-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, W07lIQWgCZ15hkdPW7iQU+qaDCouFAIfiIsHhXrwzh6qARKPqbTZrrnDA/jyD/We vnYUcB0AbDNHwRwOw/RJHg== 0000922247-02-000007.txt : 20020814 0000922247-02-000007.hdr.sgml : 20020814 20020814145220 ACCESSION NUMBER: 0000922247-02-000007 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20020630 FILED AS OF DATE: 20020814 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CTD HOLDINGS INC CENTRAL INDEX KEY: 0000922247 STANDARD INDUSTRIAL CLASSIFICATION: MEDICINAL CHEMICALS & BOTANICAL PRODUCTS [2833] IRS NUMBER: 593029743 STATE OF INCORPORATION: FL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-25466 FILM NUMBER: 02735128 BUSINESS ADDRESS: STREET 1: 27317 NW 78 AVENUE STREET 2: N/A CITY: HIGH SPRINGS STATE: FL ZIP: 32643 BUSINESS PHONE: 3864540887 FORMER COMPANY: FORMER CONFORMED NAME: CYCLODEXTRIN TECHNOLOGIES DEVELOPMENT INC DATE OF NAME CHANGE: 19941012 10QSB 1 ctd10qsb6302002.txt CTD HOLDINGS 10QSB JUNE 30, 2002 SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-QSB __X__ Quarterly Report Under Section 13 or 15(d) of The Securities Exchange Act of 1934 for the Quarterly Period Ended: June 30, 2002. ____ Transition Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 for the Transition Period From ____ to ____ Commission file number: 0-24930 CTD HOLDINGS, INC. (Exact name of registrant as specified in its charter) Florida 59-3029743 (State or other jurisdiction (IRS Employer of incorporation or organization) Identification No.) 27317 N.W. 78th Avenue, High Springs, Florida 32643 (Address of principal executive offices) (Zip Code) Issuer's telephone number, including area code: 386-454-0887 Former name, former address and former fiscal year, if changed since last report: N/A. Check whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes Applicable only to issuers involved in bankruptcy proceedings during the preceding five years Check whether the registrant filed all documents and reports required to be filed by Section 12, 13 or 15 (d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. No. Applicable only to corporate issuers As of August 13, 2002, the Company had outstanding 4,791,220 shares of its common stock. Transitional Small Business Disclosure Format (Check One): No. PART I: Financial Information 3 PART I: FINANCIAL INFORMATION Item 1 Financial Statements (unaudited) CTD HOLDINGS,INC. CONSOLIDATED BALANCE SHEET (Unaudited) ASSETS June 30, 2002 ------------- CURRENT ASSETS Cash and cash equivalents $ 26,602 Accounts receivable 100,464 Inventory 37,926 Note receivable 7,920 ------------ Total current assets 172,912 PROPERTY AND EQUIPMENT, Net 347,195 OTHER ASSETS Intangibles, Net 3,369 ----------- TOTAL ASSETS $ 523,476 =========== (Continued) F-1 CTD HOLDINGS, INC. CONSOLIDATED BALANCE SHEET (unaudited) (Concluded)
LIABILITIES AND STOCKHOLDERS' EQUITY June 30, 2002 ----------- CURRENT LIABILITIES Accounts payable and accrued expenses $ 110,639 Current portion of long-term debt 8,199 ----------- Total current liabilities 118,838 ----------- Long-term Liabilities Long-term debt, less current portion 157,370 Stockholder loan 110,284 ----------- Total long-term liability 267,654 ----------- STOCKHOLDERS' EQUITY Class A common stock, par value $ .0001 per share, 9,900,000 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 (1,817,994) ----------- Total stockholders' equity 136,984 ----------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 523,476 ===========
See Accompanying Notes to Financial Statements F-2 CTD HOLDINGS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended Six Months Ended June 30, June 30, ----------------------- ----------------------- 2002 2001 2002 2001 ----------- ---------- ----------- ---------- PRODUCT SALES $ 130,995 $ 84,814 $ 326,844 $ 176,996 COST OF PRODUCTS SOLD 25,796 6,195 60,887 22,300 ----------- ---------- ----------- ---------- GROSS PROFIT 105,199 78,619 265,957 154,696 SELLING, GENERAL AND 56,758 64,043 120,174 138,452 ADMINISTRATIVE EXPENSES ----------- ---------- ----------- ---------- INCOME FROM OPERATIONS 48,441 14,576 145,783 16,244 ----------- ---------- ----------- ---------- OTHER INCOME (EXPENSE) Investment and other income 1,108 451 1,483 2,804 Interest expense (6,877) (7,535) (15,311) (21,683) Gain (Loss) on disposal of equipment 10,000 - (25,678) - ----------- ---------- ---------- ---------- Total other income (expense) 4,231 (7,084) (39,506) (18,879) ----------- ---------- ----------- ---------- NET INCOME (LOSS) FROM CONTINUING OPERATIONS 52,672 7,492 106,277 (2,635) LOSS FROM DISCONTINUED OPERATIONS - (7,406) - (24,937) ----------- ---------- ----------- ---------- NET INCOME (LOSS) $ 52,672 $ 86 $ 106,277 $ (27,572) =========== ========== =========== ========== NET INCOME (LOSS) PER COMMON SHARE From continuing operations $ .01 $ - $ .02 $ - From discontinued operations - - - (0.01) ----------- - ---------- ----------- ---------- Net income (loss) per share $ .01 $ - $ .02 $ (0.01) =========== ========== =========== ============ WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 4,791,220 4,063,720 4,791,220 4,027,470 =========== ========== =========== ===========
See Accompanying Notes to Financial Statements F-3 CTD HOLDINGS,INC. CONSOLIDATED STATEMENTS OF CASH FLOWS Increase (Decrease) in Cash and Cash Equivalents (Unaudited)
Six Months Ended June 30, -------------------------- 2002 2001 ---------- ------------ CASH FLOWS FROM OPERATING ACTIVITIES Net income (loss) $ 106,277 $ (27,572) ---------- ----------- Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization 11,870 17,132 Loss on disposal of equipment 25,678 - Increase or decrease in: Accounts receivable (74,704) (58,702) Inventory (5,961) 9,649 Other current assets 1,305 3,617 Accounts payable and accrued expenses (41,751) (14,100) ------------ ----------- Total adjustments (83,563) (42,404) ------------ ----------- NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES 22,714 (69,976) ------------ ----------- CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property and equipment (17,877) ( 2,486) Repayment of note receivable 2,536 4,913 ----------- ----------- NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES (15,341) 2,427 ----------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES Payments on long-term debt (4,019) (13,806) Net proceeds (payments) on line of credit (19,631) (3,705) Net proceeds (payments) on loan payable to stockholder 14,389 69,010 Proceeds from sales of equipment 20,300 - ------------ ----------- NET CASH PROVIDED BY FINANCING ACTIVITIES 11,039 51,499 ------------ ----------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 18,412 (16,050) CASH AND CASH EQUIVALENTS, beginning of period 8,190 16,690 ------------ ----------- CASH AND CASH EQUIVALENTS, end of period $ 26,602 $ 640 ============ ===========
(Continued) F-4 CTD HOLDING, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS Increase (Decrease) in Cash and Cash Equivalents (Unaudited) (Concluded)
Six Months Ended June 30, ------------------------ 2002 2001 ---------- --------- SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION Cash paid for interest $ 15,311 $ 21,683 ========== ========= SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES Stock issued to officer for compensation $ - $ 44,687 ========== =========
See Accompanying Notes to Financial Statements F-5 CTD HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2002 (Unaudited) The information presented herein as of June 30, 2002, and for the three and six months ended June 30, 2002 and 2001, is unaudited. (1) BASIS OF PRESENTATION: The accompanying financial statements include CTD Holdings, Inc. and its Subsidiaries (the Company). The accompanying financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-QSB and Rule 10-01 of Regulations S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal required adjustments) considered necessary for a fair presentation have been included. Operating results for the three and six month periods ended June 30, 2002, are not necessarily indicative of the results that may be expected for the year ending December 31, 2002. For further information, refer to the financial statements and footnotes thereto included in the Company's annual report of Form 10-KSB for the year ended December 31, 2001. (2) 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. SFAS 128 eliminated the previous requirement that earnings per share include the effect of any dilutive common stock equivalents in the calculation. F-7 CTD HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2002 (Unaudited) (Concluded) (3) DISCONTINUATION OF MUSHROOM FARMING OPERATIONS: During the first quarter of 2001, the Company discontinued its mushroom growing operation. 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 reviewed the long-lived assets related to the mushroom farming operation to determine if the carrying value of the assets may not be recoverable. When an impairment is identified, the Company recognizes a loss for the difference between the carrying amount and the estimated value of the asset. The fair values of the assets evaluated were based on an estimate of discounted cash flow analysis or recent sales information of similar assets. During 2001, 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 a write-down of $20,113, which reduced the carrying value to zero at December 31, 2001. (4) INCOME TAXES The Company recorded no income tax expense for the three or six months ended June 30, 2002 due to the availability of a net operating loss carry forward. F-8 Item 2. Management's Discussion and Analysis or Plan of Operation Management Discussion and Analysis Liquidity and Capital Resources As of June 30, 2002, the Company's working capital was $54,074 compared to $13,202 in the previous quarter and ($102,544) at December 31, 2001. Working capital continued to improve, and increased this quarter because of increasing profitability. By maintaining stringent expense reduction policies and concentrating on sales of cyclodextrins (CD), management expects liquidity to continue to improve throughout 2002 as profitability is maintained. In keeping with its commitment to use the Internet as its major advertising and public relations outlet, the Company's upgrade of its Website was completed early in the quarter at a cost of $4000. By increasing its catalog of CD products from 64 items to 154 items and improving access to its databases, the Company has indeed strengthened its leadership position in the expanding CD Industry. Results of Operations Sales of CD and related manufactured complexes are historically highly volatile. In efforts to offset this volatility, the Company continues to expand its revenue producing activities in CD related research and development services for new customers and expand its line of manufactured products. Product sales of CTD are primarily to large pharmaceutical and food companies for research and development purposes. Because of its leadership role over the past 10 years in CD technology, the company is beginning to enjoy substantial sales to companies doing clinical trials with CD's. No financial ripples from the discontinued mushroom operation were realized in the second quarter. The Company will continue to carefully manage its expenses, but does not expect to see as large reductions in expenses; and may see increases in future periods necessary to support the increased sales levels. The Company's relocation from a leased facility to its own building is also complete. The Company continues to reduce its dependency on a few major customers by expanding its product line and capitalizing on the exposure from its website and general growth in the CD market. In the second quarter of 2002, six customers represented 88% of sales. For the year ended December 31, 2001, three customers represented 63% of total sales. This diversification in customers will continue to stabilize the Company's revenue. Total product sales for the second quarter of 2002 were $130,995, an increase of 54% from 2001 sales of $84,814 for the same period; but was down by 1/3 from the first quarter's sales, emphasizing the extraordinary nature of that quarter's sales. This change is due in part to the normal volatility of the Company's sales, and in large part to market reaction to new FDA approvals of food and pharmaceutical products containing CD's. The Company's gross profit margin for the second quarter of 2002 was 80% compared to 93% reported for the same period in 2001. The Company expects its gross profit margin in 2002 to stay between 80 and 85% through 2002. The Company's SG&A expenses decreased to $56,758 in the second quarter of 2002 even from $64,043 in the same period of 2001 when expense reduction efforts were in full force; even slightly less than the previous quarter ($63,416). With the greatly reduced expenses maintained in 2001, management had improved the financial condition for the Company to begin 2002, and it continues that successful strategy even now. With expenses in check, management has positioned itself to maintain profitability even if the expected summer slow-down in CD sales occurs. However, the Company to date has seen no signs of such a slow-down. The Company incurred a $35,678 loss from the sale of certain laboratory equipment during the first quarter of 2002 and a $10,000 gain in the second quarter of 2002. In addition to generating cash for the Company, the sale of this equipment will further reduce maintenance and depreciation expense associated with the sold equipment. However, that loss was a major factor in the increased net income of the company in the second quarter even with 1/3 less sales than the first quarter. The Company and its subsidiaries will continue to introduce new products that will enhance profitability and continue to implement its strategy of creating or acquiring operational affiliates and/or additional subsidiaries that will use CD's in herbal medicines, waste-water remediation, pharmaceuticals, and foods. The Company also intends to pursue exclusive relationships with major CD manufacturer(s) and specialty CD labs to distribute their products. In keeping with its commitment to utilize the full power of the Internet as a major advertising and public relations outlet, the Company anticipates spending an additional $2000-$5000 to improve its Web Site further in 2002. The Web Site continues to reinforce CTD's role as the best-known CD technology provider in the world. Forward-looking Statements 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 Cyclodextrin and mushrooms; changes in governmental laws and regulations surrounding various matters, such as labeling disclosures; delays in the development, production, testing and marketing of products; product margins and customer product acceptance. Item 6. Exhibits and Reports on Form 8-K None. (a) Exhibits Exhibit Description Page (2) Plan of Acquisition, Reorganization, Arrangement, Liquidation or Succession None (4) Instruments defining the Rights of Security Holders None (10) Material Contracts None (11) Statement re: Computation of Per Share Earnings Note 2, Financial Statements (15) Letter re: Unaudited Interim Financial Information None (18) Letter re: Change in Accounting Principles None (19) Report Furnished to Security Holders None (22) Published Report re: Matters Submitted to Vote of Security Holders None (23) Consents of Experts and Counsel None (24) Power of Attorney None (27) Financial Data Schedule (99) Additional Exhibits None 99.1 Certification of CEO 99.2 Certification of CFO (b) Reports on Form 8-K: None SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. CTD HOLDINGS, INC. DATE /s/ C.E. "Rick" Strattan - ----------------------------- August 14, 2002 C.E. Rick Strattan, President Chief Executive Officer, Chief Operating Officer and Chief Financial Officer EX-99.1 2 certificationceo.txt CEO CERTIFICATION Exhibit 99.1 CERTIFICATION PURSUANT TO SECTION 1350, CHAPTER 63 OF TITLE 18 OF THE UNITED STATES CODE, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of CTD Holdings, Inc. (the "Company") on Form 10QSB for the period ending June 30, 2002 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, C.E. Rick Strattan , Chief Executive Officer of the Company, certify, pursuant to the 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of section 13 (a) or 15 (d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. /s/C.E. Rick Strattan C.E. Rick Strattan Chief Executive Officer August 13, 2002 EX-99.2 3 certificationcfo.txt CFO CERTIFICATION Exhibit 99.2 CERTIFICATION PURSUANT TO SECTION 1350, CHAPTER 63 OF TITLE 18 OF THE UNITED STATES CODE, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of CTD Holdings, Inc. (the "Company") on Form 10QSB for the period ending June 30, 2002 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, C.E. Rick Strattan, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of Section 13 (a) or 15 (d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. /s/C.E. Rick Strattan C.E. Rick Strattan Chief Financial Officer August 13, 2002 -----END PRIVACY-ENHANCED MESSAGE-----