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, 2002

( ) 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:

<PAGE>

                              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
<PAGE>

or any amendment to this Form 10-KSB ( )

     State issuer's revenues for its most recent fiscal year:  $522,372.

     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:  $175,970  based on the average  high and low price  (reflecting  only one
sale) as of March 17, 2003, of $.09 per share.

     State the number of shares  outstanding of each of the issuer's  classes of
common equity, as of the latest practical date: 4,791,220 shares of Common Stock
as of March 17, 2003.

                       DOCUMENTS INCORPORATED BY REFERENCE

                                      None

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


PART I

Item 1.  Description of Business

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

CDs

     Cyclodextrins  are  molecules  that bring  together  oil and water and have
potential applications anywhere oil and water must be used together.  Successful
applications have been made in the areas of agriculture,  analytical  chemistry,
biotechnology,  cosmetics, diagnostics, electronics, foodstuffs, pharmaceuticals
and toxic waste  treatment.  Stabilization of food flavors and fragrances is the
largest current  worldwide  market for CD  applications.  The Company and others
have  developed  CD-based  applications  in  stabilization  of flavors  for food
products; elimination of undesirable tastes and odors; preparation of antifungal
complexes  for foods  and  toiletries;  stabilization  of  fragrances  and dyes;
reduction of foaming in foods; cosmetics and toiletries;  and the improvement of
quality, stability and storability of foods.

     CDs can improve the solubility and stability of a wide range of drugs. Many
promising drug compounds are unusable or have serious side effects  because they
are either too unstable or too insoluble in water.  Strategies for administering
currently  approved  compounds  involve  injection of formulations  requiring pH
adjustment and/or the use of organic solvents. The result is frequently painful,
irritating,  or damaging. These side effects can be ameliorated by CDs. CDs also
have many potential uses in drug delivery for topical  applications  to the eyes
and skin.

<PAGE>

     We believe that the  application of CDs in both OTC and ethical  ophthalmic
products  provides  the  greatest  opportunity  for the  successful  and  timely
introduction of CD containing preparations for topical drug use.

     We  provide  consulting  services  for the  commercial  development  of new
products  containing  CDs.  Our  revenues  are  derived  from  consulting,   the
distribution of CDs, the  manufacturing  of selected CD complexes,  and sales of
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 (NCD's).

     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 ("CMCD's").
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.

<PAGE>

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.  Proctor & Gamble uses CDs in
Bounce(R),  a popular fabric  softener and Febreze.  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 10 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;  Ensuiko Sugar Refining Co., Ltd. -
Yokohama, Japan; 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
<PAGE>

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 goods and services.

     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.  While the bulk price of commercialized  CD's has
gone down,  it appears that our  strategy of  expanding  the CD product line has
compensated for the necessary competitive price reductions.  We have doubled our
list of major customers from 3 to 6 thereby  reducing 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
<PAGE>

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 CSk's) and (naturally
modified CD's) NMCDs.

<PAGE>

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.

     We intend to form a more  formal  business  relationship  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.

<PAGE>

Employees

     In 2002 the Company employed four 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

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.  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.

<PAGE>

<TABLE>

<S>           <C>                  <C>               <C>
                                    High               Low
2000          First Quarter        $                 $
              Second Quarter       $ 0.438           $ 0.313
              Third Quarter        $ 0.313           $ 0.203
              Fourth Quarter       $ 0.203           $ 0.203
2001          First Quarter        $ 0.141           $ 0.141
              Second Quarter       $ 0.15            $ 0.11
              Third Quarter        $ 0.15            $ 0.07
              Fourth Quarter       $ 0.11            $ 0.10
2002          First Quarter        $ 0.086           $ 0.086
              Second Quarter       $ 0.082           $ 0.076
              Third Quarter        $ 0.065           $ 0.065
              Fourth Quarter       $ 0.049           $ 0.047


</TABLE>

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

         Holders

     As of March 17,  2003,  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 66.

         Dividend Policy

     The Company  will not pay any cash  dividends  on its common  stock in 2003
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.

Item 6. Management's  Discussion and Analysis of Financial Condition and Results
of Operations

Liquidity and Capital Resources

Our cash and cash equivalents  increased to approximately $46,000 as of December
31, 2002 compared to approximately $8,000 as of December 31, 2001. This increase
was  primarily  a  result  in  improvement  of cash  flows  from  operations  of
approximately   $48,000  offset  by  purchases  of  property  and  equipment  of
approximately   $17,000  plus  net  proceeds  on  our  existing   debt  totaling
approximately $7,000.

As of December  31, 2002,  our net working  capital was  approximately  $115,000
compared to  approximately  ($103,000) at the end of 2001.  The  improvement  in
working  capital  resulted  from  increased  sales,  and a 17% reduction in SG&A
expenses.  The reduction in SG&A expenses resulted from the elimination of costs
during 2002 from our discontinued  mushroom  business,  and the consolidation of
all operational  components and low overhead costs associated with operating for
a full year in one location, our 40-acre property in High Springs, FL.

We believe that working  capital will continue to improve in 2003 as a result of
the continued expansion of the Cyclodextrin  industry while maintaining overhead
costs at a minimum.

Results of Operations

Sales of  cyclodextrins  and related  manufactured  complexes  are  historically
highly volatile. In efforts to offset this volatility, we continue to expand our
revenue  producing  activities in cyclodextrin  related research and development
services  for  unrelated  companies  while  expanding  our  line of  distributed
products.  Our product  sales are  primarily  to large  pharmaceutical  and food
companies for research and development purposes.
<PAGE>

Total product sales for 2002 were  $522,000,  an 80% increase over 2001 sales of
$289,000. This change is certainly in large part due to the normal volatility of
our sales; however this group of large customers is growing. In 1999 and 2000 it
was 3 or 4 customers accounting for 80% of our business;  in 2002, six companies
accounting for 80% of our business.  These major companies  continue to buy from
us and they're continuing to buy more.

During  2002,  we further  reduced  our  dependency  on just two or three  major
customers by increasing  sales to a few more  significant  customers.  While the
same six  companies  accounted  for  70-80% of our total  sales in both 2001 and
2002;  four of them  purchased a combined total of  approximately  $213,000 more
product in 2002 while the other two's purchases  remained fairly constant.  This
$213,000 increase  accounted for more than 90% of our increase in sales in 2002.
This growing business from repeat  customers (43% from 2001-2002)  occurred with
the smaller volume  customers as well. In 2002,  83% of the Company's  customers
either increased or maintained their purchase levels.

Our gross profit margin of 84% remained consistently strong for 2002 compared to
88% for 2001.  The  slight  decrease  from the prior  year is  primarily  due to
fractionally smaller margins associated with larger quantities purchased.

Our SG&A expenses decreased to approximately $231,000 in 2002 from approximately
$279,000 in 2001 as a result of the elimination of the costs associated with the
discontinued  mushroom  operations and controlling of overhead costs  associated
with consolidating all operations in one location.

Total  other  expenses  decreased  slightly  to  approximately  $32,000  in 2002
compared to approximately $33,000 in 2001. This slight improvement was primarily
associated  with a loss on the  disposal  of  certain  equipment  related to the
discontinued mushroom business of approximately  $24,000;  offset by an increase
in  investment  income of  approximately  $14,000 due to our large cash reserves
maintained throughout the year.

As a result of these  improvements  in sales and  reduction of SG&A expenses the
company  recognized net income of  approximately  $166,000 in 2002 compared to a
net loss of approximately ($114,000) in 2001.

We will continue to introduce new products that will increase  sales revenue and
continue to 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. In 2002, we became 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 are utilizing the local ISP and web site managing
Company,  ITG Inc. Early in 2002, we again upgraded our Web Site. This more than
$30,000  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.
<PAGE>

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.]

                          INDEPENDENT AUDITORS' REPORT

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,  2002,  and the related  consolidated
statements  of  operations,  stockholders'  equity  and cash flows for the years
ended December 31, 2002 and 2001. 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 audit.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  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, 2002, and the results of its operations and
its cash flows for the years ended  December  31, 2002 and 2001,  in  conformity
with accounting principles generally accepted in the United States of America.

/s/James Moore & Company
January 23, 2003
Gainesville, Florida

                                      F - 1

<PAGE>

                               CTD HOLDINGS, INC.
                           CONSOLIDATED BALANCE SHEET

                                DECEMBER 31, 2002

<TABLE>
<CAPTION>

                                     ASSETS

<S>                                                     <C>
CURRENT ASSETS
 Cash and cash equivalents                               $    46,244
 Accounts receivable                                          36,282
 Inventory                                                    64,146
                                                        -------------
     Total current assets                                    146,672

PROPERTY AND EQUIPMENT                                       335,016

INTANGIBLES                                                    3,229

OTHER                                                          4,854

                                                         -------------
TOTAL ASSETS                                             $   489,771
                                                         =============
</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, 2002

                                   (Continued)

<TABLE>
<CAPTION>

                      LIABILITIES AND STOCKHOLDERS' EQUITY

<S>                                                            <C>
CURRENT LIABILITIES
 Accounts payable and accrued expenses                   $     23,195
 Current portion of long-term debt                              8,876
                                                         -------------
     Total current liabilities                                 32,071
                                                         -------------
LONG-TERM LIABILTIES
  Long-term debt, less current portion                        152,513
  Due to shareholder

108,900

                                                           -------------
     Total long-term liabilities                               261,413
                                                           -------------

STOCKHOLDERS' EQUITY
 Class  A  common  stock,  par  value  $.0001  per  share,   100,000,000  shares
  authorized, 4,791,220 shares issued

  and outstanding                                                  480
 Class B non-voting common stock, par
  value $ .0001 per share, 10,000,000 shares                        -
  authorized, 0 shares issued and outstanding
 Additional paid-in capital                                  1,954,498
 Accumulated deficit                                        (1,758,691)
                                                          -------------
     Total stockholders' equity                                196,287
                                                          -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                 $   489,771
                                                          =============
</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, 2002 AND 2001
 <TABLE>

<CAPTION>                                               2002        2001
                                                   -------------   -------------
<S>                                                        <C>             <C>
PRODUCT SALES                                       $   522,372     $   289,425

COST OF PRODUCTS SOLD                                    84,483          34,026
                                                   -------------   -------------
GROSS PROFIT                                            437,889         255,399

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES            240,536         279,110
                                                   -------------   -------------
INCOME (LOSS) FROM OPERATIONS                           197,353         (23,711)
                                                   -------------   -------------
OTHER INCOME (EXPENSE)
 Investment and other income                             23,251           2,605
 Interest expense                                       (30,924)        (35,435)
 Loss on disposal of equipment                          (24,100)             -
                                                   -------------   -------------
     Total other income (expense)                       (31,773)        (32,830)
                                                   -------------   -------------
INCOME (LOSS) FROM CONTINUING OPERATIONS
  BEFORE INCOME TAXES                                  165,580          (56,541)

INCOME TAXES                                               -              -
                                                   -------------   -------------
NET INCOME (LOSS) FROM CONTINUING OPERATIONS            165,580         (56,541)

Loss from discontinued operations                           -           (37,228)
Impairment allowance on assets of
  discontinued operations                                   -           (20,113)
                                                    -------------   ------------
NET INCOME (LOSS)                                   $    165,580    $  (113,882)
                                                   =============   ============

NET INCOME (LOSS) PER COMMON SHARE:
     From continuing operations                     $        .03    $      (.01)
     From discontinued operation                    $          -    $      (.01)
                                                    ------------    ------------

     Net Income (Loss)                              $        .03    $      (.02)
                                                     ============    ===========
Weighted average number of
  common shares outstanding                            4,791,220      4,388,922
                                                     ============    ===========

</TABLE>

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

                                       F-4

<PAGE>

<TABLE>
<CAPTION>

                                                  CTD HOLDINGS, INC.
                                   CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                                    FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001

                                       COMMON STOCK             ADDITIONAL                     TOTAL
                                                                 PAID-IN        ACCUMULATED   STOCKHOLDERS'
                                    SHARES        AMOUNT         CAPITAL       DEFICIT        EQUITY
                                  -----------   -----------   ------------  -------------   ------------
<S>                                    <C>            <C>            <C>           <C>           <C>
Balance, December 31, 2000         3,991,220    $       398   $   1,898,503  $ (1,810,389)  $     88,512

Shares issued for services           800,000             82          49,918             -         50,000

Shares issued for company
 expense by stockholder                    -              -           6,077             -          6,077


Net loss                                   -              -               -       (113,882)     (113,882)
                                  -----------    -----------    -----------    -----------   -----------
Balance, December 31, 2001         4,791,220            480       1,954,498     (1,924,271)       30,707

Net Income                                               -              -               -        165,580
165,580

                                 ------------   ------------   ------------   ------------   ------------
Balance, December 31, 2002         4,791,220     $       480    $  1,954,498    $(1,758,691)  $196,287

                                  ============   ============   =============  ============   ============
</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, 2002 AND 2001
                Increase (Decrease) in Cash and Cash Equivalents

                                                           2002          2001
                                                        -----------  -----------
CASH FLOWS FROM OPERATING ACTIVITIES
 Net income (loss)                                     $   165,580  $ (113,882)
                                                        -----------  -----------
 Adjustments to reconcile net income (loss) to
      net cash provided by (used for) operating
         activities:
   Depreciation and amortization                             24,190      51,293
   Loss on disposal of equipment                             24,100         -
   Valuation allowance                                       12,907         -
   Stock issued for services                                    -        50,000
   Stock issued by stockholder for company expense              -         6,077
   Increase in accounts receivable                          (18,575)    (17,035)
   Decrease (Increase) in inventory                         (32,181)     24,353
   Decrease in other current assets                           1,305       5,793
   Decrease in accounts payable
      and accrued expenses                                 (129,195)    (30,027)
                                                        -----------  -----------
        Total adjustments                                  (117,449)     90,454
                                                        -----------  -----------
    Net cash provided by (used for) operating
      activities                                             48,131     (23,428)
                                                        -----------  -----------
CASH FLOWS FROM INVESTING ACTIVITIES
 Purchase of property and equipment                         (17,877)     (9,295)
 Other                                                          748       9,687
                                                         ----------- -----------
Net cash provided by (used for) investing activities        (17,129)        392
                                                         ------------ ----------
CASH FLOWS FROM FINANCING ACTIVITIES
 Net payments on line of credit                             (19,631)     (5,561)
 Proceeds from loan to stockholder, net                      13,005      38,128
 Payment on long-term debt                                   (8,199)    (18,031)
 Proceeds from sale of equipment                             21,877         -
                                                         -----------  ----------
Net cash provided by financing
  activities                                                  7,052      14,563
                                                        ------------  ----------

Net increase (decrease) in cash and cash equivalents         38,054      (8,500)

CASH AND CASH EQUIVALENTS, beginning of year                  8,190      16,690
                                                        ------------  ----------
CASH AND CASH EQUIVALENTS, end of year                    $  46,244    $  8,190
                                                        ============  ==========

                                       F-6

<PAGE>

                               CTD HOLDINGS, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                           DECEMBER 31, 2002 AND 2001
                Increase (Decrease) in Cash and Cash Equivalents

                                   (Continued)

                                                         2002         2001
                                                     ------------  ------------

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the year for interest               $   30,924     $  35,435
                                                     ===========   ============
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND
 FINANCING ACTIVITY

  Common stock issued for company expenses
    paid by stockholder                              $        -     $   6,077
                                                     ===========   ============
  Common stock issued for services                   $        -     $  50,000
                                                     ============  ============

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

                                       F-7

<PAGE>

                               CTD HOLDINGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2002 AND 2001

(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.  In 1999, the Company
formed Nature Spirit Mushroom Enterprises,  Inc. (NSME), a 99% owned subsidiary,
to grow mushrooms and to develop and market a line of mushroom  based  products.
The Company  discontinued its mushroom growing operation in the first quarter of
2001.

     (b) BASIS OF PRESENTATION - The consolidated  financial  statements include
the  Company  and  its 99%  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. Depreciation on leasehold improvements is computed on
the straight-line method over the lesser of the term of the related lease or the
estimated useful lives of the assets.  In accordance with Statement of Financial
Accounting Standards No. 121 "Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to be Disposed Of," the Company  periodically  reviews
its  long-lived  assets to determine if the carrying  value of assets may not be
recoverable.  If an impairment is identified,  the Company recognizes a loss for
the difference between the carrying amount and the estimated value of the asset.

     (f) INVENTORY - Inventory  consists of cyclodextrin  products purchased for
resale  and  chemical  complexes.  Inventory  is  recorded  at the lower of cost
(first-in, first-out) or market.

     (g) INTANGIBLES - Intangible assets consist of loan costs recorded at cost.
Intangible  assets  are  amortized  using the  straight-line  method  over their
respective estimated useful lives.  Accumulated amortization is $993 at December
31, 2002.

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

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

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

     (k) 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.

                                       F-8

<PAGE>

                               CTD HOLDINGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2002 AND 2001

(l)  RECLASSIFICATIONS  - Certain amounts in the 2001 financial  statements have
been   reclassified   for   comparative   purposes  to  conform  with  the  2002
presentation.

(m) 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:

On May 31, 2001, the Company  entered into a one-year  employment  contract with
its  president  with an  annual  salary  of  $30,000.  In  conjunction  with the
employment  agreement,  the Company issued 800,000 shares of common stock valued
at $50,000 for salary earned under the agreement plus bonuses.

During the third quarter of 2001, the Company entered into a financial  services
agreement  with a  consultant.  The  Company  paid  $2,500,  and  the  Company's
president issued 50,000 shares of common stock valued at $9,200 on behalf of the
Company.  The value of the common  stock was based on the  trading  value on the
date of award less a discount for lack of market float for the stock. The 50,000
shares of common stock were obtained  from the  Company's  president for $3,125,
and the difference of $6,075 was recorded as an increase to additional paid - in
capital.  The Company  charged the total  consultant  compensation of $11,700 to
expense in 2001.

Rent  expense  under all  operating  leases was $11,251 and $30,868 for 2002 and
2001, respectively.

(3) PROPERTY AND EQUIPMENT

Property and equipment as of December 31, 2002, consists of:

         Land                                          $    80,000
         Buildings and improvements                        207,706
         Machinery and equipment                            69,823
         Office furniture and equipment                     53,411
                                                       ------------
                                                           410,940
         Less: accumulated depreciation                     75,924
                                                       ------------
         Property and equipment, net                   $   335,016
                                                       =============

The  carrying  value of the  remaining  idle  long-lived  assets  related to the
mushroom farming operations was approximately $ 130,000 at December 31, 2002.

(4) CONCENTRATIONS OF CREDIT RISK:

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

     (a)  DEMAND  DEPOSITS - The  Company  has demand  deposits  in a  financial
institution that are insured by the Federal Deposit Insurance  Corporation up to
$100,000.  At December 31, 2002, the bank balance was $13,641. The Company has a
money  market  account with a financial  institution  with a balance of $40,344,
which is not insured by the Federal Deposit Insurance  Corporation.  The Company
has no policy of requiring collateral or other security to support its deposits.

                                       F-9

<PAGE>

                               CTD HOLDINGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2002 AND 2001

     (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. The Company has no policy requiring
collateral or other security to support its accounts receivable.

(5) MAJOR CUSTOMERS AND SUPPLIERS:

Sales to four customers (Ben Venue  Laboratories,  Sigma Chemical Company.  Dade
Behring and  AstraZeneca,  Inc.)in 2002 represented  approximately  75% of total
sales.  Sales to three  customers  (Sigma  Chemical  Company.  Dade  Behring and
AstraZeneca, Inc.) in 2001 represented approximately 63% of total sales.

Purchases from four  suppliers in 2002  represented  approximately  69% of total
costs of  products  sold.  Purchases  from  two  suppliers  in 2001  represented
approximately 24 % of total costs of products sold.

(6) LONG-TERM DEBT:

Long-term debt consists of the following as of December 31, 2002:

         Mortgage note payable to bank, payments of $1,782 due monthly including
          principal and interest at 7.95%, collateralized by land and buildings

          with a cost of $210,000                                   $  161,389



              Less current portion                                       8,876
                                                                    -----------
              Long - term debt, less current portion                $  152,513
                                                                    ===========

Maturities  on  long-term  debt as of December 31, 2002 over the next five years
are as follows:

         Year ending

         December 31,                                   Amount

            2003                                       $  8,876
            2004                                          9,607
            2005                                         10,400
            2006                                         11,257
            2007                                         12,185
            2008     and thereafter                     109,064
                                                       ---------
                                                      $ 161,389

                                                       =========

(7) RELATED PARTY TRANSACTIONS:

The majority shareholder  periodically advances the Company short-term loans and
defers receipt of salary. The Company owes the shareholder $ 108,900 at December
31,  2002.  The loan is  unsecured,  long-term,  and  interest  accrues  at 10%.
Interest  expense related to the loans totaled $ 11,263 and $8,652 for the years
ended December 31, 2002 and 2001, respectively.

                                      F-10

<PAGE>

                               CTD HOLDINGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000

(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 the financial  instruments
disclosed herein 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.  The following  table  summarizes
financial  instruments  by  individual  balance sheet account as of December 31,
2002:

                                                CARRYING            FAIR
                                                 AMOUNT             VALUE
                                               ----------         ---------
FINANCIAL ASSETS
  Cash and cash equivalents                   $  46,244          $  46,244
  Accounts receivable                            36,282             36,282
                                               ----------         ---------
         Total financial assets               $  82,526         $   82,526
                                               ==========         =========
FINANCIAL LIABILITIES
  Accounts payable and accrued expenses       $  23,195         $   23,195
  Long-term debt                                161,389            161,389
  Due to shareholder                            108,900            108,900
                                               ----------         ---------
         Total financial liabilities          $ 293,484         $  293,484
                                               ==========         =========
The fair value of all financial  instruments  approximates carrying value due to
the short-term maturity of the instruments.

(9) INCOME TAXES:

The  Company  has  available  at  December  31,  2002,   unused  operating  loss
carryforwards  totaling  approximately  $ 1,592,000 that may be applied  against
future taxable income. If not used, the carryforwards will expire as follows:

           Year Ending

           December 31,                               Amount

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

             2009                               $     839,000
             2010                                     195,000
             2017                                     206,000
             2020                                     281,000
             2021                                      71,000
                                                -----------------
             Total                              $   1,592,000
                                                =================

If all of the operating loss carryforwards and temporary deductible  differences
were used,  the Company  would realize a deferred tax asset of  approximately  $
495,000  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.  Management has
established a valuation  allowance equal to the amount of the deferred tax asset
due to uncertainty  of  realization  of the benefit of the net operating  losses
against future taxable income.

                                      F-11

<page>

                               CTD HOLDINGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2002 AND 2001

                                                 2002          2001
                                             -----------   ------------
Current income tax expense                   $   53,000    $       -

Tax benefit of temporary differences             (5,000)     (56,000)

Tax benefit of operating loss carryforwards     (48,000)           -

Effect of increase in valuation allowance             -       56,000

                                             -----------   ------------
Total net tax expense                        $       -     $       -
                                             ===========   ============

(10) DISCONTINUATION OF MUSHROOM FARMING OPERATIONS:

During the first quarter of 2001, the Company  discontinued its mushroom growing
operation.  The fair values of the  long-lived  assets  related to the  mushroom
farming  operations  were evaluated based on an estimate of discounted cash flow
analysis or recent sales information of similar assets. As of December 31, 2001,
the Company  determined  there was no impairment of land,  property or equipment
related to the mushroom  farming  operations.  However,  the Company  determined
there was an impairment in the carrying  value of goodwill and other  intangible
assets  related to the  mushroom  farming  operations.  Therefore,  the  Company
recorded an impairment expense of $20,113 during 2001.

(11)     SUBSEQUENT EVENT:

In January 2003, the Company  announced a repurchase  program as of December 31,
 2002, under which the Company would buy back common stock up to a

maximum of 1,000,000  shares.  The purchase  price would be at $0.01  premium to
market not to exceed $0.10 per share.  This offer  expires on April 15, 2003. As
of January 23, 2003,  no shares have been  purchased  by the Company  under this
program.

                                      F-12

<PAGE>

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

None

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:  Principal Occupation Year First and Other Major Became Name, Age
Age Affiliations Director

C.E. Rick Strattan      56        President, CEO and Chairman             1990

George L. Fails         57        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  therefore 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>
<CAPTION>

                           SUMMARY COMPENSATION TABLE
           (three  fiscal  years ended  December  31,2000, 2001 and 2003)

                                     Annual                     Long Term
                                   Compensation               Compensation
--------------------------------------------------------------------------
                         Year    Salary   Bonus  Compensation Compensation

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

Name and Principal
Position

C.E. Rick Strattan       2002    $ 33,346    -0-    -0-        $  -0-
CEO, President           2001    $    835    -0-    -0-        $ 59,687(1)
                         2000    $ 32,918    -0-    -0-        $ 40,000(2)

George L. Fails          2002    $20,000      -0-    -0-        $  -0-
                         2001    $20,000      -0-    -0-        $  -0-
                         2000    $10,000      -0-    -0-        $  -0-

</TABLE>

     (1) Reflects grants of 800,000 shares
     (2) Reflects grants of 336,000 shares


     On May 31, 2001, the Company entered into a one-year  employment  agreement
with Mr.  Strattan  at an annual  salary of  $30,000  per  year.  The  Agreement
authorized  the  payment of  $100,000 of Mr.  Strattan's  accrued  salary by the
issuance of the Company's common shares at a rate of $.125 per share. No written
agreement presently exists between Mr. Strattan and the Company.

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 17, 2003,  by each person who, to the  knowledge of the Company,  owned
beneficially  more than five percent (5%) of such stock,  the  ownership of each
director,  and the ownership of all  directors  and officers as a group.  Unless
otherwise  noted,  shares are subject to the sole voting and investment power of
the indicated person.

Names and Address of Individual or .........Amount and Nature of   Approximate %
Identity of Group ..........................Beneficial Ownership     of Class

C.E. Rick Strattan(1).......................      2,836,000            59.192%
4123 N.W. 46th Avenue
Gainesville, FL 32606

George L. Fails.............................         40,000             0.008%

All Officers and Directors as a group ......      2,876,000            60.000%

     (1) Held by Strattan Associates, Ltd., of which Mr. Strattan is the general
partner.  Strattan Associates,  Ltd. is a limited partnership established by Mr.
<PAGE>

Strattan  for estate tax  purposes  and is not  otherwise  engaged in  business.
Strattan  Associates,  Ltd. is the owner of the 500,000 shares of CTD stock. Mr.
Strattan is the President/CEO/CFO and Director of the Company.

Item 12.  Certain Relationships and Related Transactions.

On May 31, 2001, the Company entered into a one-year  employment  agreement with
Mr.  Strattan at an annual salary of $30,000 per year. The Agreement  authorized
the payment of $100,000 of Mr. Strattan's  accrued salary by the issuance of the
Company's  common  shares at a rate of $.125 per  share.  No  written  agreement
presently exists between Mr. Strattan and the Company.

Mr.  Strattan  periodically  advances  the Company  short-term  loans and defers
receipt of salary.  The Company owes the  shareholder  $ 108,900 at December 31,
2002. The loan is unsecured,  long-term,  and interest accrues at 10%.  Interest
expense  related to the loans  totaled $ 11,263  and $8,652 for the years  ended
December 31, 2002 and 2001, respectively.

PART IV.

Item 13.  Exhibits and Reports on Form 8-K.

(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
<PAGE>

        (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++

    (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

   (99.1) Certification  of  Chief  Executive Officer  and Chief  Financial
          Officer 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.
<PAGE>

     **  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 referenced  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.

Item 14. Controls and Procedures

(a) Evaluation of disclosure controls and procedures.

Our Chief Executive  Officer and Chief Financial  Officer,  after evaluating the
effectiveness  of our  "disclosure  controls and  procedures" (as defined in the
Securities  Exchange Act of 1934 Rules 13a-14(c) and 15d-14(c) as of a date (the
"Evaluation Date") within 90 days before the filing of this annual report,  have
concluded  that,  as  of  the  Evaluation  Date,  our  disclosure  controls  and
procedures were adequate and designed to ensure that 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.

(b) Changes in internal controls.

There were no significant  changes in our internal  controls or in other factors
that  could  significantly  affect  our  internal  controls  subsequent  to  the
Evaluation Date.

<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 ______, 2003.

                                              CTD. HOLDINGS, INC.


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

              SIGNATURE                                TITLE


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



         ____________/s/_____________________    Director
          GEORGE L. FAILS

<page>

                                  CERTIFICATION

                                       OF

                CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER

I, C.E. RICK STRATTAN, certify that:

1. I have reviewed this annual report on Form 10-KSB of CTD HOLDINGS, INC.;

2.  Based on my  knowledge,  this  annual  report  does not  contain  any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made,  not  misleading  with  respect to the period  covered by this annual
report;

3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included  in this annual  report,  fairly  present in all  material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4. I am responsible for  establishing  and maintaining  disclosure  controls and
procedures  (as  defined  in  Exchange  Act Rules  13a-14  and  15d-14)  for the
registrant and have:

a) designed  such  disclosure  controls and  procedures  to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to me by others  within those  entities,  particularly  during the
period  in  which  this  annual  report  is being  prepared;  b)  evaluated  the
effectiveness  of the  registrant's  disclosure  controls and procedures as of a
date  within  90 days  prior  to the  filing  date of this  annual  report  (the
"Evaluation  Date"); and c) presented in this annual report my conclusions about
the  effectiveness  of  the  disclosure  controls  and  procedures  based  on my
evaluation  as of the  Evaluation  Date; 5. I have  disclosed,  based on my most
recent  evaluation,  to the  registrant's  auditors  and the audit  committee of
registrant's   board  of  directors  (or  persons   performing   the  equivalent
functions):  a) all  significant  deficiencies  in the  design or  operation  of
internal  controls  which could  adversely  affect the  registrant's  ability to
record, process, summarize and report financial data and have identified for the
registrant's  auditors any material weaknesses in internal controls;  and b) any
fraud, whether or not material,  that involves management or other employees who
have a significant role in the  registrant's  internal  controls;  and 6. I have
indicated  in this  annual  report  whether  there were  significant  changes in
internal controls or in other factors that could  significantly  affect internal
controls  subsequent  to the date of our most recent  evaluation,  including any
corrective  actions  with  regard  to  significant   deficiencies  and  material
weaknesses.

Date: March 25, 2003

_______/s/____________________________
C.E. RICK STRATTAN
Chief Executive Officer
Chief Financial Officer