SECURITIES AND EXCHANGE COMMISSION

                        Washington, D. C.   20549

                                   FORM 10-QSB

__X__ Quarterly Report Under Section 13 or 15(d) of The Securities  Exchange Act
of 1934 for the Quarterly Period Ended: June 30, 1998.

_____ 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

                   CYCLODEXTRIN TECHNOLOGIES DEVELOPMENT, INC.
             (Exact name of registrant as specified in its charter)


        Florida                                       59-3029743
  (State or other jurisdiction                      (IRS Employer
of incorporation or organization)                Identification No.)


   3713 S.W. 42nd Avenue, Suite 3, Gainesville, Florida, 32608-2531
 (Address of principal executive offices)              (Zip Code)


          Issuer's telephone number, including area code: 352-375-6822


   Former name, former address and former fiscal year, if changed since last
   report: N/A.

Check  whether  the issuer  (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

Applicable  only to  issuers  involved  in  bankruptcy  proceedings  during  the
preceding five years

Check whether the  registrant  filed all  documents  and reports  required to be
filed by Section 12, 13 or 15 (d) of the Exchange Act after the  distribution of
securities under a plan confirmed by a court. No.

Applicable only to corporate issuers

As of June 30, 1998, the Company had outstanding  1,225,110 shares of its common
stock.

Transitional Small Business Disclosure Format
(Check One):
 No.
<PAGE>


PART I:  Financial Information

                  CYCLODEXTRIN TECHNOLOGIES DEVELOPMENT, INC.
                                  BALANCE SHEET
                                   (Unaudited)
<TABLE>
<CAPTION>
                                     ASSETS
                                                                   June 30, 1998
                                                                 --------------
<S>                                                               <C>
CURRENT ASSETS
 Cash and cash equivalents                                        $     27,182
 Investments                                                             8,680
 Accounts receivable                                                    26,435
 Inventory                                                              88,620
 Deferred tax asset                                                     10,400
 Other current assets                                                    3,295
                                                                  ------------
     Total current assets                                              164,612
                                                                  ------------
PROPERTY AND EQUIPMENT
 Furniture and equipment                                                61,915
 Leasehold improvements                                                 24,800
                                                                  ------------
                                                                        86,715
 Less: Accumulated depreciation                                         62,775
                                                                  ------------
     Total property and equipment                                       23,940
                                                                  ------------
OTHER ASSETS
 Deferred offering costs                                                65,000
 Deferred tax asset                                                    238,000
                                                                  ------------
     Total other assets                                                303,000
                                                                  ------------
TOTAL ASSETS                                                      $    491,552
                                                                  ============
</TABLE>
                                   (Continued)

                                       F-1
<PAGE>

                  CYCLODEXTRIN TECHNOLOGIES DEVELOPMENT, INC.
                                  BALANCE SHEET
                                   (Unaudited)
                                   (Concluded)
<TABLE>
<CAPTION>
                      LIABILITIES AND STOCKHOLDERS' EQUITY
                                                                   June 30, 1998
                                                                 --------------
<S>                                                              <C>
CURRENT LIABILITIES
 Accounts payable and accrued expenses                            $     45,842
 Notes payable                                                          16,501
 Payable to officer                                                     13,125
                                                                  -------------
     Total current liabilities                                          75,468
                                                                  -------------
COMMON STOCK SUBJECT TO REPURCHASE, 
 par value $.0001 per share,  100,000 shares
 authorized, 8,000 shares issued and outstanding                         2,080
                                                                  -------------

STOCKHOLDERS' EQUITY
 Class A common stock, par value $.0001 per share, 
  9,900,000 shares authorized, 1,220,110 shares 
  issued and outstanding;  Class B non-voting common
  stock, par value $.0001 per share, 10,000,000 shares
  authorized, 0 shares issued and outstanding                              120
 Additional paid-in capital                                          1,670,744
 Accumulated other comprehensive income                                 (4,156)
 Accumulated deficit                                                (1,252,704)
                                                                  -------------
     Total stockholders' equity                                        414,004
                                                                  -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                        $    491,552
                                                                  =============
</TABLE>

                See Accompanying Notes to Financial Statements

                                       F-2
<PAGE>

                  CYCLODEXTRIN TECHNOLOGIES DEVELOPMENT, INC.
                            STATEMENTS OF OPERATIONS
                                   (Unaudited)
<TABLE>
<CAPTION>
                                  Three Months Ending      Six Months Ending
                                        June 30,                June 30,
                                 ----------------------  ----------------------
                                    1998        1997        1998        1997
                                 ----------  ----------  ----------  ----------
<S>                              <C>         <C>         <C>         <C>
PRODUCT SALES                    $  93,123   $  60,244   $ 137,407   $ 139,854

COST OF PRODUCTS SOLD               33,433      15,941      42,100      37,239
                                 ----------  ----------  ----------  ----------
GROSS PROFIT                        59,690      44,303      95,307     102,615
                                 ----------  ----------  ----------  ----------
OPERATING EXPENSES
  Selling, general and
   administrative                   40,208      93,386      97,737     162,826
  Public offering costs                  0     131,122           0     131,122
                                 ----------  ----------  ----------  ----------
   Total operating expenses         40,208     224,508      97,737     293,948
                                 ----------  ----------  ----------  ----------
INCOME (LOSS) FROM OPERATIONS       19,482    (180,205)     (2,430)   (191,333)
                                 ----------  ----------  ----------  ----------
OTHER INCOME (EXPENSE)
 Investment and other income        10,173         964      12,705       1,621
 Gain due to change in redemption
  price on common stock subject
  to repurchase                          0      11,725           0         787
 Equity in loss from
  unconsolidated joint venture           0        (122)          0        (244)
 Interest expense                   (1,141)       (447)     (1,994)     (1,240)
                                 ----------  ----------  ----------  ---------
   Total other income                9,032      12,120      10,711         924
                                 ----------  ----------  ----------  ----------
INCOME (LOSS) BEFORE INCOME TAX     28,514    (168,085)      8,281    (190,409)

INCOME TAX EXPENSE                   1,600      24,350       1,600      24,350
                                 ----------  ----------  ----------  ----------
NET INCOME (LOSS)                $  26,914   $(192,435)  $   6,681   $(214,759)
                                 ==========  ==========  ==========  ==========
NET INCOME (LOSS) PER COMMON
 SHARE - BASIC AND DILUTIVE      $    0.02   $   (0.16)  $     .01   $    (.18)
                                 ==========  ==========  ==========  ==========
WEIGHTED AVERAGE NUMBER OF
 COMMON SHARES OUTSTANDING
 - BASIC AND DILUTIVE             1,281,646   1,225,110   1,255,462   1,225,110
                                 ==========  ==========  ==========  ==========
</TABLE>

                See Accompanying Notes to Financial Statements

                                       F-3
<PAGE>

                  CYCLODEXTRIN TECHNOLOGIES DEVELOPMENT, INC.
                            STATEMENTS OF CASH FLOWS
                      Increase in Cash and Cash Equivalents
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                           Six Months Ending
                                                               June 30,
                                                     --------------------------
                                                        1998           1997
                                                     ------------  ------------
<S>                                                  <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES
 Net income (loss)                                   $     6,681   $(  214,759)
                                                     ------------  ------------
 Adjustments  to reconcile  net income  (loss)
  to net cash provided by operating
  activities:
   Depreciation and amortization                           7,141        16,291
   Gain on sale of investments                              (510)       (1,137)
   Deferred compensation earned                                0        18,500
   Equity in loss of unconsolidated joint venture              0           244
   Gain based on redemption price of common
     stock subject to repurchase                               0          (787)
   Stock issued for services                                 675             0
   Decrease in accounts receivable                        15,101        64,798
   Increase in inventory                                  (1,624)       (6,955)
   Increase (decrease) in other current assets               958        (7,383)
   Decrease in deferred income tax                         1,600        24,350
   (Increase) decrease in deferred offering costs        (30,000)      127,531
   Increase in accounts payable and
    accrued expenses                                      14,464         9,420
                                                     ------------  ------------
        Total adjustments                                  7,805       244,872
                                                     ------------  ------------
    NET CASH PROVIDED BY OPERATING ACTIVITIES             14,486        30,113
                                                     ------------  ------------
CASH FLOWS FROM INVESTING ACTIVITIES
 Purchase of equipment and leasehold improvements         (3,732)         (742)
 Loan to employee                                              0        (1,822)
 Repayment of employee loan                                1,642         8,354
 Proceeds from sale of investment                         17,227        22,304
 Purchases of investments                                 (8,202)      (21,167)
                                                     ------------  ------------
    NET CASH PROVIDED BY INVESTING ACTIVITIES              6,935         6,927
                                                     ------------  ------------
CASH FLOWS FROM FINANCING ACTIVITIES
 Net Payments on line-of-credit                           (7,377)      (38,199)
 Net Payments on investment margin acct.                  (8,318)            0
 Net proceeds on loan payable to officer                  13,125         3,253
                                                     ------------  ------------
    NET CASH USED FOR FINANCING ACTIVITIES                (2,570)      (34,946)
                                                     ------------  ------------
NET INCREASE IN CASH AND CASH EQUIVALENTS                 18,851         2,094

CASH AND CASH EQUIVALENTS, beginning of period             8,331         7,767
                                                     ------------  ------------
CASH AND CASH EQUIVALENTS, end of period             $    27,182   $     9,861
                                                     ============  ============
</TABLE>

                                   (Continued)
                                       F-4
<PAGE>

                  CYCLODEXTRIN TECHNOLOGIES DEVELOPMENT, INC.
                            STATEMENTS OF CASH FLOWS
                      Increase in Cash and Cash Equivalents
                                   (Unaudited)
                                   (Concluded)
<TABLE>
<CAPTION>
                                                           Six Months Ending
                                                               June 30,
                                                     --------------------------
                                                        1998           1997
                                                     ------------  ------------
<S>                                                  <C>          <C>
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
  Cash paid during the period for interest           $     1,994   $     1,240
                                                     ============  ============

SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND
 FINANCING ACTIVITY
  Equity in loss of unconsolidated joint venture     $         0   $       244
                                                     ============  ============
</TABLE>

                See Accompanying Notes to Financial Statements

                                       F-5
<PAGE>

                   CYCLODEXTRIN TECHNOLOGIES DEVELOPMENT, INC.
                          NOTES TO FINANCIAL STATEMENTS
                     SIX MONTHS ENDED JUNE 30, 1998 AND 1997
                                   (Unaudited)

The information  presented herein as of June 30, 1998, and for the three and six
months ended June 30, 1998 and 1997, is unaudited.

(1) BASIS OF PRESENTATION:

The  accompanying  financial  statements  have been prepared in accordance  with
generally accepted accounting  principles for interim financial  information and
with the  instructions  to Form  10-QSB  and  Rule  10-01  of  Regulations  S-X.
Accordingly,  they do not include all of the information and footnotes  required
by generally accepted accounting  principles for complete financial  statements.
In the opinion of management,  all  adjustments  (consisting of normal  required
adjustments) considered necessary for a fair presentation have been included.

Operating  results  for the six  month  period  ended  June  30,  1998,  are not
necessarily  indicative  of the results that may be expected for the year ending
December 31, 1998. For further  information,  refer to the financial  statements
and footnotes thereto included in the Company's annual report of Form 10-KSB for
the year ended December 31, 1997.

(2) COMMITMENTS:

On July 7, 1994, the Company  entered into a five year  noncancelable  operating
lease for office space,  commencing  November 1994. The Company has an option to
rent  additional  space and a purchase  option in which ten percent of the lease
payments may be applied to the purchase price.

Rent  expense  under the  foregoing  lease and all other  operating  leases  was
$11,718  and  $11,220  for  the  six  months  ended  June  30,  1998  and  1997,
respectively.

Effective  January 1, 1995, the Company  obtained an exclusive right to market a
dietary  supplement in the United States for three years.  The Company agreed to
pay  approximately  $60,000 for this right.  The agreement allows the Company to
recover this fee through  discounts on inventory  purchased through December 31,
1997. The license fee was amortized on a straight-line basis over the three year
period  of  the  contract  and  was  fully   amortized  at  December  31,  1997.
Amortization  expense in 1997 was $20,000.  In January 1998,  this agreement was
extended  until  December  31,  1998,  including  the right of first  refusal to
reobtain its  exclusive  marketing  rights  during this period.  The Company was
required to order  additional  inventory of  approximately  $15,000 by March 31,
1998, under the terms of this agreement  extension.  This agreement deadline was
further  extended  on  March  23,  1998  to  June  1,  1998.  The  Company  paid
approximately $5,500 in January 1998 toward this obligation. As of June 1, 1998,
the Company had not  purchased the  additional  inventory and the right of first
refusal expired. As of June 30, 1998 the $5,500 prepayment has been expensed and
the Company is under no further obligation to purchase inventory.

In May 1996, the Company  entered into an agreement with  Diversified  Corporate
Consulting Group, L.C., an unrelated company,  to provide consulting services to
be completed within 12 months. In return, the Company issued Diversified 110,110
shares  of the  Company's  common  stock,  a  quantity  equal to 10% of all then
outstanding  common stock,  in lieu of document  licensing  fees and of required
cash  payments  for up to an  aggregate  of 130 hours of hourly  consulting  and
licensing fees.

The Company  entered into an agreement with Cyclops h. f.  (Cyclops),  a company
located in Reykjavik,  Iceland,  in May 1996 to secure  limited  exclusivity  to
certain  inventions  embodied  in patents  owned by Cyclops  for the  purpose of
creating  an  organization  that  would   commercialize   products  using  those
inventions.  In consideration,  the Company agreed to share equally with Cyclops
the  net  profits  derived  from  products  commercialized  by  the  Company  or
affiliates of the Company that use the inventions. This agreement expired in May
1997.
                                       F-6
<PAGE>

                   CYCLODEXTRIN TECHNOLOGIES DEVELOPMENT, INC.
                          NOTES TO FINANCIAL STATEMENTS
                     SIX MONTHS ENDED JUNE 30, 1998 AND 1997
                                   (Unaudited)

(2) COMMITMENTS (Continued):

In April 1997, the Company  entered into an agreement with Atlantic  Syndication
Network,  Inc.  (ASNI) for the  production of a half hour premier cable program.
The Company  paid $2,500 in 1997 to reserve  production  time and also issued to
ASNI 10,000  shares of the  Company's  voting  common  stock.  The Company  also
granted ASNI an option to purchase up to 25,000 shares of its non-voting  common
stock at a purchase price of $1 per share. This option expired June 1, 1998.

The Company has other commitments as discussed in Notes 6 and 7.

(3) COMMON STOCK SUBJECT TO REPURCHASE:

During 1994, the Company adopted a nonqualified  employee stock issuance plan to
provide  incentives  to  employees.  Stock  issued  under  this  plan  is at the
discretion  of the Board of  Directors  of the Company  and bears a  restrictive
legend.  All shares  issued  pursuant to this Plan must be held for a minimum of
two years and become fully vested after five years. During the three year period
beginning  on the first day of the third year  after  issuance  and ending  five
years after  issuance,  the Company shall purchase all or any part of the shares
from the employee upon the employee's written request; the purchase price of the
shares shall be 50% of the then current market value of the shares.

The Company  values the shares  issued under the plan at 50% of the bid price on
award date.  The quoted  market  price was not used to value the stock since the
stock does not trade freely in an established  market,  and thus, a market price
could not be  accurately  established.  The amount  recorded is  classified as a
reduction to stockholders' equity in the accompanying financial statements.  The
Company  amortizes  this  amount over the  vesting  period on the  straight-line
basis, the estimated benefit of future services.

The Company reflects its obligation to repurchase the stock as a liability under
the caption  Common Stock Subject to Repurchase  in the  accompanying  financial
statements. Any change in the valuation of this account is recorded as a gain or
loss in the  accompanying  statement of  operations.  The  Company's  repurchase
obligation for current  employees is valued at 50% of the bid price of the stock
on the balance sheet date. The Company's repurchase obligation for stock held by
former employees is valued at 50% of the bid price on the date of the employee's
termination.

The Company has reserved  100,000 of its  10,000,000  voting common stock shares
authorized to be used under this Plan.

1994 Shares
In December  1994,  the Company  issued  25,000  shares to employees  for future
services under this plan. The Company valued the 25,000 shares at $37,500, which
was  approximately  50% less than the bid price at the award  date.  On June 30,
1997,  all of the  remaining  employees  holding  stock issued in 1994 under the
employee  stock  issuance  plan  noted  above,  terminated  employment  with the
Company. At that time, the remaining  unamortized amount of the stock issued for
future services was charged to expense.  The Company's  obligation to repurchase
the remaining 5,000 1994 shares expires in 1999.

                                       F-7
<PAGE>

                   CYCLODEXTRIN TECHNOLOGIES DEVELOPMENT, INC.
                          NOTES TO FINANCIAL STATEMENTS
                     SIX MONTHS ENDED JUNE 30, 1998 AND 1997
                                   (Unaudited)

(3) COMMON STOCK SUBJECT TO REPURCHASE:  (Continued)

1998 Shares
In April 1998, the Company issued 1,500 shares to employees for future  services
under  this  plan.  The  Company  valued  the 1,500  shares  at $675,  which was
approximately 50% less than the bid price on the effective award date.

The Company  expensed $675 and $18,500 under the plan for the quarter ended June
30, 1998 and 1997. The Company also recognized a gain of $787 for the six months
ended June 30,  1997,  due to a change in the  redemption  price on common stock
subject to repurchase. No shares have been repurchased under this plan in 1998.

(4)     MAJOR CUSTOMERS AND SUPPLIERS:

Sales to the three largest  customers  were  approximately  74% and 66% of total
sales for the six months ended June 30, 1998 and 1997, respectively.

(5) NOTES PAYABLE:

The Company has a $25,000  line-of-credit with a local bank. The monthly minimum
payment is calculated based on the outstanding balance. The interest rate varies
monthly at prime plus 3%  (currently  11.5%).  The  Company  owes  approximately
$16,500 at June 30,  1998.  The credit line can be  canceled  and payment of the
outstanding amount due can be required on demand by the bank at anytime.

(6) JOINT VENTURES:

Effective May 1, 1995, the Company entered into a joint venture  agreement under
the name of Ocudex,  Inc. (Ocudex).  The Company and Ocumed,  Inc., an unrelated
company,  each own 50% of Ocudex.  The Company has advanced Ocudex $51,000 as of
December 31, 1997.  The Company  accounts for its investment in the Ocudex joint
venture using the equity method of accounting  whereby its investment is carried
at cost,  including  advances,  adjusted for the Company's share of earnings and
losses.  The Company  reduced  its  investment  in the joint  venture to zero at
December 31, 1997, due to uncertainty as to recovery of these amounts.

In March 1997, the Company entered into a joint venture agreement with Jurox PTY
Limited  (Jurox),  an  unrelated  company,  in order to  develop a new  product.
According to the agreement, each party shall be separately responsible for their
own costs for the development of the product.  The Company has agreed to provide
the developed product to Jurox at the cost to manufacture plus 10%. Jurox agrees
to pay the Company royalties on net sales of the product as follows:
          5% of net sales for the first  year of sales,  4% of net sales for the
          second year of sales, and 3% of net sales for a further 8 years.
No transactions have taken place as of June 30, 1998.

                                       F-8
<PAGE>

                   CYCLODEXTRIN TECHNOLOGIES DEVELOPMENT, INC.
                          NOTES TO FINANCIAL STATEMENTS
                     SIX MONTHS ENDED JUNE 30, 1998 AND 1997
                                   (Unaudited)

(7) DEFERRED OFFERING COSTS:

On October 14, 1997,  the Company  entered into a financial  services  agreement
with an unrelated company for financial  consulting  services related to raising
additional  capital.  Under this  agreement,  the  Company  issued an option for
600,000 shares of the Company's  common stock with an exercise price of $.25 per
share,  which is  approximately  50% of the market price on the date the parties
agreed to the terms of the  agreement.  The quoted  market price was not used to
value the stock since the stock does not trade freely in an  established  market
and, thus, a market price could not accurately be established.  The Company also
agreed to pay the consultant $85,000 in installments of $20,000 in October 1997,
and $5,000 each month  thereafter  until November 1998.  Beginning in March 1998
the  agreement  was  amended to provide  payment of the  remaining  installments
through  the future  issuance of the  Company's  common  stock.  The Company has
accrued all earned but unpaid  amounts at June 30, 1998. The number of shares to
be issued is determined  monthly by dividing $5,000 by 50% of the average market
price of the stock during the month the compensation is earned.  The Company has
paid $40,000 in cash and accrued $20,000 in stock as of June 30, 1998.

On April 30, 1998 the Company gave sixty days notice to terminate  the financial
services  agreement  and cancel the option for 600,000  shares of the  Company's
common  stock in favor of a new  agreement.  The Company  agreed to continue the
$5,000  monthly  payments for service in stock  through  July 31, 1998.  The new
agreement  specifies  that if at least  $2.5  million  in new  capital is raised
before July 31, 1998,  the  consultant  will be issued  50,000  shares of common
stock,  plus an amount of stock equal to $25,000  divided by the lowest  monthly
average  stock value during the months of March  through July 1998 and a monthly
retainer of $2,500 through December 31, 1998.

As  the  Company  is  currently  preparing  for a  private  placement  to  raise
additional  capital in 1998, the costs under this agreement and the direct costs
of preparing a business plan have been classified as deferred charges. The total
amount deferred at June 30, 1998, is $65,000.  These and any additional deferred
costs  will be  offset  against  the net  proceeds  of the  offering  or will be
expensed if the Company's efforts are unsuccessful.

(8) EARNINGS PER COMMON SHARE:

Net income  (loss) per  common  share is  computed  in  accordance  with the new
requirements  of Statement of Financial  Accounting  Standards No. 128. SFAS 128
requires  earnings per share  information to be computed using a simple weighted
average of common  shares  outstanding  during the periods  presented.  SFAS 128
eliminated the previous  requirement  that earnings per share include the effect
of any dilutive common stock equivalents in the calculation. There was no effect
on the 1998 or  previously  reported  1997 per share amounts as a result of this
change in accounting method.

The stated  earnings  per share  amounts do not include any  potential  dilutive
effect if certain options issued in 1997 to purchase an additional 10,000 shares
of the  Company's  common  stock  were  exercised  because  the  exercise  price
currently  exceeds  market value and the effect would be  anti-dilutive  for all
periods presented.

                                       F-9
<PAGE>

                   CYCLODEXTRIN TECHNOLOGIES DEVELOPMENT, INC.
                          NOTES TO FINANCIAL STATEMENTS
                     SIX MONTHS ENDED JUNE 30, 1998 AND 1997
                                   (Unaudited)

(9)  COMPREHENSIVE INCOME

The  Company  adopted  Statement  of  Financial  Accounting  Standards  No. 130,
"Reporting  Comprehensive  Income."  This  statement  established  standards for
reporting and display of comprehensive income and its components.  Comprehensive
income is net income,  plus certain  other items that are  recorded  directly to
shareholders'  equity,  bypassing  net  income.  The only  such  item  currently
applicable to the Company was the unrealized loss on investments.

The Company's comprehensive income was as follows:

<TABLE>
<CAPTION>
                                         Three Months Ended   Six Months Ended
                                           June 30, 1998        June 30, 1998
                                         ------------------  ------------------
<S>                                      <C>                 <C>
Net income                               $          26,914   $           6,681
Other comprehensive income
  Unrealized loss on investments                    (1,662)             (4,156)
                                         ------------------  ------------------
Total comprehensive income               $          25,252   $           2,525
                                         ==================  ==================
</TABLE>

There was no other  comprehensive  income for the three or six months ended June
30, 1997.

                                      F-10

<PAGE>
Item 2. Management Discussion and Analysis or Plan of Operation

                  CYCLODEXTRIN TECHNOLOGIES DEVELOPMENT, INC.
                      MANAGEMENT DISCUSSION AND ANALYSIS
                             AS OF JUNE 30, 1998

LIQUIDITY AND CAPITAL RESOURCES

As of June 30,  1998,  the  Company's  working  capital was $89,144  compared to
$74,647 at March 31,  1998.  This  increase is due  primarily to the income from
operations recognized in the second quarter.

Total product sales increased during the second quarter of 1998 by $32,879 (55%)
compared to the second quarter of 1997.  This increase in sales is due primarily
to general  sales  volatility  as  historically  experienced  by the Company and
continued interest in cyclodextrins by the food and  pharmaceutical  industries.
Year to date  sales  remained  constant.  Selling,  General  and  Administrative
expenses (SG&A) decreased by 57% due principally to reduced personnel costs.

Inventory  continues to be dominated (65%) by the Garlessence retail product and
therefore masks the steady  movement of the other  components of that inventory.
Management has continued to maintain appropriate inventory levels in response to
normal customer sales.  Management  expects  consulting fee revenues to increase
which may offset product sale volatility.

The three year  period of time  (starting  January 1, 1995) in which the Company
could recover its original  licensing  fee for  Garlessence  of $60,000  through
discounted purchases of raw materials expired at the end of 1997 and the license
fee has been fully  amortized.  The Company has recovered  $9,137 of its license
fee  through  purchase  discounts.  The  Company  did  not  purchase  additional
inventory in the second quarter necessary to maintain the right-of-first-refusal
and this status expired June 1, 1998. There is no assurance that the license fee
or product investment will be recovered.

The Company  continues to seek out distribution  arrangements that will allow it
to recover all of its  Garlessence  licensing  fee and inventory  costs.  In the
second  quarter  of 1998,  the  Company  sold  less  than  $100 of  Garlessence.
Management  believes that as a last resort it can recover at least the inventory
value  of  the  Garlessence  by  selling  it to  companies  that  purchase  such
inventory.  Since the  Garlessence  inventory has a greater than five year shelf
life,  the  Company  fully  expects to  recover  all of its  investment  in this
product.

In order to alleviate a potential  short term cash shortage  resulting  from the
reduced  sales  levels  in  December  1997 and  early in  1998,  Rick  Strattan,
President,  made a shareholder's  loan to the Company in March of  approximately
$16,800.  The loan is being amortized over a 12 month period at 8% interest with
payments  due the  first  of each  month.  As of June 30,  1998 the  outstanding
balance is approximately $13, 125. Management does not expect further funding to
be required to meet the Company's cash needs.

To meet the  financial  needs of expected  future  growth,  the Company  filed a
registration  statement with the SEC to make a public  offering in 1996 and 1997
of 250,000 shares of common stock and 125,000 warrants of the Company. No shares
of stock were sold in this offering.  The offering closed April 30, 1997 and the
Company expensed the previously  capitalized  deferred offering costs ($127,467)
in the second quarter of 1997. While most of these offering costs were non-cash,
the net result was a large negative impact on the financial results reported for
the year ended December 31, 1997. 
<PAGE>
                  CYCLODEXTRIN TECHNOLOGIES DEVELOPMENT, INC.
                      MANAGEMENT DISCUSSION AND ANALYSIS
                             AS OF JUNE 30, 1998
                                (Continued)

The Company currently has a $25,000 credit line with $8,500 available as of June
30, 1998.

The Company is in the fourth year of a five-year  lease for 3,000 square feet of
space for an office, laboratory, and manufacturing plant. The Company moved into
the building during October 1994. Rent payments are $18,000 in year one, $18,900
in year two,  $19,484 in year three,  $20,844 in year four,  and $21,888 in year
five. The Company also has a purchase  option on this space in which ten percent
of the lease  payments  may be applied to the  purchase  price.  The Company may
exercise an option to lease an additional  3,000 square feet of adjoining space.
The Company houses its  administrative  offices,  laboratory,  and manufacturing
facility in this complex,  utilizing an aggregate of approximately  1,650 square
feet.  This  facility has been built,  and can be  expanded,  according to "GMP"
(good manufacturing practices)  specifications in anticipation of the commercial
needs of the markets the Company  serves.  The  remaining  1,350  square feet of
space is for pilot plant  manufacturing and an analytical  laboratory.  However,
this  expansion will require  additional  funding and there is no assurance that
any additional funding will be available.  Management has no immediate plans for
this expansion.

The Company's  right-of-first-refusal  (ROFR) with Cyclops h.f. (CyC) to certain
inventions  embodied in patents  owned by Cyclops  expired in September of 1997.
Licenses to specific  ophthalmic drugs benefiting from CyC's inventions will now
have to be  negotiated  with the German  company  that holds these  rights.  The
Company feels confident that rights to these inventions can be obtained at least
for sales in the United States.  Contingent upon a successful  private placement
of the Company's  stock in the third quarter of 1998 the Company expects to file
New Drug  Applications  with the Food  and  Drug  Administration  (FDA)  for the
licensed  ophthalmic  products.  There is no assurance  that the Company will be
able to obtain  licenses to the CyC  inventions  or that the  private  placement
proposed will raise sufficient capital to undertake the New Drug Applications.

On May 1, 1995 the Company  entered  into a joint  venture  operating as Ocudex,
Inc. The Company and Ocumed,  Inc., (Ocumed) an unrelated company,  each own 50%
of Ocudex.  The Company had agreed to provide  funds on a best efforts  basis of
not more than $10,000 per month for up to 12 months. As of December 31, 1997 the
Company had advanced a total of $51,000 and realized  losses of $11,094 to date.
Since  there was no  activity  at Ocudex  during  all of 1997 and the  Company's
efforts  to  acquire  the assets of Ocumed,  did not  materialize,  the  Company
provided an allowance in the fourth quarter of 1997 for the remaining investment
in the amount of $40,406.  The corporate shell will remain  available for future
use as the Company will continue to work with Ocumed to bring  ophthalmic  drugs
using cyclodextrins to the market.

In May of 1996 the Company entered into a contractual agreement with Diversified
Corporate Consulting Group, LLC (DCCG),  whereby the Company transferred 110,010
shares of CTD's  voting  common  stock to DCCG in return  for  future  financial
services  related to business and  financial  public  relations  improvement  as
defined in its agreement.  The Company currently has 1,225,110 shares issued and
outstanding. While this agreement expired in May

<PAGE>
                  CYCLODEXTRIN TECHNOLOGIES DEVELOPMENT, INC.
                      MANAGEMENT DISCUSSION AND ANALYSIS
                             AS OF JUNE 30, 1998
                                (Continued)

of 1997,  the Company  continues  to utilize  DCCG's  services on a best efforts
basis.  Management  anticipates  benefits  will be  realized  in 1998  from  the
retaining of DCCG (now called Genesis Consulting (GCLLC).

Through  GCLLC the Company  retained the services of  Burckhardt & Company,  Inc
(B&C) to coordinate the private  placement that will make possible the Company's
planned  ophthalmic  drug  applications  to the FDA.  Planning  for this private
placement began in late 1997 and the Company has spent $40,000 and $2,500 in the
form of consulting fees to B&C and Executive Concepts, respectively. The Company
has also recorded $2,500 in stock to be issued to Executive Concepts and $20,000
in stock to be issued to B&C. Since these costs are directly attributable to the
proposed private placement,  they have been classified as deferred charges.  The
total  amount  deferred  as of June 30,  1998 is  $65,000.  B&C has  advised the
Company that the private  placement  should be complete in the third  quarter of
1998. There is no assurance that the private  placement will be completed in the
third  quarter  1998 or that  finds  sufficient  to  cover  the  Company's  drug
applications to the FDA will be raised.

The private placement is expected to raise $2,000,000; to be used as follows:

<TABLE>

<S>                                                             <C>
Initial costs to secure Licenses and
  Intellectual Property                                         $     250,000
File IND                                                               50,000
Complete IND studies                                                  300,000
Working Capital for completing Phase I & II studies                   850,000
Working Capital for Administering IND through Phase II
  applications                                                        400,000
Private Placement Costs                                               150,000
                                                                -------------
       Total                                                    $   2,000,000

</TABLE>

The Company  expects the above  process to be  completed  within 12 months of an
initial IND  application;  such  application  could occur as early as the end of
1998.  Management  expects to be able to move several  related  ophthalmic  drug
products through the above process at much reduced incremental costs. Using this
strategy,  the Company anticipates  licensing one or more of the drugs that have
completed  phase II studies to interested  ophthalmic  manufacturing  companies,
thereby   creating   revenue  from  these  licenses  in  1999.  These  licensing
arrangements  provide a proof of concept  and  thereby  are  expected to provide
credibility for a possible future public offering.  Using the licensing revenues
and/or the proceeds of such a public offering, the Company expects to take drugs
not out-licensed, completely through marketing approval by the FDA (Phase III).

While there are no assurances that the above private placement can be completed,
both B&C and GCLLC have committed  considerable resources to its accomplishment.
Management  has  structured  the  drug  applications  so that  even if only  50%
($1,000,000) of the private placement proceeds become available

<PAGE>
                  CYCLODEXTRIN TECHNOLOGIES DEVELOPMENT, INC.
                      MANAGEMENT DISCUSSION AND ANALYSIS
                             AS OF JUNE 30, 1998
                                (Continued)

to the  Company,  the Company  will be able to  complete  phase II studies on at
least one of the ophthalmic drugs to be submitted; however the planned economies
of multiple,  related drug  applications  will be lost.  Once the phase I and II
studies  are  complete,  Management  believes  it  can  approach  investors  for
additional funding based on the phase I and II data.  Additional capital will be
required if the Company is to complete the phase III approvals  itself.  Without
additional  capital,  the  Company  could  license  the  phase I and II data and
through licensing royalties over time generate revenue.

In the case that less than the  $1,000,000 is raised,  the Company will allocate
funds  between doing an IND for the best  pharmaceutical  candidate and creating
retail  over-the-counter  products that require minimal regulatory  intervention
such as  contact  lens  soak  solutions,  benzocaine  patches,  plaque-softening
chewing gum,  etc to be marketed or  sub-licensed  by the Company.  In the event
that  no  further  funding  is  available,   Management  believes  that  it  can
sub-license its secured licensing rights along with the completed IND to a large
ophthalmic company to recover its costs and generate revenues.

Management has evaluated the Company's  computer systems to determine the impact
of the Year 2000 (Y2K) on the Company's operations. Management has completed its
evaluation  and  determined  that both the  hardware  and  software  used by the
Company  are Y2K  capable  and no  additional  cost or impact on  operations  is
expected.


RESULTS OF OPERATIONS

Sales of  cyclodextrins  and related  manufactured  complexes  are  historically
highly volatile. In efforts to offset this volatility,  the Company continues to
expand its  revenue  producing  activities  to include  providing  research  and
development  services for unrelated  companies and its inventory line to include
more routinely  purchased products.  While sales are still volatile,  Management
feels that these efforts will reduce the  volatility  and that total product and
service sales will continue to grow.

Total product sales for the quarter ended June 30, 1998 were $93,123 compared to
$60,244  for the same  period in 1997.  Total  sales  between  these two periods
increased  55%.  However,  sales for the six months ended June 30, 1998 and 1997
remain constant. Management expects cyclodextrin sales to continue at historical
levels in the near term.

Product  sales are  primarily to large  pharmaceutical  and food  companies  for
research and development purposes. Sales of both products and services have been
concentrated among a few large customers,  averaging 40% of total sales over the
past three years.  Over the past six months,  one customer has been  responsible
for 57% of total sales.

The Company's gross profit margin on product sales decreased from 74% to 64% for
the second quarter of 1997 and 1998, respectively. The Company expects the trend
of  decreasing  gross  profit  margins to continue as the cost of  cyclodextrins
rises.


<PAGE>
                  CYCLODEXTRIN TECHNOLOGIES DEVELOPMENT, INC.
                      MANAGEMENT DISCUSSION AND ANALYSIS
                             AS OF JUNE 30, 1998
                                (Continued)

Selling,  general and administrative (SG&A) expenses for the second quarter 1998
($40,208 vs. $93,386)  decreased 57% from the second quarter 1997. This decrease
is the result of a reduction in personnel and related costs made in 1997 as well
as a  decrease  in  advertising  and a general  reduction  in  office  expenses.
Management  continues to monitor SG&A expenses in efforts to keep these expenses
minimized.

The Company's net income from  operations for the six months ended June 30, 1998
was  $6,681  versus  a net  loss of  ($214,759)  for the  same  period  in 1997.
Comparing  net income  (loss)  before income taxes for the six months ended June
30, 1998 and 1997 and  excluding  the $131,122  public  offering  costs in 1997,
shows a $67,568  improvement  in net operating  results from 1997 to 1998.  This
improvement is due primarily to reduced  personnel and  advertising  costs and a
general reduction in other expenses.

The Company will continue to develop new products, and implement its strategy of
creating  operational  affiliates  that  will  use  CD's  in  herbal  medicines,
wastewater remediation, and pharmaceuticals.

<PAGE>

PART II: Other Information

Item 6.   Exhibits and Reports on Form 8-K

None.

(a)  Exhibits

Exhibit     Description                                                 Page

   (2)      Plan of Acquisition, Reorganization, Arrangement,
            Liquidation or Succession                                   None

   (4)      Instruments defining the Rights of Security Holders         None

  (10)      Material Contracts                                          None

  (11)      Statement re: Computation of Per Share Earnings             Note 8,
                                                                       Financial
                                                                      Statements

  (15)      Letter re: Unaudited Interim Financial Information          None

  (18)      Letter re: Change in Accounting Principles                  None

  (19)      Report Furnished to Security Holders                        None

  (22)      Published Report re: Matters Submitted to Vote of
            Security Holders                                            None

  (23)      Consents of Experts and Counsel                             None

  (24)      Power of Attorney                                           None

  (27)      Financial Data Schedule

  (99)      Additional Exhibits                                         None

(b) Reports on Form 8-K                                                 None

None.
<PAGE>
In accordance with the  requirements of the Exchange Act, the registrant  caused
this  report to be  signed on its  behalf  by the  undersigned,  thereunto  duly
authorized.


Dated:  June 30, 1998

                                          /s/ C. E. RICK STRATTAN
                                          C. E. RICK STRATTAN
                                          President, Chief Executive Officer,
                                          Chief Financial Officer