholders by the weighted average shares of
       common stock outstanding during the period (3,120,000 shares). Diluted
       per share results reflect the potential dilution from the exercise or
       conversion of securities into common stock.

       Stock options and warrants (both vested and non-vested) totaling 18,000
       shares at June 30, 2008 and 153,333 shares at June 30, 2007 were excluded
       from the calculation of diluted per share results presented because their
       effect was anti-dilutive. Accordingly, diluted net loss per common share
       is the same as basic net loss per common share.




                                       6
<PAGE>


                               CDSI HOLDINGS INC.

              NOTES TO CONDENSED FINANCIAL STATEMENTS - (CONTINUED)
                                   (UNAUDITED)


(5)    COMPREHENSIVE (LOSS) INCOME

       Comprehensive (loss) income of the Company includes net (loss) income and
       changes in the value of investment securities available for sale that
       have not been included in net (loss) income. Comprehensive (loss) income
       applicable to common shares for the three and six months ended June 30,
       2008 and 2007 is as follows:

<Table>
<Caption>
                                               THREE MONTHS ENDED JUNE 30,    SIX MONTHS ENDED JUNE 30,
                                               ---------------------------    --------------------------
                                                  2008            2007           2008           2007
                                               -----------    ------------    -----------    -----------

<S>                                             <C>           <C>            <C>            <C>
      Net (loss) income ....................    $   (7,700)   $    10,695    $   (19,551)   $     1,456

      Net unrealized gains on investment
         securities available for sale:

      Change in unrealized gains ...........            --             36             --            (20)
      Net unrealized gains reclassified
         into net (loss) income, net .......            --           (204)            --           (204)
                                               -----------    -----------    -----------    -----------
      Net change in unrealized gain
         on investment securities ..........            --           (168)            --           (224)
                                               -----------    -----------    -----------    -----------

         Comprehensive (loss) income .......   $    (7,700)   $    10,527    $   (19,551)   $     1,232
                                               ===========    ===========    ===========    ===========
</Table>




(6)    CONTINGENCIES

       As of June 30, 2008, the Company was not authorized to transact business
       in any state other than Delaware, which is its state of incorporation.
       The Company received an inquiry from the Florida Department of State (the
       "FDS") inquiring whether the Company should have registered with the FDS
       in previous years, beginning in 1998. In March 2006, the Company
       responded to the inquiry and stated it believes its activities in
       previous years did not meet the requirements for such registration;
       however, no assurance can be provided that the Company's position will be
       accepted by the FDS. The Company is unable to quantify the amount of any
       registration fees and other costs attributable to any failure to register
       and has not accrued any amounts in its condensed financial statements
       related to such inquiry.







                                       7
<PAGE>


                               CDSI HOLDINGS INC.

ITEM 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
            RESULTS OF OPERATIONS

OVERVIEW

         The Company intends to seek new business opportunities. As the Company
has only limited cash resources, the Company's ability to complete any
acquisition or investment opportunities it may identify will depend on its
ability to raise additional financing, as to which there can be no assurance.
There can be no assurance that the Company will successfully identify, complete
or integrate any future acquisition or investment, or that acquisitions or
investments, if completed, will contribute favorably to its operations and
future financial condition.


RESULTS OF OPERATIONS

         REVENUES

         For the three and six months ended June 30, 2008 and 2007 the Company
did not generate revenues from operations.

         EXPENSES

         Expenses associated with corporate activities were $7,805 and $19,915
for the three and six months ended June 30, 2008, respectively, as compared to
$8,691 and $18,642 for the same periods in the prior year. The expenses were
primarily associated with costs necessary to maintain a public company, which
consist primarily of directors' fees, accounting fees, and stock transfer fees.
The increase in the six month period was primarily associated with the costs
associated with testing management's internal control over financial reporting
in the 2008 period offset by lower director's fees. The decrease in the three
month period was primarily due to lower director's fees in 2008 compared to
2007.

         OTHER INCOME

         Interest income was $105 and $364 for the three and six months ended
June 30, 2008, compared to $558 and $1,270 for the three and six months ended
June 30, 2007. The decrease is due primarily to lower cash balances and lower
interest rates in 2008 versus 2007.

         We recorded a $204 gain from the disposal of our remaining 2,800 shares
of Dialog stock for the three and six months ended June 30, 2007.

         The recovery of unclaimed property for the three and six months ended
June 30, 2007 relates to refunds receivable for unclaimed property in a state
where we previously conducted business. In January 2007, we filed for refunds of
approximately $21,700 and in June 2007 were notified that $18,624 of the refund
claims had been approved for payment. The amount was received in July 2007. All
claims were accepted as an additional $3,167 was received in the fourth quarter
of 2007.



                                       8
<PAGE>


                               CDSI HOLDINGS INC.


ITEM 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
            RESULTS OF OPERATIONS - (CONTINUED)



LIQUIDITY AND CAPITAL RESOURCES

         At June 30, 2008, the Company had an accumulated deficit of
approximately $8,217,057. The Company has reported an operating loss in each of
its fiscal quarters since inception and it expects to continue to incur
operating losses in the immediate future. The Company has reduced operating
expenses and is seeking acquisition and investment opportunities. No assurance
can be given that the Company will not continue to incur operating losses.

         The Company has limited available cash, limited cash flow, limited
liquid assets and no credit facilities. The Company has not been able to
generate sufficient cash from operations and, as a consequence, financing has
been required to fund ongoing operations. Since completion of the Company's
initial public offering of its common stock (the "IPO") in May 1997, the Company
has primarily financed its operations with the net proceeds of the IPO. The
funds were used to complete the introduction of the PC411 Service over the
Internet, to expand marketing, sales and advertising, to develop or acquire new
services or databases, to acquire Controlled Distribution Systems, Inc. and for
general corporate purposes.

         Cash used for operations for the six months ended June 30, 2008 and
2007 was $20,950 and $20,247, respectively. The increase is associated primarily
with increased expenses and lower interest income. The Company evaluates its
accruals on a quarterly basis and makes adjustments when appropriate.

         Cash provided from investing activities of $204 for the six months
ended June 30, 2007 consisted of gains on the sale of 2,800 shares of Dialog
Common Stock.

          The Company does not expect significant capital expenditures during
the year ended December 31, 2008.

         At June 30, 2008, the Company had cash and cash equivalents of $29,338.
The Company does not currently have any commitments for any additional
financing, and there can be no assurance that any such commitments can be
obtained. Any additional equity financing may be dilutive to its existing
stockholders, and debt financing, if available, may involve pledging some or all
of its assets and may contain restrictive covenants with respect to raising
future capital and other financial and operational matters.

         Inflation and changing prices had no material impact on revenues or the
results of operations for the periods ended June 30, 2008 and 2007.

         We are not authorized to transact business in any state other than
Delaware, which is its state of incorporation. We received an inquiry from the
Florida Department of State (the "FDS") inquiring whether we should have
registered with the FDS in previous years, beginning in 1998. In March 2006, we
responded to the inquiry and stated we believe our activities in previous years
did not meet the requirements for such registration; however, no assurance can
be provided that our position will be accepted. We are unable to quantify the
amount of any registration fees and other costs attributable to any failure to
register and have not accrued any amounts in our condensed financial statements
related to such inquiry.



                                       9
<PAGE>


                               CDSI HOLDINGS INC.


ITEM 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
            RESULTS OF OPERATIONS - (CONTINUED)


         Management is currently evaluating alternatives to supplement the
Company's present cash and cash equivalents to meet its liquidity requirements
over the next twelve months. Such alternatives include seeking additional
investors and/or lenders and may include an investment or loan from Vector Group
Ltd., our principal stockholder. Although there can be no assurance, the Company
believes that it will be able to continue as a going concern for the next twelve
months.

         The Company or its affiliates, including Vector Group Ltd., may, from
time to time, based upon present market conditions, purchase shares of the
Common Stock in the open market or in privately negotiated transactions.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

         The Company and its representatives may from time to time make oral or
written "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995 (the "Reform Act"), including any
statements that may be contained in the foregoing "Management's Discussion and
Analysis of Financial Condition and Results of Operations", in this report and
in other filings with the Securities and Exchange Commission and in its reports
to stockholders, which represent the Company's expectations or beliefs with
respect to future events and financial performance. These forward-looking
statements are subject to certain risks and uncertainties and, in connection
with the "safe-harbor" provisions of the Reform Act, the Company has identified
under "Risk Factors" in Item 1 of the Company's Form 10-KSB for the year ended
December 31, 2007 filed with the Securities and Exchange Commission and in this
section important factors that could cause actual results to differ materially
from those contained in any forward-looking statements made by or on behalf of
the Company.

         The Company's plans and objectives are based, in part, on assumptions
involving judgments with respect to, among other things, future economic,
competitive and market conditions and future business decisions, all of which
are difficult or impossible to predict accurately and many of which are beyond
the control of the Company. Although the Company believes that its assumptions
underlying the forward-looking statements are reasonable, any of the assumptions
could prove inaccurate and, therefore, there can be no assurance that the
forward-looking statements included in this report will prove to be accurate. In
light of the significant uncertainties inherent in the forward-looking
statements included herein, particularly in view of the Company's limited
operations, the inclusion of such information should not be regarded as a
representation by the Company or any other person that the objectives and plans
of the Company will be achieved. Readers are cautioned not to place undue
reliance on such forward-looking statements, which speak only as of the date on
which such statements are made. The Company does not undertake to update any
forward-looking statement that may be made from time to time on its behalf.



                                       10
<PAGE>


                               CDSI HOLDINGS INC.



ITEM 3.     CONTROLS AND PROCEDURES

     Under the supervision and with the participation of our management,
including our principal executive officer and principal financial officer, we
have evaluated the effectiveness of our disclosure controls and procedures as of
the end of the period covered by this report, and, based on their evaluation,
our principal executive officer and principal financial officer have concluded
that these controls and procedures are effective.

     There were no changes in our internal control over financial reporting
during the period covered by this report that have materially affected, or are
reasonably likely to materially affect, our internal control over financial
reporting.



                                       11
<PAGE>








                               CDSI HOLDINGS INC.


                           PART II. OTHER INFORMATION

Item 1.  Legal Proceedings

         Reference is made to Note 6 to our unaudited condensed financial
statements.

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds


         No securities of ours which were not registered under the Securities
              Act of 1933 have been issued or sold by us during the three months
              ended June 30, 2008.

         No securities of ours were repurchased by us or our affiliated
              purchasers during the three months ended June 30, 2008.

Item 6.  Exhibits

         31.1     Certification of Chief Executive Officer, Pursuant to Exchange
                  Act Rule 13a-14(a), as Adopted Pursuant to Section 302 of the
                  Sarbanes-Oxley Act of 2002.

         31.2     Certification of Chief Financial Officer, Pursuant to Exchange
                  Act Rule 13a-14(a), as Adopted Pursuant to Section 302 of the
                  Sarbanes-Oxley Act of 2002.

         32.1     Certification of Chief Executive Officer, Pursuant to 18
                  U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the
                  Sarbanes-Oxley Act of 2002.

         32.2     Certification of Chief Financial Officer, Pursuant to 18
                  U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the
                  Sarbanes-Oxley Act of 2002.





                                       12
<PAGE>



                                    SIGNATURE



         Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.




                                     CDSI HOLDINGS INC.
                                     (Registrant)



Date: August 14, 2008                By: /s/ J. Bryant Kirkland III
                                         ---------------------------------------
                                         J. Bryant Kirkland III
                                         Vice President, Treasurer
                                         and Chief Financial Officer
                                         (Duly Authorized Officer and
                                         Chief Accounting Officer)



                                       13