U.S. Securities and Exchange Commission

                             Washington, D.C. 20549

                                   Form 10-KSB

(Mark One)

(X) ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
                               1934 (Fee Required)

                   For the fiscal year ended December 31, 2004

( ) TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
                            OF 1934 (No Fee Required)

              For the transition period from _________ to _________

                         Commission file number 0-24930

                               CTD HOLDINGS, INC.
                 (Name of small business issuer in its charter)

            FLORIDA                                   59-3029743
     State or other jurisdiction of               (I.R.S. Employer
     incorporation or organization)              Identification No.)

                  27317 N. W. 78th Avenue, High Springs, FL 32643
                (Address of principal executive offices) (Zip Code)

                     Issuer's telephone number: 386-454-0887

Securities registered under Section 12(b) of the Exchange Act:

         Title of each class          Name of each exchange on which registered

                                      None

Securities registered under Section 12(g) of the Exchange Act:

                              Class A Common Stock
                                (Title of class)

     Check  whether  the issuer (1) filed all  reports  required  to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 12 months (or for such
shorter period that the  registrant was required to file such reports),  and (2)
has been subject to such filing requirements for the past 90 days. Yes X No----.

     Check if there is no disclosure  of  delinquent  filers in response to Item
405 of Regulation S-B is not contained in this form,  and no disclosure  will be
contained,  to the  best of  registrant's  knowledge,  in  definitive  proxy  or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB ( )

     State issuer's revenues for its most recent fiscal year:  $464,692.

     State the aggregate market value of the voting stock held by non-affiliates
computed by reference  at the price at which the stock was sold,  or the average
bid and asked  prices of such stock,  as of a specified  date within the past 60
days:  $720,514  based on the average  high ($.08) and low ($.08)  price as of
March 4, 2005, of $.08 per share.

     State the number of shares  outstanding of each of the issuer's  classes of
common  equity,  as of  the latest  practical  date: 10,953,967 shares of Common
Stock as of March 4, 2005.

                       DOCUMENTS INCORPORATED BY REFERENCE

                                      None

Transitional Small Business Disclosure Format (Check One): Yes No X

<PAGE>
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
havepotential  applications  anywhere  oil and  water  must  be  used  together.
Successfulapplications  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  that  the   application   of  CDs  in  both  OTC  and  ethical
ophthalmicproducts  provides the greatest  opportunity  for the  successful  and
timelyintroduction 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
its 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 that the food additive  industry will
continue to increase its use of CDs.

     CDs have  been  used in a  variety  of food  products  in Japan for over 25
years. 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 that the failure of businesses to exchange  information about CD
molecules has hindered a more rapid commercialization of CDs as safe excipients.
We believe that 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 WEB Page and
"site" on the world-wide web and obtaining a unique and descriptive domain name:
"cyclodex.com".

     We intend to work with clients in countries whose current  regulatory views
include CDs as natural  products  acting as excipients  to introduce  beneficial
pharmaceuticals improved by CDs.

     Along  with  the  new  products  themselves,  the  Company  has  created  a
licensable  mark  that  may be  used  by  other  manufacturers  wishing  to take
advantage of the improved aqueous delivery afforded by Trappsol CDs.

     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.  Discussions between
the  principals  of  Cyclolab  and CTD have been  ongoing for more than 5 years.
Potential   relationships  which  have  been  discussed  include  joint  venture
arrangements,  the Company's outright acquisition of Cyclolab and the employment
of Cyclolab  personnel to create  Cyclolab-USA.  There is no assurance  that the
Company will be able to reach a formal business relationship with Cyclolab.

Government Regulation

     Under the Federal  Food,  Drug and Cosmetic Act ("Food and Drug Act"),  the
Food  and  Drug  Administration  ("FDA")  is given  comprehensive  authority  to
regulate the development,  production,  distribution,  labeling and promotion of
food and drugs. The FDA's authority  includes the regulation of the labeling and
purity of the Company's  food and drug  products.  In the event the FDA believes
that any  company  is not in  compliance  with the  law,  the FDA can  institute
proceedings  to detain or seize  products,  enjoin  future  violations or assess
civil and/or criminal penalties against that Company.

     The FDA and comparable  agencies in foreign  countries  impose  substantial
requirements  upon the introduction of therapeutic drug products through lengthy
and detailed laboratory and clinical testing procedures, sampling activities and
other costly and time consuming  procedures.  The extent of potentially  adverse
government   regulations   which  might  arise  from   future   legislation   or
administrative action cannot be predicted.

     Under present FDA regulations,  FDA defines drugs as "articles intended for
use in the diagnosis,  cure,  mitigation,  treatment or prevention of disease in
man."  The  Company's  product  development  strategy  is at first to  introduce
products  that  will not be  regulated  by the FDA as drugs  because  all of its
ingredients are natural products or are generally regarded as safe (GRAS) by the
FDA.  The  Company  is  continually  updated  by  counsel  as to  changes in FDA
regulations that might affect the use of and claims for these products. There is
no assurance that the FDA will not take the position that the Company's food and
nutritional  supplement  products are subject to  requirements  relating to drug
development  and sale.  The  effect of such  determination  could be to limit or
prohibit distribution of such products.

Employees

     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 Properties.


          In 2000, the Company bought  approximately 40 acres in Alachua County,
Florida,  for a purchase  price of $210,000  which was paid for in part by a new
first  mortgage  of  $150,000.  The  property  had been  developed  in part as a
mushroom  growing  facility.  The  Company  has  discontinued  mushroom  growing
operations, but continues to use the property as its corporate headquarters. Its
present 6,000 sq.ft.  facility is expected to be adequate to house the Company's
operations for the foreseeable future.


Item 3.  Legal Proceedings.
         None


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

<PAGE>
Part II

Item 5.  Market for Registrant's Common Equity and Related Stockholder Matters.

     In October 1994, the Company's securities began trading on the OTC Bulletin
Board and in the over-the-counter market "pink sheets" under the symbol CTDI. 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


2003          First Quarter        $ 0.083           $ 0.081
              Second Quarter       $ 0.071           $ 0.071
              Third Quarter        $ 0.049           $ 0.048
              Fourth Quarter       $ 0.353           $ 0.318

2004          First Quarter        $ 0.424           $ 0.370
              Second Quarter       $ 0.249           $ 0.229
              Third Quarter        $ 0.095           $ 0.086
              Fourth Quarter       $ 0.061           $ 0.057


     Over-the-counter  market quotations reflect  inter-dealer  prices,  without
retail  mark-up,   mark-down  or  commissions  and  may  not  represent   actual
transactions.

         Holders

     As of  December  31,  2004,  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 76.

         Dividend Policy

     The Company  will not pay any cash  dividends  on its common  stock in 2004
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.
<PAGE>
                      Equity Compensation Plan Information
<TABLE>
<S>                        <C>                     <C>                        <C>
                            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
                          ====================      ====================       ========================
</TABLE>

Notes to Equity Compensation Plan Table:

Note 1 -- The Company has employment agreements terminating on December 31, 2005
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 6. Management's Discussion and Analysis of Financial
Condition and Results of Operations

Introduction

CTD Holdings,  Inc. (referred to as the "Company," "CTD," or in the first person
notations of "we," "us," and "our") began  operations in 1990.  Our revenues are
principally   derived  from  retail  sales  of  cyclodextrins  and  cyclodextrin
complexes.  Our sales are primarily to major  chemical  supply houses around the
world, pharmaceutical companies, and food companies for research and development
and to diagnostics  companies.  We acquire 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
comprehensive database of patented and patent pending uses of cyclodextrins from
the United States.  We also maintain less  comprehensive  database that includes
patents issued in many other countries  including Japan, Gemany and others. This
information  is  available to our  customers.  We also offer our  customers  our
knowledge  of the  properties  and  potential  new  uses  of  cyclodextrins  and
complexes.

As most of our customers  use our  cyclodextrin  products in their  research and
development  activities,  their ordering from us is  unpredictable in regards to
timing,  product mix and volume.  We also have four major  customers whom have a
significant effect on our revenues when they increase or decrease their research
and development  activities that use  cycldextrins.  We keep in constant contact
with these  customers  as to their  cyclodextrin  needs so we can  maintain  the
proper  inventory  composition and quantity in anticipation of their needs.  The
sales to major  customers  and the product mix and volume of products sold has a
significant effect on our revenues and gross profit. These factors contribute to
our significant revenue volatility from quarter to quarter and year to year.

Liquidity and Capital Resources

Our cash and cash equivalents  increased to approximately $94,000 as of December
31, 2004 compared to approximately $8,000 as of December 31, 2003. Our cash flow
from  operations  for 2004 was $205,000  compared to $65,000 for 2003.  While we
reported a net loss in 2004 of $561,000,  we had  $708,000 in noncash  expenses.
The increased cash flow from operations is due primarily to an increase in sales
of  cyclodetrins  resulting  in an  increase  in gross  profit of  $37,000,  and
favorable working capital changes,  including a decrease in accounts  receivable
of  $75,000  due to the  collection  of a large  December  2003 sale in 2004,  a
decrease in inventory and increase in accounts  payable due to normal  operating
fluctuations.

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.  However,  we require
additional  funding to  implement  our  acquisition  strategy.  Our  acquisition
strategy  includes  raising  $1,500,000  in the next  twelve  months.  Our first
acquisition  will  require  approximately  $500,000.  We believe we can fund the
initial  costs of  raising  capital  and start  our  acquisition  strategy  from
existing working capital.

Controlling  cash expenses  continues to be  management's  primary  fiscal tool.
However,  growth  requires  increased  expenditures  and  we  feel  that  it  is
appropriate  during the current growth stage to engage consultants that can help
the Company in financial areas outside its expertise,  accepting that these fees
will act to reduce  profitability.  We are working hard to increase  revenues to
balance these new  expenses,  but cannot be sure that such effort will be enough
in the short term to sustain financial performance like that of the recent past.
Our cash SG&A expenses for 2004, as a percentage of sales,  have  decreased from
2003.

During 2004, we acquired a sports memorabilia collection from our President.  We
obtained an appraisal on the  collection  for  $400,000.  We issued stock with a
fair value  equal to  approximately  70% of the  appraised  value (we bought the
Collection at a 30% discount from the appraised  value). We also engaged a third
party  consultant  to  liquidate  the  Collection,  which has  provided  us with
additional cash flow with minimal associated cash expenses.

During 2003, we began  improvements  and renovations of our corporate office and
have invested $123,000 through December 31, 2004. We are 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
four  quarters  to put the Company in a position to initiate a 5-year plan for a
new Cyclodextrin Research Park.

In December 2004, the Company  issued  3,500,000  shares of its common stock for
$3,500 to a financial consultant. The Company recognized an expense of $206,500,
which is the difference  between the amount paid and the fair value of the stock
issued based on the trading price on the date of the stock purchase. The Company
has agreed to register the stock by filing a registration  statement by June 19,
2005 with an effective  date no later than August 19, 2005. If the  registration
is not filed and  effective by the dates  indicated,  the Company is required to
issue an  additional  175,000  shares  of common  stock  for each  month or part
thereof  until the  registration  statement is filed or becomes  effective.  The
Company is currently in the process of preparing a registration  statement to be
filed.

In May 2004, we entered into a three-month agreement with a consultant regarding
capital raising and strategic  options to modify the Company's capital structure
in order to expedite planned  acquisitions.  The agreement  automatically renews
monthly  unless  cancelled by either party with 30 days notice.  We paid $15,000
upon entering the  agreement  and will pay $3,500 per month,  for each month the
contract is in force,  which we expensed  when paid.  We are required to pay the
consultant  7.5% of any capital  raised and 5% of any other capital  transaction
resulting within two years of the  introduction by the consultant.  We cancelled
this agreement effective December 31, 2004 and no additional amounts are due.

In April 2004,  we entered  into a one-year  consulting  agreement  as part of a
package  designed to create  additional  revenue.  We acquired a  collection  of
sports  memorabilia  from our majority  shareholder  and President 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 to liquidate that

collection  for not  less  than 75% of its book  value as  stated  in any of the
leading  collectibles  industry  guide books.  The consultant was issued 250,627
shares of common stock valued at  $100,250,  which we expensed.  We agreed to an
option whereby the consultant may 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.

The Company has filed Form S-1 with the U.S.  Securities and Exchange Commission
for a shelf  registration  of  10,000,000  shares of common stock to be used for
business acquisition purposes.

We issued  809,611  shares of our common  stock to our  President on February 1,
2005, for compensation  earned under an employment  agreement.  The shares had a
fair value of $40,481 on January 31, 2005.

We have no off-balance sheet arrangements at December 31, 2004.

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 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 have not recorded impairment allowances as of December
31,  2004.  Should  the fair  value of these  assets  decline  or if our  future
operating plans change,  we may be required to record an impairment  charge that
could be significant.

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  (e.g.,  an  individual   restaurant)   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, 2004, 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 $110,000.  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.

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  for  2001  and  2002,
expectations of future taxable income, the carry-forward periods available to us
for tax reporting  purposes,  and other relevant factors.  At December 31, 2004,
our net deferred tax assets are $430,000, 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 had a net loss for 2004, which increased our NOL and deferred tax assets.  We
also  increased  our  valuation  allowance  an  equal  amount  (total  valuation
allowance  increased to 48% from 43%),  which resulted in no benefit  recognized
for 2004.  In 2003,  we reduced our  valuation  allowance  from 100% to 43%. The
range of possible  judgments relating to the valuation of our deferred tax asset
is very wide.  For  example,  had we  determined  that the  weight of  available
evidence  did not support a decision  that a portion of our  deferred tax assets
will be realized,  the amount  recorded to "Income tax (expense)  benefit" would
have  been  an  expense  of  $225,000  for  2004  (rather  than  $0)  for  2004.
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  recorded  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  that the
remaining portion of our deferred tax assets is realizable.

2004 Compared to 2003

Total  product sales for 2004 were  $465,000,  a 18% increase over 2003 sales of
$395,000. Our major customers continue to be repeat purchasers. In 2003, 3 major
customers  accounted  for 62% of our sales;  in that year the largest  purchaser
accounted for 43% of sales. In 2004, 4 major customers  accounted for 80% of our
sales; the largest purchaser only accounted for 24% of sales.

Our gross profit margin of 83% remained consistently strong for 2004 compared to
88% for 2003.  Changes in the product mix in sales has a  significant  effect on
our overall gross profit percentage,  but management expects our gross profit to
remain in the 80% range.

Our SG&A expenses increased to $665,000 in 2004 from $287,000 in 2003, primarily
as a result of stock  based  compensation  to  officers  and  consultants.  Cash
expenses increased due to additional consulting, legal and accounting fees

incurred as a result of the Company's  acquisition  of the baseball  memorabilia
collection,  issuing of common  stock,  and  increased  merger and  acquisitions
activity.  We have evaluated several acquisition  candidates in which we engaged
consultants,  legal counsel and accountants to evaluate these  opportunities and
advise us regarding  the terms and  conditions in potential  contracts.  We also
incurred  additional  expenses  (travel,  lodging,  etc) to visit with potential
targets to travel more frequently to meet with the selected candidates.

For 2004,  the Company has  employment  agreements  with two  officers for total
monthly salaries of $4,900. In addition,  the officers are awarded shares of 144
restricted  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 2004, the Company  awarded
971,533  shares and  recognized  an expense of $109,000 for stock  awarded under
these agreements. Both agreements have been extended through December 31, 2005.

In April 2004, we acquired a collection of sports  memorabilia from our majority
shareholder  and  President.  We also  engaged a  consultant  to  liquidate  the
collection.  The  consultant was issued 250,627 shares of common stock valued at
$100,250, which was expensed. We also 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. We may be required to pay the
consultant $50,000 after three months and an additional $50,000 after six months
- both payments  contingent upon the Company receiving  cumulative payments from
the sales of the  Collection  totaling  $150,000.  The Company has the option of
paying the additional  compensation,  if any, by issuing additional common stock
to the  consultant.  If the target sales amounts are met, the Company will value
the stock when  earned and record an expense  through  operations.  The  Company
recognized $27,000 in gains from the sales of the collection in 2004.

As a result of an agreement in May 2004 with two financial  consultants advising
us on corporate  structure matters,  the Company issued 343,137 shares of common
stock to the consultants under the terms of the agreement and charged operations
for the fair value of the stock issued ($17,157).

We expect  significant  increases  in future  legal and  accounting  fees as the
result of implementing our planned merger and acquisition strategy.

For 2003,  based on our  profitability  for 2003 and  2002,  we  revaluated  our
valuation  allowance on our deferred tax asset.  Our deferred tax asset is based
on our net  operating  loss  carryforward.  We  determined  that  our  valuation
allowance should be reduced form 100% to 43%, resulting in an income tax benefit
of $225,000 for 2003.  For 2004,  we incurred a loss and an  additional  NOL. We
increased our valuation  allowance to 48%, resulting in no income tax expense or
benefit or change in the deferred tax asset for 2004.

We  recognized  a net loss for 2004 of  $(561,000)  compared  to net  income  of
$272,000 for 2003.

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

<PAGE>

Item 7.  Financial Statements

                        [LETTERHEAD OF JAMES MOORE & CO.]

              REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



To the Board of Directors and Stockholders of
CTD Holdings, Inc.:



We have audited the  accompanying  consolidated  balance  sheet of CTD Holdings,
Inc. and  subsidiaries  as of December 31,  2004,  and the related  consolidated
statements  of  operations,  stockholders'  equity  and cash flows for the years
ended December 31, 2004 and 2003. These  consolidated  financial  statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance  with 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  audits  provides  a
reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material respects,  the financial position of CTD Holdings,  Inc.
and  subsidiaries as of December 31, 2004, and the results of its operations and
its cash flows for the years ended  December  31, 2004 and 2003,  in  conformity
with accounting principles generally accepted in the United States of America.

/s/James Moore & Company
January 21, 2005
Gainesville, Florida

                                     F - 1


<PAGE>

                               CTD HOLDINGS, INC.
                           CONSOLIDATED BALANCE SHEET
                                DECEMBER 31, 2004
<TABLE>
<CAPTION>

                                     ASSETS

<S>                                                     <C>
CURRENT ASSETS
 Cash and cash equivalents                               $    94,371
 Certificate of deposit                                       40,333
 Accounts receivable                                          59,022
 Inventory                                                    50,999
 Deferred tax asset                                           25,000
 Loan to shareholder                                           2,084
                                                        -------------
     Total current assets                                    271,809
                                                        -------------
PROPERTY AND EQUIPMENT, NET                                  431,165
                                                        -------------
OTHER
 Intangibles, net                                             12,879
 Deferred tax asset                                          200,000
 Sports memorabilia collection                                94,045
                                                         -------------
     Total other assets                                      306,924
                                                         -------------
TOTAL ASSETS                                             $ 1,009,898
                                                         =============
</TABLE>

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

                                     F-2

<PAGE>

                               CTD HOLDINGS, INC.
                           CONSOLIDATED BALANCE SHEET
                                DECEMBER 31, 2004
                                   (Continued)
<TABLE>
<CAPTION>

                      LIABILITIES AND STOCKHOLDERS' EQUITY

<S>                                                    <C>
CURRENT LIABILITIES
 Accounts payable and accrued expenses                   $     23,840
 Current portion of long-term debt                              8,441
 Current portion of shareholder loan                           20,000
 Call option on sports memorabilia collection                 203,470
                                                         -------------
     Total current liabilities                                255,751
                                                         -------------
LONG-TERM LIABILTIES
  Long-term debt, less current portion                        152,600
  Shareholder loan, less current portion                       33,598
                                                         -------------
     Total long-term liabilities                              186,198
                                                         -------------


STOCKHOLDERS' EQUITY
 Class A common stock, par value $.0001 per share,
  100,000,000 shares authorized, 10,956,517 shares
  issued and outstanding                                        1,096
 Preferred stock, par value $.0001 per share,
  5,000,000 shares authorized; series A, 1 share
  issued and outstanding (Note 11)                                  -

 Additional paid-in capital                                 2,615,288
 Accumulated deficit                                       (2,048,435)
                                                         -------------
     Total stockholders' equity                               567,949
                                                         -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                $ 1,009,898
                                                         =============
</TABLE>

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

                                     F-3

<PAGE>

                               CTD HOLDINGS, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                 FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003

<TABLE>
<S>                                               <C>             <C>

                                                        2004           2003
                                                   -------------   ------------
PRODUCT SALES                                       $   464,692    $   394,532

COST OF PRODUCTS SOLD                                    78,827         45,433
                                                   -------------   ------------
GROSS PROFIT                                            385,865        349,099

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES            664,779        286,724
                                                   -------------   ------------

SPORTS MEMORABILIA COLLECTION
 Gain on sales                                           25,332              -
 Other income (expense)                                (307,720)             -
                                                   -------------   ------------
                                                       (282,388)             -
                                                   -------------   ------------

OTHER INCOME (EXPENSE)
 Investment and other income                             14,688          6,973
 Interest expense                                       (12,027)       (22,599)
 Loss on disposal of equipment                           (2,852)             -
                                                    -------------   -----------
     Total other income (expense)                          (191)       (15,626)
                                                    ------------    -----------
INCOME (LOSS) BEFORE INCOME TAXES                      (561,493)        46,749

INCOME TAX BENEFIT (EXPENsE)                                  -        225,000
                                                    ------------    -----------
NET INCOME (LOSS)                                   $  (561,493)    $  271,749
                                                    ============    ===========

NET INCOME (LOSS) COMMON SHARE:                     $      (.08)    $      .05
                                                    ============    ===========

 Weighted average number of
  common shares outstanding                           7,232,194      5,004,919
                                                    ============    ===========
</TABLE>


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

                                     F-4

<PAGE>

<TABLE>


                                                          CTD HOLDINGS, INC.
                                           CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

                                            FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003

                                       COMMON STOCK             PREFERRED STOCK
<S>                              <C>           <C>          <C>       <C>            <C>          <C>             <C>
                                                                                      ADDITIONAL                       TOTAL
                                                                                        PAID-IN      ACCUMULATED   STOCKHOLDERS'
                                    SHARES       PAR VALUE     SHARES   PAR VALUE       CAPITAL        DEFICIT         EQUITY
                                  -----------   ------------  --------  ----------    ------------  -------------   ------------
Balance, December 31, 2002          4,791,220   $        480         -  $        -    $  1,954,498  $  (1,758,691)  $   196,287

Shares issued for services          1,000,000            100         -           -          49,900              -        50,000

Company expenses paid by
 stockholder                                -              -         -           -          25,000              -        25,000

Net Income                                  -              -         -           -               -        271,749       271,749
                                  ------------   -----------  --------  ----------    ------------   ------------   -----------

Balance, December 31, 2003          5,791,220            580         -           -       2,029,398     (1,486,942)      543,036

Shares issued for service             100,000             10         -           -          39,990              -        40,000

Shares issued for acquisition of
 baseball memorabilia collection    1,029,412            103         -           -         105,897              -       106,000

Shares issued in conjuction with
 liquidation agreement of baseball
 memorabilia collection               250,627             25         -           -         100,225              -       100,250

Fair value of stock options issued
 in conjuction with liquidation
 agreement of baseball memorabilia
 collection                                 -              -         -           -           4,000              -         4,000

Exchange of common shares for
 preferred share                   (1,029,412)          (103)        1           -             103              -             -

Shares issued for services            343,137             34         -           -          17,122              -        17,156

Sale of stock                       3,500,000            350         -           -           3,150              -         3,500

Expense related to stock sold
 below fair value                           -              -         -           -         206,500              -       206,500

Shares issued under
 employment agreements                971,533             97         -           -         108,903              -       109,000

Net loss                                    -              -         -           -               -       (561,493)     (561,493)
                                  ------------   ------------  --------  ---------    ------------   ------------    ----------
Balance, December 31, 2004         10,956,517    $     1,096         1   $       -     $ 2,615,288   $ (2,048,435)   $  567,949
                                  ============   ============  ========  =========    ============   ============    ==========
</TABLE>

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

                                       F-5

<PAGE>

                               CTD HOLDINGS, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                           DECEMBER 31, 2004 AND 2003
                Increase (Decrease) in Cash and Cash Equivalents
<TABLE>
<S>                                                    <C>          <C>

                                                           2004          2003
                                                        -----------  -----------
CASH FLOWS FROM OPERATING ACTIVITIES
 Net income (loss)                                      $  (561,493) $  271,749
                                                        -----------  -----------
 Adjustments  to reconcile  net income  (loss) to net cash provided by operating
  activities:

   Depreciation and amortization                             27,762      28,543
   Gain on sale of sports memorabilia collection            (25,332)          -
   Loss on disposal of equipment                              2,852           -
   Deferred income taxes                                          -    (225,000)
   Bad debts                                                      -       4,854
   Stock issued for services                                363,906      50,000
   Company expenses paid by stockholder                           -      25,000
   Stock compensation to employees                          109,000           -
   Call option-sports memorabilia collection                203,470           -
   Fair value of stock options issued                         4,000           -
 Increase or decrease in:
   Accounts receivable                                       75,000     (97,741)
   Inventory                                                 28,184     (15,037)
   Accounts payable and accrued expenses                    (21,951)     22,596
                                                         ----------   ----------
        Total adjustments                                   766,891    (206,785)
                                                         ----------   ----------
    Net cash provided by operating activities               205,398      64,964
                                                         ----------   ----------
CASH FLOWS FROM INVESTING ACTIVITIES
 Proceeds from sale of sports memorabilia collection         37,287           -
 Purchase of property and equipment                         (80,882)    (54,716)
 Purchase of certificate of deposit                         (40,333)          -
 Purchase of intangibles                                          -     (11,174)
                                                         ----------   ----------
    Net cash used for investing activities                  (83,928)    (65,890)
                                                         ----------   ----------
CASH FLOWS FROM FINANCING ACTIVITIES
 Payment on long-term debt                                   (9,903)     (8,628)
 Proceeds from sale of stock                                  3,500           -
 Payments on loan payable to stockholder                    (26,369)    (28,933)
 Loan to shareholder                                         (3,500)          -
 Received from shareholder                                    1,416           -
                                                         ----------   ----------
    Net cash used for financing activities                  (34,856)    (37,561)
                                                         ----------   ----------

Net increase (decrease) in cash and cash equivalents         86,614     (38,487)

CASH AND CASH EQUIVALENTS, beginning of year                  7,757      46,244
                                                         ----------   ----------
CASH AND CASH EQUIVALENTS, end of year                    $  94,371    $  7,757
                                                         ==========   ==========
</TABLE>

                                       F-6


<PAGE>

                               CTD HOLDINGS, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                           DECEMBER 31, 2004 AND 2003
                Increase (Decrease) in Cash and Cash Equivalents

                                   (Continued)
<TABLE>

<S>                                                 <C>           <C>
                                                         2004         2003
                                                     ------------  ------------

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the year for interest               $     8,996   $   13,472
                                                     ===========   ============
Cash paid for income taxes                           $         -   $        -
                                                     ===========   ============
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND
 FINANCING ACTIVITY

  Stock issued in acquisition of sports memorabilia
   collection                                        $   106,000   $        -
                                                     ===========   ============

  Common stock issued in connection with liquidation
   of sports memorabilia collection                  $   100,250   $        -
                                                     ===========   ============

  Vehicle acquired with debt financing               $         -   $   14,881
                                                     ===========   ============
  Common stock issued for services                   $   472,906   $   50,000
                                                     ===========   ============
    Company expenses paid by shareholder             $         -   $   25,000
                                                     ===========   ============
</TABLE>

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


<PAGE>


                               CTD HOLDINGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           DECEMBER 31, 2004 AND 2003

(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. 144  "Accounting  for the  Impairment  or Disposal of  Long-Lived
Assets",  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  MEMORABILIA  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  10).  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 expenses 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 from product sales are recognized  when
the following four revenue recognition  criteria are met: persuasive evidence of
an arrangement exists, delivery has occurred or services have been rendered, the
selling  price  is fixed  or  determinable,  and  collectibility  is  reasonably
assured.  Outbound  shipping charges to customers are included in product sales.
Product sales and shipping  revenues,  net of discounts,  returns and allowances
are recorded when the products are shipped and title passes to customers.  Sales
to  customers  are made  pursuant  to our  standard  terms and  conditions  that
provides  for  transfer of both title and risk of loss upon our  delivery to the
carrier,  which is  commonly  referred  to as "F.O.B.  Shipping  Point."  Return
allowances  are  infrequent and are recorded when we become aware of the return.
Periodically,  we  provide  incentive  offers  to  our  customers  to  encourage
purchases.  Such offers are primarily percentage discounts off current purchases
for certain  products we are  promoting  or for larger  volume  orders.  Current
discount offers,  when accepted by our customers,  are treated as a reduction to
the  purchase  price of the related  transaction.  Current  discount  offers are
presented as a net amount included in product sales.

     (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.

     (m)  RECLASSIFICATIONS  - Certain amounts in the 2003 financial  statements
have  been  reclassified  for  comparative  purposes  to  conform  with the 2004
presentation.

     (n) 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.

     (o) 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 2004, the Company  entered into  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 2004,  the Company  awarded  971,533
shares and  recognized  an expense of  $109,000  for stock  awarded  under these
agreements. Both agreements have been extended through December 31, 2005.

In 2003, the Company issued  1,000,000  shares  registered under Form S-8 to its
President  as a bonus.  The stock was valued at  $50,000  when  awarded  and was
expensed.

In December 2004, the Company  issued  3,500,000  shares of its common stock for
$3,500 to a financial consultant. The Company recognized an expense of $206,500,
which is the difference  between the amount paid and the fair value of the stock
issued based on the trading price on the date of the stock purchase. The Company
has agreed to register the stock by filing a registration  statement by June 19,
2005 with an effective  date no later than August 19, 2005. If the  registration
is not filed and  effective by the dates  indicated,  the Company is required to
issue an  additional  175,000  shares  of common  stock  for each  month or part
thereof  until the  registration  statement is filed or becomes  effective.  The
Company is currently in the process of preparing its  registration  statement to
be filed.

The Company  entered into an agreement  with two  financial  consultants  in May
2004. Upon amending the Articles of  Incorporation  for Series A Preferred Stock
as  described  in Note 11, the Company  issued  343,137  shares of common  stock
registered  under Form S-8 to the  consultants  under terms of the agreement and
charged expense for $17,156 the fair value of the stock on the measurement date.

In March 2004, the Company  entered into a one-year  agreement with a consultant
regarding  construction and specialized concrete formulations and issued 100,000
shares of stock  valued at $40,000 at the date of  issuance,  which the  Company
expensed in the first quarter of 2004. The stock was registered  using Form S-8.
The  consultant  is related to the  president  and majority  shareholder  of the
Company.

In 2004,  the Company  entered  into an agreement  with a  consultant  regarding
capital raising and strategic options.  The agreement was also terminated during
2004. The Company paid the consultant $39,500,  which was expensed.  The Company
is required to pay the consultant 7.5% of any capital raised and 5% of any other
capital  transaction  resulting  within  two  years of the  introduction  by the
consultant.

In 2003, the Company  engaged a consultant to perform  services over a six month
period. The majority  stockholder (and President)  transferred 500,000 shares of
CTDH stock valued at $25,000 to the  consultant  on behalf of the  Company.  The
consulting  fee was  expensed by the  Company in 2003 and  recorded as a capital
contribution received from the stockholder.

Rent expense under all operating leases was $3,739 and $6,345 for 2004 and 2003,
respectively.

(3) PROPERTY AND EQUIPMENT

Property and equipment as of December 31, 2004, consists of:
<TABLE>

        <S>                                           <C>
         Land                                          $    80,000
         Buildings and improvements                        211,864
         Machinery and equipment                            78,407
         Office furniture and equipment                     50,627
                                                       ------------
                                                           420,898

         Less: accumulated depreciation                    112,557
                                                       ------------
                                                           308,341

            Construction in progress                       122,824
                                                       ------------

            Property and equipment, net                $   431,165
                                                       ============
</TABLE>

The  carrying  value of remaining  idle  long-lived  assets  related to a former
mushroom farming operation was approximately $ 110,000 at December 31, 2004.

(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, 2004, the
demand and  certificate  deposit bank balance was  $135,588.  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. Three major customers accounted for
85% of the accounts  receivable balance at December 31, 2004. The Company has no
policy   requiring   collateral  or  other  security  to  support  its  accounts
receivable.

                                     F-8
<PAGE>


                               CTD HOLDINGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           DECEMBER 31, 2004 AND 2003

(5) MAJOR CUSTOMERS AND SUPPLIERS:

Sales to four customers in 2004  represented  approximately  62% of total sales.
Sales to three customers in 2003 represented approximately 74% of total sales.

Purchases  from two  suppliers in 2004  represented  approximately  80% of total
costs of  products  sold.  Purchases  from  two  suppliers  in 2003  represented
approximately 80% of total costs of products sold.

The Company has only one source for certain manufactured inventory. However, the
Company has  manufactured  these products in the past and could do so again,  if
necessary. There are multiple sources for its other inventory products.

(6) LONG-TERM DEBT:

Long-term debt consists of the following as of December 31, 2004:


         Mortgage note payable to bank, payments of
          $1,263 due monthly including principal and
          interest at prime plus 1.0% (6.25% at
          December 31, 2004), collateralized by land
          and buildings with a cost of $210,000                       $  150,393



         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                                                      10,648
                                                                     -----------

         Total long-term debt                                            161,041

         Less current portion                                              8,441
                                                                     -----------
   Long-term debt, less current portion                               $  152,600
                                                                     ===========


Maturities  on  long-term  debt as of December 31, 2004 over the next five years
and thereafter are as follows:
<TABLE>

        <S>                                            <C>
         Year ending
         December 31,                                   Amount

             2005                                        8,441
             2006                                        8,993
             2007                                        9,583
             2008                                        8,161
             2009                                        7,192
             2010 and thereafter                       118,671
                                                     ---------
                                                     $ 161,041
                                                     =========
</TABLE>

(7) RELATED PARTY TRANSACTIONS:

The majority  stockholder  periodically  advances the Company loans. The Company
owes the  stockholder  $53,598 at December 31, 2004.  The loan is unsecured  and
interest  accrues at 4.17%.  Interest expense related to the loan totaled $3,031
and  $9,127  for the years  ended  December  31,  2004 and  2003,  respectively.
Principal payments are $5,000 per quarter.

<PAGE>
                               CTD HOLDINGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           DECEMBER 31, 2004 AND 2003

(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,  2004,   unused  operating  loss
carryforwards  totaling  approximately  $ 1,569,000 that may be applied  against
future taxable income. If not used, the carryforwards will expire as follows:
<TABLE>

       <S>                                     <C>
           Year Ending
           December 31,                               Amount

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

             2009                               $     760,000
             2010                                     195,000
             2017                                     206,000
             2020                                     280,000
             2021                                      71,000
             2024                                      57,000
                                                -----------------
             Total                              $   1,569,000
                                                =================
</TABLE>

If all of the operating loss carryforwards and temporary deductible  differences
were used,  the  Company  would  realize a deferred  tax asset of  approximately
$430,000  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.  Management  expects  to  maintain  continued
profitability in the future and realize additional benefits of its net operation
loss carryforwards. At December 31, 2004, the Company evaluated its deferred tax
asset valuation  allowance and increased its valuation  allowance  percentage to
48%  resulting in no income tax expense or benefit or change in its deferred tax
asset for 2004. At December 31, 2003  Management  determined that a reduction in
the  valuation  allowance  to  43%  from  100%  of the  future  tax  benefit  is
appropriate.  Accordingly,  the Company has  recognized a $225,000  deferred tax
asset and the  resulting  income tax  benefit in 2003 to reflect  this change in
estimate.
<PAGE>
                               CTD HOLDINGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           DECEMBER 31, 2004 AND 2003

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
estimated deferred tax asset will change in the near term and be material to the
financial statements.

<TABLE>
<S>                                              <C>           <C>
                                                 2004          2003
                                             -----------   ------------
Current income tax benefit (expense)         $   30,000     $  (17,000)

Tax expense of temporary differences            (13,000)             -

Tax benefit of operating loss carryforwards           -         17,000

Decrease (increase) in valuation allowance      (17,000)       225,000

                                             -----------   ------------
Total net tax benefit (expense)               $       -     $  225,000
                                             ===========   ============
</TABLE>

(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
acquired the Collection to provide additional cash flow, with minimal associated
cash  expenses.  The  Collection  was  appraised at $400,000.  The President was
issued  1,029,412  shares of  unregistered  common  stock of the Company for the
Collection. The number of shares was determined using 70% of the appraised value
($280,000)  divided  by 90% of the  average  of the bid and  ask  price  for the
Company's  stock on April 14, 2004.  The formula was used to provide the Company
with a discounted price from the appraised value when compared to the fair value
of the stock issued of approximately 20%.

Since the  acquisition of the  Collection  was from the Company's  President and
controlling shareholder,  the Company recorded the Collection at $106,000, which
is the acquisition cost basis of the President and controlling shareholder.

The Company  records  sales and related  expenses of the  Collection as gains or
losses from operations in the accompanying  statement of operations.  Concurrent
with the  acquisition  of the  Collection,  the Company  entered into a one-year
contract  with a unrelated  consultant  to liquidate  the  Collection on a "best
efforts" basis. The Company issued the consultant 250,627 shares of common stock
registered on Form S-8 valued at $100,250 on the date the contract was executed.
The  Company  expensed  the  $100,250  through  operations  in the  accompanying
statement of  operations.  The  consultant  earns a 10%  commission on the gross
sales price of all  Collection  sales.  The Company  receives net proceeds after
deductions for the consultant's  commission and other direct selling expenses of
the consultant.

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  was issued an option to acquire  100,000 shares of the Company's
stock at  $.50/share  during the  one-year  term of the  agreement.  The Company
follows SFAS 123 in accounting  for stock options  issued to  nonemployees.  The
fair value of each option  granted is estimated  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;  standard  deviation of  historical  stock return  44.03%.  The fair value
calculated  resulting  from the  issuance  of this option was  determined  to be
$4,000,  which was charged through  operations in the accompanying  statement of
operations.<PAGE>
                               CTD HOLDINGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           DECEMBER 31, 2004 AND 2003

The Company may be required to pay the consultant $50,000 after three months and
an  additional  $50,000  after six months - both  payments  contingent  upon the
Company receiving  cumulative payments from the sales of the Collection totaling
$150,000. The Company has the option of paying the additional  compensation,  if
any,  by issuing  additional  common  stock to the  consultant.  The  Company is
required to register the stock, if issued.  If the target sales amounts are met,
the  Company  will  value the stock when  earned  and record an expense  through
operations.  As of December  31,  2004,  the Company  recorded  net  receipts of
approximately $37,000 from sales of the Collection.

The  consultant  is  required  to maintain  adequate  insurance  and pay for any
transportation  costs.  The  consultant is to liquidate the Collection at prices
not less than 75% of the values  published in  auction-house  guidebooks  and/or
reputable trade  publications and price guides.  The consultant is also required
to provide a detailed itemization of sales to the Company on a monthly basis.


(11) CORPORATE CHANGES

The Company amended its Articles of Incorporation  authorizing a class of "blank
check"  preferred stock  consisting of 5,000,000 shares and creating a series of
Series A Preferred Stock and set forth its designations, rights and preferences.
The more  significant  right is the share votes together with the holders of the
common stock on all matters  submitted to a vote of Company  shareholders,  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 CTD Holding 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.  The Company issued one share of the Series A
Preferred Stock to its majority  shareholder in exchange for 1,029,412 shares of
common stock held by the majority  shareholder,  surrendered  to the Company and
cancelled. See Note 2.

(12) SIGNIFICANT FOURTH QUARTER ADJUSTMENTS

During  the  fourth  quarter  of 2003,  the  Company  determined  its  valuation
allowance  on  its  deferred  tax  asset   resulting  from  net  operating  loss
carryfowards  to be lower than  previously  recorded  and reduced the  valuation
allowance from 100% to 43% resulting in an income tax benefit of $225,000 in the
fourth quarter of 2003.

                                      F-12
<PAGE>
Item 8.  Changes in and Disagreements with Accountants on Accounting
         and Financial Disclosure

None


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, 2004 (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,  while a third  year  student  pursuing  a degree  in
accounting  at the  University  of Florida 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, while
a third  year  student  pursuing a degree in  accounting  at the  University  of
Florida 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.

(c) Changes in internal controls.

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.
<PAGE>
PART III.

Item 9.  Directors, Executive Officers, Promoters and Control Persons;
         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      58        President, CEO and Chairman             1990

George L. Fails         59        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 Viet Nam, 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.

<PAGE>

Item 10. Executive Compensation.

<TABLE>

                           SUMMARY COMPENSATION TABLE

                                                                                          Long-term compensation
                                                                          ........................................................
                                         Annual compensation                         Awards               Payouts
                                 --------------------------------------   ----------------------------    ---------
<S>                       <C>        <C>         <C>           <C>            <C>              <C>           <C>         <C>
                                                                                           Securities
                                                          Other annual    Restricted       underlying      LTIP       All other
Name & principal         Year       Salary      Bonus     compensation    stock awards     options/SARs    payouts    compensation
                                     ($)         ($)          ($)             ($)              (#)           ($)          ($)
===================    ========  ===========  =========  ==============   ============     ============   =========   ============

C.E. Rick Strattan       2004    $ 36,000        -0-          -0-         $90,833.33 (1)        -0-          -0-          -0-
President, CEO           2003    $ 36,000     $50,000 (3)     -0-             -0-               -0-          -0-          -0-
Chairman                 2002    $ 33,346        -0-          -0-             -0-               -0-          -0-          -0-


George L. Fails          2004    $ 22,800        -0-          -0-         $18,166.67 (2)        -0-          -0-          -0-
Operations Manager       2003    $ 20,836        -0-          -0-             -0-               -0-          -0-          -0-
                         2002    $ 20,000        -0-          -0-             -0-               -0-          -0-          -0-

   (1) Reflects grant of 809,611 shares
   (2) Reflects grant of 161,922 shares
   (3) Reflects grants of 1,000,000 shares

</TABLE>

     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, 2005.

     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, 2005.


Item 11.  Security Ownership of Certain Beneficial Owners and Management.

     The  following  table  shows  the  ownership  of the  Common  Stock  of the
Company on  March 4, 2005, by each person  who, to the knowledge of the Company,
owned  beneficially  more than ten percent (10%) 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   .......................   1,745,611 (1)          15.94%
4123 N.W. 46th Avenue
Gainesville, FL 32606

George L. Fails.............................     201,922 (2)           1.84%
2420 N.W. 142nd Avenue
Gainesville, FL 32609

Aspatuck Holdings, Inc. ....................   4,000,000              36.52%

All Officers and Directors as a group ......   1,947,533              17.78%

     (1) Includes 809,611 common shares issued pursuant to Employment Agreement.
     (2) Includes 161,922 common shares issued pursuant to Employment Agreement.


Item 12.  Certain Relationships and Related Transactions.

     Mr. Strattan  periodically advances the Company short-term loans and defers
receipt of salary.  The Company  owes the  stockholder  $53,598 at December  31,
2004.  The loan is unsecured  and interest  accrues at 4.17%.  Interest  expense
related to the loan totaled  $3,031 and $9,127 for the years ended  December 31,
2004 and 2003, respectively.
<PAGE>
PART IV.

Item 13.  Exhibits and Reports on Form 10KSB.

(a) Exhibits                                                                Page

    (1) Reports of Independent Certified Accountants                        F-1

    (2) Financial Statements                                                F-2

    Exhibits required by Item 601, Regulation S-B:

    (3) Articles of incorporation and by-laws

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

       (b) By-Laws. *                                                       None

       (c)    Certificates of Amendment to the Articles of
              Incorporation  filed November 18, 1993 and
              September 24, 1993. *                                         None

    (4) Instruments  defining  the rights of security
         holders,  including indentures

        (a) Specimen Share Certificate for Common Stock. *                  None

    (9)  Voting Trust Agreement                                             None

    (10)  Material Contracts

        (10.1)  Agreement of Shareholders dated November 11, 1993
                 by and among C.E. Rick Strattan, Garrison Enterprises,
                 Inc. and the Company. *                                    None

        (10.2)  Lease Agreement dated July 7, 1994**.                       None

        (10.3)  Consulting Agreement dated July 29, 1994 between
                 the Company and Yellen Associates. *                       None

        (10.4)  License Agreement dated December 20, 1994 between
                 the Company and Herbe Wirkstoffe GmbH. *                   None

        (10.5)  Joint Venture Agreement between the Company and
                 Ocumed, Inc. dated May 1, 1995, incorporated by
                 reference to the Company's Form 10-QSB for the
                 quarter ended June 30, 1995.**                             None

        (10.6)  Extension of Agreement between the Company and Herbe
                 Wirkstoffe GmbH.***                                        None
        (10.7)  Lease Extension+

        (10.8)  Loan Agreement with John Lindsay+

        (10.9)  Small Potatoes Contract+

        (10.10) Employment Agreement with C.E. Rick Strattan dated
                 May 30, 2001++

        (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

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

    (18)  Letter on change in accounting principles                         None

    (22)  Subsidiaries of Registrant                                        None

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

    (24)  Consents of Experts and Counsel                                   None

    (25)  Power of Attorney                                                 None

    (27)  Financial Data Schedule

    (28)  Additional Exhibits                                               None

    (29)  Information from reports furnished to state insurance
           regulatory authorities                                           None

    (31)  Certificate of Chief Executive Officer
           and Chief Financial Officer****

    (32)  Certification  pursuant  to 18  U.S.C.  Section  1350,  as  adopted
           pursuant to Section 906 of the Sarbanes-Oxley Act of 2002****

(b) Reports on Form 8-K:

         None

     *  Incorporated  by  reference to the  Company's  Form 10-SB filed with the
  Securities and Exchange Commission on February 1, 1994.

     **  Incorporated  by reference to the Company's  Form 10-KSB filed with the
  Securities and Exchange Commission on March 29, 1997.

    ***  Incorporated  by reference to the Company's  Form 10-KSB filed with the
  Securities and Exchange Commission on March 28, 2000.

   ****  Filed herewith.

    +  Incorporated  by  reference to the  Company's  Form 10-KSB filed with the
  Securities and Exchange Commission on April 2, 2001.

    ++  Incorporated  by reference to the  Company's  Form 10-KSB filed with the
Securities and Exchange Commission on April 1, 2002.

    +++ Incorporated by reference to Form S-8 filed December 1, 2003.


Item 14. Principal Accountant Fees and Services

Audit Fees

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 $71,760.

Audit-Related Fees

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  $6,470.  The nature of the
services  comprising the fees  disclosed  under this category was for accounting
assistance with merger and acquisition activities.

Tax Fees

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 $7,370.

All Other Fees,

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 $5,270 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.

<Page>

                                   SIGNATURES

         In accordance  with Section 13 or 15(d) of the Securities  Exchange Act
of 1934,  the  Registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized on March 28, 2005.

                                              CTD. HOLDINGS, INC.


                                            By:  /s/ C.E. RICK STRATTAN
                                               ---------------------------------
                                                  C.E. RICK STRATTAN,
                                                  Chief Executive Officer
                                                  Chief Operating Officer

              SIGNATURE                                TITLE


           /s/ C.E. RICK STRATTAN
          -------------------------------
           C.E. RICK STRATTAN                 Chief Executive Officer
                                              Chief Operating Officer, Director

           /s/ GEORGE L. FAILS
         --------------------------------
           GEORGE L. FAILS                    Director