CTD HOLDINGS INC (Form: S-1, Received: 06/27/2019 17:30:14)

CTD HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	March 31, 2019			December 31, 2018
	(Unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	1,115,133		$	2,217,412
Accounts receivable		74,796			80,044
Inventory, net		413,253			416,531
Current portion of mortgage note receivable		37,439			37,439
Other		46,901			18,185
Total current assets		1,687,522			2,769,611

FURNITURE AND EQUIPMENT, NET		18,411			18,571

RIGHT-TO-USE LEASE ASSET, NET		63,771			-

MORTGAGE NOTE RECEIVABLE, LESS CURRENT PORTION		120,458			129,674

OTHER		15,000			-

TOTAL ASSETS	$	1,905,162		$	2,917,856

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

CURRENT LIABILITIES
Current portion of lease liability	$	14,182		$	-
Accounts payable and accrued expenses		2,622,511			1,925,332
Total current liabilities		2,636,693			1,925,332

LONG-TERM LEASE LIABILITY		50,049			-

STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, par value $.0001 per share, 500,000,000 shares authorized, 90,759,324 shares issued and outstanding, at March 31, 2019 and December 31, 2018		9,075			9,075
Preferred stock, par value $.0001 per share, 5,000,000 shares authorized		-			-
Additional paid-in capital		18,701,211			18,701,211
Stock subscription receivable		-			(130,062	)
Accumulated deficit		(19,491,866	)		(17,587,700	)
Total stockholders' equity (deficit)		(781,580	)		992,524

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)	$	1,905,162		$	2,917,856

See accompanying Notes to Consolidated Financial Statements.

F-2

CTD HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended
	March 31,
	2019			2018

REVENUES
Product sales	$	220,826		$	198,069

EXPENSES
Personnel		409,999			277,567
Cost of products sold (exclusive of depreciation, shown separately below)		20,550			23,672
Research and development		1,342,763			409,198
Repairs and maintenance		1,684			-
Professional fees		214,975			233,976
Office and other		102,642			47,867
Board of Director fees and costs		33,085			15,783
Depreciation		1,484			2,500
Freight and shipping		1,434			1,882
Total operating expenses		2,128,616			1,012,445

LOSS FROM OPERATIONS		(1,907,790	)		(814,376	)

OTHER INCOME
Investment and other		3,624			1,432

LOSS BEFORE INCOME TAXES		(1,904,166	)		(812,944	)

PROVISION FOR INCOME TAXES		-			-

NET LOSS	$	(1,904,166	)	$	(812,944	)

BASIC AND FULLY DILUTED NET LOSS PER COMMON SHARE	$	(.02	)	$	(.01	)

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING		90,759,324			72,999,361

See Accompanying Notes to Consolidated Financial Statements.

F-3

CTD HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

FOR THE THREE MONTHS ENDED MARCH 31, 2018

(unaudited)

	Common Stock				Preferred Stock Series B				Additional							Total
	Shares		Par Value		Units		Par Value		Paid-In Capital		Subscription Receivable		Accumulated Deficit			Stockholders’ Equity

Balance, December 31, 2017		72,999,361	$	7,299		15,500	$	2	$	14,470,984	$	-	$	(13,332,667	)	$	1,145,618

Net loss		-		-		-		-		-		-		(812,944	)		(812,944	)

Balance, March 31, 2018	$	72,999,361	$	7,299	$	15,500	$	2	$	14,470,984	$	-	$	(14,145,611	)	$	332,674

See Accompanying Notes to Consolidated Financial Statements.

F-4

CTD HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

FOR THE THREE MONTHS ENDED MARCH 31, 2019

(unaudited)

	Common Stock				Preferred Stock Series B				Additional								Total
	Shares		Par Value		Units		Par Value		Paid-In Capital		Subscription Receivable			Accumulated Deficit			Stockholders’ Equity (Deficit)

Balance, December 31, 2018		90,759,324	$	9,075		-	$	-	$	18,701,211	$	(130,062	)	$	(17,587,700	)	$	992,524

Collection of subscription receivable		-		-		-		-		-		130,062			-			130,062

Net loss		-		-		-		-		-		-			(1,904,166	)		(1,904,166	)

Balance, March 31, 2019		90,759,324	$	9,075		-	$	-	$	18,701,211	$	-		$	(19,491,866	)	$	(781,580	)

See Accompanying Notes to Consolidated Financial Statements.

F-5

CTD HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Three Months Ended
	March 31,
	2019			2018
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(1,904,166	)	$	(812,944	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		1,484			2,500
Accrued stock compensation to employees		7,300			3,300
Accrued stock compensation to non-employees		24,090			10,890
Increase or decrease in:
Accounts receivable		5,248			9,178
Inventory		3,278			17,778
Other current assets		(28,716	)		(4,258	)
Other		460			-
Accounts payable and accrued expenses		665,789			35,859
Total adjustments		678,933			75,247

NET CASH USED IN OPERATING ACTIVITIES		(1,225,233	)		(737,697	)

CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of equipment		(1,324	)		(1,634	)
Proceeds from mortgage note receivable		9,216			2,934

NET CASH PROVIDED BY INVESTING ACTIVITIES		7,892			1,300

CASH FLOWS FROM FINANCING ACTIVITIES
Collection of subscription receivable		130,062			-
Advance – private placement		-			74,983
Other		(15,000	)		-

NET CASH PROVIDED BY FINANCING ACTIVITIES		115,062			74,983

NET DECREASE IN CASH AND CASH EQUIVALENTS		(1,102,279	)		(661,414	)

CASH AND CASH EQUIVALENTS, beginning of period		2,217,412			1,270,973

CASH AND CASH EQUIVALENTS, end of period	$	1,115,133		$	609,559

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for interest	$	-		$	-
Cash paid for income taxes	$	-		$	-

NON-CASH INVESTING AND FINANCING ACTIVITIES
Capitalization of right-to-use asset and lease liability	$	64,231			-

See Accompanying Notes to Consolidated Financial Statements.

F-6

CTD HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 201 9

The information presented herein as of March 31, 2019 and for the three months ended March 31, 2019 and 2018 is unaudited.

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

The following is a summary of the more significant accounting policies of CTD Holdings, Inc. and subsidiaries (the “Company,” “we,” “our” or “us”) 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. We are a biotechnology company that develops cyclodextrin-based products for the treatment of disease. We have filed a Type II Drug Master File with the U.S. Food and Drug Administration (“FDA”) for our lead drug candidate, Trappsol® Cyclo™ as a treatment for Niemann-Pick Type C disease (“NPC”), a rare and fatal cholesterol metabolism disease that impacts the brain, lungs, liver, spleen, and other organs. The FDA approved our Investigational New Drug application (IND) which describes our Phase I clinical plans in the U.S. for Trappsol® Cyclo™ and in January 2017 the FDA granted Fast Track designation to Trappsol® Cyclo™ for the treatment of NPC. Initial patient enrollment in the U.S. Phase I study commenced in September 2017. We have also filed Clinical Trial Applications with several European regulatory bodies, including those in the United Kingdom, Sweden and Italy, and in Israel, all of which have approved our applications. The first patient was dosed in our European study in July 2017.

We also sell cyclodextrins and related products to the pharmaceutical, nutritional, and other industries, primarily for use in diagnostics and specialty drugs with continuing growth in research and new product development. However, our core business has transitioned to a biotechnology company primarily focused on the development of cyclodextrin-based biopharmaceuticals for the treatment of disease from a business which had been primarily reselling basic cyclodextrin products.

(b) BASIS OF PRESENTATION––The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation 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 recurring adjustments) considered necessary for a fair presentation have been included.

Operating results for the three month period ended March 31, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2018, as filed with the Securities and Exchange Commission on March 15, 2019.

(c) CASH AND CASH EQUIVALENTS––Cash and cash equivalents consist of cash and any highly liquid investments with an original purchased maturity of three months or less.

(d) ACCOUNTS RECEIVABLE––Accounts receivable are unsecured and non-interest bearing and stated at the amount we expect to collect from outstanding balances. Based on our assessment of the credit history with customers having outstanding balances and current relationships with them, an allowance for uncollectible accounts was not deemed necessary at March 31, 2019 and December 31, 2018.

(e) INVENTORY AND COST OF PRODUCTS SOLD––Inventory consists of our pharmaceutical drug Trappsol® Cyclo™, cyclodextrin products and chemical complexes purchased for resale recorded at the lower of cost (first-in, first-out) or net realizable value. Cost of products sold includes the acquisition cost of the products sold and does not include any allocation of inbound or outbound freight charges, indirect overhead expenses, warehouse and distribution expenses, or depreciation and amortization expense. The Company records a specific reserve for inventory items that are determined to be obsolete. The reserve for obsolete inventory was $39,700 at March 31, 2019 and December 31, 2018.

F-7

CTD HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 201 9

(f) EQUIPMENT––Equipment is recorded at cost, less accumulated depreciation. Depreciation is computed using primarily the straight-line method over the estimated useful lives of the assets (generally three to five years for computers, and seven to ten years for equipment and office furniture).

(g) REVENUE RECOGNITION––Effective January 1, 2018, the Company adopted the provisions of ASC 606 using the modified retrospective method. The adoption of the new revenue standards as of January 1, 2018, did not change our revenue recognition as the majority of our revenues continue to be recognized when the customer takes control of our product. As we did not identify any accounting changes that impacted the amount of reported revenues with respect to our product revenues and no adjustment to retained earnings was required upon adoption.

Under the new revenue standards, we recognize revenues when our customer obtains control of promised goods or services, in an amount that reflects the consideration which we expect to receive in exchange for those goods or services. We recognize revenues following the five step model prescribed under ASU No. 2014-09: (i) identify contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenues when (or as) we satisfy the performance obligation.

Product revenues

In the U.S. we sell our products to the end user or wholesale distributors. In other countries, we sell our products primarily to wholesale distributors and other third-party distribution partners. These customers subsequently resell our products to health care providers and patients.

Revenues from product sales are recognized when the customer obtains control of our product, which occurs at a point in time, typically upon delivery to the customer. We expense incremental costs of obtaining a contract as and when incurred if the expected amortization period of the asset that we would have recognized is one year or less or the amount is immaterial. We treat shipping and handling costs performed after a customer obtains control of the product as a fulfillment cost. We have identified one performance obligation in our contracts with customers which is the delivery of product to our customers. The transaction price is recognized in full when we deliver the product to our customer, which is the point at which we have satisfied our performance obligation.

Reserves for Discounts and Allowances

Revenues from product sales are recorded net of reserves established for applicable discounts and allowances that are offered within contracts with our customers, health care providers or payors, including those associated with the implementation of pricing actions in certain of the international markets in which we operate. Our process for estimating reserves established for these variable consideration components do not differ materially from our historical practices.

Product revenue reserves, which are classified as a reduction in product revenues, are generally characterized in the following categories: discounts, contractual adjustments and returns.

These reserves are based on estimates of the amounts earned or to be claimed on the related sales and are classified as reductions of accounts receivable (if the amount is payable to our customer) or a liability (if the amount is payable to a party other than our customer). Our estimates of reserves established for variable consideration typically utilize the most likely method and reflect our historical experience, current contractual and statutory requirements, specific known market events and trends, industry data and forecasted customer buying and payment patterns. The transaction price, which includes variable consideration reflecting the impact of discounts and allowances, may be subject to constraint and is included in the net sales price only to the extent that it is probable that a significant reversal of the amount of the cumulative revenues recognized will not occur in a future period. Actual amounts may ultimately differ from our estimates. If actual results vary, we adjust these estimates, which could have an effect on earnings in the period of adjustment.

For additional information on our revenues, please read Note 6, Revenues, to these condensed consolidated financial statements.

F-8

CTD HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 201 9

(h) RESEARCH AND DEVELOPMENT COSTS––Research and development costs are expensed as incurred.

(i) INCOME TAXES––Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective income tax bases. Deferred tax assets and liabilities are measured using enacted rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. In addition, tax benefits related to positions considered uncertain are recognized only when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions shall initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts.

(j) NET LOSS PER COMMON SHARE––Basic and fully diluted net loss per common share is computed using a simple weighted average of common shares outstanding during the periods presented. Outstanding warrants to purchase 32,192,294 common shares and 28,500,478 common shares, for the three months ended March 31, 2019 and 2018, respectively, and 1,768,147 common shares that may be issued under warrants to purchase units sold in the Company’s private placements, were antidilutive for the three months ended March 31, 2018 and March 31, 2019, and have been excluded from the calculation of loss per common share.

(k) STOCK BASED COMPENSATION––The Company periodically awards stock to employees, directors, and consultants. An expense is recognized equal to the fair value of the stock determined using the closing trading price of the stock on the award date.

(l) LIQUIDITY AND GOING CONCERN––For the three months ended March 31, 2019 and 2018, the Company incurred net losses of $1,904,166 and $812,944. At March 31, 2019, the Company had a cash balance of $1,115,133 and its current assets less current liabilities were $(949,171). The Company has an accumulated deficit of $19,491,866 at March 31, 2019. Our recent losses have predominantly resulted from research and development expenses for our Trappsol® Cyclo™ product and other general operating expenses, including board advisory fees. We believe our expenses will continue to increase as we conduct clinical trials and continue to seek regulatory approval for the use of Trappsol® Cyclo™ in the treatment of NPC.

For year ended December 31, 2018, our operations used approximately $3,188,000 in cash. This cash was provided primarily by cash on hand and net proceeds of $4,102,000 from equity issuances. At December 31, 2018, the Company had a cash balance of $2,217,000 and current assets less current liabilities of $844,000. We will need additional capital to maintain our operations, continue our research and development programs, conduct clinical trials, seek regulatory approvals and manufacture and market our products.

We will need to raise additional capital through the sale of our securities from time to time for the foreseeable future to fund the development of our drug product candidates through clinical development, manufacturing and commercialization. Our ability to obtain such additional capital will likely be subject to various factors, including our overall business performance and market conditions. If we cannot raise the additional funds required for our anticipated operations, we may be required to reduce the scope of or eliminate our research and development programs, delay our clinical trials and the ability to seek regulatory approvals, downsize our general and administrative infrastructure, or seek alternative measures to avoid insolvency. If we raise additional funds through future offerings of shares of our Common Stock or other securities, such offerings would cause dilution of current stockholders’ percentage ownership in the Company, which could be substantial. Future offerings also could have a material and adverse effect on the price of our Common Stock.

We have incurred losses from operations in each of our last five fiscal years. Our ability to continue as a going concern is dependent upon the availability of equity financing as noted above. We will need to raise additional capital to support our ongoing operations and continue our clinical trials. There can be no assurance that the Company will be successful with these fundraising endeavors. These factors raise substantial doubt about our ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of these uncertainties.

F-9

CTD HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 201 9

(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 the amounts reported in the consolidated financial statements and accompanying notes, including contingencies. Although management bases its estimates on historical experience and assumptions that are believed to be reasonable under the circumstances, actual results could significantly differ from these estimates.

(n) FAIR VALUE MEASUREMENTS AND DISCLOSURES––The Fair Value Measurements and Disclosures topic of the Accounting Standards Codification (“ASC”) requires companies to determine fair value based on the price that would be received to sell the asset or paid to transfer the liability to a market participant. The Fair Value Measurements and Disclosures topic emphasizes that fair value is a market-based measurement, not an entity-specific measurement.

The guidance requires that assets and liabilities carried at fair value be classified and disclosed in one of the following categories:

●	Level 1: Quoted market prices in active markets for identical assets or liabilities.

●	Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data.

●	Level 3: Unobservable inputs that are not corroborated by market data.

We have no assets or liabilities that are required to have their fair value measured on a recurring basis at March 31, 2019 or December 31, 2018. Long-lived assets are measured at fair value on a non-recurring basis and are subject to fair value adjustments when there is evidence of impairment.

For short-term classes of our financial instruments which are not reported at fair value, the carrying amounts approximate fair value due to their short-term nature, which include cash, accounts receivable, and accounts payable. The fair value of the mortgage note receivable is estimated based on the present value of the underlying cash flows discounted at current rates. At March 31, 2019 and December 31, 2018, the carrying value of the mortgage note receivable approximates fair value.

(o) Accounting Standards Adopted––

●

Leases - In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842),” (“ASU 2016-02”), which amends leasing guidance by requiring companies to recognize a right-of-use asset and a lease liability for all operating and financing leases with lease terms greater than twelve months. The lease liability is equal to the present value of lease payments. The lease asset is based on the lease liability, subject to adjustment for prepaid and deferred rent and tenant incentives. For income statement purposes, leases will continue to be classified as operating or financing with lease expense in both cases calculated substantially the same as under the prior leasing guidance.

The Company adopted Topic 842 as of January 1, 2019 (the first day of fiscal 2019). See Note 7

(p) Accounting Standards to be Adopted in Future Periods ––There are no outstanding accounting standards to be adopted that will have a material effect on the Company’s financial position and operations.

(2) MORTGAGE NOTE RECEIVABLE

On January 21, 2016, we sold our real property located in High Springs, Florida to an unrelated party. Pursuant to the terms of the sale, at the closing, the buyer paid $10,000 in cash, less selling costs and settlement charges, and delivered to us a promissory note in the principal amount of $265,000, and a mortgage in our favor securing the buyer’s obligations under the promissory note. The promissory note provides for monthly payments of $3,653, including principal and interest at 4.25%, over a seven-year period that commenced March 1, 2016, with the unpaid balance due in February 2023.

F-10

CTD HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 201 9

(3) EQUITY TRANSACTIONS:

The Company expensed $31,390 and $14,190 in employee and board member stock compensation for the three months ended March 31, 2019 and 2018, respectively. These shares were valued using quoted market values. The Company accrues stock compensation expense over the period earned for employees and board members.

In April, 2018, the Company completed a private placement resulting in gross proceeds to the Company of $2,010,000. Prior to March 31, 2018, the Company received $74,983 in advance from these investors, which has been recorded as an advance -- private placement in the accompanying statement of cash flows.

As of March 31, 2019, the Company had warrants outstanding to purchase 32,192,294 shares of common stock at exercise prices of $0.25 - $1.00 per share that expire at various dates through 2025. An additional 1,768,147 shares of common stock may be issued under warrants outstanding to purchase 480,000 Units sold in the Company’s May 2016 private placement at an exercise price of $0.25 per Unit, 164,074 Units sold in the Company’s February 2017 private placement at an exercise price of $0.35 per Unit, and 600 Units sold in the Company’s October 2017 private placement at an exercise price of $100 per Unit.

( 4 ) INCOME TAXES:

The Company reported a net loss for the three months ended March 31, 2019 and 2018, respectively. The Company increased its deferred tax asset valuation allowance rather than recognize an income tax benefit.

( 5 ) SALES CONCENTRATIONS:

Sales to four major customers accounted for 76% of total sales for the three months ended March 31, 2019 and 2018, respectively. A loss of one of these customers could have a significant adverse effect on the Company’s financial condition, results of operations and cash flows.

(6) REVENUES:

The Company operates in one business segment, which primarily focuses on the development and commercialization of innovative cyclodextrin-based products for the treatment of people with serious and life threatening rare diseases and medical conditions. The Company considers there to be revenue concentration risks for regions where net product revenues exceed 10% of consolidated net product revenues. The concentration of the Company’s net product revenues within the regions below may have a material adverse effect on the Company’s revenues and results of operations if sales in the respective regions experience difficulties. See Note 1(g) – Revenue Recognition for additional discussion.

Revenues by product are summarized as follows:

	Three Months Ended
	March 31 ,
	2019		2018
Trappsol Cyclo	$	30,096	$	30,096
Trappsol HPB		70,867		74,762
Trappsol research		65,852		61,025
Aquaplex		52,560		29,455
Other		1,451		2,731
Total revenues	$	220,826	$	198,069

Substantially all of our sales of Trappsol® Cyclo™ for the three months ended March 31, 2019 and March 31, 2018 were to a particular customer who exports the drug to South America. Substantially all of our Aquaplex sales are to one customer.

F-11

CTD HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2019

(7) LEASES:

The Company adopted ASU 2016-02 “ Leases (Topic 842)” along with related clarifications and improvements effective at the beginning of fiscal 2019, using the modified retrospective transition method. There was no cumulative-effect adjustment to the Company's Consolidated Balance Sheet as of December 31, 2018. Comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods, as the Company has elected the package of practical expedients permitted under the transition guidance, which among other things, allows us to carryforward our prior lease classifications under ASC 840, “Leases.”

Under the new guidance, right-of-use assets and lease liabilities are recognized based on the present value of the future minimum lease payments over the lease terms at the commencement dates. The Company uses its incremental borrowing rates as the discount rate for its leases, which is equal to the rate of interest the Company would have to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms. The incremental borrowing rate for all existing leases as of the opening balance sheet date was based upon the remaining terms of the leases; the incremental borrowing rate for all new or amended leases is based upon the lease terms. The lease terms for all the Company’s leases include the contractually obligated period of the leases, plus any additional periods covered by a Company options to extend the leases that the Company is reasonably certain to exercise.

The Company has elected the package of practical expedients permitted under the transition guidance, which among other things, allows us to carryforward our prior lease classifications under ASC 840, “Leases.”

Adoption of Topic 842 did not have a material impact on our annual operating results or cash flows. Operating lease expense is recognized on a straight-line basis over the lease term and is included in operating costs or General and administrative expense. Variable lease payments are expensed as incurred.

The effects of the changes made to the Company’s Consolidated Balance Sheet as of December 31, 2018 for the adoption of Topic 842 is as follows:

The Company determines if an arrangement is or contains a lease at contract inception and recognizes a right-of-use asset and a lease liability at the lease commencement date. Leases with an initial term of 12 months or less but greater than one month are not recorded on the balance sheet for select asset classes. The lease liability is measured at the present value of future lease payments as of the lease commencement date, or the opening balance sheet date for leases existing at adoption of Topic 842. The right-of-use asset recognized is based on the lease liability adjusted for prepaid and deferred rent and unamortized lease incentives.

Certain leases provide that the lease payments may be increased annually based on the fixed rate terms or adjustable terms such as the Consumer Price Index. Future base rent escalations that are not contractually quantifiable as of the lease commencement date are not included in our lease liability.

The Company has one office lease, which is as an operating lease and included in the right-of-use asset, current portion of lease liability, and long-term lease liability captions on the Company’s consolidated balance sheet.

Operating lease assets are recorded net of accumulated amortization of $4,251 as of March 31, 2019.

Lease expense for lease payments are recognized on a straight-line basis over the lease term. Lease expense for the first quarter of 2019 was $3,331.

F-12

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders

CTD Holdings, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of CTD Holdings, Inc. and subsidiaries (the “Company”) as of December 31, 2018 and 2017, and the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the two years in the period ended December 31, 2018, and the related notes (collectively referred to as the “financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2018 and 2017, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2018, in conformity with accounting principles generally accepted in the United States of America.

Substantial Doubt Regarding Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has suffered recurring losses from operations and has a significant accumulated deficit. In addition, the Company continues to experience negative cash flows from operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion.

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ WithumSmith+Brown, PC

We have served as the Company’s auditor since 2011.
Orlando, Florida

March 15, 2019

F-13

CTD HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	December 31,
	201 8			201 7
ASSETS

CURRENT ASSETS
Cash and cash equivalents	$	2,217,412		$	1,270,973
Accounts receivable		80,044			56,860
Inventory, net		416,531			471,221
Current portion of mortgage note receivable		37,439			35,884
Other		18,185			60,846
Total current assets		2,769,611			1,895,784

FURNITURE AND EQUIPMENT, NET		18,571			25,736


MORTGAGE NOTE RECEIVABLE, LESS CURRENT PORTION		129,674			167,128

TOTAL ASSETS	$	2,917,856		$	2,088,648

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
Accounts payable and accrued expenses	$	1,925,332		$	943,030

STOCKHOLDERS' EQUITY
Common stock, par value $.0001 per share, 500,000,000 and 100,000,000 shares authorized at December 31, 2018 and 2017, respectively, 90,759,324 and 72,999,361 shares issued and outstanding at December 31, 2018 and 2017, respectively		9,075			7,299
Preferred stock, par value $.0001 per share, 0 and 5,000,000 shares authorized at December 31, 2018 and 2017, respectively, Series B – 50,000 shares designated, convertible 0 and 15,500 shares issued and outstanding at December 31, 2018 and 2017, liquidation preference $0 and $1,550,000 December 31, 2018 and 2017, respectively		-			2
Additional paid-in capital		18,701,211			14,470,984
Stock subscription receivable		(130,062	)		-
Accumulated deficit		(17,587,700	)		(13,332,667	)
Total stockholders' equity		992,524			1,145,618

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	2,917,856		$	2,088,648

See accompanying Notes to Consolidated Financial Statements.

F-14

CTD HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

	Year Ended December 31,
	201 8			201 7

REVENUES
Product sales	$	1,011,477		$	1,237,756

EXPENSES
Personnel		1,171,941			1,183,441
Cost of products sold (exclusive of depreciation and amortization, shown separately below)		105,026			132,918
Research and development		2,711,275			2,292,892
Repairs and maintenance		3,821			10,500
Professional fees		808,770			902,714
Office and other		354,102			421,256
Board of Directors fees and costs		95,431			117,555
Depreciation		10,124			9,271
Freight and shipping		5,643			7,847
Loss (gain) on disposal of equipment		-			(2,817	)
Inventory write down		12,150			5,500

Total expenses		5,278,283			5,081,077

LOSS FROM OPERATIONS		(4,266,806	)		(3,843,321	)

OTHER INCOME
Investment and other income		11,773			10,261

Total other income		11,773			10,261

LOSS BEFORE INCOME TAXES		(4,255,033	)		(3,833,060	)

PROVISION FOR INCOME TAXES		-			-

NET LOSS	$	(4,255,033	)	$	(3,833,060	)

BASIC AND FULLY DILUTED NET LOSS PER COMMON SHARE	$	(0.05	)	$	(0.05	)

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING		81,756,839			72,037,167

See accompanying Notes to Consolidated Financial Statements.

F-15

CTD HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

YEARS ENDED DECEMBER 31, 201 8 AND 201 7

	Common Stock				Preferred Stock Series B						Additional									Total
	Shares		Par Value		Units			Par Value			Paid-In Capital			Subscription Receivable			Accumulated Deficit			Stockholders’ Equity

Balance, December 31, 2016		66,952,529	$	6,695		-		$	-		$	11,018,915		$	-		$	(9,499,607	)	$	1,526,003
									-
Sale of common stock, net of issuance fees		5,754,832		575		-			-			1,850,480			-			-			1,851,055

Sale of preferred stock units, net of issuance fees		-		-		15,500			2			1,489,998			-			-			1,490,000

Stock compensation		292,000		29		-			-			111,591			-			-			111,620

Net loss		-		-		-			-			-			-			(3,833,060	)		(3,833,060	)

Balance, December 31, 2017		72,999,361		7,299		15,500			2			14,470,984			-			(13,332,667	)		1,145,618

Sale of preferred stock units, net of issuance fees		-		-		20,100			2			1,959,998			-			-			1,960,000

Conversion of preferred stock units to common stock		14,240,000		1,424		(35,600	)		(4	)		(1,420	)		-			-			-

Sale of common stock, net of issuance fees		3,519,963		352		-			-			2,271,649			(130,062	)		-			2,141,939

Net loss		-		-		-			-			-						(4,255,033	)		(4,255,033	)

Balance, December 31, 2018		90,759,324	$	9,075		-		$	-		$	18,701,211		$	(130,062	)	$	(17,587,700	)	$	992,524

See accompanying Notes to Consolidated Financial Statements.

F-16

CTD HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Year Ended December 31,
	201 8			201 7
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(4,255,033	)	$	(3,833,060	)

Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		10,124			9,271
Gain on disposal of equipment		-			(2,817	)
Stock compensation to employees		19,400			65,205
Stock compensation to nonemployees		64,020			53,475
Inventory valuation allowance		12,150			5,500
Increase or decrease in:
Accounts receivable		(23,184	)		32,807
Inventory		42,540			20,676
Other current assets		42,661			(6,967	)
Accounts payable and accrued expenses		898,882			593,428
Total adjustments		1,066,593			770,578

NET CASH USED IN OPERATING ACTIVITIES		(3,188,440	)		(3,062,482	)

CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of furniture and equipment		(2,959	)		(6,856	)
Proceeds from mortgage note receivable		35,899			34,409
Proceeds from sale of property and equipment, net of closing costs		-			4,650

NET CASH PROVIDED BY INVESTING ACTIVITIES		32,940			32,203

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from sale of common stock, preferred stock and warrants, net of issuance costs		4,101,939			3,341,055

NET CASH PROVIDED BY FINANCING ACTIVITIES		4,101,939			3,341,055

NET INCREASE IN CASH AND CASH EQUIVALENTS		946,439			310,776

CASH AND CASH EQUIVALENTS , beginning of year		1,270,973			960,197

CASH AND CASH EQUIVALENTS , end of year	$	2,217,412		$	1,270,973

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for interest	$	-		$	-

Cash paid for income taxes	$	-		$	-

SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES
Common stock issued in exchange for a subscription receivable	$	130,062		$	-
Conversion of preferred stock into common stock	$	1,424		$	-

See accompanying Notes to Consolidated Financial Statements

F-17

CTD HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 201 8 AND 201 7

( 1 ) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

(a) ORGANIZATION AND OPERATIONS––The Company was incorporated in August 1990 as a Florida corporation, with operations beginning in July 1992. We are a biotechnology company that develops cyclodextrin-based products for the treatment of disease. We have filed a Type II Drug Master File with the U.S. Food and Drug Administration (“FDA”) for our lead drug candidate, Trappsol ^® Cyclo™ as a treatment for Niemann-Pick Type C disease (“NPC”), a rare and fatal cholesterol metabolism disease that impacts the brain, lungs, liver, spleen, and other organs. The FDA approved our Investigational New Drug application (IND) which describes our Phase I clinical plans in the U.S. for Trappsol ^® Cyclo™ and in January 2017 the FDA granted Fast Track designation to Trappsol ^® Cyclo™ for the treatment of NPC. Initial patient enrollment in the U.S. Phase I study commenced in September 2017. We have also filed Clinical Trial Applications with several European regulatory bodies, including those in the United Kingdom, Sweden and Italy, and in Israel, all of which have approved our applications. The first patient was dosed in our European study in July 2017.

(b) BASIS OF PRESENTATION––The consolidated financial statements include the Company and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.

(c) CASH AND CASH EQUIVALENTS––Cash and cash equivalents consist of cash and any highly liquid investments with an original purchased maturity of three months or less.

(d) ACCOUNTS RECEIVABLE––Accounts receivable are unsecured and non-interest bearing and stated at the amount we expect to collect from outstanding balances. Customer account balances with invoices dated over 90 days old are considered past due. The Company does not accrue interest on past due accounts. Customer payments are allocated to the specific invoices identified on the customer’s remittance advice or, if unspecified, applied to the oldest unpaid invoices.

The carrying amount of accounts receivable are reduced by an allowance for credit losses that reflects management’s best estimate of the amounts that will not be collected. The Company reviews each customer balance where all or a portion of the balance exceeds 90 days from the invoice date. Based on the Company’s assessment of the customer's current creditworthiness, the Company estimates the portion, if any, of the balance that will not be collected, and writes off receivables as a charge to the allowance for credit losses when, in management’s estimation, it is probable that the receivable is worthless. Based on management’s assessment of the credit history with customers having outstanding balances and current relationships with them, an allowance for doubtful accounts was not deemed necessary at December 31, 2018 and 2017.

(e) INVENTORY AND COST OF PRODUCTS SOLD––Inventory consists of our pharmaceutical drug Trappsol ^® Cyclo™, cyclodextrin products and chemical complexes purchased for resale recorded at the lower of cost ( first -in, first -out) or net realizable value. Cost of products sold includes the acquisition cost of the products sold and does not include any allocation of inbound or outbound freight charges, indirect overhead expenses, warehouse and distribution expenses, or depreciation and amortization expense. The Company records a specific reserve for inventory items that are determined to be obsolete. The reserve for obsolete inventory was $39,700 and $27,500 at December 31, 2018 and 2017, respectively.

(f) MORTGAGE NOTE RECEIVABLE––The mortgage note receivable is stated at amortized value, which is the amount we expect to collect.

F-18

CTD HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 201 8 AND 201 7

( 1 ) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED)

(g) FURNITURE AND EQUIPMENT––Furniture and equipment are recorded at cost, less accumulated depreciation. Depreciation is computed using primarily the straight-line method over the estimated useful lives of the assets (generally three to five years for computers and vehicles and seven to ten years for machinery, equipment and office furniture). We periodically review our long-lived assets to determine if the carrying value of assets may not be recoverable. If an impairment is identified, we recognize a loss for the difference between the carrying amount and the estimated fair value of the asset.

(h) REVENUE RECOGNITION–– Effective January 1, 2018, the Company adopted the provisions of ASC 606 using the modified retrospective method. The adoption of the new revenue standards as of January 1, 2018 did not change the Company’s revenue recognition as the majority of its revenues continues to be recognized when the customer takes control of the product. As the Company did not identify any accounting changes that impacted the amount of reported revenues with respect to its product revenues, no adjustment to retained earnings was required upon adoption.

Under the new revenue standards, revenues are recognized when our customer obtains control of promised goods or services, in an amount that reflects the consideration which we expect to receive in exchange for those goods or services. We recognize revenues following the five step model prescribed under ASU No. 2014 - 09: (i) identify contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenues when (or as) we satisfy the performance obligation.

Product revenues

In the U.S. we sell our products to the end user or wholesale distributors. In other countries, we sell our products primarily to wholesale distributors and other third -party distribution partners. These customers subsequently resell our products to health care providers and patients.

Revenues from product sales are recognized when the customer obtains control of our product, which occurs at a point in time, typically upon delivery to the customer. We expense incremental costs of obtaining a contract as and when incurred if the expected amortization period of the asset that we would have recognized is one year or less or the amount is immaterial. We treat shipping and handling costs performed after a customer obtains control of the product as a fulfillment cost. We have identified one performance obligation in our contracts with customers which is the delivery of product to our customers. The transaction price is recognized in full when we deliver the product to our customer, which is the point at which we have satisfied our performance obligation.

Reserves for Discounts and Allowances

Revenues from product sales are recorded net of reserves established for applicable discounts and allowances that are offered within contracts with our customers, health care providers or payors, including those associated with the implementation of pricing actions in certain of the international markets in which we operate. Our process for estimating reserves established for these variable consideration components do not differ materially from our historical practices.

Product revenue reserves, which are classified as a reduction in product revenues, are generally characterized in the following categories: discounts, contractual adjustments and returns.

These reserves are based on estimates of the amounts earned or to be claimed on the related sales and are classified as reductions of accounts receivable (if the amount is payable to our customer) or a liability (if the amount is payable to a party other than our customer). Our estimates of reserves established for variable consideration typically utilize the most likely method and reflect our historical experience, current contractual and statutory requirements, specific known market events and trends, industry data and forecasted customer buying and payment patterns. The transaction price, which includes variable consideration reflecting the impact of discounts and allowances, may be subject to constraint and is included in the net sales price only to the extent that it is probable that a significant reversal of the amount of the cumulative revenues recognized will not occur in a future period. Actual amounts may ultimately differ from our estimates. If actual results vary, we adjust these estimates, which could have an effect on earnings in the period of adjustment.

F-19

CTD HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 201 8 AND 201 7

( 1 ) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED)

For additional information on our revenues, please read Note 2, Revenues, to these consolidated financial statements.

(i) SHIPPING AND HANDLING FEES––Shipping and handling fees, if billed to customers, are included in product sales. Shipping and handling costs associated with inbound and outbound freight are expensed as incurred and included in freight and shipping expense.

(j) ADVERTISING––Advertising costs are charged to operations when incurred. We incur minimal advertising expenses.

(k) RESEARCH AND DEVELOPMENT COSTS––Research and development costs are expensed as incurred.

(l) INCOME TAXES––Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective income tax bases. Deferred tax assets and liabilities are measured using enacted rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. In addition, tax benefits related to positions considered uncertain are recognized only when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions shall initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts.

The Tax Cut and Jobs Act (the “Tax Act”) was enacted on December 22, 2017. The Tax Act contains several key provisions including, among other things, reducing the U.S. federal corporate tax rate from 35% to 21%. Changes in tax law are accounted for in the period of enactment. In addition, federal net operating losses (“NOLs”) generated during future periods will be carried forward indefinitely, but will be subject to an 80% utilization against taxable income. The carryback provision has been revoked for NOLs after January 1, 2018.

(m) NET LOSS PER COMMON SHARE––Basic and fully diluted net loss per common share is computed using a simple weighted average of common shares outstanding during the periods presented, as convertible preferred stock and outstanding warrants to purchase 32,192,294 and 28,500,478 common shares were antidilutive for 2018 and 2017, respectively.

(n) STOCK BASED COMPENSATION––The Company periodically awards stock to employees, directors, and consultants. An expense is recognized equal to the fair value of the stock determined using the closing trading price of the stock on the award date.

(o) FAIR VALUE MEASUREMENTS AND DISCLOSURES–The Fair Value Measurements and Disclosures topic of the Accounting Standards Codification (“ASC”) requires companies to determine fair value based on the price that would be received to sell the asset or paid to transfer the liability to a market participant. The Fair Value Measurements and Disclosures topic emphasizes that fair value is a market-based measurement, not an entity-specific measurement.

The guidance requires that assets and liabilities carried at fair value be classified and disclosed in one of the following categories:

●	Level 1: Quoted market prices in active markets for identical assets or liabilities.

●	Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data.

●	Level 3: Unobservable inputs that are not corroborated by market data.

F-20

CTD HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 201 8 AND 201 7

( 1 ) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED)

We have no assets or liabilities that are required to have their fair value measured on a recurring basis at December 31, 2018 or 2017. Long-lived assets are measured at fair value on a non-recurring basis and are subject to fair value adjustments when there is evidence of impairment.

For short-term classes of our financial instruments, which include cash, accounts receivable and accounts payable, and which are not reported at fair value, the carrying amounts approximate fair value due to their short-term nature. The fair value of the mortgage note receivable is estimated based on the present value of the underlying cash flows discounted at current rates. At December 31, 2018 and 2017, the carrying value of the mortgage note receivable approximates fair value.

(p) LIQUIDITY AND GOING CONCERN–– For the year ended December 31, 2018 and 2017, the Company incurred net losses of $4,255,000 and $3,833,000, respectively. The Company has an accumulated deficit of approximately $17,588,000 at December 31, 2018. Our recent losses have predominantly resulted from research and development expenses for our Trappsol ^® Cyclo™ product and other general operating expenses, including board advisory fees. We believe our expenses will continue to increase as we conduct clinical trials and continue to seek regulatory approval for the use of Trappsol ^® Cyclo™ in the treatment of NPC.

For year ended December 31, 2018, our operations used approximately $3,188,000 in cash. This cash was provided primarily by cash on hand and net proceeds of $4,102,000 from equity issuances. At December 31, 2018, the Company had a cash balance of $2,217,000 and current assets less current liabilities of $844,000. We will need additional capital to maintain our operations, continue our research and development programs, conduct clinical trials, seek regulatory approvals and manufacture and market our products.

The Company has incurred losses from operations in each of the last five years. We will need to raise additional capital through the sale of our securities from time to time for the foreseeable future to fund the development of our drug product candidates through clinical development, manufacturing and commercialization. Our ability to obtain such additional capital will likely be subject to various factors, including our overall business performance and market conditions. If we cannot raise the additional funds required for our anticipated operations, we may be required to reduce the scope of or eliminate our research and development programs, delay our clinical trials and the ability to seek regulatory approvals, downsize our general and administrative infrastructure, or seek alternative measures to avoid insolvency. If we raise additional funds through future offerings of shares of our Common Stock or other securities, such offerings would cause dilution of current stockholders’ percentage ownership in the Company, which could be substantial. Future offerings also could have a material and adverse effect on the price of our Common Stock.

Our consolidated financial statements for the year ended December 31, 2018 and 2017 were prepared on the basis of a going concern which contemplates that we will be able to realize assets and discharge liabilities in the normal course of business. We have incurred losses from operations in each of our last five fiscal years. Our ability to continue as a going concern is dependent upon the availability of equity financing as noted above. We will need to raise additional capital to support our ongoing operations and continue our clinical trials. These factors raise substantial doubt about our ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of these uncertainties.

(q) 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 the amounts reported in the consolidated financial statements and accompanying notes. Although management bases its estimates on historical experience and assumptions that are believed to be reasonable under the circumstances, actual results could significantly differ from these estimates.

(r) RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS–– In August 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016 - 15, “Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force).” The amendments in this ASU relate to eight specific types of cash receipts and cash payments which current U.S. generally accepted accounting principles (“U.S. GAAP”) either is unclear or does not include specific guidance on the cash flow classification issues. The amendments in this ASU are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company adopted this ASU effective January 1, 2018 and there was no significant impact on its consolidated financial statements and disclosures.

F-21

CTD HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 201 8 AND 201 7

( 1 ) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED)

In February 2016, the FASB issued ASU 2016 - 02, Leases (Topic 842 ), which requires that lessees recognize assets and liabilities for leases with lease terms greater than 12 months in the statement of financial position. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. This update also requires improved disclosures to help users of financial statements better understand the amount, timing and uncertainty of cash flows arising from leases. The update is effective for fiscal years beginning after December 15, 2018, including interim reporting periods within that reporting period. The Company will adopt this ASU effective January 1, 2019 and does not expect a significant impact on its consolidated financial statements and disclosures.

Between May 2014 and December 2016, the FASB issued several ASUs on Revenue from Contracts with Customers (Topic 606 ). These updates will supersede nearly all existing revenue recognition guidance under current U.S. GAAP. The core principle is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. A five -step process has been defined to achieve this core principle, and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP. The standards are effective for annual periods beginning after December 15, 2017, and interim periods therein, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standards in each prior reporting period with the option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting the standards recognized at the date of adoption (which includes additional footnote disclosures). Effective January 1, 2018, the Company adopted the provisions of ASC 606 using the modified retrospective method. The adoption of the new revenue standards as of January 1, 2018 did not change the Company’s revenue recognition as the majority of its revenues continues to be recognized when the customer takes control of the product. As the Company did not identify any accounting changes that impacted the amount of reported revenues with respect to its product revenues, no adjustment to retained earnings was required upon adoption.

( 2 ) REVENUES:

The Company operates in one business segment, which primarily focuses on the development and commercialization of innovative cyclodextrin-based products for the treatment of people with serious and life threatening rare diseases and medical conditions. The Company considers there to be revenue concentration risks for regions where net product revenues exceed 10% of consolidated net product revenues. The concentration of the Company’s net product revenues within the regions below may have a material adverse effect on the Company’s revenues and results of operations if sales in the respective regions experience difficulties. The Company adopted the requirements of ASC 606 on January 1, 2018 using the modified retrospective method. See Note 1 (h) – Revenue Recognition for additional discussion.

Revenues by product are summarized as follows:

	Year Ended
	December 31 ,
	2018		2017
Trappsol ^® Cyclo™	$	166,596	$	342,231
Trappsol ^® HPB		484,101		710,939
Trappsol ^® Fine Chemical		233,910		130,982
Aquaplex ^®		116,806		17,760
Other		10,064		35,844
Total revenues	$	1,011,477	$	1,237,756

All of our sales of Trappsol ^® Cyclo™ for the year ended December 31, 2018 and 84% of our sales of Trappsol ^® Cyclo™ for the year ended December 31, 2017 were to a single customer who exports the drug to South America. Substantially all of our Aquaplex ^® sales are to one customer.

F-22

CTD HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 201 8 AND 201 7

( 3 ) MAJOR CUSTOMERS AND SUPPLIERS:

Our revenues are derived primarily from chemical supply and pharmaceutical companies located primarily in the United States. In 2018, four major customers accounted for 57% of total revenues. Accounts receivable balances for these major customers represent 31% of total accounts receivable at December 31, 2018. In 2017, three major customers accounted for 59% of total revenues. Accounts receivable balances for these major customers represent 27% of total accounts receivable at December 31, 2017.

Substantially all inventory purchases were from three vendors in 2018 and 2017. These vendors are located primarily outside the United States.

We have three sources for our Aquaplex® products. There are multiple sources for our Trappsol ^® products.

For the year ended December 31, 2018, the product mix of our revenues consisted of 17% biopharmaceuticals, 71% basic natural and chemically modified cyclodextrins, and 12% cyclodextrin complexes. For the year ended December 31, 2017, the product mix of our revenues consisted of 28% biopharmaceuticals, 71% basic natural and chemically modified cyclodextrins, and 1% cyclodextrin complexes.

( 4 ) MORTGAGE NOTE RECEIVABLE :

On January 21, 2016, the Company sold its real property located in High Springs, Florida to an unrelated party. Pursuant to the terms of the sale, at the closing, the buyer paid $10,000 in cash, less selling costs and settlement charges, and delivered to the Company a promissory note in the principal amount of $265,000, and a mortgage in our favor securing the buyer’s obligations under the promissory note. The promissory note provides for monthly payments of $3,653, including principal and interest at 4.25%, over a seven -year period that commenced March 1, 2016, with the unpaid balance due in February 2023. Scheduled debt principal collections on this mortgage for the next five years and thereafter are as follows:

Year Ending
December 31,	Principal
2019	$	37,439
2020		39,061
2021		40,754
2022		42,520
2023		7,339
Thereafter		-
	$	167,113

( 5 ) CONCENTRATIONS OF CREDIT RISK:

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

DEMAND DEPOSITS––We maintain bank accounts in Federal credit unions and other financial institutions, which are insured up to the Federal Deposit Insurance Corporation limits. The bank accounts may exceed federally insured levels; however, we have not experienced any losses in such accounts.

F-23

CTD HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 201 8 AND 201 7

( 6 ) FURNITURE AND EQUIPMENT:

Furniture and equipment consists of the following as of December 31:

	2018		2017

Machinery and equipment	$	16,089	$	14,764
Office furniture		52,820		51,186
		68,909		65,950
Less: accumulated depreciation		50,338		40,214

Furniture and equipment, net	$	18,571	$	25,736

( 7 ) EQUITY TRANSACTIONS:

The Company expensed $83,420 and $118,680 in employee and board member stock compensation in 2018 and 2017, respectively. These shares were valued using quoted market values. The Company accrues stock compensation expense over the period earned for employees and board members. In 2018, the Company did not issue shares of Common Stock as a bonus. In 2017, the Company issued 292,000 shares of Common Stock to eight board members, the Company’s secretary, and to employees as a bonus.

In April 2014, we entered into a one -year agreement with Scarsdale Equities, LLC (“Scarsdale”), which was subsequently extended, to act as our financial advisor and exclusive placement agent. Under the agreement, Scarsdale is entitled to a fee with respect to each private placement of debt or equity securities of the Company in an amount equal to 6% of the proceeds of such financing raised by Scarsdale, and a seven -year warrant to purchase 6% of the securities issued as a part of such financing raised by Scarsdale, with an exercise price equal to 100% of the offering price of the securities sold during the term of the agreement. The foregoing compensation terms were modified for private placements effected in 2017, resulting in the compensation described in more detail below. The agreement also provides for payment of the above fees for any financing within one year of the expiration of the term, with investors identified by Scarsdale during the term. N. Scott Fine, the Company’s Chief Executive Officer and Chairman of the Board, was a principal of Scarsdale at the time we initially retained Scarsdale as our financial adviser, and his son is currently employed by Scarsdale, is active on our account and serves as our Secretary.

On February 23, 2017, the Company issued 5,754,832 “Units” at a purchase price of $0.35 per Unit in a private placement, each Unit consisting of one share of Common Stock, and a seven -year warrant to purchase an additional share of Common Stock at an exercise price of $0.35, for aggregate gross proceeds to the Company of approximately $2 million. Scarsdale acted as financial advisor to the Company in connection with the private placement and was paid a cash fee of approximately $153,000, and it and its designees were issued seven -year warrants to purchase 164,074 Units at an exercise price of $0.35 per Unit. A $10,000 cash fee was also paid to another party with respect to this private placement.

In October 2017, the Company completed a private placement of 15,500 preferred stock “Units” at a purchase price of $100 per Unit, each Unit consisting of one share of Series B Convertible Preferred Stock (“Series B Preferred Stock”) convertible into 400 shares of Common Stock, and seven -year warrants to purchase 400 shares of Common Stock at an exercise price of $0.25 per share. The Series B Preferred Stock was automatically converted into Common Stock on May 23, 2018, when the Company increased its authorized shares of Common Stock, which resulted in the Company having a sufficient number of authorized and unissued shares of Common Stock to permit the conversion or exercise, as applicable, of all outstanding shares of preferred stock, warrants and other convertible securities. The Series B Preferred Stock had a liquidation preference of $100 per share, was not redeemable, and did not entitle the holder to special dividends. Scarsdale acted as financial advisor to the Company in connection with the private placement and was paid a cash fee of $60,000, and it and its designees were issued seven -year warrants to purchase 600 Units at an exercise price of $100 per Unit.

F-24

CTD HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 201 8 AND 201 7

( 7 ) EQUITY TRANSACTIONS: (CONTINUED)

In April 2018, the Company completed a private placement of 20,100 “Units”, at a price of $100 per Unit, resulting in gross proceeds to the Company of $2,010,000. Each Unit consisted of one share of Series B Preferred Stock convertible into 400 shares of Common Stock, and seven -year warrants to purchase 400 shares of Common Stock at an exercise price of $0.25 per share. Prior to March 31, 2018, the Company received $74,983 in advance from these investors. Scarsdale acted as financial advisor to the Company in connection with the private placement and was paid a cash fee of $50,000.

On May 23, 2018, at a special meeting of shareholders, the Company’s shareholders approved amendments to the Company’s Articles of Incorporation increasing the number of authorized shares of Common Stock from 100,000,000 shares to 500,000,000 shares, and deleting references to the Series A Preferred Stock, which was no longer outstanding. Following the meeting, the Company filed Articles of Amendment to its Article of Incorporation which resulted in the automatic conversion of each outstanding share of Series B Preferred Stock into 400 shares of Common Stock, increasing the number of outstanding shares of Common Stock by 14,240,000.

In December 2018, the Company completed a private placement of 3,519,963 common stock “Units” at a price of $0.65 per Unit, resulting in gross proceeds to the Company of $2,342,034, of which $130,063 was received in January 2019 and is reflected in the accompanying balance sheet as a stock subscription receivable. Each Unit consisted of one share of common stock and a seven -year warrant to purchase one share of common stock at an exercise price of $0.65 per share.

The following table presents the number of Common Stock warrants outstanding:

Warrants outstanding, December 31, 2016			8,677,500
Issued			11,954,831
Exercised			-
Expired			-
Warrants outstanding, December 31, 2017			20,632,331
Issued			11,559,963
Exercised			-
Expired			-
Warrants outstanding, December 31, 2018			32,192,294

The following table presents the number of Common Stock warrants outstanding, their exercise price, and expiration dates at December 31, 2018:

Warrants Issued	Exercise Price		Expiration Date

240,000	$	0.25	April 2021
103,500	$	1.00	July 2021
156,000	$	0.50	July 2022
78,000	$	0.50	August 2022
8,100,000	$	0.25	June 2023
5,754,831	$	0.35	February 2024
6,200,000	$	0.25	October 2024
8,040,000	$	0.25	April 23, 2025
3,519,963	$	0.65	December 2025
32,192,294

In addition, there are seven -year warrants outstanding at December 31, 2018 to purchase 480,000 Units sold in our May 2016 private placement at an exercise price of $0.25 per Unit, 164,074 Units sold in our February 2017 private placement at an exercise price of $0.35 per Unit, and 600 Units sold in our October 2017 private placement at an exercise price of $100 per Unit.

F-25

CTD HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 201 8 AND 201 7

( 8 ) PREFERRED STOCK:

The Company’s Articles of Incorporation provide for 5,000,000 shares of “blank check” preferred stock. At December 31, 2018, no shares of preferred stock were outstanding or designated.

In October 2017, the Company designated 50,000 shares of preferred stock as Series B Convertible Preferred Stock and issued an aggregate of 35,600 of such shares in connection with the private placements described in Note 7 above. Each share of Series B Preferred Stock was convertible into 400 shares of Common Stock, had a liquidation preference of $100 per share, and did not entitle the holder to special dividends. The Series B Preferred Stock automatically converted into common stock in 2018. Please read Note 7, Equity Transactions, to these consolidated financial statements.

( 9 ) INCOME TAXES:

If all of our net operating loss carryforwards and temporary deductible differences were used, we would realize a net deferred tax asset of approximately $6,235,000 based upon expected income tax rates. Under ASC 740, deferred tax assets must be reduced by a valuation allowance if it is likely that all or a portion of it will not be realized. At December 31, 2018, we have determined it is more likely than not that we will not realize our temporary deductible differences and net operating loss carryforwards, and have provided a 100% valuation allowance on our net deferred tax asset.

Positive evidence we evaluated in the order of significance and weighting in our evaluation includes the amount of net operating loss carryforward utilized against current income tax liabilities in four of the prior ten years, and the length of time the net operating loss carryforwards are available before they expire. Negative evidence we considered in the order of significance and weighting in our evaluation include our recent net losses, our plans for continued clinical trial and product development expenses, the timing of expiration of the net operating loss carryforwards prior to being utilized, unpredictability of future sales and profitability, competition from others, and new government regulations. We determined greatest weight should be given to our plans for continued clinical trial and product development expenses, trend of increasing expenses, and recent net operating losses in our evaluation. We re-measure our valuation allowance each quarter based on changes in our current and expected future sales and margins, and changes in the other factors of both positive and negative evidence.

We have available at December 31, 2018, unused federal and state net operating loss carryforwards totaling approximately $11,903,000 that may be applied against future taxable income.

F-26

CTD HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 201 8 AND 201 7

( 9 ) INCOME TAXES: (CONTINUED)

If not used, the net operating loss carryforwards will expire as follows:

Year Ending December 31,	Amount

2020	$	174,000
2021		71,000
2024		66,000
2028		7,000
2030		160,000
2031		73,000
2032		48,000
2034		727,000
2035		1,969,000
2036		2,867,000
2037		2,481,000
Indefinite		3,260,000
Total	$	11,903,000

A change in ownership pursuant to Section 382 of the Internal Revenue Code occurred during 2014. As a result, net operating losses in existence as of the date of the ownership change are subject to an annual Section 382 limitation. At December 31, 2018, the amount of net operating losses subject to an annual Section 382 limitation has not been determined.

The Company has expenses that qualify for the Orphan Drug Credit. The Orphan Drug Credit may be used to offset any current tax liabilities. Unused credits may be carried forward for 20 years. If the credit has not been used by the end of the 20 year carryforward period, it can be deducted as an expense for federal income tax purposes. The cumulative unused credit carryforward was $3,085,000 at December 31, 2018.

For 2018, we did not recognize a benefit or provision for income taxes. The net deferred tax asset before the valuation allowance increased $1,575,000 from 2017 to 2018, which is primarily the result of an additional net operating loss for 2018. We increased our valuation allowance to offset this increase in our deferred tax asset.

For 2017, we did not recognize a benefit or provision for income taxes. The net deferred tax asset before the valuation allowance increased $1,044,000 from 2016 to 2017, which is primarily the result of an additional net operating loss for 2017. We increased our valuation allowance to offset this increase in our deferred tax asset.

Significant components of our deferred Federal income taxes were as follows:

	2018			201 7
Deferred tax assets:
Net operating loss carryforwards	$	3,017,000		$	2,206,000
Tax credits		3,085,000			2,397,000
Impairment allowances		10,000			7,000
Stock compensation		64,000			20,000
Other		62,000			35,000
Less valuation allowance		(6,235,000	)		(4,660,000	)
Deferred tax asset, net of valuation		3,000			5,000
Deferred tax liabilities:
Property and equipment		(3,000	)		(5,000	)
Deferred tax liabilities		(3,000	)		(5,000	)
Net tax assets	$	-		$	-

F-27

CTD HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 201 8 AND 201 7

( 9 ) INCOME TAXES: (CONTINUED)

On December 22, 2017, the President of the United States signed into law the Tax Cuts and Jobs Act (H.R. 1 ) (the “Act”). The Act includes a number of changes in existing tax law impacting businesses including, among other things, a permanent reduction in the corporate income tax rate from 34% to 21%, effective January 1, 2018.

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The Company’s net tax asset as of December 31, 2018 was determined based on the current enacted federal tax rate of 34% prior to the passage of the Act. As a result of the reduction in the corporate income tax rate to 21% from 34% under the Act, the Company revalued its net deferred tax assets and liabilities as of January 1, 2018. The impact of the reduction of the income tax rate was a reduction of deferred tax asset and the corresponding valuation allowance of approximately $768,000.

The differences between the effective income tax rate reflected in the benefit (provision) for income taxes and the amounts, which would be determined by applying federal statutory income tax rate of 21% at December 31, 2018 and 34% at December 31, 2017, is summarized as follows:

	2018			2017

Tax benefit (expense) at Federal statutory rate	$	894,000		$	1,303,000
Effect of State taxes		185,000			139,000
Tax credits		676,000			1,135,000
Nondeductible expenses		(180,000	)		(435,000	)
Tax Cuts and Jobs Act rate decrease		-			(1,098,000	)
Valuation allowance – deferred tax assets		(1,575,000	)		(1,044,000	)
Total tax benefit (provision)	$	-		$	-

The Company files income tax returns in the U.S. Federal jurisdiction, and in the State of Florida. The Company is no longer subject to U.S. Federal or state income tax examinations by tax authorities for years before 2015.

The Company has reviewed and evaluated the relevant technical merits of each of its tax positions in accordance with accounting principles generally accepted in the United States of America for accounting for uncertainty in income taxes, and determined that there are no uncertain tax positions that would have a material impact on the financial statements of the Company. When applicable, interest and penalties will be reflected as a component of income tax expense.

( 10 ) EMPLOYEE BENEFIT PLAN:

The Company maintains a 401 (k) plan available to all employees who have satisfied certain eligibility requirements. Employee contributions are discretionary. The Company may match employee contributions and may also make discretionary contributions for all eligible employees based upon their total compensation. For 2018 and 2017, the Company elected to match the employee’s contribution, not to exceed 4% of compensation. The Company’s 401 (k) contributions were $24,765 and $14,235 for 2018 and 2017, respectively.

( 1 1 ) COMMITMENTS AND CONTINGENCIES:

During 2017, the Company filed a Complaint against the National Institutes of Health (the “NIH”) in the United States District Court for the Northern District of Florida, Gainesville Division. Pursuant to the Complaint, the Company is seeking an order requiring the NIH to provide the Company with records responsive to a request originally made by the Company to the NIH under the Freedom of Information Act on October 19, 2016. Subsequent to the filing of the Complaint, the Company received documents from the NIH with substantial redactions. Legal counsel is currently reviewing those documents and our options in connection with this proceeding.

F-28

CTD HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 201 8 AND 201 7

( 11 ) COMMITMENTS AND CONTINGENCIES: (CONTINUED)

From time to time, the Company is a party to claims and legal proceedings arising in the ordinary course of business. Our management evaluates our exposure to these claims and proceedings individually and in the aggregate and records an expense for potential losses on such litigation if it is possible to estimate the amount of loss and if the amount of the loss is probable.

On November 26, 2018, we entered a new two -year lease for approximately 2,500 square feet of office and distribution warehouse space located in Gainesville, Florida for $1,600 per month, with a two -year renewal option.

( 1 2 ) RELATED PARTY TRANSACTIONS:

As discussed in Note 7 above, N. Scott Fine, our Chief Executive Officer and Chairman of the Board, was a principal of Scarsdale at the time we initially retained Scarsdale as our financial adviser, and his son is currently employed by Scarsdale, is active on our account and serves as our Corporate Secretary.

Since October 2016, we have paid a monthly fee of $5,000 to a non-profit organization of which C.E. Rick Strattan is the Executive Director, in consideration of consulting services provided to us by Mr. Strattan. Mr. Strattan is our founder, former Chief Executive Officer and one of our directors.

During 2017, Rebecca A. Fine, Mr. Fine’s daughter, was employed by us as an Executive Assistant and was paid an annual salary of $60,000. During 2018, she was engaged by us as a contractor to provide those services at the rate of $5,000 per month and received a bonus of $5,000. She is currently engaged by us as a contractor at the rate of $5,800 per month.

Kevin J. Strattan, the son of C.E. Rick Strattan, has been employed by us since 2008, and since 2014 has been our Vice President, Finance – Compensation. His annual salary increased from $90,000 to $100,000 in November 2017 and to his current salary of $107,200 in October 2018. In addition, he received a bonus of $10,000 in 2018.

Corey E. Strattan, the daughter-in-law of C.E. Rick Strattan, has been employed by us since 2011 as a documentation specialist and logistics coordinator. During 2017 she was paid an annual salary of $48,000. In January 2018, her annual salary increased to $72,000. In January 2019 her annual salary increased to $78,000 her current salary. In addition, she received a bonus of $5,000 in 2018.

F-29

Common Stock

60,899,000 Shares

P R O S P E C T U S

June 27 , 201 9

Large accelerated filer [ ]	Accelerated filer [ ]
Non-accelerated filer [ ] (Do not check if a smaller reporting company)	Smaller reporting company [X]
	Emerging growth company [ ]

Prospectus Summary	1

Risk Factors	3

Disclosure Regarding Forward-looking Statements	8

Use Of Proceeds	8

Market Price for our Common Stock and Dividends	9

Our Business	10

Description Of Property	15

Legal Proceedings	15

Management’s Discussion And Analysis Of Financial Condition And Results Of Operation	16

Management	23

Executive Compensation	25

Security Ownership Of Certain Beneficial Owners And Management	27

Certain Relationships And Related Party Transactions And Director Independence	2 9

Description Of Securities	30

May 2019 Private Placement	3 3

Selling Shareholde rs	3 4

Plan Of Distribution	41

Legal Matters	43

Experts	43

About This Prospectus	43

Where you can find more information	43

Index to consolidated financial statements	F-1

Securities Being Offered by the Selling Shareholders:	60,899,000 Shares of Common Stock, including (i) 29,770,000 issued and outstanding shares of Common Stock, (ii) 29,770,000 shares of Common Stock issuable upon exercise of Investor Warrants, and (iii) 1,359,000 shares of Common Stock issuable upon exercise of Placement Agent Warrants.

Trading Market	The Common Stock offered in this prospectus is quoted on the OTCQB under the symbol “CTDH.” We have filed an application to have our Common Stock listed on the Nasdaq Capital Market. However, we may not be successful in having our shares listed on the Nasdaq Capital Market.

Shares of Common Stock Outstanding Before the Offering:	121,034,463 ⁽¹⁾

Shares of Common Stock Outstanding After the Offering:	152,163,463 ⁽ ² ⁾

Use of Proceeds:	We will not receive any of the proceeds from the sale of the shares of our Common Stock being offered for sale by the selling shareholders. Upon the exercise of the Warrants for an aggregate of 31,129,000 shares of Common Stock by payment of cash however, we will receive the exercise price of the Warrants, or an aggregate of approximately $9,338,700.

Plan of Distribution:	The selling shareholders may sell all or a portion of the shares of Common Stock beneficially owned by them and offered hereby from time to time directly or through one or more underwriters, broker-dealers or agents. Registration of the Common Stock covered by this prospectus does not mean, however, that such shares necessarily will be offered or sold. See “ Plan of Distribution .”

Risk Factors:	An investment in our securities involves a high degree of risk and could result in the loss of your entire investment. Prior to making an investment decision, you should carefully consider all of the information in this prospectus and, in particular, you should evaluate the risk factors set forth under the caption “Risk Factors” beginning on page 3 of this prospectus.

		High		Low
2017	First Quarter	$	0.80	$	0.41
	Second Quarter	$	0.62	$	0.37
	Third Quarter	$	0.55	$	0.27
	Fourth Quarter	$	0.51	$	0.25

2018	First Quarter	$	0.45	$	0.25
	Second Quarter	$	0.40	$	0.25
	Third Quarter	$	0.77	$	0.30
	Fourth Quarter	$	1.18	$	0.50

2019	First Quarter	$	0.84	$	0.56
	Second Quarter (through June 27, 2019)	$	0.83	$	0.33

Name & Principal Position	Year	Salary ($)		Stock Awards ($) (1)		All Other Compensation ($) ( 2 )		Total ($)

N. Scott Fine	2018		400,000		4,294		62,347		466,641
CEO	2017		400,000		16,170		24,673		440,843

Jeffrey L. Tate	2018		186,667		4,294		27,233		218,194
COO	2017		155,000		16,170		17,371		188,541

Dr. Sharon H. Hrynkow	2018		232,000		-		7,947		239,947
Chief Scientific Officer (3)

(1)	In accordance with Rule 416(a) under the Securities Act of 1933, as amended (the “Securities Act”), the Registrant is also registering hereunder an indeterminate number of shares that may be issued and resold resulting from stock splits, stock dividends or similar transactions.

(2)	The proposed maximum offering price per share and the proposed maximum aggregate offering price have been estimated solely for the purpose of calculating the amount of the registration fee in accordance with Rule 457(c) under the Securities Act of 1933 on the basis of the average of the high and low prices of the Common Stock on the OTC Markets on June 21, 2019, a date within five trading days prior to the date of the filing of this registration statement.

	●	29,770,000 issued and outstanding shares of Common Stock;

	●	29,770, 000 shares of Common Stock issuable upon exercise of Warrants (the “Investor Warrants”); and

	●	1,359,000 shares of Common Stock issuable upon exercise of placement agent warrants (the “Placement Agent Warrants” and together with the Investor Warrants, the “Warrants”).

●	refusals or delays in the approval of applications or supplements to approved applications;

●	refusal of a regulatory authority to review pending market approval applications or supplements to approved applications;

●	restrictions on the marketing or manufacturing of the product, withdrawal of the product from the market or voluntary or mandatory product recalls or seizures;

●	fines, warning letters, or holds on clinical trials;

●	import or export restrictions;

●	injunctions or the imposition of civil or criminal penalties;

●	restrictions on product administration, requirements for additional clinical trials, or changes to product labeling requirements; or

●	recommendations by regulatory authorities against entering into governmental contracts with us.

Name	Age	Positions and Offices With Registrant	Year First Became Director

N. Scott Fine	62	Director, Chief Executive Officer	2014
Jeffrey L. Tate, Ph.D.	61	Director, Chief Operating Officer	2010
C.E. Rick Strattan	73	Director	1990
Markus W. Sieger	53	Lead Director	2014
F. Patrick Ostronic	63	Director	2014
William S. Shanahan	79	Director	2016
Dr. Randall M. Toig	68	Director	2018
Joshua M. Fine	37	Chief Financial Officer and Secretary	N/A
Dr. Sharon H. Hrynkow	58	Chief Scientific Officer and SVP for Medical Affairs	N/A

(1)	Reflects award of 20,000 shares to each Named Executive Officer in 2018 and 2017 as compensation for services as a member of the Company’s Board of Directors in 2018 and 2017, respectively. Also reflects award of 20,000 shares in 2017 as compensation for services in the form of an employee bonus. All of the shares were fully vested upon issuance. The stock award figure represents the value of the stock award at grant date as calculated under FASB ASC Topic 718.

(2)	Reflects matching contributions made under the Company’s 401(k) plan, and insurance premiums for health, dental, and vision.

(3)	Dr. Sharon H. Hrynkow was designated an executive officer of the Company by our Board of Directors on June 29, 2018.

●	Mr. Fine’s employment as Chief Executive Officer is for an initial term ending on September 14, 2020, subject to automatic one-year extensions unless either party notifies the other party prior to the expiration of the then term.

●	Mr. Fine receives an initial base salary of $400,000 per annum.

●	Mr. Fine is entitled to an annual bonus based on financial performance and personal performance targets to be established by the Board of Directors or a committee thereof.

●	In the event of the termination of Mr. Fine’s employment by the Company without Cause (as defined in the Employment Agreement), Mr. Fine will be entitled to continued payment of his base salary for a period of one-year following termination, and the payment of any bonus previously earned by Mr. Fine but not yet paid.

●	Dr. Hrynkow employment with us is for an initial term ending on September 14, 2019, subject to automatic one-year extensions unless either party notifies the other party prior to the expiration of the then term.

●	Dr. Hrynkow is entitled to a base salary of $200,000 per annum, which has been increased to $248,000.

●	Dr. Hrynkow is entitled to an annual bonus based on financial performance and personal performance targets.

●	In the event of the termination of Dr. Hrynkow’s employment by the Company without Cause (as defined in the Employment Agreement), Dr. Hrynkow will be entitled to continued payment of her base salary for a period of one-year following termination, and the payment of any bonus previously earned by Dr. Hrynkow but not yet paid.

Names and Address of Individual or Identity of Group(1)	Number of Shares Beneficially Owned			Approximate Percent of Class


Officers and Directors
C.E. Rick Strattan		20,608,385	(2)		17.0	%

Jeffrey L. Tate		1,090,972	(3)		*

N. Scott Fine		8,752,966	(4)		7.1	%

Markus Sieger		5,165,714	(5)		4.2	%

F. Patrick Ostronic		1,614,780	(6)		1.3	%

William S. Shanahan		4,145,020	(7)		3.4	%

Dr. Randall M. Toig		2,615,540	(8)		2.1	%

Joshua M. Fine		2,277,659	(9)		1.9	%

Dr. Sharon Hrynkow		595,000	(10)		*

All Directors and Executive Officers as a Group (9 Persons)		46,866,036	(11)		36.0	%

5% Holders
Novit, L.P.		13,135,164	(12)		10.5	%
966 Hungerford Drive Rockville, Maryland 20850

Scarsdale Equities LLC 10 Rockefeller Plaza, Suite 720 New York, NY 10020		13,862,900	(13)		11.0	%

Armistice Capital Master Fund Ltd.		12,000,000	(14)		9.9	%

(1)		Unless otherwise indicated, the business address of each officer and director of the Company is c/o CTD Holdings, Inc., 6714 NW 16th Street, Suite B, Gainesville, Florida 32653.

(2)		Based solely on a Schedule 13D/A filed by Mr. Strattan with the SEC on October 20, 2015, and Form 4s filed by Mr. Strattan on June 8, 2016, July 26, 2016, April 4, 2017 and February 5, 2018. Includes currently exercisable warrants to purchase 40,000 shares of Common Stock and 630,738 shares of Common Stock owned by TFBU, Inc. (“TFBU”), a tax exempt organization under Section 501(c)(3) of the Internal Revenue Code. Mr. Strattan has sole voting and dispositive power with respect to the shares of Common Stock issued in the name of TFBU.

(3)		Includes currently exercisable warrants to purchase 225,000 shares of Common Stock.

(4)		Includes currently exercisable warrants to purchase 2,076,483 shares of Common Stock.

(5)		Includes currently exercisable warrants to purchase 372,857 shares of Common Stock.

(6)		Includes currently exercisable warrants to purchase 709,890 shares of Common Stock.

(7)		Includes currently exercisable warrants to purchase 2,039,560 shares of Common Stock.

(8)		Includes currently exercisable warrants to purchase 1,307,770 shares of Common Stock.

(9)		Includes 1,679,659 shares that may be issued under currently exercisable warrants, including warrants to purchase Common Stock underlying warrants to purchase “Units” of the Company’s securities.

(10)		Includes currently exercisable warrants to purchase 280,000 shares of Common Stock.

(11)		Includes 9,731,219 shares that may be issued under currently exercisable warrants, including warrants to purchase Common Stock underlying warrants to purchase “Units” of the Company’s securities.

(12)		Novit U.S., Inc. is the general partner of Novit, L.P. and Katarzyna Kusmierz is the trustee of the NAP Trust, which owns all of the outstanding partnership interests in Novit, L.P. Each of Novit US, Inc. and Ms. Kusmierz share voting and dispositive power over the shares Common Stock owned by Novit, L.P. and may be deemed to own such shares of Common Stock. Includes currently exercisable warrants to purchase 3,617,582 shares of Common Stock.

(13)		Based on a Schedule 13G/A filed by Scarsdale Equities, LLC with the SEC on February 19, 2019 and information provided by Scarsdale to the Company. Includes 8,422,900 shares of Common Stock held in accounts managed by Scarsdale and 5,440,000 shares of Common Stock issuable upon the exercise of warrants held in such managed accounts.

(14)		Does not include a warrant to purchase 12,000,000 shares of Common Stock that may be issued on exercise of a warrant, as such warrant includes a provision precluding the exercise thereof if the warrant holder would beneficially own in excess of 4.99% of the Company’s outstanding shares of Common Stock. Armistice Capital, LLC, the investment manager of Armistice Capital Master Fund Ltd., or Armistice, and Steven Boyd, the managing member of Armistice Capital, LLC, hold shared voting and dispositive power over the shares held by Armistice. Each of Armistice Capital, LLC and Steven Boyd disclaims beneficial ownership of the securities listed except to the extent of their pecuniary interest therein. The principal business address of Armistice is c/o Armistice Capital, LLC, 510 Madison Avenue, 7th Floor, New York, NY, 10022

	•	the transaction is approved by a majority of disinterested directors before the shareholder becomes an interested shareholder;

	•	the interested shareholder has owned at least 80% of the corporation’s outstanding voting shares for at least five years preceding the announcement date of any such business combination;

Name of Selling Stockholder	Number of Shares of Common Stock Owned Prior to Offering			Maximum Number of Shares of Common Stock to be Sold Pursuant to this Prospectus			Number of Shares of Common Stock Owned After Offering			Percentage of Common Stock Owned After the Offering
William Moore (1)		840,000	(2)		840,000	(2)		-			-
William McGough (3)		600,000	(4)		400,000	(5)		200,000	(6)		*
Francis Mlynarczyk (7)		1,050,000	(8)		200,000	(6)		850,000	(9)			%
Anthony B. Low-Beer (10)		5,700,000	(11)		1,200,000	(12)		4,500,000	(13)		2.9	%
John R. Low-Beer (14)		750,000	(15)		400,000	(5)		350,000	(16)		*
Sheila Low-Beer (17)		575,000	(18)		400,000	(5)		175,000	(19)		*
Fredrick Morris (20)		354,000	(21)		200,000	(6)		154,000	(22)		*
ALB Private Investments (23)		4,900,000	(24)		400,000	(5)		4,500,000	(13)		2.9	%
Ong Geok Chin (25)		587,692	(26)		280,000	(27)		307,692	(28)		*
Markus Sieger (29)		5,165,714	(30)		800,000	(31)		4,365,714	(32)		2.9	%
Ivan C. Frederickson Jr.(33)		600,000	(4)		600,000	(4)		-			-

Michael & Ashley Jorgensen (34)	400,000	(5)	400,000	(5)	-		-
Sharon Hrynkow (’35)	595,000	(36)	80,000	(37)	515,000	(38)	*
Scott & Kathleen Simpson (39)	800,000	(31)	800,000	(31)	-		-
Randall Toig (40)	2,615,540	(41)	400,000	(5)	2,215,540	(42)	1.4	%
Jeffrey S Bornstein (43)	405,000	(44)	400,000	(5)	5,000	(45)	*
Lorenzo Corte (46)	320,000	(47)	320,000	(47)	-		-
Scott & Cathy Fine (’48)	8,752,966	(49)	800,000	(31)	6,025,714	(50)	5.2	%
Joshua Weinshank (51)	95,506	(52)	80,000	(37)	15,506	(53)	*
Robert Koch (54)	400,000	(5)	400,000	(5)	-		-
William S. Shanahan (55)	4,145,020	(56)	1,600,000	(57)	2,545,020	(58)	1.7	%
Phylis M. Esposito (59)	1,855,000	(60)	200,000	(6)	1,655,000	(61)	1.1	%
Maida Chicon (62)	300,000	(63)	80,000	(37)	220,000	(64)	*
Kevin McCormack (65)	365,000	(66)	200,000	(6)	165,000	(67)	*
Ryan McCormack (68)	275,000	(69)	200,000	(6)	75,000	(70)	*
Alan H. Abramson Trust U/A 7/22/13 (71)	160,000	(72)	160,000	(72)	-		-
Dennis B Poster (73)	200,000	(6)	200,000	(6)	-		-
Sinthia Martins Silva (74)	200,000	(6)	200,000	(6)	-		-
Francis Patrick Ostronic (75)	1,614,780	(76)	400,000	(5)	1,214,780	(77)	*
Novit LP (78)	13,135,164	(79)	1,600,000	(57)	11,535,164	(80)	7.4	%
National Bank Financial, Inc. (81)	1,200,000	(12)	1,200,000	(12)	-		-
Dyke Rogers (82)	400,000	(16)	400,000	(16)	-		-
Northlea Partners (83)	140,000	(84)	140,000	(84)	-		-
Bigger Capital Fund, LP (85)	2,000,000	(86)	2,000,000	(86)	-		-
District 2 Capital Fund LP (87)	2,000,000	(85)	2,000,000	(85)	-		-
Efrat Investments LLC (88)	1,200,000	(12)	1,200,000	(12)	-		-
Warberg WF VII LP (89)	480,000	(90)	480,000	(90)	-		-
Warberg WF VI LP (91)	480,000	(90)	480,000	(90)	-		-
Clay Struve (92)	400,000	(5)	400,000	(5)	-		-
Verition Multi Strategy Master Fund Ltd.(93)	1,600,000	(57)	1,600,000	(57)	-		-
A.K.S. Family Partners LP (94)	400,000	(5)	400,000	(5)	-		-
Empery Asset Master, LTD (95)	2,061,860	(96)	2,061,860	(96)	-		-
Empery Tax Efficient, LP (97)	359,556	(98)	359,556	(98)	-		-
Empery Tax Efficient II, LP (99)	1,578,584	(100)	1,578,584	(100)	-		-
Sabby Volatility Warrant Master Fund, Ltd. (101)	4,000,000	(102)	4,000,000	(102)	-		-
Armistice Capital Master Fund Ltd. ( 103)	24,000,000	(104)	24,000,000	(104)	-		-
Alta Partners, LLC (105)	400,000	(5)	400,000	(5)	-		-
Orca Capital GMBH (106)	600,000	(4)	600,000	(4)	-		-
RedDiamond Partners LLC (107)	800,000	(31)	800,000	(31)	-		-
Ramnarian Jaigobind+	1,426,948	(108)	1,426,948	(108)	-		-
Fordham Financial Management, Inc. (109)	271,800	(110)	271,800	(110)	-		-

	•	the interested shareholder is the beneficial owner of at least 90% of the outstanding voting shares of the corporation, exclusive of shares acquired directly from the corporation in a transaction not approved by a majority of the disinterested directors; or

	•	the consideration paid to the holders of the corporation’s voting stock is at least equal to certain fair price criteria.

	Page

Consolidated Balance Sheets as of March 31, 2019 (Unaudited) and December 31, 2018.	F-2

Consolidated Statements of Operations (Unaudited) for the Three Months Ended March 31, 2019 and 2018.	F- 3

Consolidated Statement of Stockholders’ Equity (Unaudited) for the Three Months Ended March 31, 2018	F- 4

Consolidated Statement of Stockholders’ Equity (Deficit) (Unaudited) for the Three Months Ended March 31, 2019	F- 5

Consolidated Statements of Cash Flows (Unaudited) for the Three Months Ended March 31, 2019 and 2018	F- 6

Notes to Unaudited Consolidated Financial Statements	F- 7

Report of Independent Registered Public Accounting Firm – WithumSmith+Brown, PC	F- 13

Consolidated Balance Sheets as of December 31, 2018 and 2017	F- 14

Consolidated Statements of Operations for the Years Ended December 31, 2018 and 2017	F- 15

Consolidated Statements of Shareholders’ Equity for the Years Ended December 31, 2018 and 2017	F- 16

Consolidated Statements of Cash Flows for the Years Ended December 31, 2018 and 2017	F- 17

Notes to Consolidated Financial Statements	F- 18

SEC registration fee	$	3,173.81
Accounting fees and expenses	$	2,500.00
Legal fees and expenses	$	30,000.00
Miscellaneous expenses	$	2,500.00

Total	$	38,173.81

Exhibits

3.1	Amended and Restated Articles of Incorporation filed June 29, 2018 (incorporated by reference to the Company’s Form 10-Q filed with the Securities and Exchange Commission on August 14, 2018).

3.2	By-Laws (incorporated by reference to the Company’s Form 10-SB filed with the Securities and Exchange Commission on February 1, 1994).

4.1	Form of Warrant issued to investors in private placements conducted in 2016, 2017 and 2018 (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed June 8, 2016).

4.2	Form of Warrant, dated May 31, 2019, issued by CTD Holdings, Inc. to investors and ThinkEquity, a division of Fordham Financial Management, Inc., and its designees (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed June 4, 2019).

5.1	Opinion of Fox Rothschild LLP

10.1	Conversion Agreement dated as of February 19, 2014 between CTD Holdings, Inc. and C.E. Rick Strattan (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed February 20, 2014).

10.2	Voting Commitment Letter dated as of February 19, 2014 between CTD Holdings, Inc. and C.E. Rick Strattan (incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed February 20, 2014).

10.3	Securities Purchase and Collaboration Agreement dated as of April 9, 2014 between CTD Holdings, Inc. and Novit, L.P. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed April 15, 2014).

10.4†	Employment Agreement between the Company and N. Scott Fine, dated as of September 14, 2015 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed October 16, 2015).

10.5†	Amendment to Employment Agreement between the Company and N. Scott Fine, dated as of November 7, 2017 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed November 8, 2017).

10.6	Promissory Note in the original principal amount of $265,000, dated January 21, 2016, by Crit, Inc. DBA Commercial Gates & Electric, in favor of CTD Holdings, Inc. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed January 27, 2016).

10.7	Mortgage, dated January 21, 2016, by Crit, Inc. DBA Commercial Gates & Electric, in favor of CTD Holdings, Inc. (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed January 27, 2016).

10.8	Commercial Contract between Alchem Laboratories Corporation and Nanosonic Products Inc., entered into September 6, 2016 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed December 20, 2016).

10.9	Form of Securities Purchase Agreement between CTD Holdings, Inc. and investors in the October 2017 private placement (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed October 20, 2017).

10.10†	Employment Agreement between the Company and Dr. Sharon H. Hrynkow, dated as of September 14, 2015 (incorporated by reference to Exhibit 10.10 to the Company’s Annual Report on Form 10-K filed March 15, 2019).

10.11†	Amendment to Employment Agreement between the Company and Dr. Sharon H. Hrynkow, dated as of November 8, 2017 (incorporated by reference to Exhibit 10.11 to the Company’s Annual Report on Form 10-K filed March 15, 2019).

10.12	Securities Purchase Agreement, dated as of May 30, 2019, between CTD Holdings, Inc. and purchasers party thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed June 4, 2019)

10.13	Placement Agency Agreement, dated as of May 30, 2019, between CTD Holdings, Inc. and ThinkEquity, a division of Fordham Financial Management, Inc. (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed June 4, 2019).

10.14	Registration Rights Agreement, dated as of May 30, 2019, between CTD Holdings, Inc. and purchasers party thereto (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed June 4, 2019).

21.1	Subsidiaries (incorporated by reference to Exhibit 21.1 to the Company’s Annual Report on Form 10-K filed April 16, 2018).

23.1	Consent of WithumSmith+Brown, PC.

23.2	Consent of Fox Rothschild LLP (included in Exhibit 5.1)

101.INS	XBRL Instance Document

101.SCH	XBRL Taxonomy Extension Schema Document

101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF	XBRL Taxonomy Extension Definition Linkbase Document

101.LAB	XBRL Taxonomy Extension Label Linkbase Document

101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

	CTD HOLDINGS , INC.

	By:	/s/ N. Scott Fine
		N. Scott Fine
		Chief Executive Officer

Signature	Title	Date


/s/ N. Scott Fine	Chief Executive Officer, Director	June 27, 2019
N Scott Fine


/s/ Joshua M. Fine	Chief Financial Officer	June 27, 2019
Joshua M. Fine

/s/ C.E. Rick Strattan	Director	June 27, 2019
C.E. Rick Strattan

/s/ Jeffrey L. Tate	Chief Operating Officer, Director	June 27, 2019
Jeffrey L. Tate

/s/ Randall M. Toig	Director	June 27, 2019
Randall M. Toig

/s/ William S. Shanahan	Director	June 27, 2019
William S. Shanahan

/s/ F. Patrick Ostronic	Director	June 27, 2019
F. Patrick Ostronic

/s/ Markus W. Sieger	Director	June 27, 2019
Markus W. Sieger