**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**WASHINGTON,
      D.C. 20549**





**FORM
      10-KSB**





ANNUAL
      REPORT UNDER SECTION 13 OR 15(d) OF THE


SECURITIES
      EXCHANGE ACT OF 1934


For
      the
      fiscal year ended December 31, 2006





**Commission
      file number: 000-31385**





**GLOBAL
      FOOD TECHNOLOGIES, INC.**


(Name
      of
      small business issuer in its charter)





**DELAWARE**
            
            **52-2257546**(State
                or other jurisdiction of
            
            (I.R.S.
                Employerincorporation
                or organization)
            
            Identification
                No.)**113
                Court Street Hanford California**
            
            **93230**(Address
                of principal executive offices)
            
            (Zip
                Code)





**559-589-0100**


(Issuer’s
      telephone number)




Securities
      registered under Section 12(b) of the Exchange Act: None




Securities
      registered under Section 12(g) of the Exchange Act: Common Stock, $0.0001 par
      value per share






Check
      whether the issuer is not required to file reports pursuant to Section 13 or
      15(d) of the Exchange Act. Yes oNo
x




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





Check
      if
      there is no disclosure of delinquent filers in response to Item 405 of
      Regulation S-B contained in this form, and no disclosure will be contained,
      to
      the best of registrant’s knowledge, in definitive proxy or information
      statements incorporated by reference in Part III of this Form 10-KSB or any
      amendment to this Form 10-KSB. o





Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act).  Yes
o No
x





State
      issuer’s revenues for its most recent fiscal year: None





As
      of May
      18, 2007, the aggregate market value of the registrant’s common stock held by
      non-affiliates of the registrant was $ 4,860,095.





At
      May
      18, 2007, the number of shares outstanding of each of the issuer’s Common Stock,
      $.0001 par value per share, was 25,870,832.





**DOCUMENTS
      INCORPORATED BY REFERENCE**


None





Transitional
      Small Business Disclosure Format (Check one): Yes o 
      No x




1





**GLOBAL
      FOOD TECHNOLOGIES, INC.**


**INDEX
      TO**


**ANNUAL
      REPORT FORM 10-KSB**


**FOR
      THE YEAR ENDED DECEMBER 31, 2006**


**Item**
            
            **Page****Number**
            **Description**
            **Number****PART
                I**1
            Description
                of Business
            32
            Description
                of Property
            153
            Legal
                Proceedings
            164
            Submission
                of Matters to a Vote of Security Holders
            16**PART
                II**5
            Market

                for Common Equity and Related Stockholder Matters and Small Business
                Issuer Purchases of Equity Securities
            166
            Management’s
                Discussion and Analysis or Plan of Operation
            187
            Financial
                Statements
            258
            Changes
                in and Disagreements with Accountants on Accounting and Financial
                Disclosure
            258A
            Controls
                and Procedures
            258B
            Other
                Information
            26**PART
                III**9
            Directors,
                Executive Officers, Promoters, Control Persons and Corporate Governance;
                Compliance with Section 16(a) of the Exchange Act
            2610
            Executive
                Compensation
            3011
            Security
                Ownership of Certain Beneficial Owners and Management and Related
                Stockholder Matters
            3312
            Certain
                Relationships and Related Transactions and Director
                Independence
            3413
            Exhibits
            3714
            Principal
                Accountant Fees and Services
            38Signatures
            40





2




**PART
      I.**





**ITEM
      1. DESCRIPTION OF BUSINESS**





On
      March
      24, 1999, Global Food Technologies, Inc., a Delaware corporation, (GFT, we
      or
      the Company) was incorporated under the laws of the State of Delaware under
      the
      name “Boulevard Acquisition Corporation” to serve as a vehicle to effect a
      merger, exchange of capital stock, asset acquisition or other business
      combination. On August 19, 2005, we executed and simultaneously consummated
      an
      Asset Acquisition Agreement with Solvis Group, Inc., a Delaware corporation,
      and
      Global Food Technologies, Inc., a privately held Delaware corporation, which
      we
      refer to as Tech, engaged purely in the research and development of food safety
      technologies. Pursuant to this Asset Acquisition Agreement, we acquired
      substantially all of the assets and liabilities of Tech in exchange for issuing
      to Tech 22,943,693 shares of our common stock. At the time, these shares
      represented approximately 97% of our issued and outstanding common stock. We
      refer to the asset acquisition in this report as the Transaction.





In
      connection with the Transaction, all the members of Tech’s board of directors
      resigned (except for Stephen J. Fryer, who currently is the sole director of
      Tech) and were appointed as our directors. In addition, the executive officers
      of Tech resigned (except for Stephen J. Fryer and Marshall F. Sparks, who
      currently are Tech’s President and Chief Financial Officer/Secretary,
      respectively) and were appointed to the same positions with our Company.
      Accordingly, the Transaction resulted in a change of control and was accounted
      for as a reverse merger (recapitalization), with Tech deemed to be our
      accounting acquirer. On October 3, 2005, we amended our Certificate of
      Incorporation to change our name to “Global Food Technologies, Inc.” and Tech
      changed its name to “Global Food Tech, Inc.” All share amounts referred to in
      this report are as adjusted by the one-for-three reverse stock split on
      September 30, 2005, as described below.





Shortly
      before the closing of, and in connection with, the Transaction, we entered
      into
      a Stock Purchase Agreement, dated as of August 11, 2005, with Pierce Mill
      Associates, Inc., a Delaware corporation, and our then sole stockholder (holding
      100,000 shares), and Solvis, pursuant to which we issued 520,000 shares of
      our
      common stock to Solvis. At the time, this gave Solvis a controlling position
      in
      our issued and outstanding capital stock, as consideration for facilitating,
      and
      as a part of, the Transaction by which we acquired the assets and liabilities
      of
      Tech. The Stock Purchase Agreement with Solvis was amended in April 2006 to
      reduce the number of shares granted to Solvis from 520,000 shares to 100,000
      shares.





Tech
      was
      originally formed in 2000 as a limited liability company to engage in research
      and development of food safety technologies, but had no operations until it
      received its initial funding on July 25, 2001. This initial funding consisted
      of
      approximately $200,000 raised by Tech in a private placement of its equity
      securities. On August 1, 2001, Tech was incorporated in the State of Delaware,
      and the limited operations of the limited liability company were merged into
      the
      new corporation on November 19, 2001. Immediately prior to the Transaction,
      Tech
      was engaged in the research and development of its proprietary scientific food
      safety technologies to increase the quality and value of commercially packaged
      seafood, poultry and other meats, and to make these products safer for human
      consumption by eliminating disease-causing bacteria and spoilage microorganisms.
      As a result of the Transaction, we have adopted Tech’s business plan in its
      entirety, and intend to continue to research, develop, market and seek to
      license our patented food safety technologies.




3





In
      September 2005, our Board of Directors declared a reverse stock split exchanging
      one share of our common stock for every three shares of our common stock
      outstanding as of the September 30, 2005 record date. This reduced our
      outstanding common stock at September 30, 2005, from 70,164,410 shares
      outstanding to 23,389,506 shares, after giving effect to the reduction of shares
      granted to Solvis from 520,000 to 100,000 shares as described above. As of
      March
      31, 2007, we have 25,654,772 shares issued and outstanding.





**Business
      of the Company**





**Overview**





We
      are
      engaged in research and development of commercial applications for: (1) our
      proprietary scientific food processing technologies, which are focused on
      increasing the quality and value of commercially packaged seafood, poultry,
      and
      other meats, substantially extending the shelf-life of these meats and making
      these products safer for human consumption by reducing disease-causing bacteria;
      and (2) our *iPura* *TM* Food
      Safety Program and *iPura* *TM* Brand,
      which are focused on instilling extraordinary food safety measures into the
      food
      processing industries though a comprehensive food safety program, which is
      represented by our *iPura* *TM* consumer
      food safety brand.





We
      have
      focused our development efforts on products designed to reduce significantly
      the
      presence of salmonella, campylobacter, and other bacterial pathogens found
      in
      processed seafood, poultry, and meat products. We believe that using our
      proprietary, low-cost technologies designed to sharply reduce the presence
      of
      dangerous and often lethal pathogens in seafood, poultry, and meat products,
      and
      significantly increase the shelf-life and commercial value of these products,
      we
      could create a new paradigm in food safety. GFT’s technological
      solutions can help
      food
      processors increase the quality, safety, and economic value of their products
      by
      reducing or eliminating the waste and liability associated with the distribution
      of contaminated food, and by increasing product shelf life. This could help
      the
      distribution chain avoid losses, protect their reputation, gain new customers,
      avoid losing customers, and increase their profits by meeting consumer demand
      for cleaner and safer food. Our *iPura* *TM* brand
      will be a tool used to communicate to consumers that extraordinary measures
      went
      into the food safety practices in an effort to reduce their chances of
      contacting a foodborne illness due to pathogenic contamination.


Through
      onsite surveys at processing facilities in North America, South America, Asia,
      and Europe, GFT management has determined that a non thermal pathogenic “kill
      step” prior to packaging is missing in the food industry. This is the
      opportunity for GFT’s technology. GFT has invented the “kill step” that
      management believes is absent in food processing. GFT developed the *iPura* TM Seafood
      System (“The *iPura* TM System”)
      by commercializing its proprietary technology platform and its “kill-step”
process which capitalize on GFT’s expertise in cellular biology and a globally
      patented method combining pressure, temperature, vacuum, and an environmentally
      friendly organic antimicrobial solution to eliminate disease causing bacteria
      (pathogens) and other spoilage organisms, without affecting the texture, color,
      taste, or nutritional value of the product.




GFT
      plans
      to provide the technology, the equipment and personnel for the pathogenic “kill
      step”, as part of an onsite food safety service. GFT plans to install its system
      in food processor’s facilities at the end of the processing line. The *iPura* TM System
      is comprised of a large stainless steel pressure vessel with associated
      manifolds, hydraulics, pneumatics, loaders, un-loaders, fill/mix, and conveyance
      apparatuses, all constructed inside a controlled environment. The “kill step”
will be performed by GFT personnel operating our *iPura* TM System,
      immediately prior to packaging. After the sanitization, GFT places its
“ *iPura* *TM* ”
logo
      on
      the package. The label will serve to identify food products that have a higher
      level of safety and quality. GFT plans to charge the processor a food safety
      service fee and a licensing fee for the use of the *iPura* TM label.
      GFT plans to ship its first system in late 2007 for installation in a major
      salmon producer’s facility in the country of Chile.





4




We
      spent
      approximately $4,857,188 and $4,074,872 on research and development during
      the
      fiscal years ended December 31, 2006 and December 31, 2005, respectively. As
      described below in this report, our *iPura* TM Seafood
      Processing System is ready for commercialization and we are actively seeking
      customer orders. Our other technologies remain in various stages of research
      and
      development.





**The
      Problems We Address**





It
      is
      widely known that contamination from bacteria in raw food processing and
      packaging is a major cause of worldwide food waste (spoilage) before
      consumption, as well as food poisoning after consumption.  Our
      technologies and proposed products and services are focused on reducing the
      incidence of food poisoning worldwide due to ingesting salmonella,
      campylobacter, and other bacteria often present in seafood, poultry and other
      meats, either naturally or through contamination, while processing and packaging
      these foods for commercial consumption. These disease-causing bacteria, or
      pathogens, can remain in processed food and be eaten by consumers, causing
      frequently serious illness, and sometimes death.





A
      report
      published by the U.S. Government Accounting Office (GAO) has assessed the costs
      to the United States alone from food-borne illnesses as follows: “The extent of
      food-borne illness in the United States and its associated costs are
      significant. [The Center for Disease Control] estimates that unsafe foods cause
      as many as 76 million illnesses, 325,000 hospitalizations, and 5,000 deaths
      annually. In terms of medical costs and productivity losses, food-borne
      illnesses associated with seven major pathogens cost the nation between $7
      billion and $37 billion annually, according to USDA’s estimates.” (See: Food
      Safety: Overview of Federal and State Expenditures, U.S. General Accounting
      Office, GAO-01-077, February 2001, available at www.gao.gov/new.items/d01177.pdf )
      Our
      management estimates that the worldwide medical and productivity costs related
      to food poisoning constitute a multiple of the amount suffered in the United
      States, considering that, in many food-exporting countries outside of the United
      States, there are less regulated processing, clean conditions, availability
      of
      preventative and remedial medical products, and services and education about
      the
      problem. Management cannot further quantify this estimate, since complete and
      reliable records of the true incidence of diseases transmitted by food are
      not
      available on an international basis. It also should be noted that statistics
      concerning all food-borne illnesses include incidences caused by foods other
      than seafood, poultry and other meats (such as fruits, nuts and vegetables).
      However, it is generally accepted that the largest health risks come from
      seafood, poultry and other meat products.





The
      U.S.
      General Accounting Office (GAO) in February 2007, called on legislators to
      radically amend the food safety system, which it said is fragmented, and
      inefficient. An absolute priority needs to be better systems for
      prevention. Traditionally, three principal methods have been used by
      governmental agencies and food processors to monitor and control microorganisms
      found in food: education and training; inspecting facilities and operations
      that
      process, sell and/or serve food; and microbiological testing. Although these
      methods are essential parts of any food control program, they have limitations
      and shortcomings when used alone. For instance, testing products is an
      inefficient means to assess retrospectively the conditions under which food
      has
      been processed, transported and stored, especially if negative results then
      require tracing and recalling food products after their distribution. FAO
      Fisheries Department “Assurance of Seafood Quality” chapter 4, “Traditional
      Microbiological Quality Control;
      http://www.fao.org/DOCREP/003/T1768E/T1768E04.html





5




We
      believe that the food processing industry has a critical need for a
      pathogen-elimination step prior to final packaging. Making seafood, poultry,
      and
      other meats safer for human consumption, while at the same time substantially
      extending their shelf-life when being marketed to consumers is our primary
      objective.





Government,
      university, and private studies have indicated that consumers are very concerned
      about food safety. Michigan State University’s Food Safety Policy Center in a
      national survey (April 2006) found that 96% of respondents stated that labels
      should contain food safety information and that 84% of consumers polled are
      willing to pay a food safety premium for a reduction in their chances of
      becoming ill due to food contamination. Michigan State University Food Safety
      Policy Center , United States National Survey on Consumer Perception of Food
      Safety; http://www.fspc.msu.edu/





The
      January 2007 issue of Consumer Reports stated that pathogenic contamination
      was
      found on 83% of the poultry they sampled from U.S. retail grocers. The report
      stated that chickens labeled as organic or raised without antibiotics and
      costing $3 to $5 per pound were more likely to harbor salmonella than were
      conventionally produced broilers that cost approximately $1 per pound and that
      no major brand fared better than others overall. Foster Farms, Pilgrim’s Pride,
      and Tyson chickens were lower in salmonella incidence than Perdue, but they
      were
      higher in campylobacter. This Consumers Report issue also stated, “Our tests
      show the current practices aren’t enough” and, “when contaminated chickens
      arrive at supermarkets, problems can multiply. Just one slip-up in storage,
      handling, or cooking, and you’re at risk”.





USA
      Today
      featured food safety on March 19, 2007 with headlines “U.S. Food Imports Outrun
      FDA Resources,” and stated, “People are not as protected as they think.” GFT
      management believes that the current state of food safety combined with the
      consumer’s willingness to pay a premium for safer food could allow the entire
      distribution chain to profit with increased margins when they market products
      with our *iPura* TM label.





**Our
      Proposed Products and Services**





In
      seeking to launch our technology commercially, we have concentrated first on
      developing products for use by seafood processors, where management believes
      the
      danger is highest, thus giving us the greatest likelihood of market acceptance
      by processors, grocers and consumers. The
      overall strategy begins with initiating cleaner food at the source through
      use
      of the *iPura* TM system
      and food safety program.





We
      developed the *iPura* TM system,
      formerly the BEST system, and have now commercialized the proprietary technology
      platform and the “kill-step” process. We will provide the technology, the
      equipment and personnel for the pathogenic “kill step”, as part of the onsite
      food safety service. The system will be installed in the food processor’s
      facilities at the end of the processing line, and is comprised of a large
      stainless steel pressure vessel with associated manifolds, hydraulics,
      pneumatics, loaders, un-loaders, fill/mix, and conveyance apparatuses, all
      constructed inside a controlled environment. Our methods simply add one
      additional step (prior to freezing and packaging) in the processing lines
      already in place in virtually every seafood and poultry processing facility.
      This new “kill step” will be performed by GFT personnel, immediately prior to
      packaging. After the sanitization, GFT places its *iPura* *TM* logo on
      the package.





6




Our
      proprietary technologies are designed to reduce the instances of food-borne
      illnesses that claim thousands of lives and cost businesses billions of dollars
      in losses internationally every year. Our pathogen reduction and elimination
      technology platform integrates traditional food handling and processing with
      cellular biology, creating what we believe will be a new paradigm for the food
      safety industry. In essence, our technology works by reducing the natural rates
      of cellular respiration, cellular dormancy, expansion and contraction within
      the
      cellular matrix by exposing the treated products to specific modified
      atmospheres, resulting in the transfer and discharge of fluids to and from
      the
      cellular wall. By creating a safe and environmentally friendly wash, and forcing
      this wash in and around all sides of the cellular walls of the products we
      are
      treating, our technology kills the pathogens contained within or surrounding
      those cells without affecting the taste, color, texture, or nutritional value
      of
      the processed tissues.





Destroying
      pathogens makes the product safe; the greatly reduced levels of bacteria and
      spoilage organisms, and the cellular dormancy, allow for a longer shelf-life;
      and the controlled packaging keeps the product safe and fresh. While we cannot
      say that our *iPura* TM Seafood
      Processing System will eradicate all the pathogens found in the food we treat,
      our internal laboratory testing and studies (conducted jointly with, and
      confirmed by, representatives from a highly-respected university in the Western
      United States, which we refer to as the University) indicate that our methods
      are significantly more effective in reducing bacterial count on the treated
      products compared to methods in commercial use today. This vast reduction in
      pathogen count and spoilage microorganisms is how our technology works to extend
      the shelf-life of the food we treat, because it slows substantially the growth
      and reproduction of these pathogens following treatment.





Our
      pathogen-elimination “kill step” process is designed to help food processors
      increase the quality, safety, and economic value of their products by
      eliminating the waste, rejection, recall and liability associated with
      distributing contaminated food products. This can provide substantial public
      health and economic benefits to food processors, food distributors, grocers,
      restaurants, and other food service companies, and, ultimately, governments
      and
      consumers. Additionally, the extended shelf-life that results from substantially
      reducing pathogens and spoilage organisms during the processing and packaging
      of
      seafood, poultry and other meat products is accomplished without using harmful
      chemicals or irradiation. These undesirable methods of pathogen management
      have
      traditionally been used by processors, and our avoiding caustic chemicals or
      radiation in our methods is one of the greatest distinguishing features of
      our
      proprietary technology. We believe that introducing an innovative, safe,
      affordable, environmentally friendly, non-thermal, pathogen-elimination “kill
      step” process represents a quantum leap forward in food processing technology.





We
      believe that the *iPuraTM* Food
      Safety Program will help the food chain grow their margins by increasing the
      quality, safety, and economic value of their products by reducing or eliminating
      the waste and liability associated with the distribution of contaminated food,
      and by increasing shelf life.





The *iPura* *TM* ** Food Safety
      Program is the constitution of the *iPura* *TM* food
      safety brand and is anticipated to include: (1) An organic pathogenic and
      spoilage microorganism “kill step” prior to packaging (The *iPura* *TM* ** System);
      (2) Intelligent packaging of product; (3) Product traceability of handling
      and
      temperature; (4) An independent third party certification of standards; (5)
      A
      unique product insurance that follows the *iPura* TM labeled
      product throughout the distribution chain; and, (6) A distribution chain and
      consumer “pull through” marketing program promoting *iPura* *TM* as “The
      Highest Standard in Food Safety TM .”





7




The
      following definitions are related to the *iPura* *TM* ** Food
      Safety Program which is imbedded into the service and licensing contract as
      prerequisites to the use of the *iPura* *TM* ** label:





·
            ***iPura*****TM**-
                A premium brand owned by GFT and licensed to qualifying food processors
                that signifies clean and safe food using state-of-the-art food safety
                processes.


·
            ***The******iPura*****TM*****Standards***-
                The terms, specifications and requirements that must be met by a
                processor
                to qualify for an*iPura*TM*Contract.
                The**iPura*TM*Standards*include:





o
            Hazard
                Analysis and Critical Control Points
                (HACCP)


o
            Good
                Manufacturing Practices (GMP’s)


o
            Sanitation
                Standard Operating Procedures (SSOP’s)





The *iPura* TM  *Standards* will
      also incorporate the following additional food safety measures to create
      extraordinary standards that meet GFT’s definition of “The Highest Standard in
      Food Safety”:





1.
            Non-thermal
                pathogenic kill step prior to packaging.
              (performed
                by the *iPura*TMSystem).


2.
            Scientific
                packaging.


3.
            Independent
                3rdparty certification of materials and
                procedures.


4.
            No
                use of toxic chemical disinfectants (such as
                chlorine).


5.
            Product
                traceability and temperature
                monitoring.





·
            ***The
                iPura*****TM*****System***-
                The physical equipment that performs the organic pathogenic kill
                step
                prior to packaging.**


·
            ***The
                iPura*****TM*****Service*****-
                The onsite service performed by GFT personnel.


·
            ***The**********iPura*****TM*****Contract*****-
                The contract by and between GFT and the processor whereby GFT executes
                the*iPura*TM*Program*for a service fee based on a charge per lb./kilo of product treated
                by the*iPura*TM*System*.


·
            ***The**********iPura*****TM*****Food Safety Program***-
                The entire program that includes the*******iPura*TM*Standards*,*******iPura*TM*System*,*iPura*TM*Service,
                and the********iPura*TM*Contract*including**a
                license to affix the*iPura*TMlabel on products treated by the*iPura*TM*System*,
                and*iPura*TMproduct
                insurance throughout the distribution chain, and an*iPura*TMdistribution chain and consumer “pull through” marketing
                program.


·
            **The
                Highest Standard in Food Safety****TM****-**The
                slogan for the*iPura*TMbrand, the result of the successful execution of the*iPura*TM*Food
                Safety Program.*





*iPura* *TM*  products
      will carry a unique food regulatory intervention insurance, not currently
      available in the marketplace. Marine Management Insurance Brokers, Inc.
      (“MMIB”), a leader in providing specialized insurance products and risk
      management services to the international trade of seafood, has investigated
      and
      endorsed the efficacy of the *iPura* TM System
      and Program .
      As a
      result of MMIB’s endorsement, We intend to embed into the *iPura* *TM*  brand,
      a
      seamless and risk-managed approach to food regulatory violations. The *iPura* *TM*  processor
      and their downstream customers will be relieved of the significant losses and
      disruption of trade that results from food safety violations. This will provide
      the market with an unprecedented level of security and provides international
      credibility for the *iPura* *TM*  brand.
      Mr. Curtis Keyes, the CEO and founder of MMIB, also serves on our Advisory
      Board.




8





We
      believe that our *iPura* TM Seafood
      Processing System has undergone adequate testing and is now fully developed
      and
      ready for market introduction. We will be shipping our first commercial system
      to Chile in mid 2007 for installation into a major seafood processing plant.
      We
      believe that once we are able to demonstrate the system’s man-machine interface,
      we will be in position to sign contracts with many processors that have been
      identified, several of which have worked with us during trials of their products
      at our R&D facility.





However,
      our *iPura* TM Seafood
      Processing System has never been installed and operated in a third-party
      commercial setting and we do not currently have any orders for the *iPura* TM Seafood
      Processing System. In addition, we do not have any agreements in place with
      third-party manufacturers for our systems or components. Furthermore, we may
      not
      be able to successfully commercialize our other technology described below
      or
      extrapolate it to any other applications (including those discussed below).
      Our
      success will depend on many factors that are not within our control, such as
      whether we will have sufficient economic and other resources and whether our
      products and services will be accepted in the marketplace, among others
      described more fully in Item 6 under the heading “Cautionary Information
      Regarding “Forward-Looking Statements.”





We
      have
      established, and applied for registration of, the *iPura* *TM* trade
      mark to identify products processed by the *iPura* TM Seafood
      Processing System. We expect the *iPura* *TM*  brand
      to
      signify that exceptional food safety measures have been taken in processing
      the
      product labeled with this mark. We will market the *iPura* *TM* brand
      both to consumers and distribution chain participants. Our management believes
      that consumers are willing to pay a premium for value added food safety, and
      we
      believe that we can create additional demand for our products by educating
      consumers about the benefits of food products bearing the *iPura* *TM* label.
      Currently, we have only engaged in limited marketing of our *iPura* *TM* brand.





To
      date,
      we have tested our technology only on seafood and poultry products, and on
      actual seafood product supplied by our potential customers. Application of
      our
      technology to poultry and other foods will require significant additional
      research and development. Our system is effective against bacterial pathogens
      and spoilage microorganisms, such as salmonella, campylobacter and *E.
      coli* .
      However, our technology is not designed or intended to, and does not have,
      any
      effect on viral or genetically transmitted diseases, such as “mad cow disease”
or avian flu, and we have no present intent to expand our science into that
      area. Our management has studied food safety issues extensively, and believes
      that the largest number of deaths resulting from food-borne illnesses are
      attributable to bacterial pathogens, and we are committed to focusing on the
      food safety issues associated with those specific illnesses, at least for the
      foreseeable future.





Benefits
      of our technology over other technologies include the following:





·
            our
                “kill step” method does not affect the size, weight, texture, taste,
                smell, appearance or nutritional value of the seafood, poultry or
                other
                meat products treated by it; ·
            our
              systems are scalable to suit the output level of each individual
              processor; ·
            installation
              can be made at little cost to the seafood, poultry or meat processor,
              since our current plan is to charge service and licensing fees based
              on
              volume; and ·
            our
              method is clean, safe to use, and environmentally friendly, because
              it
              does not rely on caustic chemicals or radiation to eliminate pathogens
              and
              spoilage organisms in the treatment
              process.




While
      our
      current research and development efforts have been focused almost exclusively
      on
      the seafood and poultry markets, subject to the availability of sufficient
      resources, we intend to commence scientific research activities on applying
      our
      technology to other meat products, including pork. Due to resource limitations,
      we currently do not have any projected schedule for commencing this research
      or
      a cost estimate relating to this activity.





9




We
      have
      done exploratory research into possibly using our technology in the field of
      aquaculture - raising fish and shellfish in artificial environments for easy
      “farming.” However, as fish are raised in crowded farming conditions, they
      become notably more susceptible to viral and bacterial disease from parasites
      in
      the water and in the fish. To combat this phenomenon, growers have traditionally
      used large levels of antibiotics. Our research seems to suggest that we may
      be
      able to utilize our proprietary technology to accomplish two possible
      objectives: (1) developing a special membrane that can be inserted into
      aquaculture ponds to chemically bond free-flowing antibiotics and remove them
      from the environment; and (2) developing our own, proprietary, self-contained
      aquaculture ponds, designed to treat the water in which the fish and shellfish
      are raised with our “kill step” technology, and potentially eliminate or
      significantly reduce the need for antibiotic treatment. Currently, we do not
      have any plans to adapt our technologies to aquaculture.





We
      have
      done development work on proprietary film for packaging commercial food products
      using nano chemistry. Preliminary test results indicate a reduction in microbial
      growth and further extension of product shelf-life. Development is continuing
      on
      this nano technology project in a joint effort with the Chemistry and
      Microbiology departments of the University, and data validation continues with
      the University and our testing teams. This technology, if successfully
      commercialized, would be introduced into specific packaging films and would
      complement our *iPura* TM Seafood
      Processing System by continuing to reduce the growth of microbial
      microorganisms, adding days of shelf-life to the packaged food product without
      adding any harmful byproducts and without compromising the odor, texture, or
      flavor of the product.  The film packaging project is in the conceptual
      stage with only preliminary research to date. Development will commence with
      a
      proof of science prototype and microbiology testing when we deem it appropriate
      in relation to other development projects we are conducting and availability
      of
      resources. This phase will provide the laboratory data necessary to make a
      submission to the U.S. Food and Drug Administration, (FDA), and the
      specifications necessary to obtain proposals for contract manufacturing. The
      development phase, if commenced, is estimated to require six months and a budget
      of $250,000.





**Distribution
      and Marketing Plan**





We
      have
      determined that the way to most effectively maximize the value of our patented
      and proprietary technologies is to license them to the processors for a service
      and licensing fee. We plan to distribute our products and generate revenue
      by
      offering to install our *iPura* TM Seafood
      Processing System for a small up-front cost to food processors, under the terms
      of a service and license agreement containing a negotiated price-per-pound
      charge to the processor. We intend that these service contracts will specify
      that our personnel (which may include authorized subcontractors) must install,
      operate and maintain each *iPura* TM Seafood
      Processing System inside the customer’s processing plant, and we will control
      every aspect of our proprietary technologies, including system design,
      installation, controlled environments, film for packaging, and an anti-microbial
      agent. By the terms of these service and licensing contracts, we will have
      the
      ability to monitor and maintain every element of our processing system, allowing
      us to control how our technology is utilized as well as confirming our income
      rights on a real-time basis. We believe that processors who utilize our system
      will have a competitive edge over processors who continue to use the current
      methods, which we view to be less effective and less safe.





10




GFT
      began
      promoting the *iPura* *TM* ** label
      through industry trade shows, trade publications, workshops, seminars, invited
      speaking engagements, and meetings sponsored on GFT’s behalf by various
      governmental agencies and industry trade associations. Through various media,
      we
      believe that we have aroused interest and countered price objections.
      The Company
      is executing its marketing strategy by promoting the *iPura* TM brand
      as
      the world’s first food safety label. **** The *iPura* TM label
      is **** anchored
      with a descriptive slogan: **** “ The
      Highest Standard in Food Safety TM ”.





Although
      we have not yet commercially installed any *iPura* TM Seafood
      Processing System, we have developed relationships in the first three markets
      we
      have chosen to introduce our technologies: Vietnam, Chile, and China. We have
      chosen to commence our business in these three countries, and have established
      representative office relationships there, because we believe that these markets
      represent very large seafood and poultry exporting countries, have strong
      governmental and trade association support that can help with quicker market
      acceptance by processors, and have a proven desire to be seen as using “state of
      the art” technologies in processing their food for export
      consumption.





Vietnam





Although
      Vietnam is a leading exporter of seafood (especially shrimp products), it has
      been heavily affected by more stringent requirements in the European Union
      and
      in North America. According to Mr. Nguyen Huu Dung, National Director for
      SEAQUIP and Secretary General for Vietnamese Association for Seafood Exporters
      and Producers, or “VASEP”, in Hanoi, Vietnam, between 1991 and 2002, the output
      of fisheries production in Vietnam more than doubled, reaching 2,410,900 tons
      and yielding approximately U.S. $2 billion in 2002. (See: Status
      of Fish Trade and Food Security in Vietnam,
      United
      Nations Food and Agriculture Organization, 2003, available at


www.fao.org/documents/show_cdr.asp?url_file=/DOCREP/006/Y4961E/y4961e0k.htm .)





Despite
      the importance of this sector, according to our contacts at VASEP, there is
      concern that more than half of the nation’s seafood is grown either in the
      polluted waters of the Mekong River or in stagnant aquaculture ponds, both
      of
      which pose a serious threat to food safety.





Several
      of our officers and directors traveled to Ho Chi Minh City during the end 2004
      and in 2005 to meet with representatives of the Ministry of Fisheries and VASEP
      to discuss how our technology can assist processors in Vietnam to deal with
      the
      health issues posed by bacterial pathogens and help encourage greater
      importation of Vietnamese seafood as concerns over the safety of its exported
      fish are alleviated. VASEP agreed to help us make contact with Vietnamese
      seafood processors, and those discussions are continuing. In June 2005, VASEP
      sponsored us to make a “New Technology Presentation” at the VIETFISH2005 trade
      conference held in Ho Chi Minh City. A total of five large seafood processors
      shipped seafood samples from their processing plants in Vietnam to our
      laboratory in Pocatello, Idaho, in order to test the degree of microbial
      reduction and shelf-life extension that might be expected if they sign a service
      agreement with us. After these studies were completed and the results were
      confirmed by the University, VASEP sponsored GFT in June of 2006, at the VASEP
      annual processor meeting to make a presentation titled “New Technology Meeting
      FDA Requirements”. And, in April of 2007 the U.S. Commercial Services office of
      the U.S. Commerce Department, together with VASEP, sponsored three seminars
      for
      GFT and Marine Management Insurance Brokers (Insurance underwriters for *iPura* TM ).
      The
      seminars were titled: “THE CHALLENGES OF MEETING WORLDWIDE FOOD SAFETY” and took
      place in Ho Chi Minh City, Can Tho, and Ca Mau, Vietnam. Due to this support
      GFT
      has identified several candidates for installation of *iPura* TM Systems
      and has conducted site surveys at six prospective processor locations in
      Vietnam. GFT management believes that the Vietnamese seafood industry can be
      penetrated rapidly once GFT has the financial resources to set its operational
      plans in motion.




11




Chile





The
      principal seafood exports from Chile are salmon and trout, with salmon leading
      the industry. In recent years, salmon farming in Chile has grown at an enormous
      pace, such that by October 2003, a Reuters news report indicated that Chilean
      salmon production represented 35% of the world’s total, just 2% below that of
      Norway, the world’s largest salmon exporter. (See: Reuters, Salmon
      Farms Spawn Fortunes, And Critics, In Chile ,
      published October 2, 2003 and available at www.flmnh.ufl.edu/fish/innews/salmonfortunes2003.html .)
      Business Week also has reported that in 2004 “Chile exported $1.4 billion of
      salmon and trout” representing “35% of the world’s supply.” (See: Chile,
      an Innovative Incubator ,
      Business Week, October 3, 2005, available at www.businessweek.com/magazine/content/05_40/b3953200.htm .)





We
      began
      to look at opportunities for our proposed products and services in Chile through
      our Director of Operations in Chile, a former Consul General and former trade
      commission of Chile, in Los Angeles, California, who has worked extensively
      with
      the Chilean trade agencies CORFO and PROCHILE. As with our experience in
      Vietnam, we undertook marketing our products and services through initial
      contacts with government and trade association leaders who want to enhance
      Chile’s reputation as a leader in the seafood export market. We sent a
      delegation to Chile in May 2005 to meet with representatives of the Chilean
      Department of Fisheries, regional government officials, trade association,
      and a
      number of large individual fish processing companies to explain our technology
      and planned commercial products and services. With the assistance of CORFO
      (the
      business development agency for Chile) five major seafood processors from Chile
      sent us their fish samples for testing by the *iPura* TM Seafood
      Processing System. In 2006, GFT was able to validate those results during a
      Science and Business Conference hosted by GFT and the Department of Biological
      Sciences at Idaho State University. GFT was able to demonstrate the system’s
      superior efficacy to leaders from the Chilean seafood industry. In addition
      to
      the validation of microbial reduction, the potential Chilean customers were
      able
      to verify an improved smell, texture, taste and overall appearance of their
      seafood product processed in our facility. From the attendees at the conference,
      GFT selected a large seafood processor in Chile as its first strategic customer.
      Once the first system is operational and GFT is able to demonstrate the
      man-machine interface, GFT intends to secure contracts with several major
      producers in Chile. The same news and information from the first fully
      operational unit in Chile will be used to negotiate contract signings in our
      world wide target markets.





China





In
      2006,
      GFT met with industry and governmental leaders as the invited guests of the
      Chinese Seafood Certification Institute (“CSCI”) and Ms. Min Han, its CEO. The
      CSCI was formerly under the Ministry of Agriculture until it was privatized.
      In
      March 2007, GFT signed a contract with the CEO of the CSCI, for representation
      on the identification of potential customers for the placement of up to 265 *iPura* *TM*  food
      safety service and licensing contracts, over a 5 year period. The minimum
      production requirement on each contract (one for each system) is 15,000 metric
      tons per year. GFT accepted an invitation from the Chinese Aquatic Processing
      and Marketing Association to speak to over 100 major Chinese seafood processors
      in China, in May 2007. This high-level promotion of *iPura* TM in China
      will be an important step in the largest market in the world. China produces
      over 30% of the world’s seafood with thousands of seafood processors and more
      than 500 companies identified by GFT as “prime targets”. The Company is
      positioned for growth opportunities with a supported
      program.





12




United
      States and Other International Markets





Management
      will focus our initial sales and marketing efforts on the seafood industry
      in
      Vietnam, Chile, and China because of the immediate need to address the problems
      of food-borne pathogens in those important international export markets.
      Management believes that by leveraging the contacts that we have made in these
      three countries, we can build the resources and track record to then enter
      markets in which there is greater competition (and the need for greater amounts
      of capital and resources to compete effectively), such as in the United States
      and other countries that we have identified.





Production





Our
      commercialization team is ready to put full-scale production plans in motion.
      The team consists of seasoned experts with high-level engineering and production
      experience at the Jet Propulsion Laboratory, Lawrence Livermore Laboratory,
      and
      Allied Signal. They have had success working together as a team while working
      on
      several major projects, including NASA’s Galileo project. This team evaluated
      our last prototype, and then they designed and then supervised the manufacture
      of our new equipment, including the systems and subsystems. GFT’s system is now
      easy to operate and maintain, and scalable for volume. Upon receipt of adequate
      funding, We plan to sign contracts
      for the manufacturing of the *iPura* *TM* ** systems with
      experienced commercial suppliers. The pressure vessel components will be
      manufactured in Southern California while most of the system components such
      as
      pumps, chillers, etc. are industry standard and can be procured locally in
      the
      country of installation. Installation and integration will be handled by local
      engineering and construction companies that have been recommended by interested
      government agencies. GFT engineers will oversee all installations and GFT
      employees will operate and maintain the systems onsite and will handle all
      the
      quality control aspects of the process.





Although
      our immediate plans include sales in Vietnam, Chile, and China, we also have
      taken steps to promote our *iPura* *TM* ** brand
      name in the United States. We intend to continue to educate processors,
      distributors, restaurants, and other food providers, grocers, governments and
      consumers about the risks of food-borne pathogens in seafood, poultry, and
      other
      meats, and the health and economic benefits that our technologies can produce.
      To that end, we have participated in trade shows in the United States, South
      America, Asia, and Europe. We also have entered into the media-buying agreement
      described below.





There
      is
      not yet in place any agreement or understanding for any particular food
      processor to install, use or pay for any of our technology in Vietnam, Chile,
      China or the United States or any other country, and we cannot assure you that
      any will ever develop in the future.





Media
      Campaign





In
      September 2005, we entered into a three-year contract for media production
      and
      distribution services with Global Media Fund, LLC to produce and distribute
      nationally-syndicated newspaper and/or radio features covering our proprietary
      products and services and their commercial launch into the food safety industry.
      These articles and radio spots, a material part of our proposed marketing plan,
      will be distributed to over 10,000 newspapers and 6,000 radio stations.





13




The
      cost
      of the contract totals $4,500,000, with cash of $50,000 and common stock with
      a
      value of $1,100,000 payable at signing and additional common stock with an
      aggregate value of $1,100,000 paid in three installments in 2006. The commitment
      for the remaining cost of $2,250,000 will be paid in shares valued at 90% of
      market price at the time of issuance (with a floor price of $4.50) in twelve
      quarterly installments, which began in January 2006. The maximum share
      commitment for this entire component of cost at the minimum price is 500,000
      shares. The contract can be cancelled at any time with no obligation to continue
      the quarterly payments.




**Competition**





Currently,
      we face few potential competitors in the field of food safety technology, and
      no
      company known to us has technologies that are directly similar to the
      technologies we propose using. Current products designed to kill pathogens
      and
      keep bacteria from reattaching to food products have had limited success and
      include chlorine wash, ozone treatment and irradiation. Our potential
      competitors include manufacturers of caustic chemicals, poly-films, irradiators
      and ozonators.





Despite
      the current situation, we recognize that bringing our proposed proprietary
      products and services to commercial scale will require significant capital,
      human resources, industry and governmental assistance, and other assets which
      we
      may not be able to obtain in a timely fashion, if at all. The entry of large,
      well-capitalized competitors into the food safety markets, to the extent they
      can produce products and services which are environmentally friendly, economical
      and possess some or all of the other attributes that our technology offers,
      could render our proposed products and services noncompetitive or obsolete.
      Similarly, we may be unable to keep pace with technological developments or
      other market factors. Technological competition in the food processing industry
      by companies, universities, governmental entities and others diversifying into
      the field of food safety is expected to increase and could become intense.
      These
      organizations could have significantly greater research and development
      capabilities than we do and/or greater marketing, manufacturing, financial
      and
      managerial resources. In addition, acquisitions of, or investments in, competing
      food safety technology companies by large corporations could increase these
      competitors’ research, financial, marketing, manufacturing and other resources.
      Potential competitive technologies ultimately may prove to be safer, more
      effective or less costly than any technologies that we are developing currently
      or may develop in the future. Additionally, our competitive position may be
      materially adversely affected if we are unable to develop or successfully
      commercialize our food safety technologies before a competitor can enter the
      market.





**Government
      Regulation**





Our
      business will be subject to federal and state regulations in the United States,
      as well as those of the foreign jurisdictions in which we may endeavor to sell
      our products and services (such as Vietnam, Chile, and China). In addition
      to
      all of the other regulations to which a U.S. business is subject generally
      (including, among other things, regulations governing employment, occupational
      safety, business licensing, import-export activities and taxation), some of
      our
      products, such as the proprietary film we are developing for packaging
      commercial food products, will be subject to review and approval by the FDA.
      Since our suppliers have already received FDA approval for the current
      components of our *iPura* TM Seafood
      Processing System that come into contact with food, such as the liquid wash,
      our *iPura* TM Seafood
      Processing System does not require FDA approval. However, other states or
      foreign jurisdictions in which our processes are used, or where a product
      treated with them is exported, may impose further regulations which could be
      more or less stringent than those imposed by the FDA. We do not believe that
      any
      governmental regulations will materially restrict the installation and use
      of
      our *iPura* TM Systems
      in Vietnam, Chile, or China and we do not believe that any specific regulatory
      bodies will require pre-approval of our systems in those countries.




14




**Intellectual
      Property**





We
      have
      been issued three patents from the U.S. Patent and Trademark Office that relate
      to the *iPura* TM Seafood
      Processing System. We also have filed one additional patent application that
      is
      pending. These patents allow us to own and control the science that has resulted
      in our proposed line of commercial food safety solutions. We filed for patent
      protection in the U.S. and in 15 foreign countries, and in the European Union.
      This will result in patent protection in every major seafood and poultry
      producing and exporting countries. The countries we have selected, along with
      the United States, represent our management’s determination of the prime target
      markets for the food safety technologies we are developing.





We
      have
      filed applications to register the following 7 trade marks with the U.S. Patent
      and Trademark Office as well as the same 15 patent countries, and the European
      Union, through PCT filings:





·
            iPura*TM*


·
            Safer
                Processing...Safer Food*TM*


·
            Revolutionizing
                Food Safety...Through Innovation*TM*


·
            The
                Highest Standard in Food Safety*TM*


·
            Food
                Safety Is Good Business*TM*


·
            Value
                Created and Sealed*TM*


·
            Quality
                Created and Sealed*TM*




The
      current status for these trade marks in the various countries range from
      registered, published, allowed, or pending.




Although
      we have filed an application to register the trade mark slogan “A Higher
      Standard of Food Safety”, on advice of counsel, we have decided to allow this
      application to lapse as it will be replaced in commercial use by “The Highest
      Standard in Food Safety *TM* *”.*




**Employees**





As
      of
      December 31, 2006, we had 25 full time employees.





**ITEM
      2. DESCRIPTION OF PROPERTY**





We
      lease
      our research and development facilities located at 1656 Kraft Road, Pocatello,
      Idaho, which is comprised of approximately 40,000 square feet, from a third
      party for $5,734 per month. The five-year lease expired on July 14, 2006 and
      was
      extended for one year, now expiring on July 14, 2007.





We
      have a
      lease with the City of Hanford, California, for approximately 2,060 square
      feet
      of office facilities located at 113 Court, Hanford, California. The lease
      expires June 30, 2008. The monthly lease rate is $4,369.




15




Through
      May 2006, we rented our engineering and headquarters offices, consisting of
      approximately 1,500 square feet, located at 420 North Main Street, Pocatello,
      Idaho, from K&M Holdings, LLC, at a monthly rental rate of $1,398. The
      rental was terminated in May. See also the disclosure included in Item 12 under
      the heading “Related Transactions.”





Pursuant
      to an oral agreement, we rent a full service office, consisting of approximately
      350 square feet, on a month-to-month basis for our Chief Financial Officer
      and
      Chief Engineer, located at 4100 Newport Place, Suite 620, Newport Beach,
      California, from two individuals, Mike Rubel and Stephen J. Fryer, at a rental
      rate of $2,225 per month. See also the disclosure included in Item 12 under
      the
      heading “Related Transactions.”





**ITEM
      3. LEGAL PROCEEDINGS**





We
      are
      not a party to any material legal proceedings and, to our knowledge, no material
      proceedings are threatened or contemplated against us.





**ITEM
      4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS**





Not
      applicable.





**PART
      II.**





**ITEM
      5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS
      ISSUER PURCHASES OF EQUITY SECURITIES**





There
      is
      currently no public market for our securities and we cannot assure you that
      one
      will develop.





**Number
      of Stockholders**





As
      of
      March 31, 2007, we had 225 stockholders of record. **





**Dividends**





We
      have
      not paid dividends on our common or preferred stock, and we do not anticipate
      paying dividends on our common or preferred stock at any time in the foreseeable
      future. We currently anticipate that we will retain any earnings for use in
      developing our business. Any determination to pay dividends in the future will
      be at the sole discretion of our Board of Directors and will be dependent upon
      our results of operations, financial condition, contractual restrictions,
      restrictions imposed by applicable law and other factors deemed relevant by
      our
      Board of Directors, if any.





**Recent
      Sales of Unregistered Securities**





During
      2006, we issued the following securities which were not registered under the
      Securities Act of 1933, as amended, which we refer to as the Securities Act.
      We
      did not employ any form of general solicitation or advertising in connection
      with the offer and sale of the securities described below. In addition, we
      believe the purchasers of the securities are “accredited investors” for the
      purpose of Rule 501 of the Securities Act. For these reasons, among others,
      the
      offer and sale of the securities listed below were made in reliance on the
      exemption from registration provided by Section 4(2) of the Securities Act,
      Regulation D or Regulation S promulgated by the Securities and Exchange
      Commission, which we refer to as the SEC, under the Securities Act.





16




On
      April
      5, 2006, we commenced a private placement of our securities to accredited
      investors in conformity with Rule 506 of Regulation D of the Securities Act
      of
      1933, as amended. The offering consists of 500,000 units, each consisting of
      two
      shares of Common Stock and one warrant to purchase one share of Common Stock
      for
      a maximum offering price of $4,500,000. In May 2006, we met with a group of
      current stockholders in London, England in conjunction with the Brussels Seafood
      Show. Certain shareholders expressed an interest in adding to their investment
      without solicitation and sales of common stock were made at a price of $4.50
      per
      share and were conducted under the provisions of Regulation S. Subsequently,
      a
      sponsor of other groups of foreign investors expressed an interest in promoting
      investors and a presentation was made twice in Mexico to investors qualified
      under Regulation S of the Securities Act of 1933, as amended, and securities
      were sold at the price of $4.50 per share with a warrant premium which varied
      at
      the time of investment.





A
      total
      of 724,958 shares of common stock and 236,095 warrants to purchase common stock
      were issued in the private placements for total proceeds of $3,111,411, net
      of
      costs and commissions of $150,900. Costs and commissions included $86,130 of
      commissions, the issuance of 22,028 warrants to purchase common shares at $5.00
      per share for a term of two years with a fair value of $27,088, the issuance
      of
      3,000 shares of common stock with a fair value of $13,500, and $22,115 of stock
      issue costs.





A
      total
      of 411,111 shares of common stock valued at $4.50 per share were issued to
      Global Media Fund for a total value of $1,850,000, and recorded as marketing
      expense when the shares were granted. 81,482 shares of common stock were issued
      on January 1 2006, April 1 2006, and July 1 2006, respectively. In addition,
      41,667 shares of common stock were issued on January 1 2006, April 1 2006,
      July
      1 2006, and October 1 2006, respectively.




Accrued
      Directors fees are paid in shares of common stock beginning in June 2006. A
      total of 14,369 shares of common stock were issued during the year valued at
      $64,661.




Shares
      were issued for services to engineering and marketing consultants in August
      and
      November 2006, for a total of 19,695 shares valued at $88,625.





In
      November 2006, Restricted Stock awards were made under the 2006 Stock Incentive
      Plan to 26 employees and consultants. The awards are fully vested but the shares
      are restricted as to transfer until they are registered and an actual trading
      market exists. A total of 375,000 restricted shares were granted to employees
      and 155,000 restricted shares were issued to consultants. The shares were valued
      at $4.50 per share for compensation expense of $1,687,500 and $697,500,
      respectively.




In
      November 2006, 1,360,000 warrants to purchase common stock were issued to
      certain Directors, an officer, consultants and members of the Advisory Board
      as
      compensation. All warrants are exercisable at $5.00 per share for a term of
      5
      years. The fair value of the warrants was determined to be $2,811,120. Four
      Directors received a total of 300,000 warrants, the CFO received 200,000
      warrants and 8 consultants and Advisory Board members received a total of
      860,000 warrants.




17




Warrants
      to purchase 64,000 shares of common stock were issued to two lenders as
      additional consideration for short term loans. The 64,000 warrants are
      exercisable at $4.50 for a period of 2 years after the date of repayment of
      principal. The fair value of the warrants was determined to be $90,048 and
      was
      recorded as additional interest expense. Three loans totaling $290,000 were
      from
      a Director. See also the disclosure included in Item 12 under the heading
“Related Transactions.”





We
      did
      not make any repurchases of our securities during fiscal year 2006.





**ITEM
      6. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF
      OPERATION**





The
      following presentation of our plan of operation has been prepared by management
      and should be read in conjunction with the financial statements and notes
      thereto included in Item 7 of this Annual Report on Form 10-KSB.





**Plan
      of Operation**





From
      the
      commencement of our research and development activities in 2001, we have raised
      substantial equity capital to fund the development of our BEST Seafood
      Processing System. The BEST Seafood Processing System has been re-branded as
      the *iPuraTM
      System* and is
      ready for market introduction as the embodiment of ***The*** **** ***iPura*** **TM** ***Food Safety Program*** ,
      although our other prospective products still require additional research and
      development. To date, we have not generated any revenues and we have incurred
      accumulated losses of $36,127,217 and negative operating cash flows of
      $22,521,220. Research on our first generation prototype was completed in 2004,
      and development and refinement on the commercial system design continued through
      2005, especially adapting the system to processing salmon. Production has
      commenced on one unit of the current generation of the **** ***iPura*** **TM** ****** system,
      including the material handling components necessary for processing salmon,
      which we intend to use for our first commercial installation with a customer
      in
      Chile.





GFT
      began
      promoting the *iPuraTM* label
      through industry trade shows, trade publications, workshops, seminars, invited
      speaking engagements, and meetings sponsored on our behalf by various
      governmental agencies and industry trade associations. Through various media,
      GFT has aroused interest and countered price objections. The Company
      is executing its marketing strategy by promoting the *iPura* TM
brand
      to food processors and industry associations as the world’s first food safety
      label. **** In
      2008,
      we expect to begin marketing the *iPura* TM
brand
      to consumers. The *iPura* TM
label
      is **** anchored
      with a descriptive and lasting slogan: **** “ **The
      Highest Standard in Food SafetyTM”.**




·
              The
                science and marketing connect perfectly with world food safety issues.
 ·
              The*iPura*TM
                  label is a tool which communicates that exceptional food safety
                  measures
                  have been taken to protect consumer health.
 ·
              The
                label will serve to identify food products that have a higher level
                of
                safety and quality.
 ·
              GFT
                  has filed trade marks for its brand and
                  slogan in every major food producing and food consuming nation.
 ·
              Trade
                marks are expected to be listed on the primary registry at the USPTO
                and
                internationally, as a global trademark search by counsel found no prior
                marks or obstructions.


The *iPuraTM* Food Safety
      Program is the constitution of the *iPuraTM* food
      safety brand, which is anticipated to include:




18




·
            An
                organic pathogenic and spoilage microorganism “kill step” prior to
                packaging.


·
            Intelligent
                packaging of product.


·
            Product
                traceability of handling and
                temperature.


·
            An
                independent third party certification of
                standards.


·
            A
                unique product insurance that follows the*iPura*TM
                labeled product throughout the distribution
                chain.


·
            A
                distribution chain and consumer “pull through” marketing program promoting*iPuraTM*as
                “The Highest Standard in Food SafetyTM.”




The *iPuraTM* Food
      Safety Program will help the food chain grow their margins by increasing the
      quality, safety, and economic value of their products by reducing or eliminating
      the waste and liability associated with the distribution of contaminated food,
      and by increasing shelf life.


We
      will
      aggressively promote the *iPura* TM brand
      utilizing an extensive media and educational campaign focusing on the health
      and
      economic benefits of *iPura* TM **** treated
      products and the increased profit margins available to the entire distribution
      chain. GFT has entered into a media-buying agreement, financed with common
      stock, with its strategic partner Global Media Fund LLC. The agenda includes
      regular distribution of feature articles in the U.S. to over 10,000 newspapers,
      news, wire services, and radio spots to more than 6,000 radio stations, over
      a
      24-month period. ** The
      estimated retail value of such media spots is $54 million. GFT’s pull-through
      marketing campaign will begin with “Ask your grocer for *iPuraTM* ”.
      Food
      safety is public health news and the *iPuraTM* food
      safety brand is expected to be publicized as news in media across the
      globe .





Initially,
      we have targeted three major seafood markets: Chile, Vietnam, and China. Each
      is
      among the world’s top 10 seafood exporting markets and potential customers as
      well as certain government agencies in each country have expressed significant
      interest in installing *iPura* TM
      systems. With **** the
      official sponsorship of government and industry associations, GFT has presented
      to hundreds of processors in these countries, and will be ready to fill any
      orders that result from these presentations with large volume processors as
      soon
      as growth capital is secured. GFT anticipates expanding into other large seafood
      producing countries such as Norway, Thailand, India, Canada, and the United
      States in phase two. Seafood will be followed by poultry and pork, with plans
      to
      develop a system for meat and other food products marketed under the *iPura* TM
label.





GFT
      has
      established itself in three of the world’s largest seafood exporting countries:
      Vietnam, Chile, and China. GFT was successful in executing a top down strategy
      that began at the respective country’s governmental level of: The Ministry of
      Agriculture / Department of Agriculture, these meetings resulted in
      introductions to the Ministry of Fisheries / Department of Fisheries, which
      led
      to introductions with governmental food regulatory agencies and the
      recommendations by these public entities to the Seafood Processing Associations.
      All were briefed on the *iPura* TM Food
      Safety Program, the economic value proposition was explained, and the
      cooperation and support of these groups was assured.





During
      the next 12 months, we intend to market our products aggressively and create
      awareness of our *iPuraTM* brand,
      the *iPuraTM* Seafood
      Processing System and other food processing technologies.




We
      also
      intend to participate in the following industry conferences:


·
            Institute
                of Food Technologists Expo


·
            Food
                Marketing Institute Annual Business
                Conference


·
            Food
                Safety Conference (International Association for Food
                Protection)


·
            National
                Food Policy Conference




19




As
      of
      December 31, 2006, we had no debt other than trade indebtedness in the ordinary
      course of business and short tem loans of $540,000 from a Director and a
      shareholder. Based on our cash balance as of December 31, 2006, we estimate
      that
      we will need to raise additional capital in the amount of $7 million to cover
      our operating costs for fiscal year 2007 and to build two units of ***The
      iPura*** **TM**  ***System*** .
      If
      additional units are required to meet customer demand, we will need to raise
      additional funds. Any additional capital we raise may involve issuing additional
      shares of common stock or other equity securities, or obtaining debt financing.
      However, at this point, we have not specifically identified the type or sources
      of this funding. We are aggressively exploring commercial and joint venture
      financing opportunities and relationships with potential processor/customers
      with sale and lease-back arrangements.





We
      plan
      to continue to pursue developing and adapting our ***iPura*** **TM**  ***System*** to
      poultry processing and developing a proprietary anti-microbial solution to
      be
      used in conjunction with the ***iPura*** **TM**  ***System*** .





We
      believe that we have adequate plant capabilities and capacity and sufficient
      qualified personnel to achieve our planned operations over the next 12 months,
      although we do anticipate an investment in additional research and laboratory
      facilities to meet any accelerated or new product support requirements. In
      addition, an increase in the number of units of the ***iPura*** **TM**  ***System*** produced
      and installed beyond the next two units will likely require outsourcing of
      fabrication, integration and installation of the units, which will be supervised
      by our existing personnel. We will add non-technical support personnel as
      required to manage the increase in administrative activity.





**Revenues**





Since
      our
      inception, we have not had any revenues from operations and have operated mainly
      as a research and development company.





**Liquidity
      and Capital Resources**





The
      independent auditors report on our financial statements for the year ended
      December 31, 2006 included in this Form 10-KSB states that our difficulty in
      generating sufficient cash flow to meet our obligations and sustain operations
      raise substantial doubts about our ability to continue as a going
      concern.





Historically,
      our sole source of cash and for Tech has been the sale of equity to investors.
      Although we expect to generate revenue from installing and operating the initial ***iPura*** **TM**  ***Systems*** within
      the next 12 months, any funds generated from installing and operating our ***iPura*** **TM**  ***Systems*** during
      fiscal year 2007 are not expected to cover our operating expenses. In addition
      to cash in hand as of December 31, 2006, we believe that we will need
      approximately $7 million to cover operating expenses during the next 12 months,
      including costs for constructing 2 ***iPura*** **TM**  ***Systems.*** However,
      the amount of capital required will vary depending on a variety of factors,
      many
      of which are beyond our control. We believe that commercial financing is
      available to construct and install our ***iPura*** **TM**  ***System*** ***s*** ,
      but
      have not identified any sources of financing. We cannot assure you that funds
      from our future operations or funds provided by our current financing
      activities will meet the requirements of our operations, and in that event,
      we
      will continue to seek additional sources of financing to maintain
      liquidity.




20




We
      are
      actively pursuing all potential financing options as we look to secure
      additional funds both to stabilize and to grow our business operations. Our
      management will review any financing options at their disposal, and will judge
      each potential source of funds on its individual merits. We cannot assure you
      that we will be able to secure additional funds from debt or equity financing,
      as and when we need to, or if we can, that the terms of this financing will
      be
      favorable to us or our stockholders.





**Critical
      Accounting Policies**





**Use
      of Estimates** - The
      preparation of the financial statements in conformity with generally accepted
      accounting principles requires management to make estimates and assumptions
      that
      affect the reported amounts of assets and liabilities and disclosure of
      contingent assets and liabilities at the date of the financial statements and
      the reported amounts of revenues and expenses during the reporting period.
      Actual results could differ from those estimates.





***iPura***TM**(formerly the** “ **BEST”)
      Seafood Processing System -** The Seafood
      Processing System, the physical embodiment of our food processing technology,
      was completed, tested and available for commercial application (in a previous
      generation design) in 2005 and was capitalized on at a construction cost of
      $3,157,111. Design, testing and support costs involved were expensed. In 2005,
      mechanical and software upgrades were implemented to optimize the mechanical
      process. The improvements were so substantial that this prior model was deemed
      inappropriate for installation in a customer’s processing facility. As a result,
      the Company recorded an asset impairment charge of $3,157,111 for the year
      ended
      December 31, 2005. A
      new
      model is being constructed with increased capacity and simplified operating
      and
      maintenance parameters. Design, testing and support costs incurred on this
      model
      through December 31, 2006 have been included in research and development costs.




**Long-lived
      Assets** - We
      account for the impairment and disposition of long-lived assets in accordance
      with Statement of Financial Accounting Standards No. 144 (“SFAS 144”),
“Accounting for the Impairment or Disposal of Long-Lived Assets.” In accordance
      with SFAS No. 144, the long lived assets are to be held and reviewed for events
      or changes on circumstances that indicate that their carrying value may not
      be
      recoverable. We periodically review the carrying value of long lived assets
      to
      determine whether or not an impairment to such value has incurred.
      The ***iPura*TM** Seafood
      Processing System asset was physically reconfigured for operational efficiency
      in 2005. The total capitalized cost of the ***iPura*TM** Seafood
      Processing System was considered impaired in 2005 and the Company recorded
      an
      asset impairment charge of $3,157,111 for the year ended December 31, 2005.
      No
      other impairments were recorded during the period from June 25, 2001 (the date
      of Tech’s inception) through December 31, 2006.




**Loss
      of per share -**Loss per
      share was computed using the weighted average number of shares of common stock
      equivalents outstanding during the period.  Stock purchase warrants were
      not in the computation as their effect would be antidilutive.




**Stock-based
        compensation** -
        Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based
        Compensation" ("SFAS No. 123"), established a fair value method of accounting
        for stock-based compensation plans and for transactions in which an entity
        acquires goods or services from non-employees in exchange for equity
        instruments. Through December 31, 2005, the Company accounted for stock-based
        compensation utilizing the fair value method of accounting prescribed in
        SFAS
        No. 123.
 
 In
        December 2004, the Financial Accounting Standards Board (“FASB”) issued
        Statement of Financial Accounting Standards 123R, “Share-Based Payment” (“SFAS
        123R”). This statement requires that the cost resulting from all share-based
        payment transactions be recognized in the financial statements. This statement
        establishes fair value as the measurement objective in accounting for
        share-based payment arrangements and requires all entities to apply a fair-value
        based measurement method in accounting for share-based payment transactions
        with
        employees except for equity instruments held by employee share ownership
        plans.
        Effective January 1, 2006, the Company adopted the fair value recognition
        provisions of SFAS 123R, using the modified prospective method. Under this
        method, the provisions of SFAS 123R apply to all awards granted or modified
        after the date of adoption and all previously granted awards not yet vested
        as
        of the date of adoption. The initial adoption of this standard had no effect
        on
        the Company’s financial statements.
 
 Shares,
        warrants and options issued to non-employees for services are accounted for
        in
        accordance with SFAS 123(R) and Emerging Issues Task Force Issue No. 96-18
        (“EITF 96-18”), “Accounting for Equity Instruments that are Issued to Other Than
        Employees for Acquiring or In Conjunction with Selling Goods or Services”
whereby the fair value of such option and warrant grants is determined using
        the
        Black-Scholes Model at the earlier of the date at which the non-employee’s
        performance is completed or a performance commitment is reached.





**Recent
      accounting pronouncements** -
      References to the “FASB,” “SFAS” and “SAB” herein refer to the “Financial
      Accounting Standards Board,” “Statement of Financial Accounting Standards” and
      the “SEC Staff Accounting Bulletin,” respectively.




21





In
      September 2006, the FASB issued SFAS No. 157, *Fair
      Value Measurements* .
      SFAS
      No. 157 defines fair value, establishes a framework for measuring fair value
      in
      U.S. generally accepted accounting principles and expands disclosures about
      fair
      value measurements. SFAS No. 157 is effective for fiscal years beginning after
      November 15, 2006 and interim periods within those fiscal years. The Company
      is
      currently evaluating the effect that the adoption of SFAS No. 157 will have
      on
      its financial position and results of operations.





In
      June
      2006, the FASB issued FASB Interpretation No. 48, *Accounting
      for Uncertainty in Income Taxes, an interpretation of FASB Statement
      No.109* (FIN
      48). FIN 48 provides criteria for the recognition, measurement, presentation
      and
      disclosure of uncertain tax positions that has an effect on a company's
      financial statements accounted for in accordance with SFAS No. 109, *Accounting
      for Income Taxes* ,
      as a
      result of positions taken or expected to be taken in a company's tax return.
      A
      tax benefit from an uncertain position may be recognized only if it is "more
      likely than not" that the position is sustainable based on its technical merits.
      The provisions of FIN 48 are effective for fiscal years beginning after December
      15, 2006. The Company is currently evaluating the potential effect that the
      adoption of FIN 48 will have on the Company's financial statement presentation
      and disclosures.





In
      February 2007, the FASB issued SFAS 159 *The
      Fair Value Option for Financial Assets and Financial
      Liabilities* .
      SFAS
      159 permits the measurement of certain financial instruments at fair value.
      Entities may choose to measure eligible items at fair value at specified
      election dates, reporting unrealized gains and losses on such items at each
      subsequent reporting period. SFAS 159 is effective for fiscal years beginning
      after November 15, 2007. The Company has not evaluated the potential impact
      of
      the fair value option.





**Off-Balance
      Sheet Arrangements**





We
      do not
      have any off-balance sheet arrangements.





**Cautionary
      Information Regarding “Forward-Looking Statements”**




This
      Annual Report on Form 10-KSB includes certain statements about us that may
      be
      deemed to be “forward-looking statements” within the meaning of the Private
      Securities Litigation Reform Act of 1995. These forward-looking statements
      relate to matters such as, among other things, product development and
      acceptance, our anticipated financial performance, business prospects,
      technological developments, new products, future distribution or license rights,
      international expansion, possible strategic alternatives, new business concepts,
      capital expenditures, consumer trends and similar matters.




Forward-looking
      statements necessarily involve known and unknown risks, uncertainties and other
      factors that may cause our actual results, levels of activity, performance
      or
      achievements to be materially different from any future results, levels of
      activity, performance or achievement expressed or implied by these
      forward-looking statements. In some cases, you can identify forward-looking
      statements by terminology such as “may,” “will,” “should,” “could,” “intend,”
“expect,” “anticipate,” “assume,” “hope,” “plan,” “believe,” “seek,” “estimate,”
“predict,” “approximate,” “potential,” “continue” or the negative of these
      terms. Statements including these words and variations of these words, and
      other
      similar expressions, are forward-looking statements. Although we believe that
      the expectations reflected in our forward-looking statements are reasonable
      based upon our knowledge of our business, we cannot absolutely predict or
      guarantee any future results, levels of activity, performance or achievements.
      Moreover, neither we nor any other person assumes responsibility for the
      accuracy and completeness of these statements.




22




We
      note
      that a variety of factors could cause our actual results and future experiences
      to differ materially from the anticipated results or other expectations
      expressed in these forward-looking statements. The risks and uncertainties
      that
      may affect our operations, performance, development and results include, but
      are
      not limited to, the following:




·
            whether
                we will be able obtain additional financing to continue or expand
                operations and the terms on which we will be able to obtain this
                financing, if at all;




·
            whether
                our initial system installation will perform as expected in commercial
                applications;




·
            our
                ability to obtain one or more third-party manufacturers for our system
                components and other products;




·
            the
                cost at which we will be able to have our system components and other
                products manufactured, if at all, and the time it will take to have
                our
                system components and other products
                manufactured;




·
            our
                ability to obtain all required components for our systems on a timely
                basis and at the prices we
                anticipate;




·
            whether
                our systems and products are viewed as providing the benefits we
                claim and
                whether these benefits are marketable by any customers we may seek
                to
                obtain;




·
            our
                ability to enter into service contracts with food processors, the
                time it
                takes for us to enter into any of these contracts and the prices
                we are
                able to charge these customers;




·
            our
                systems and products performing in the manner we expect in customer
                applications and without any material
                modifications;




·
            our
                ability to obtain all necessary governmental approvals for our systems
                and
                other products;




·
            whether
                the introduction of the*iPura*TMbrand will succeed in creating preferences with the consuming
                public




·
            whether
                we will be able to apply our technology to products other than fish
                or use
                our technology in any other fields;




·
            the
                pace at which we will utilize our existing working capital and whether
                our
                existing working capital will be sufficient for us to continue to
                develop
                our systems and products to the extent we
                anticipate;




·
            our
                ability to protect our intellectual property and obtain and maintain
                patents and other protections for our intellectual
                property.




·
            the
                possible impact from competing products or
                technologies;




23




·
            possible
                reductions in consumer demand for fish and poultry, including as
                a result
                of any outbreaks of disease, including avian flu, or negative reports
                regarding the health benefits of fish and poultry;




·
            our
                ability to hire, train and retain a consistent supply of reliable
                and
                effective employees, both domestically and in any countries in which
                we
                might be able to install one of our processing
                system;




·
            the
                risk of non-payment by, and/or insolvency or bankruptcy of, our customers
                and others with indebtedness to us;




·
            the
                costs of complying with applicable labor laws and requirements, including,
                without limitation, with respect to health
                care;




·
            economic
                and political instability in foreign countries or restrictive actions
                by
                the governments of foreign countries in which we may seek to conduct
                our
                business or obtain customers;




·
            changes
                in tax laws or the laws and regulations governing food processing
                and on
                income generated outside the United
                States;




·
            general
                economic, business and social conditions in the United States and
                in
                foreign countries where we may conduct our
                business;




·
            fluctuation
                in interest rates, insurance, shipping, energy, fuel and other business
                utilities in any countries in which we conduct
                business;




·
            the
                stability of and fluctuations in currencies in which we conduct
                business;




·
            threats
                or acts of terrorism or war; strikes, work stoppages or slow downs
                by
                labor organizations in any countries in which we conduct business;
                and




·
            natural
                or man-made disasters that could adversely impact the industries
                or
                countries in which we conduct
                business.




Forward-looking
      statements made by us are based upon a knowledge of our business and the
      environment in which we operate. However, because of the factors listed above,
      actual results may differ from those in the forward-looking statements.
      Consequently, these cautionary statements qualify all of the forward-looking
      statements made in this report. We cannot assure you that the results or
      developments we anticipate will be realized or, even if substantially realized,
      that those results or developments will result in the expected consequences
      or
      otherwise affect us, our business or operations in the ways expected. You are
      cautioned not to place undue reliance on these forward-looking statements,
      which
      speak only as of their dates, or on any subsequent written and oral
      forward-looking statements attributable to us or persons acting on our behalf,
      all of which are expressly qualified in their entirety by these cautionary
      statements. Except to the extent required by law, we do not undertake any
      obligation to release or publish any revisions to our forward-looking
      statements, including without limitation those contained in this report, to
      reflect events or circumstances after the date of this report or to reflect
      the
      occurrence of unanticipated events.




24




**ITEM
      7. FINANCIAL STATEMENTS**





The
      information required by this item is submitted as a separate section of this
      report immediately following the signature page.




**ITEM
      8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
      DISCLOSURE**





There
      were no changes in or disagreements with accountants on accounting and financial
      disclosure in our two most recent fiscal years.





**ITEM
      8A. CONTROLS AND PROCEDURES**





We
      maintain disclosure controls and procedures (as defined in Rule 13a-15(e) and
      Rule 15d-15(e) under the Securities Exchange Act of 1934, as amended, which
      we
      refer to as the Exchange Act) that are designed to ensure that information
      required to be disclosed in our periodic reports filed under the Exchange Act
      is
      recorded, processed, summarized and reported within the time periods specified
      in the rules and forms of the SEC, and that this information is accumulated
      and
      communicated to our management, including our principal executive/financial
      officer, to allow timely decisions regarding required disclosure.





Our
      management, with the participation and supervision of our Chief Executive
      Officer and Chief Financial Officer, evaluated the effectiveness of our
      disclosure controls and procedures as of the end of the period covered by this
      Annual Report on Form 10-KSB. In designing and evaluating the disclosure
      controls and procedures, management recognized that any controls and procedures,
      no matter how well designed and operated, can provide only reasonable assurance
      of achieving the desired control objectives. In addition, the design of
      disclosure controls and procedures must reflect the fact that there are resource
      constraints and that management is required to apply its judgment in evaluating
      the benefits of possible controls and procedures relative to their costs.




Based
      on
      that evaluation, our Chief Executive Officer and Chief Financial Officer
      concluded that our disclosure controls and procedures are effective to provide
      reasonable assurance that information we are required to disclose in reports
      that we file or submit under the Exchange Act is recorded, processed, summarized
      and reported within the time periods specified in SEC rules and forms, and
      that
      this information is accumulated and communicated to our management, including
      our Chief Executive Officer and Chief Financial Officer, as appropriate, to
      allow timely decisions regarding required disclosure.





Because
      of the inherent limitations in all control systems, no evaluation of controls
      can provide absolute assurance that all control issues and instances of fraud,
      if any, will be or have been detected. These inherent limitations include the
      realities that judgments in decision-making can be faulty, and that breakdowns
      can occur because of simple error or mistake. Additionally, controls can be
      circumvented by the individual acts of some persons, by collusion of two or
      more
      people and/or by management override of the control. The design of any system
      of
      controls also is based in part upon certain assumptions about the likelihood
      of
      future events, and there can be no assurance that any design will succeed in
      achieving its stated goals under all potential future conditions. Over time,
      controls may become inadequate because of changes in conditions and/or the
      degree of compliance with the policies and procedures may deteriorate. Because
      of the inherent limitations in a cost-effective internal control system,
      misstatements due to error or fraud may occur and not be detected. To date,
      we
      have not had any revenue and, as such, our controls have not been evaluated
      based on actual receipt of revenues.




25




There
      were no changes in our internal controls that occurred during the last fiscal
      quarter of 2006 that have materially affected, or are reasonably likely to
      materially affect, our internal control over financial reporting.





**ITEM
      8B OTHER INFORMATION**





**Adoption
      of 2006 Stock Incentive Plan**




In
      November 2006, our Board of Directors adopted the
      2006 Stock Incentive Plan, which allows grants of stock, stock options or stock
      appreciation rights to be made to employees, consultants, officer and directors,
      as determined from time to time by the Board. 3 million shares of common stock
      are reserved for such issuances under the Stock Incentive Plan. A copy of the
      Stock Incentive Plan is attached hereto as Exhibit 10.9 and is incorporated
      by
      reference herein.




**Resignation
      of Officer**




On
      August 12, 2006, Mark Terry resigned as our Chief
      Technology Officer.




**PART
      III.**





**ITEM
      9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, CONTROL PERSONS AND CORPORATE
      GOVERNANCE; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE
      ACT**





The
      names, ages and positions of our directors and executive officers, as of March
      31, 2007, are set forth below. Biographical information for each of these
      persons also is presented below:








Name
            Age
            Position
                HeldJames
                Bouskos
            58
            Chairman
                of BoardKeith
                Meeks
            46
            President
                and Chief Executive OfficerMarshall
                F. Sparks
            66
            Chief
                Financial Officer, Secretary and TreasurerMark
                Terry
            46
            DirectorStephen
                J. Fryer
            69
            DirectorGary
                L. Nielsen
            64
            DirectorArthur
                C. Agnos
            68
            Director




There
      are
      no family relationships between any of our directors and/or any executive
      officers.





**James
      Bouskos**  **-
      Chairman of the Board**





Mr.
      James
      Bouskos currently serves as the Chairman of our Board of Directors, a position
      he was appointed to in August 2005 in connection with the Transaction. He joined
      Tech in December 2004, when he was appointed the Chairman of Tech’s Board of
      Directors. From January 2000 to September 2004, Mr. Bouskos operated Bouskos
      Consulting, a business consulting firm that served real estate developers,
      restaurants, retailers, corporations, including high technology and
      biotechnology companies, and other businesses. In 1988, Mr. Bouskos was
      appointed by the Mayor of San Francisco to the San Francisco Port Commission,
      which oversees the maritime, commercial and public operations of San Francisco’s
      waterfront. He served as both the Vice President and President of the Port
      Commission until his retirement from the Port Commission in 1992. Mr. Bouskos
      attended Foothill College and California State University Fresno, where he
      majored in English Literature.





26




**Keith
      Meeks - President and Chief Executive Officer**





Mr.
      Keith
      Meeks currently serves as our President and Chief Executive Officer, positions
      he was appointed to in August 2005 in connection with the Transaction. He was
      also a co-founder of Tech. Previous to this, he had served as the Vice President
      of Corporate Development of Tech where his responsibilities included working
      with Tech’s consultants and advisors to select beta test site partners and
      primary target markets. He has been a director and an officer of Tech since
      August 2001. From August 2000 to July 2001, he was the Director of Business
      Development of Global Food Technologies, LLC, the predecessor of Tech. Mr.
      Meeks
      started his professional career in the financial services industry in 1980
      with
      New York Life, and later became a Certified Financial Planner and Investment
      Advisor, receiving this designation from the College of Financial Planners
      in
      Denver, Colorado.





On
      December 24, 2002, the California Corporations Commissioner issued Cease and
      Refrain Orders pursuant to California Corporations Code 25532, enjoining Mr.
      Meeks, among approximately 150 financial advisors, from (1) offering for sale
      any investment agreements in the form of promissory notes, real estate
      investment agreements and/or investment contract issued by TLC Investment &
Trade Co., TLC America, Inc., dba Brea Development Company, TLC Brokerage,
      Inc.,
      dba TLC Marketing, TLC Development Inc. and/or TLC Real Properties RLLP-1,
      or
      any other security not qualified or exempt under California’s securities laws;
      (2) effecting any transaction involving a security without first being licensed
      in California as a broker-dealer and (3) offering, selling, buying or offering
      to buy any security by means of any written or oral communication which includes
      an untrue statement of material fact.





Mr.
      Meeks
      has over 21 years of involvement in the financial services industry, and during
      this time, has not been sued based on the services he has provided to his
      clients or for any other reason or matter. No action has been taken nor charges
      filed against him following his receipt of the Cease and Refrain Orders from
      the
      California Corporations Commissioner.








**Marshall
      F. Sparks**  **-
      Chief Financial Officer and Secretary**





Mr.
      Marshall F. Sparks currently serves as our Chief Financial Officer and
      Secretary, positions he was appointed to in August 2005 in connection with
      the
      Transaction. Mr. Sparks is also the Chief Financial Officer of Tech. He has
      been
      a consultant on corporate financial matters and capital formation with Hampton
      Financial and has operated Hampton Financial since September 1990. Mr. Sparks
      is
      a financial executive with extensive experience in developing technology
      businesses. He has founded and capitalized numerous companies, taking them
      from
      the developmental to the commercial stage. He has facilitated and conducted
      five
      initial public offerings, five joint venture transactions and 15 merger and
      acquisition transactions. Mr. Sparks is a California Certified Public Accountant
      and earned his undergraduate degree and MBA from the University of California,
      Berkeley.





**Mark
      Terry**  **-
      Director**





Mr.
      Mark
      Terry currently serves as one of our Directors and was the Chief Technology
      Officer until his resignation in August 2006. He was appointed to both positions
      in August 2005 in connection with the Transaction. He is the original co-founder
      of Tech and the inventor of the BEST Seafood Processing System proprietary
      technology and food processing system. From August 2001 to August 2005, Mr.
      Terry served as the Chief Technology Officer, Chief Operating Officer and
      Director of Tech. From August 2000 to July 2001, he was a managing member of
      Global Food Technologies, LLC, the predecessor of Tech. He is the inventor
      on
      all of our patents, including the patent that is the basis for the technology
      in
      the ***iPura*** **TM**  ***System.*** Mr.
      Terry attended Montana State University, San Jose State University and LaSalle
      University, where he studied mechanical engineering, mathematical science,
      statistical analysis and chemical engineering.





27





**Stephen
      J. Fryer - Director**





Mr.
      Stephen J. Fryer currently serves as one of our Directors, a position he was
      appointed to in August 2005 in connection with the Transaction. Mr. Fryer also
      serves as a Director on Tech’s Board of Directors and has served in this
      position since December 2003 and briefly served as Tech’s interim Chief
      Executive Officer. He has been a managing partner of SC Capital Partners, LLC,
      an investment banking and financial advisory company, since July 2005. From
      January 2003 to July 2005, he was a consultant to Grant Bettingen, Inc., an
      investment banking firm in Newport Beach, California. From April 2001 to
      December 2002, he headed Fryer and Associates, an investment banking firm.
      From
      December 1998 to April 2001, he was the Chief Executive Officer and Chairman
      of
      Pen Interconnect, a company formerly involved in contract manufacturing. He
      was
      a Managing Director of Ventana International, Inc., which is a venture capital
      and boutique investment-banking firm with over $150 million in capital. He
      is a
      graduate of the University of Southern California with a degree in Mechanical
      Engineering and a minor in Economics.





**Gary
      L. Nielsen - Director**





Mr.
      Gary
      L. Nielsen currently serves as one of our Directors, a position he was appointed
      to in August 2005 in connection with the Transaction. He also serves as a
      Director on Tech’s Board of Directors, a position he has held since December
      2004. Mr. Nielsen is a Certified Public Accountant and a member of the American
      Institute of Certified Public Accountants and Arizona Society of Certified
      Public Accountants. Since September 2005, Mr. Nielsen has served as the
      President of National Health Benefits Corp. He served as the principal of Terra
      Capital, Inc. from September 2003 through September 2005. From December 2000
      through September 2003, Mr. Nielsen was the Chief Financial Officer of
      Environmental Support Solutions, Inc. Previously, he was a manager in the
      Phoenix office of KPMG Peat Marwick and has served in an executive capacity
      as
      Senior VP of Finance or CFO for three NYSE companies, one AMEX company and
      a
      NASDAQ company. These companies include Granite Golf Corporation, Best Western
      International, Giant Industries, Inc., American Continental Corporation and
      Del
      Webb Corporation. Mr. Nielsen is a graduate of the Arizona State University
      where he received a Bachelor of Science in Accounting.




**Arthur
      C. Agnos - Director**





Mr.
      Arthur C. Agnos currently serves as one of our Directors, a position he was
      appointed to in August 2005 in connection with the Transaction. Mr. Agnos also
      serves on the Board of Directors of Countrywide Treasury Bank, a subsidiary
      of
      Countrywide Credit Industries headquartered in Calabasas, California, a position
      he has held since June 2001. From February 2001 to September 2005, Mr. Agnos
      served as a consultant for E.J. De La Rosa & Co., Inc., an investment
      banking firm. Mr. Agnos has extensive experience in executive roles and
      decision-making at the federal, state and local government levels as Mayor
      of
      San Francisco, as an elected member of the California State Legislature and
      as a
      senior Presidential appointee in the U.S. Department of Housing and Urban
      Development. Mr. Agnos began his elective career in the California legislature,
      where he served as Chair of the Joint Legislative Audit Committee. He has served
      as the Chair of the Assembly Ways and Means Health and Welfare Subcommittee
      of
      the California legislature. From June 1993 to January 2001, he was the Regional
      Director of the U.S. Department of Housing and Urban Development in the
      Pacific-Hawaii region. Mr. Agnos received a Bachelor of Arts from Bates College
      and a Master in Social Work from Florida State University. ****




28




**Term
      of Office**





Our
      directors are elected to hold office until the next annual general meeting
      of
      our stockholders or until removed from office in accordance with our bylaws.
      Our
      officers are appointed by our Board of Directors and hold office until removed
      by our Board of Directors.





**Meetings
      of the Board of Directors and Information Regarding
      Committees**





During
      our fiscal year ended December 31, 2006, our Board of Directors held three
      meetings.





Our
      Board
      of Directors has established three committees: an Executive Committee, an Audit
      Committee and a Compensation Committee. As of March 31, 2007, these committees
      were comprised as follows:





Executive
                Committee:
            James
                Bouskos (Committee Chairman)
              Mark
                Terry
              Stephen
                J. FryerAudit
                Committee:
            Gary
                L. Nielsen (Committee Chairman),
              (Audit
                Committee Financial Expert)
              Stephen
                J. Fryer
              Arthur
                C. AgnosCompensation
                Committee:
            Arthur
                C. Agnos (Committee Chairman)
              Gary
                L. Nielsen
              Stephen
                J. Fryer





As
      of
      March 31, 2007, Stephen J. Fryer, Gary L. Nielsen and Arthur C. Agnos are
      independent directors. The Board of Directors has determined that Mr. Nielsen
      is
      an “audit committee financial expert” within the meaning of Item 401(e)(2) of
      Regulation S-B.





**Section
      16(a) Beneficial Ownership reporting Compliance**


Section
        16(a) of the Exchange Act and the rules thereunder require our executive
        officers, directors and greater than 10% stockholders to file reports of
        beneficial ownership of our common stock on Form 3 and changes in
        beneficial ownership on Forms 4 and 5 with the SEC.
 
 We
        believe that during the fiscal year ended December 31, 2006, our executive
        officers, directors or beneficial owners of more than 10% of our common stock
        complied with the Section 16(a) filing requirements, with the following
        exceptions: Each of Messrs. Terry, Bouskos and Nielsen failed to file Form
        3s;
        each of Messrs. Agnos, Fryer and Nielsen failed to file Form 4s reporting
        two
        separate stock grants and one warrant issuance to each of them; each of Messrs.
        Bouskos and Sparks failed to file a Form 4 reporting a warrant issuance to
        each
        of them. The Company anticipates that filings for each of the transactions
        above
        will be filed shortly after the filing of this report on Form
        10-KSB.




29


**Code
      of Ethics**





We
      have
      adopted a Code of Ethics that applies to our directors, officers and employees,
      including our principal executive, financial and accounting officers. A copy
      of
      the Code of Ethics is attached as an exhibit to our Annual Report on Form 10-KSB
      and is also available on our website at www.globalfoodtech.com. We intend to
      disclose on our website amendments to, or waivers from, any provision of our
      Code of Ethics which applies to our Chief Executive Officer, Chief Financial
      Officer, principal accounting officer and persons performing similar functions
      and amendments to, or waivers from, any provision which relates to any element
      of our Code of Ethics described in Item 406(b) of Regulation S-B.





**ITEM
      10. EXECUTIVE COMPENSATION**





**Executive
      Compensation**





We
      have
      not adopted any retirement, pension, profit sharing or insurance programs or
      other similar programs for the benefit of our employees other than the 2006
      Stock Incentive Plan for Officers, Directors, employees and consultants





The
      following table sets forth compensation information for services rendered by
      our
      Chief Executive Officer in fiscal 2006 and our named executive officers.




30




**SUMMARY
                COMPENSATION TABLE**Name
                and Principal
              Position
            
            Year
            
            Salary
              ($)
            
            Option
              Awards
              ($)
                (1)
            
            All
              Other
              Compensation
              ($)
                (2)
            
            Total
              ($)James
                Bouskos
            
            
            2006
            
            
            76,116
            
            
            103,350
            
            
            10,500
            
            
            189,966Chairman
                of theBoardKeith
                Meeks
            
            
            2006
            
            
            150,555
            
            
            --
            
            
            9,295
            
            
            159,850President
                andChief
                ExecutiveMarshall
                F Sparks
            
            
            2006
            
            
            106,500
            
            
            413,400
            
            
            --
            
            
            519,900Chief
                FinancialOfficerMark
                Terry
            
            
            2006
            
            
            150,000
            
            
            --
            
            
            6,853
            
            
            156,853Chief
                TechnologyOfficer





(1)
            Option
                awards took the form of fully vested Warrants to purchase common
                stock at
                an exercise price of $5.00 per share. The warrants were granted in
                November 2006 and have a term of 5 years. The amount shown is the
                imputed
                value of the warrant, calculated using the Black-Scholes method,
                required
                to be recognized in the financial
                statements. (2)
            Other
                Annual Compensation represents payments made on leased vehicles provided
                to these three officers.




**Stock
      Option Grants**





We
      adopted our 2006 Stock Incentive Plan in November 2006. Directors and executive
      officers are eligible to receive awards under the plan, however no awards under
      the Stock Incentive Plan were granted to persons serving as our Directors,
      Chief
      Executive Officer or our named executive officers during the fiscal year ended
      December 31, 2006.




31




**Outstanding
                Equity Awards at Fiscal Year-End**Name
            Number
                of Securities Underlying Unexercised Options (#) Exercisable
              (1)
            Number
                of Securities Underlying Unexercised Options (#)
                Unexercisable
            Equity
                Incentive Plan Awards: Number of Securities Underlying Unexercised
                Unearned Options
            Option
                Exercise Price ($)
            Option
                Expiration DateJames
                Bouskos
            --
            50,000
            --
            $5.00
            Nov.
                2011Keith
                Meeks
            --
            --
            --Marshall
                F. Sparks
            --
            200,000
            --
            $5.00
            Nov.
                2011Mark
                Terry
            --
            --
            --


(1)
      The
      equity awards were in the form of warrants. The warrants are not exercisable
      until the shares are registered or our common stock is listed on a stock
      exchange or other market selected by the Company. No stock grants were awarded
      to our named executive officers during 2006 and no stock awards were outstanding
      as of fiscal 2006 year-end.





**Employment
      Agreements**





Neither
      we nor Tech have any employment agreements or severance agreements with any
      of
      our respective executive officers and directors.





**Director
      Compensation**





Our
      independent directors are entitled to receive the following
      compensation:


·
            $24,000
                annual retainer fee


·
            $1,000
                per Board meeting attended


·
            $4,000
                per year per committee chairmanship





After
      the
      first year of service, independent directors are entitled to stock option or
      warrant grants in an amount to be determined by the Board of
      Directors.




As
      of
      December 31, 2006, our independent directors were Stephen J. Fryer, Gary L.
      Nielsen and Arthur C. Agnos. All directors are entitled to be reimbursed for
      reasonable expenses actually incurred by them in connection with their duties
      as
      directors.





**Director
                compensation**Name
            Fees
                Earned or Paid
              in
                Cash ($)
            Stock
                Awards ($)(1)
            Option
                Awards
              ($)
                (2)
            Total
              ($)Stephen
                J Fryer
            8,001
            18,999
            103,350
            130,350Gary
                L Nielsen
            9,333
            21,663
            206,700
            237,696Arthur
                C Agnos
            6,997
            23,999
            206,700
            237,696


(1)
            Director’s
                fees are accrued monthly and were paid in cash through March, thereafter
                the accrual was paid in shares of common stock quarterly beginning
                in June
                2006. A total of 14,369 shares were issued during the year valued
                at
                $64,661. The shares of stock are fully vested and not subject to
                any
                forfeiture or repurchase
                restrictions.


(2)
            Option
                awards took the form of fully vested Warrants to purchase common
                stock at
                an exercise price of $5.00 per share. The warrants were granted in
                November 2006 and have a term of 5 years. The amount shown is the
                imputed
                value of the warrant, calculated using the Black-Scholes method,
                required
                to be recognized in the financial
                statements.






32




**TEM
      11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
      STOCKHOLDER MATTERS**





**Equity
      Compensation Plans**





In
      November 2006, we adopted a stock incentive plan to incentivize officers,
      Directors, employees and consultants with awards of securities including stock
      options, stock appreciation rights and restricted stock grants. There are a
      maximum of 3,000,000 shares of Common Stock subject to award under the plan
      and
      the awards must be made at fair market value at the date of the award. We
      awarded grants of 530,000 shares of restricted stock to 26 individuals upon
      adoption of the Plan. No awards were made to officers or Directors under the
      plan.





**Equity
      Compensation Plan Information**





Plan
                category
            Number
                of securities to be issued upon exercise of
              outstanding
                options, warrants and rights
            Weighted
                average exercise price of outstanding options, warrants and
                rights
            Number
                of securities remaining available for future issuance under equity
                compensation plans (excluding securities reflected in column
                (a))Plans
                approved by security holders
            none
            none
            nonePlans
                not approved by security holders
            none
            none
            2,470,000
                (1)


(1)
      Represents the unissued balance of the 2006 Stock Incentive Plan, which we
      intend to submit to a vote of our security holders for approval.





**Beneficial
      Ownership Table**





The
      following table sets forth information concerning the number of shares of our
      common stock as of March 31, 2007, and including shares of our parent, Tech,
      that are owned beneficially by: (i) each person (including any group) known
      to
      us to beneficially own more than 5% of our common stock, (ii) each of our
      directors and named executive officers, and (iii) all of our officers and
      directors as a group. Unless otherwise indicated, the stockholders listed below
      possess sole voting and investment power with respect to the shares indicated,
      subject to community property laws where applicable.




33




**Name
                and Address of Beneficial Owner (1)**
            **Number
                of**
              **Shares
                of**
              **Our**
              **Common**
              **Stock**
            **Percentage
                of Shares of**
              **Our**
              **Common**
              **Stock
                (2)**
            **Number
                of**
              **Shares
                of**
              **Tech**
            **Percentage
                of Shares of**
              **Tech
                (3)**James
                Bouskos
            --
            *
            970,287
            4.1%Keith
                Meeks
            --
            *
            796,933
            3.4%Mark
                Terry
            --
            *
            2,422,844
            10.3%Marshall
                F. Sparks
            --
            *
            133,334
            *Stephen
                J. Fryer
            12,555
            *
            299,445
            1.3%Gary
                L. Nielsen
            13,147
            *
            111,667
            *Arthur
                C. Agnos
            13,666
            *
            12,667
            *All
                directors and
              officers
                as a group
              (7
                individuals)
            39,368
            *
            4,767,177
            20.2%Global
                Food Tech,
              Inc.
                (4)
            22,945,062
            89%
            --
            *


*
      Less
      than one percent.





(1) 
      The address of the stockholders identified in this table is c/o Global Food
      Technologies, Inc., 113 Court Street, Hanford, CA 93203.





(2) 
      The percentage ownership is based on 25,654,772 shares of common stock
      outstanding as of March 31, 2007.




(3) 
      The percentage ownership is based on 22,945,062 shares of the common stock
      of
      Tech outstanding as of March 31, 2007.





(4) 
      Mr. Fryer is the sole director and the President of Global Food Tech, Inc.
      and
      Mr. Sparks is the Chief Financial Officer and Secretary of Global Food Tech,
      Inc. Messrs. Fryer and Sparks share voting and dispositive powers with respect
      to our shares held by Global Food Tech, Inc. Each of Messrs. Fryer and Sparks
      expressly disclaims beneficial ownership of these shares. Information is based
      on Schedule 13D filed by Global Food Tech, Inc. on April 13, 2006.





**ITEM
      12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
      INDEPENDENCE**





**Certain
      Relationships**





Immediately
      after the Transaction, most of the directors and officers of Tech resigned
      from
      Tech and were appointed to the same positions with us. However, Stephen J.
      Fryer, one of our Directors, remains on Tech’s Board of Directors as its sole
      director, and also acts as Tech’s President. Marshall F. Sparks, our Chief
      Financial Officer, Secretary and Treasurer, also has been appointed as the
      Chief
      Financial Officer, Secretary and Treasurer of Tech. Until Mr. Fryer and Mr.
      Sparks no longer serve Tech or us in these capacities, this commonality of
      our
      respective Boards of Directors and executive managements could create, or appear
      to create, potential conflicts of interest when these directors and managements
      are faced with decisions that could have different implications for Tech and
      us.




34




**Related
      Transactions**





With
      respect to each of the transactions described below, we believe that the terms
      of such transactions were no less favorable to us than could have been obtained
      from unaffiliated third parties.




In
      June
      2003, Tech relocated its scientific and engineering office from the
      manufacturing facility to a separate building. The building is owned by Mark
      Terry and Keith Meeks, who were two of Tech’s founders and officers, and who
      currently serve as our officers, in the name of K&M Holdings LLC. The rental
      arrangement is on a month-to-month basis in the amount of $1,398 per month,
      which we believe represents the fair market rent. Pursuant to the Transaction,
      we assumed the rental for this facility. The rental was terminated in May
      2006.





In
      November 2004, Tech established an office in Newport Beach, California, to
      provide space for its Chief Financial Officer. Mike Rubel and Stephen J. Fryer
      personally leased office space co-located with Grant Bettingen Inc., our former
      investment banking firm, and allocated and rented space to Tech, Grant Bettingen
      Inc. and three other tenants. Pursuant to an oral agreement, the rental of
      the
      space is on a month-to-month basis at a rate of $790 per month. In July 2006
      an
      additional office for engineering staff was rented and the rental rate was
      increased to $2,100 per month Mr. Fryer is our Director and our former interim
      Chief Executive Officer.





On
      August
      11, 2005, we entered into a Stock Purchase Agreement with Solvis Group, Inc.
      and
      Pierce Mill Associates, Inc., pursuant to which we issued 520,000 shares of
      our
      common stock to Solvis, which were valued at $2,340,000. Solvis received a
      controlling interest in us and therefore was able to facilitate the transactions
      contemplated by the Asset Acquisition Agreement pursuant to which we acquired
      all of the assets and liabilities of Tech. At that time, Mr. Fryer was a
      director of Dalrada Financial Corporation, which controlled Solvis, and was
      also
      one of our directors. On August 10, 2005, Solvis acquired control of us through
      its acquisition of the 520,000 shares. On August 19, 2005, we acquired the
      assets and assumed the liabilities of Tech, and Solvis became a minority
      stockholder in connection with the issuance of 22,943,693 shares to Tech. The
      Stock Purchase Agreement with Solvis has been amended to reduce the number
      of
      shares granted to Solvis to 100,000 shares, which were valued at $500,000 and
      charged to expenses as a cost of the Transaction.





SC
      Capital Partners LLC was retained to provide advisory services and transaction
      assistance on corporate matters, financing transactions and merger and
      acquisition transactions for a period of one year, effective September 2005.
      A
      monthly retainer of $6,000 and reasonable expense reimbursement is included
      and
      various success fees and commissions were defined. A commission of $18,260
      was
      accrued under the contract for participation in a private placement and was
      paid
      in 2007. No other payments were made, other than the retainer, or obligations
      incurred under the agreement. The agreement expired in September 2006. Mr.
      Fryer, our former interim Chief Executive Officer and a current member of our
      Board of Directors, is a principal of SC Capital.




35




In
      April
      and May of 2006, we arranged a series of 3 loans aggregating $290,000 from
      Gary
      L. Nielsen, a member of our Board of Directors. Two loans aggregating $190,000
      are demand loans. The third loan for $100,000 matured July 18, 2006, and was
      repaid on its due date. The loans bear interest of 8% plus an additional five
      points, aggregating $14,500, due at maturity, which was expensed as additional
      interest expense in 2006. Additional consideration for the 3 loans was approved
      by the Board in August 2006, in the form of warrants to purchase 29,000 shares
      of our common stock. The warrants are exercisable at $4.50 per share for two
      (2)
      years from the date of repayment. The Company determined the fair value of
      the
      warrants to be $20,793 based
      upon a Black-Scholes option pricing model with the following assumptions:
      expected volatility of 50%, a risk-free interest rate of 4.9%, an expected
      term
      of 2 years, and 0% dividend yield. The $20,793 was recorded
      as additional interest expense. In August 2006, another loan for $100,000 was
      made for 90 days from Mr. Nielsen’s IRA account at 8% interest and no additional
      consideration. The loan was extended in November 2006 for an additional six
      months maturing in May 2007. In May 2007, the loan was further extended to
      November, 2007. All loans are unsecured.





On
      April
      3, 2006, we arranged a 30 day bridge loan in the amount of $350,000 from a
      non-principal shareholder. The loan bears interest at eight percent (8%) per
      annum plus an additional five points, or $17,500, which was recorded as interest
      expense. The loan is secured by all assets, including any intellectual assets,
      of the Company. Additional consideration included the issuance of warrants
      to
      purchase 35,000 shares of our common stock. The warrants are exercisable at
      $4.50 per share for two (2) years from the date of repayment. The Company
      determined the fair value of the warrants to be $17,325 based
      upon a Black-Scholes option pricing model with the following assumptions:
      expected volatility of 50%, a risk-free interest rate of 4.8%, an expected
      term
      of 2 years, and 0% dividend yield. The $17,325 was recorded
      as additional interest expense. In July, $100,000 of principal was repaid,
      leaving a balance of $250,000 that is currently past due. The Company is
      currently negotiating an extension of this note. The loan is guaranteed by
      Keith
      Meeks, our President, and Mark Terry, a Director of the Company who was also
      the
      former Chief Technology Officer of the Company.





**Director
      Independence**





As
      of
      December 31, 2006, our independent directors were Stephen J. Fryer, Gary L.
      Nielsen and Arthur C. Agnos. These independent directors also serve on our
      audit
      committee and compensation committee; no non-independent directors serve on
      such
      committees. We do not currently have a nominating committee but anticipate
      appointing such committee of independent directors in connection with future
      annual meetings and nominations for directors. Our common stock is not listed
      on
      any national securities exchange or other market. However, for purposes of
      determining director independence, we use the standards set forth by the
      American Stock Exchange. Mr. Fryer served briefly as interim CEO during part
      of
      [year]. In accordance with the American Stock Exchange rules, a director is
      considered independent if such service as an interim executive officer was
      for a
      period of less than one year. We also considered the related party transactions
      set forth in Item 12 of this report to the extent such transactions involved
      any
      of our independent directors, and believe that such transactions do not prevent
      the directors from being considered independent.




36




**ITEM
      13. EXHIBITS**





Exhibit
                No.
            Description3.1(1)
            Restated
                Certificate of Incorporation dated October 18, 2005.3.2(1)
            Second
                Amended and Restated Bylaws as of August 31, 2005.4.1(2)
            Lock-Up
                Agreement dated as of December 20, 2005 between Global Food Technologies,
                Inc. and Solvis Group, Inc.4.2+(2)
            Form
                of Lock-Up Agreement entered into by Global Food Technologies, Inc.
                and
                its officers and directors as of December 20, 2005.10.1(3)
            Asset
                Acquisition Agreement dated as of August 19, 2005 between Global
                Food
                Tech, Inc. (formerly known as Global Food Technologies, Inc.), Solvis
                Group, Inc. and Global Food Technologies, Inc. (formerly known as
                Boulevard Acquisition Corporation).10.2(4)
            Services
                Agreement dated September 30, 2005 between Global Food Technologies,
                Inc.
                and Global Media Fund, LLC.10.3(1)
            Stock
                Purchase Agreement dated August 11, 2005 between Global Food Technologies,
                Inc. (formerly known as Boulevard Acquisition Corporation), Pierce
                Mill
                Associates, Inc. and Solvis Group, Inc.10.4(1)
            Side
                Letter Agreement dated August 11, 2005 between Global Food Tech,
                Inc.
                (formerly known as Global Food Technologies, Inc.), Solvis Group,
                Inc.,
                Pierce Mill Associates, Inc. and August Law Group, P.C.10.5(1)
            Amendment
                No. 1 to Asset Acquisition Agreement dated November 21, 2005 between
                Global Food Tech, Inc., Solvis Group, Inc. and Global Food Technologies,
                Inc.10.6(2)
            Lease
                Agreement dated April 6, 2001 between Parrish Realty, Inc. and Global
                Food
                Technology, Inc.10.7(2)
            Lease
                Agreement Addendum dated April 22, 2002 between Parrish Realty, Inc.
                and
                Global Food Technologies, Inc.10.8(5)
            Office
                Lease Agreement dated July 1, 2006 between Global Food Technologies
                Inc.
                and City of Hanford10.9*+
            2006
                Stock Incentive Plan24.1
            Power
                of attorney (included in signature page).31.1*
            Certification
                of Chief Executive Officer pursuant to Exchange Act Rules 13a-14(a)
                and
                15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley
                Act of
                200231.2*
            Certification
                of Chief Financial Officer pursuant to Exchange Act Rules 13a-14(a)
                and
                15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley
                Act of
                200232.1‡
            Certifications
                of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as
                adopted
                pursuant to Section 906 of the Sarbanes-Oxley Act of
                200232.2‡
            Certifications
                of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as
                adopted
                pursuant to Section 906 of the Sarbanes-Oxley Act of
                2002


+  Management
      contract or compensatory plan or arrangement


*  Filed
      herewith


‡  Furnished
      herewith




37




(1)
            Filed
                on November 23, 2005 as an exhibit to our Quarterly Report on Form
                10-QSB
                for the quarterly period ended September 30, 2005 and incorporated
                herein
                by reference.





(2)
            Filed
                on July 6, 2006, as an exhibit to our Annual Report on Form
                10-KSB.





(3)
            Filed
                on August 19, 2005 as an exhibit to our Current Report on Form 8-K
                and
                incorporated herein by reference.





(4)
            Filed
                on October 6, 2005 as an exhibit to our Current Report on Form 8-K
                and
                incorporated herein by reference.





(5)
            Filed
                on August 1, 2007 as an exhibit to Global Food’s Report on Form 10-QSB for
                the quarter ended June 30, 2006 and incorporated herein by
                reference.








**ITEM
      14. PRINCIPAL ACCOUNTANT FEES AND SERVICES**





The
      firm
      Weinberg & Company, P.A., independent auditor, has audited our financial
      statements for the years ended December 31, 2006 and 2005. The Board of
      Directors has appointed Weinberg & Company, P.A. to serve as our independent
      auditors for the 2006 year-end audit and to review our quarterly financial
      reports for filing with the SEC during fiscal year 2007.





The
      following table shows the fees billed for audit and other services provided
      by
      Weinberg & Company, P.A. for fiscal years 2006 and 2005.





2006
              
              2005Audit
                  Fees (1)
              
              $
              47,482
              
              $
              73,940Audit-Related
                  Fees
              
              
              0
              
              
              0Tax
                  Fees
              
              
              0
              
              
              0All
                  Other Fees (2)
              
              
              35,843
              
              
              33,967Total
              
              $
              83,325
              
              $
              107,907


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


(1)
      Audit
      fees represent fees for professional services provided in connection with the
      audit of our annual financial statements and review of our quarterly financial
      statements and audit services provided in connection with other statutory or
      regulatory filings.





(2)
      All
      Other Fees represent services in connection with SEC filings.




38




**Pre-Approval
      of Non-Audit Services**







The
      SEC
      adopted rules that require that before the independent auditor is engaged by
      us
      to render any auditing or permitted non-audit related service, the engagement
      must be:




-
      approved by our Audit Committee; or




-
      entered
      into pursuant to pre-approval policies and procedures established by our Audit
      Committee, provided the policies and procedures are detailed as to the
      particular service, the Audit Committee is informed of each service, and the
      policies and procedures do not include delegation of the Audit Committee’s
      responsibilities to management.




Our
      Audit
      Committee requires advance approval of all audit, audit-related, tax and other
      services performed by our independent auditor. Unless the specific service
      has
      been previously pre-approved with respect to that year, the Audit Committee
      must
      approve the permitted service before our independent auditor is engaged to
      perform it. All services performed by our independent auditors in 2006 and
      2005
      were approved in accordance with the Audit Committee’s pre-approval
      policies.





39




**SIGNATURES**





In
      accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused
      this report to be signed on its behalf by the undersigned, thereunto duly
      authorized.




Dated:
              August 2, 2007
            GLOBAL
                FOOD TECHNOLOGIES, INC.,
              a
                Delaware corporationBy:
            /s/ Keith
              MeeksName:
              Keith MeeksTitle:
              President and Chief Executive Officer





KNOWN
      BY
      ALL PERSONS THESE PRESENTS, that each person whose signature appears below
      constitutes and appoints Keith Meeks and Marshall F. Sparks, or any one of
      them,
      their attorneys-in-fact and agents with full power of substitution and
      re-substitution, for him and his name, place and stead, in any and all
      capacities, to sign any or all amendments to this Annual Report on Form 10-KSB
      and to file the same, with all exhibits thereto, and other documents in
      connection therewith, with the Securities and Exchange Commission, granting
      unto
      said attorneys-in-fact and agents, and each of them, full power and authority
      to
      do and perform each and every act and thing requisite and necessary to be done
      in and about the foregoing, as fully to all intents and purposes as he might
      or
      could do in person, hereby ratifying and confirming all that said
      attorneys-in-fact and agents, or either of them, or their substitutes, may
      lawfully do or cause to be done by virtue hereof.





In
      accordance with the Exchange Act, this report has been signed below by the
      following persons on behalf of the registrant and in the capacities and on
      the
      dates indicated.





Name:
            
            Title
            Date/s/
                Keith MeeksKeith
                Meeks
            
            President
                and Chief Executive Officer (Principal
              Executive
                Officer)
            August
                2, 2007/s/
                James BouskosJames
                Bouskos
            
            Chairman
                of the Board
            August
                2, 2007/s/
                Marshall F. SparksMarshall
                F. Sparks
            
            Chief
                Financial Officer, Secretary and Treasurer
              (Principal
                Financial and Accounting Officer)
            August
                2, 2007Mark
                Terry
            
            Director
            August
                2, 2007/s/
                Stephen J. FryerStephen
                J. Fryer
            
            Director
            August
                2, 2007/s/
                Gary L. NielsenGary
                L. Nielsen
            
            Director
            August
                2, 2007/s/
                Arthur C. AgnosArthur
                C. Agnos
            
            Director
            August
                2, 2007





40


**GLOBAL
        FOOD TECHNOLOGIES, INC**
 **(A
        DEVELOPMENT STAGE COMPANY)**


**TABLE
        OF CONTENTS**








PAGE 42
              REPORT OF INDEPENDENT REGISTERED PUBLIC
                ACCOUNTING FIRMPAGE 43
              BALANCE
                SHEET AS OF DECEMBER 31, 2006PAGE 44
              STATEMENTS
                OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2006 AND 2005 AND
                FOR THE
                PERIOD FROM JULY 25, 2001 (INCEPTION) THROUGH DECEMBER 31,
                2006PAGE 45
              STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY
                (DEFICIENCY) FROM JULY 25, 2001 (INCEPTION) TO DECEMBER 31,
                2006PAGE 46
              STATEMENTS OF CASH FLOWS FOR THE YEARS
                ENDED
                DECEMBER 31, 2006 AND 2005 AND FOR THE PERIOD FROM JULY 25, 2001
                (INCEPTION) TO DECEMBER 31, 2006PAGES 47-57
              NOTES
                  TO FINANCIAL STATEMENTS AS OF DECEMBER 31, 2006 AND
                  2005




41





REPORT
      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM





To
      the
      Board of Directors and Stockholders of


Global
      Food Technologies, Inc.







We
      have
      audited the accompanying balance sheet of Global Food Technologies, Inc. (a
      development stage company) as of December 31, 2006 and the related statements
      of
      operations, stockholders’ equity (deficiency) and cash flows for the years ended
      December 31, 2006 and 2005 and from July 25, 2001 (Inception) to December 31,
      2006. These financial statements are the responsibility of the Company's
      management. Our responsibility is to express an opinion on these financial
      statements based on our audits.




We
      conducted our audits in accordance with standards of the Public Company
      Accounting Oversight Board (United States). Those standards require that we
      plan
      and perform the audits to obtain reasonable assurance whether the financial
      statements are free of material misstatement. An audit includes examining,
      on a
      test basis, evidence supporting the amounts and disclosures in the financial
      statements. An audit also includes assessing the accounting principles used
      and
      significant estimates made by management, as well as evaluating the overall
      financial statement presentation. We believe that our audits provide a
      reasonable basis for our opinion.





In
      our
      opinion, the financial statements referred to above present fairly, in all
      material respects, the financial position of Global Food Technologies, Inc.
      as
      at December 31, 2006 and the results of its operations and its cash flows for
      the years ended December 31, 2006 and 2005 and for the period July 25, 2001
      (Inception) to December 31, 2006, in conformity with accounting principles
      generally accepted in the United States of America.





The
      accompanying financial statements have been prepared assuming that the Company
      will continue as a going concern. As discussed in Note 1 to the financial
      statements, the Company has had a net loss $36,127,217 and negative cash flow
      from operations of $22,521,220 since inception. 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 financial
      statements do not include any adjustments that might result from the outcome
      of
      this uncertainty.







As
      discussed in Note 1 to the consolidated financial statements, effective January
      1, 2006 the Company adopted Statement of Financial Accounting Standard (“SFAS”),
“Share-Based Payment” (“SFAS 123(R)”) which requires companies to estimate the
      fair value of share-based payment awards on the date of grant using an
      option-pricing model.





Weinberg
      & Company, P.A.






Los
      Angeles, California




June
      27,
      2007


42


**GLOBAL
      FOOD TECHNOLOGIES, INC.**


**(A
      DEVELOPMENT STAGE COMPANY)**


**BALANCE
      SHEET**





**ASSETS**
            
            **December
                31,****2006****CURRENT
                ASSETS**Cash
            
            $
            203,169Prepaid
                expenses
            
            
            26,348Total
                Current Assets
            
            
            229,517**FIXED
                ASSETS**Laboratory
                equipment
            
            
            500,941Furniture
                and fixtures
            
            
            90,896Total
            
            
            591,837Less
                accumulated depreciation
            
            
            (444,194
            )Fixed
                assets - net
            
            
            147,643**OTHER
                ASSET,**Deposit
            
            
            11,500**TOTAL
                ASSETS**
            
            $
            388,660





**LIABILITIES
                AND STOCKHOLDERS’**
              **DEFICIENCY****CURRENT
                LIABILITIES**Accounts
                payable
            
            $
            316,358Accrued
                liabilities
            
            
            383,882Notes
                payable-related parties
            
            
            540,000Total
                Current Liabilities
            
            
            1,240,240**COMMITMENTS
                AND CONTINGENCIES****STOCKHOLDERS’
                DEFICIENCY**Preferred
                Stock, $.0001 par value, 20,000,000 shares
              authorized,
                none outstanding
            
            
            -Common
                Stock, $.0001 par value, 100,000,000 shares
              authorized,
                25,199,353 shares outstanding
            
            
            2,520Additional
                paid-in capital
            
            
            35,273,117Deficit
                accumulated during development stage
            
            
            (36,127,217
            )Total
                stockholders’ deficiency
            
            
            (851,580
            )**TOTAL
                LIABILITIES AND STOCKHOLDERS’**
              **DEFICIENCY**
            
            $
            388,660




See
      accompanying notes to financial statements




43




**GLOBAL
      FOOD TECHNOLOGIES, INC.**


**(A
      DEVELOPMENT STAGE COMPANY)**


**STATEMENTS
      OF OPERATIONS**











**For
                The**
              **Year
                Ended**
              **December
                31,**
              **2006**
            
            **For
                The**
              **Year
                Ended December 31,**
              **2005**
            
            **For
                the Period From July 25, 2001 (Inception) To December 31,
                2006**Revenues
            
            $
            -
            
            $
            -
            
            $
            -ExpensesMarketing
                expense
            
            
            2,791,150
            
            
            2,170,077
            
            
            4,961,226General
                and administrative
              expense
            
            
            5,172,838
            
            
            1,643,056
            
            
            9,761,472Research
                and development costs
            
            
            4,857,188
            
            
            4,074,872
            
            
            17,103,393Impairment
                of BEST system
            
            
            -
            
            
            3,157,111
            
            
            3,157,111Depreciation
            
            
            116,072
            
            
            103,612
            
            
            444,194Interest
                expense
            
            
            157,851
            
            
            -
            
            
            249,821Merger
                related costs
            
            
            -
            
            
            450,000
            
            
            450,000Total
                Expenses
            
            
            13,095,099
            
            
            11,598,728
            
            
            36,127,217**NET
                LOSS**
            
            $
            (13,095,099
            )
            $
            (11,598,728
            )
            $
            (36,127,217
            )Loss
                per Share, basic and diluted
            
            $
            (0.54
            )
            $
            (0.55
            )Weighted
                average shares, basic and diluted
            
            
            24,094,530
            
            
            20,961,181





See
      accompanying notes to financial statements




44




**GLOBAL
      FOOD TECHNOLOGIES, INC.**


**(A
      DEVELOPMENT STAGE COMPANY)**


**STATEMENT
      OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIENCY)**


**FOR
      THE PERIOD FROM JULY 25, 2001 (INCEPTION) TO DECEMBER 31,
      2006**


Common
                  Stock
              
              Additional
                Paid-in
              
              Deficit
                Accumulated
                During
                  the
                Development
              
              Total
                Stockholders’
                (Deficiency)Shares
              
              Amount
              
              Capital
              
              Stage
              
              EquityIssuance
                  to founders at inception, at par
              
              
              10,333,333
              
              $
              1,033
              
              $
              (1,002
              )
              $
              
              
              $
              31Sales
                  of stock for cash
              
              
              298,706
              
              
              30
              
              
              154,008
              
              
              
              
              
              154,038Premium
                  on preferred stock
              
              
              
              
              
              
              
              
              (200,800
              )
              
              
              
              
              (200,800
              )Net
                  loss
              
              
              
              
              
              
              
              
              
              
              
              (
                  957,269
              )
              
              (957,269
              )Balance,
                  December 31,2001
              
              
              10,632,039
              
              
              1,063
              
              
              (47,794
              )
              
              (957,269
              )
              
              (1,004,000
              )Sales
                  of stock for cash
              
              
              4,848,575
              
              
              485
              
              
              4,308,374
              
              
              
              
              
              4,308,859Premium
                  on preferred stock
              
              
              
              
              
              
              
              
              (12,500
              )
              
              
              
              
              (12,500
              )Net
                  loss
              
              
              
              
              
              
              
              
              
              
              
              (3,584,307
              )
              
              (3,584,307
              )Balance,
                  December 31, 2002
              
              
              15,480,614
              
              
              1,548
              
              
              4,248,080
              
              
              (4,541,576
              )
              
              (291,948
              )Sales
                  of stock for cash
              
              
              2,155,353
              
              
              216
              
              
              3,865,864
              
              
              
              
              
              3,866,080Premium
                  on preferred stock
              
              
              
              
              
              
              
              
              (291,800
              )
              
              
              
              
              (291,800
              )Net
                  loss
              
              
              
              
              
              
              
              
              
              
              
              (4,265,029
              )
              
              (4,265,029
              )Balance,
                  December 31, 2003
              
              
              17,635,967
              
              
              1,764
              
              
              7,822,144
              
              
              (8,806,605
              )
              
              (982,697
              )Sales
                  of stock for cash
              
              
              1,199,081
              
              
              120
              
              
              4,434,772
              
              
              
              
              
              4,434,892Premium
                  on preferred stock
              
              
              
              
              
              
              
              
              (37,501
              )
              
              
              
              
              (37,501
              )Fair
                  value of warrants issued for services
              
              
              
              
              
              
              
              
              3,400
              
              
              
              
              
              3,400Net
                  loss
              
              
              
              
              
              
              
              
              
              
              
              (2,626,785
              )
              
              (2,626,785
              )Balance,
                  December 31, 2004
              
              
              18,835,048
              
              
              1,884
              
              
              12,222,815
              
              
              (11,433,390
              )
              
              791,309Sales
                  of stock for cash
              
              
              1,732,220
              
              
              173
              
              
              7,943,948
              
              
              
              
              
              7,944,121Premium
                  on preferred stock
              
              
              
              
              
              
              
              
              (271,123
              )
              
              
              
              
              (271,123
              )Fair
                  value of warrants issued for services
              
              
              
              
              
              
              
              
              21,825
              
              
              
              
              
              21,825Fair
                  value of stock issued for services
              
              
              82,598
              
              
              8
              
              
              371,683
              
              
              
              
              
              371,691Conversion
                  of preferred stock
              
              
              2,400,540
              
              
              240
              
              
              2,938,879
              
              
              
              
              
              2,939,119Stock
                  transferred in consummation of merger
              
              
              100,000
              
              
              10
              
              
              
              
              
              
              
              
              10Stock
                  issued for merger related costs
              
              
              100,000
              
              
              10
              
              
              449,990
              
              
              
              
              
              450,000Stock
                  issued to round up split
              
              
              1,369
              
              
              
              
              
              
              
              
              
              
              
              -Stock
                  issued for media contract
              
              
              244,444
              
              
              24
              
              
              1,099,976
              
              
              
              
              
              1,100,000Net
                  loss
              
              
              
              
              
              
              
              
              
              
              
              (11,598,728
              )
              
              (11,598,728
              )Balance,
                  December 31, 2005
              
              
              23,496,219
              
              
              2,349
              
              
              24,777,993
              
              
              (23,032,118
              )
              
              1,748,224Sales
                  of stock for cash
              
              
              724,958
              
              
              73
              
              
              3,111,338
              
              
              
              
              
              3,111,411Stock
                  issued for services
              
              
              37,065
              
              
              4
              
              
              166,782
              
              
              
              
              
              166,786Fair
                  value of stock issued to consultants
              
              
              155,000
              
              
              15
              
              
              697,485
              
              
              
              
              
              697,500Fair
                  value of stock issued to employees
              
              
              375,000
              
              
              38
              
              
              1,687,462
              
              
              
              
              
              1,687,500Fair
                  value of stock issued for media contract
              
              
              411,111
              
              
              41
              
              
              1,849,959
              
              
              
              
              
              1,850,000Fair
                  value of warrants issued
              
              
              
              
              
              
              
              
              2,982,098
              
              
              
              
              
              2,982,098Net
                  loss
              
              
              
              
              
              
              
              
              
              
              
              (13,095,099
              )
              
              (13,095,099
              )Balance,
                  December 31,2006
              
              
              25,199,353
              
              $
              2,520
              
              $
              35,273,117
              
              $
              (36,127,217
              )
              $
              (851,580
              )




See
      accompanying notes to financial statements




45




**GLOBAL
      FOOD TECHNOLOGIES, INC.**


**(A
      DEVELOPMENT STAGE COMPANY)**


**STATEMENTS
      OF CASH FLOWS**





**For
                The Year Ended December 31, 2006**
            
            **For
                The Year Ended December 31, 2005**
            
            **For
                The Period From July 25, 2001 (Inception) To December 31,
                2006****CASH
                FLOWS FROM OPERATING ACTIVITIES:**Net
                Loss
            
            $
            (13,095,099
            )
            $
            (11,598,728
            )
            $
            (36,127,217
            )Adjustments
                to reconcile net loss to net cash used in operating
                activities:Depreciation
            
            
            116,072
            
            
            103,612
            
            
            444,194Impairment
                of BEST system
            
            
            -
            
            
            3,157,111
            
            
            3,157,111Merger
                related costs
            
            
            -
            
            
            450,000
            
            
            450,000Fair
                value of warrants issued for services
            
            
            2,982,098
            
            
            21,825
            
            
            3,007,323Fair
                value of stock issued for services
            
            
            166,786
            
            
            371,691
            
            
            538,477Fair
                value of incentive plan grants
            
            
            2,385,000
            
            
            
            
            
            2,385,000Fair
                value of stock issued for media services
            
            
            1,850,000
            
            
            1,100,000
            
            
            2,950,000Changes
                in assets and liabilities:Change
                in prepaid expenses
            
            
            125,672
            
            
            100,099
            
            
            (26,348
            )Change
                in current liabilities
            
            
            372,439
            
            
            (5,743
            )
            
            700,240Cash
                used in Operating Activities
            
            
            (5,097,032
            )
            
            (6,300,133
            )
            
            (22,521,220
            )**CASH
                FLOWS USED IN INVESTING ACTIVITIES:**Increase
                in BEST system
            
            
            
            
            
            
            
            
            (3,157,111
            )Increase
                in fixed assets
            
            
            (22,910
            )
            
            (50,867
            )
            
            (591,837
            )Increase
                in deposits
            
            
            -
            
            
            (2,500
            )
            
            (11,500
            )Cash
                used in Investing Activities
            
            
            (22,910
            )
            
            (53,367
            )
            
            (3,760,448
            )**CASH
                FLOWS FROM FINANCING ACTIVITIES:**Proceeds
                from notes payable - related parties
            
            
            740,000
            
            
            -
            
            
            740,000Principal
                payments on notes payable - related parties
            
            
            (200,000
            )
            
            -
            
            
            (200,000
            )Sale
                of redeemable Series A preferred stock -net
            
            
            -
            
            
            (45,000
            )
            
            2,125,405Sale
                of common stock
            
            
            3,111,411
            
            
            7,944,121
            
            
            23,819,432Net
                Cash Provided By Financing Activities
            
            
            3,651,411
            
            
            7,899,121
            
            
            26,484,837**(DECREASE)
                INCREASE IN CASH**
            
            
            (1,468,531
            )
            
            1,545,621
            
            
            203,169CASH
                - BEGINNING OF PERIOD
            
            
            1,671,700
            
            
            126,079
            
            
            -**CASH
                - END OF PERIOD**
            
            $
            203,169
            
            $
            1,671,700
            
            $
            203,169**SUPPLEMENTAL
                DISCLOSURES******Interest
                included in operating activities
            
            $
            2,000
            
            $
            -
            
            $
            93,970Noncash
                financing transactionsAccretion
                of redemption value of preferred stock
            
            $
            -
            
            $
            271,118
            
            $
            813,719Conversion
                of Series A preferred stock to common stock
            
            $
            -
            
            $
            2,939,119
            
            $
            2,939,119Stock
                transferred in consummation of merger
            
            $
            -
            
            $
            10
            
            $
            10





See
      accompanying notes to financial statements





46







GLOBAL
      FOOD TECHNOLOGIES, INC.


(A
      DEVELOPMENT STAGE COMPANY)


NOTES
      TO
      FINANCIAL STATEMENTS


AS
      OF
      DECEMBER 31, 2006 AND 2005





**1.** **Description
      and nature of the business, organization and basis of
      presentation**


Global
        Food Technologies, Inc. (“the Company, “we” or “us”) is a biotechnology company
        focused on food safety processes for the food processing industry. The Company
        is dedicated to using its proprietary scientific processes to substantially
        increase the shelf life of commercially packaged seafood, poultry and meat,
        and
        to make those products safer for human consumption. We have applied the research
        and technology developed over the prior four years into the “BEST” food
        processing system. We have had no revenues to date and thus continue operations
        in the development stage. We have developed the ***iPura*TM** brand
        for
        the food processed by our technology and are now referring to the “BEST” system
        as the ***iPura*TM** “ ***Food
        Processing System”.*** Our
        ability to generate revenue from the ***iPura*TM** system
        will depend, among other things, on our ability to demonstrate the merits
        of the
***iPura*TM** system
        and develop markets and alliances to penetrate those markets. The Company’s
        fiscal year end is December 31.




**Organization**


Boulevard
      Acquisition Corporation, a Delaware corporation (“BAC”), was incorporated on
      March 24, 1999 to serve as a vehicle to effect a merger, exchange of capital
      stock, asset acquisition or other business combination with a private business.




On
      August
      19, 2005, BAC entered into an Asset Acquisition Agreement with Global Food
      Technologies, Inc., a privately held Delaware corporation (“Tech”), and Solvis
      Group, Inc., a Delaware corporation, whereby BAC agreed to acquire all of the
      assets and properties subject to all claims, liabilities and obligations of
      Tech
      in exchange for the issuance to Tech of 22,943,693 shares of common stock of
      BAC, representing approximately ninety-seven percent (97%), of BAC’s issued and
      outstanding capital stock. BAC initially issued Solvis Group, Inc. 520,000
      shares as consideration for facilitating the merger, with the fair value of
      the
      shares, $2,340,000, being charged to expense as a cost of the merger. This
      agreement was amended in April 2006 and the transaction restated to reduce
      the
      shares issued to Solvis Group, Inc. from 520,000 shares to 100,000 shares,
      reducing the facilitation fee to $450,000 based on the fair value of $4.50
      per
      share and increasing the percentage of shares received by Tech to
      99.1%.




The
      acquisition was accounted for as a reverse merger (recapitalization) with Tech
      being deemed the accounting acquirer. Accordingly, the historical financial
      information presented in the financial statements is that of Tech (since July
      25, 2001, date of Tech’s inception) as adjusted. The basis of the assets and
      liabilities of Tech, the accounting acquirer, have been carried over in the
      recapitalization. Subsequent to the acquisition, the BAC changed its name to
      Global Food Technologies, Inc.





47




**Going
      concern**





We
      are
      currently a development stage enterprise. All loses accumulated since the
      inception of business has been considered as part of our development stage
      activities.





The
      accompanying financial statements have been prepared on the basis that we will
      continue as a going concern, which assumes the realization of assets and the
      satisfaction of liabilities in the normal course of business. Since inception,
      we have been engaged in product development and pre-operational activities.
      No
      revenue has been generated and we have incurred accumulated losses and used
      cash
      in operations of $36,127,217 and $22,521,220 as of December 31, 2006.
      Continuation of our existence is dependant on our ability to raise additional
      capital and achieve sustained profitable operations. The uncertainty related
      to
      these conditions raises substantial doubt about our ability to continue as
      a
      going concern. The accompanying financial statements do not include any
      adjustments that might result from the outcome of this uncertainty.





The
      sole
      source of cash has been the sale of its equity to investors. Although we expect
      to generate revenue from installing and operating ***iPura*TM**the food
      processing systems within the next 12 months, any funds generated from
      installing and operating our ***iPura*TM** food
      processing systems during fiscal year 2007 are not expected to cover all of
      our
      operating expenses. In addition to cash in hand as of December 31, 2006, we
      believe that we will need approximately $7 million to cover operating expenses
      during the next twelve months, including costs for the construction of two
***iPura*TM** food
      processing systems. We are actively pursuing all potential financing options
      as
      we look to secure additional funds both to stabilize and to grow our business
      operations. Our management will review any financing options at their disposal,
      and will judge each potential source of funds on its individual merits.





**2.** **Summary
      of significant accounting policies**





**Use
      of Estimates** - The
      preparation of the financial statements in conformity with generally accepted
      accounting principles requires management to make estimates and assumptions
      that
      affect the reported amounts of assets and liabilities and disclosure of
      contingent assets and liabilities at the date of the financial statements and
      the reported amounts of revenues and expenses during the reporting period.
      Actual results could differ from those estimates.





***iPura*TM(formerly the** “ **BEST”)
      Seafood Processing System -** The
      ***iPura*TM** Seafood
      Processing System, the physical embodiment of our food processing technology,
      was completed, tested and available for commercial application (in a previous
      generation design) in 2005 and was capitalized at a construction cost of
      $3,157,111. Design, testing and support costs involved were expensed. In 2005,
      mechanical and software upgrades were implemented to optimize the mechanical
      process. The improvements were so substantial that this prior model was deemed
      inappropriate for installation in a customer’s processing facility. As a result,
      the Company recorded an asset impairment charge of $3,157,111 for the year
      ended
      December 31, 2005. A new model is being constructed with increased capacity
      and
      simplified operating and maintenance parameters. Design, testing and support
      costs incurred on this model through December 31, 2006 have been included in
      research and development costs.




48





Future
      models of the ***iPura*TM** food
      processing system will be long lived assets capitalized at their identifiable
      construction cost. They will be placed in service under contract at a customer’s
      plant, recorded as a fixed asset and be depreciated over their expected 10
      year
      technological life.





**Property
      and Equipment and Depreciation** -
      Property and equipment are stated at cost. Depreciation is computed using the
      straight line method based on the estimated useful lives of the assets, all
      estimated at five years. There are no capitalized leasehold
      improvements.





**Long-lived
      Assets** - We
      account for the impairment and disposition of long-lived assets in accordance
      with Statement of Financial Accounting Standards No. 144 (“SFAS 144”),
“Accounting for the Impairment or Disposal of Long-Lived Assets.” In accordance
      with SFAS No. 144, the long lived assets are to be held and reviewed for events
      or changes on circumstances that indicate that their carrying value may not
      be
      recoverable. We periodically review the carrying value of long lived assets
      to
      determine whether or not an impairment to such value has incurred. The
***iPura*TM** Seafood
      Processing System asset was physically reconfigured for operational efficiency
      in 2005. The total capitalized cost of the ***iPura*TM** Seafood
      Processing System was considered impaired in 2005 and the Company recorded
      an
      asset impairment charge of $3,157,111 for the year ended December 31, 2005.
      No
      other impairments were recorded during the period from June 25, 2001 (the date
      of Tech’s inception) through December 31, 2006.





**Concentration
      of Credit Risk** - We
      place our cash with high quality financial institutions, and at times may exceed
      the Federal Deposit Insurance Corporation $100,000 insurance limit.





**Income
      Taxes** - We
      account for income taxes under the SFAS No. 109, “Accounting for Income Taxes”
(“SFAS 109”). 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. Under SFAS 109, the effect
      on deferred tax assets and liabilities of a change in tax rates is recognized
      in
      income in the period that includes the enactment date. There was no current
      or
      deferred income tax expense or benefits due to our not having any material
      operations for the period ending December 31, 2006 and 2005.





**Fair
      Value of Financial Instruments** - The
      carrying amounts of our financial instruments, including cash, accounts payable
      and accrued liabilities, approximate their fair value as of December 31, 2006
      and 2005.





**Advertising
      Expenses -** Advertising
      costs are expensed currently as they are billed from vendors. Advertising
      expenses included in marketing expenses were $50,597 in 2006 and $144,995 in
      2005.





**Loss
      Per Share** -
      Statement of Financial Accounting Standards No. 128, “Earnings per Share”,
      requires presentation of basic earnings per share (“Basic EPS”) and diluted
      earnings per share (“Diluted EPS”). Basic earnings (loss) per share is computed
      by dividing earnings (loss) available to common stockholders by the weighted
      average number of common shares outstanding during the period. Diluted earnings
      per share reflects the potential dilution, using the treasury stock method,
      that
      could occur if securities or other contracts to issue common stock were
      exercised or converted into common stock or resulted in the issuance of common
      stock that then shared in our earnings. In computing diluted earnings per share,
      the treasury stock method assumes that outstanding options and warrants are
      exercised and the proceeds are used to purchase common stock at the average
      market price during the period. Options and warrants will have a dilutive effect
      under the treasury stock method only when the average market price of the common
      stock during the period exceeds the exercise price of the options and warrants.




49


The
          3,804,458 stock purchase warrants outstanding at December 31, 2006 were
          not
          listed in the computation of loss per share as their effect would be
          antidilutive.
  **Stock-based
          compensation** -
          Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based
          Compensation" ("SFAS No. 123"), established a fair value method of accounting
          for stock-based compensation plans and for transactions in which an entity
          acquires goods or services from non-employees in exchange for equity
          instruments. Through December 31, 2005, the Company accounted for stock-based
          compensation utilizing the fair value method of accounting prescribed in
          SFAS
          No. 123.
 
 In
          December 2004, the Financial Accounting Standards Board (“FASB”) issued
          Statement of Financial Accounting Standards 123R, “Share-Based Payment” (“SFAS
          123R”). This statement requires that the cost resulting from all share-based
          payment transactions be recognized in the financial statements. This statement
          establishes fair value as the measurement objective in accounting for
          share-based payment arrangements and requires all entities to apply a fair-value
          based measurement method in accounting for share-based payment transactions
          with
          employees except for equity instruments held by employee share ownership
          plans.
          Effective January 1, 2006, the Company adopted the fair value recognition
          provisions of SFAS 123R, using the modified prospective method. Under this
          method, the provisions of SFAS 123R apply to all awards granted or modified
          after the date of adoption and all previously granted awards not yet vested
          as
          of the date of adoption. The initial adoption of this standard had no effect
          on
          the Company’s financial statements.
 
 Shares,
          warrants and options issued to non-employees for services are accounted
          for in
          accordance with SFAS 123(R) and Emerging Issues Task Force Issue No. 96-18
          (“EITF 96-18”), “Accounting for Equity Instruments that are Issued to Other Than
          Employees for Acquiring or In Conjunction with Selling Goods or Services”
whereby the fair value of such option and warrant grants is determined
          using the
          Black-Scholes Model at the earlier of the date at which the non-employee’s
          performance is completed or a performance commitment is reached.





**Recent
      Accounting Pronouncements**





In
      September 2006, the FASB issued SFAS No. 157, Fair Value Measurements. SFAS
      No.
      157 defines fair value, establishes a framework for measuring fair value in
      U.S.
      generally accepted accounting principles and expands disclosures about fair
      value measurements. SFAS No. 157 is effective for fiscal years beginning after
      November 15, 2006 and interim periods within those fiscal years. The Company
      is
      currently evaluating the effect that the adoption of SFAS No. 157 will have
      on
      its financial position and results of operations.





In
      June
      2006, the FASB issued FASB Interpretation No. 48, Accounting for Uncertainty
      in
      Income Taxes, an interpretation of FASB Statement No.109 (FIN 48). FIN 48
      provides criteria for the recognition, measurement, presentation and disclosure
      of uncertain tax positions that has an effect on a company's financial
      statements accounted for in accordance with SFAS No. 109, Accounting for Income
      Taxes, as a result of positions taken or expected to be taken in a company's
      tax
      return. A tax benefit from an uncertain position may be recognized only if
      it is
      "more likely than not" that the position is sustainable based on its technical
      merits. The provisions of FIN 48 are effective for fiscal years beginning after
      December 15, 2006. The Company is currently evaluating the potential effect
      that
      the adoption of FIN 48 will have on the Company's financial statement
      presentation and disclosures.




50




In
      February 2007, the FASB issued SFAS 159 The Fair Value Option for Financial
      Assets and Financial Liabilities. SFAS 159 permits the measurement of certain
      financial instruments at fair value. Entities may choose to measure eligible
      items at fair value at specified election dates, reporting unrealized gains
      and
      losses on such items at each subsequent reporting period. SFAS 159 is effective
      for fiscal years beginning after November 15, 2007. The Company has not
      evaluated the potential impact of the fair value option.





**3.** **Notes
      payable - related parties**





On
      April
      3, 2006, we arranged a 30 day bridge loan in the amount of $350,000 from a
      non-principal shareholder. The loan bears interest at eight percent (8%) per
      annum plus an additional five points, or $17,500, which was recorded as interest
      expense. The loan is secured by all assets, including any intellectual assets,
      of the Company. Additional consideration included the issuance of warrants
      to
      purchase 35,000 shares of our common stock. The warrants are exercisable at
      $4.50 per share for two (2) years from the date of repayment. The Company
      determined the fair value of the warrants to be $49,245 based
      upon a Black-Scholes option pricing model with the following assumptions:
      expected volatility of 50%, a risk-free interest rate of 4.8%, an expected
      term
      of 2 years, and 0% dividend yield. The $49,245 was recorded
      as additional interest expense In July 2006, $100,000 of principal was repaid,
      leaving a balance of $250,000 that is currently past due. The loan is currently
      in default and the Company is negotiating an extension of this note. The loan
      is
      guaranteed by the President of the Company and a Director of the Company who
      was
      also the former Chief Technology Officer of the Company





In
      April
      and May of 2006, we arranged three loans aggregating $290,000 from a Director
      of
      the Company. Two loans aggregating $190,000 are demand loans. The third loan
      for
      $100,000 matured July 18, 2006, and was repaid on its due date. The loans bear
      interest of 8% plus an additional five points, aggregating $14,500, due at
      maturity, which was expensed as additional interest expense in 2006. Additional
      consideration for the 3 loans was approved by the Board in August 2006, in
      the
      form of warrants to purchase 29,000 shares of our common stock. The warrants
      are
      exercisable at $4.50 per share for two (2) years from the date of repayment.
      The
      Company determined the fair value of the warrants to be $40,803 based
      upon a Black-Scholes option pricing model with the following assumptions:
      expected volatility of 50%, a risk-free interest rate of 4.8%, an expected
      term
      of 2 years, and 0% dividend yield. The $40,803 was recorded
      as additional interest expense In August 2006 another loan for $100,000 was
      made
      for 90 days from the Director’s IRA account at 8% interest and no additional
      consideration. The loan was extended in November 2006 for an additional six
      months maturing in May 2007. In May 2007, the loan was further extended to
      November, 2007. The three loans are unsecured.





**4.** **Redeemable
      Preferred Stock**





We
      are
      authorized to issue Twenty Million (20,000,000) shares of Preferred Stock with
      a
      par value of $.0001. In 2001, Eight Million (8,000,000) were designated “Series
      A” Preferred Stock and 2,440,540 shares were sold for cash to investors at
      prices ranging from $0.75 to $4.50 per share through 2005, and such shares
      were
      outstanding at December 31, 2004. During 2005, 40,000 shares were redeemed
      for
      $45,000 cash and 2,400,540 shares were converted into 2,400,540 shares of our
      Common Stock. All shares were redeemed during 2005, and there was no Preferred
      Stock outstanding as of December 31, 2006 or 2005.




51




The
      redemption feature required a demand by a shareholder of Series A Preferred
      Stock of sixty (60) days notice prior to the end of the calendar year for all
      or
      a portion of the Series A Preferred Stock held at redemption premiums of 125%
      in
      2004, 150% in 2005 and 175% in 2006.





We
      accreted the redemption value over the period on a straight-line basis with
      a
      charge to additional paid in capital and a credit to redeemable Series A
      Preferred Stock. The Series A Preferred Stock was originally classified as
      a
      liability and not in Stockholders’ equity on our historical balance sheets prior
      to the acquisition and merger discussed in Note 1. The Series A Preferred Stock
      transactions are set forth in the following table:




Fiscal
                Year
            
            Sale
                proceeds
            Redemption
                Premium
            Series
                A Preferred Shares Outstanding2001
            Sale
                at $.75 per share
            $
                803,200
            $
                200,800
            1,070,9332002
            Sale
                at $.75 per share
            $
                50,000
            $
                12,500
            66,6672003
            Sale
                at $.93 per share
            $
                1,167,205
            $
                291,800
            1,269,6072005
            Sale
                at $4.50 per share
            $
                150,000
            $
                37,501
            33,333Balance,
                December, 31 2005
            $
                2,170,405
            $
                542,601
            2,440,5402005
            Accretion
            
            $
                271,1232005
            Redemption
                by estate
            $
                (30,000)
            $
                (15,000)
            (40,000)2005
            Conversion
            $
                (2,140,405)
            $
                (798,724)
            (
                2,400,540)Balance
                September 30, 2005
            $
                0
            $
                0
            0





**5.** **Shareholders’
      Equity**





At
      December 31, 2006 our authorized capital consists of One Hundred Twenty Million
      (120,000,000) shares consisting of Common Stock in the amount of One Hundred
      Million (100,000,000) shares, $0.0001 par value and Preferred Stock in the
      amount of Twenty Million (20,000,000) shares, $0.0001 par value.






**Stock
      Issuances.** BAC
      was
      initially capitalized with the issuance of 100,000 shares of Common Stock to
      the
      founder in 1999. Tech, our accounting acquirer, periodically sold stock to
      fund
      operations since inception. The initial capitalization of Tech involved the
      issuance of 10,333,333 shares Common Stock to its founders in 2001. Through
      December 31, 2006, shares of Common and Series A Preferred Stock were sold
      in
      various offerings resulting in 13,359,433 shares being issued for cash with
      total net proceeds of $25,944,837.




52




On
      April
      5, 2006, we commenced a private placement of our securities to accredited
      investors in conformity with Rule 506 of Regulation D of the Securities Act
      of
      1933, as amended. The offering consists of 500,000 units, each consisting of
      two
      shares of Common Stock and one warrant to purchase one share of Common Stock
      for
      a maximum offering price of $4,500,000. In May 2006, we met with a group of
      current stockholders in London, England in conjunction with the Brussels Seafood
      Show. Certain shareholders expressed an interest in adding to their
      investment without solicitation and sales of common stock were made at a price
      of $4.50 per share and were conducted under the provisions of Regulation
      S.  Subsequently, a sponsor of other groups of foreign investors expressed
      an interest in promoting investors and a presentation was made twice in Mexico
      to investors qualified under Regulation S of the Securities Act of 1933, as
      amended, and securities were sold at the price of $4.50 per share with a warrant
      premium which varied at the time of investment.




A
      total
      of 724,958 shares of common stock and 236,095 warrants to purchase common stock
      were issued in the private placements for total proceeds of $3,111,411, net
      of
      costs and commissions of $150,900. Costs and commissions included $86,130 of
      commissions, the issuance of 22,028 warrants to purchase common shares at $5.00
      per share for a term of two years with a fair value of $27,088, ,the issuance
      of
      3,000 shares of common stock with a fair value of $13,500, and $22,115 of stock
      issue costs. An
      additional 37,065 shares of Common Stock were issued to employees and
      consultants for services and were recorded at the fair market value of $166,786.
      Also see Note 7 for 411,111 shares of Common Stock issued for a media
      agreement.





**Stock
      Incentive Plan.** In
      November 2006, we adopted a stock incentive plan to incentivize employees and
      consultants with awards of securities including stock options, stock
      appreciation rights and restricted stock grants. There are a maximum of
      3,000,000 shares of Common Stock subject to award under the plan and the awards
      must be made at fair market value at the date of the award. We awarded grants
      of
      530,000 shares of restricted stock to 26 individuals upon adoption of the Plan,
      valued them at $4.50 per share and recorded a compensation expense of $2,385,000
      in the fourth quarter of 2006. The shares become fully vested upon registration
      of the shares with the Securities and Exchange Commission or upon the
      development of a listing in a market initiated by us.





**Warrants.** At
      December 31, 2005, we had issued 2,122,335 warrants, exercisable from 2 to
      5
      years at $4.50 to $5.70, in conjunction with sales of common stock. We continued
      this practice in 2006 and as of December 31, 2006, had issued an additional
      236,095 warrants exercisable at $4.50 for 2 years in connection with our equity
      offerings. In 2005, warrants to acquire 266,666 shares at $4.50 were issued
      for
      services valued at $78,266, of which $48,220 was amortized to expense in 2006.
      During 2006, 1,446,028 warrants were issued for services, interest on short
      term
      loans and relating to fund raising efforts, all of these warrants are
      exercisable at $5.00 per share. A total of 22,028 warrants, exercisable for
      two
      years, were issued for fund raising activities. A total of 1,360,000 warrants
      were issued to 13 individual consultants, employees and directors for management
      services, and are exercisable for 5 years. The fair value of all of the warrants
      issued in 2006 aggregated $2,928,256, of which $27,088 was considered a cost
      of
      fund raising and the remaining $2,901,168 was charged to operations. The Company
      used a Black-Scholes pricing model with the following assumptions to determine
      the fair value of the warrants: expected volatility of 50%, a risk-free interest
      rate of 4.6%, an expected term of 5 years, and 0% dividend yield. No warrants
      have been exercised. At December 31, 2006, there were 3,804,458 warrants
      outstanding. See Note 3 for 64,000 warrants issued as additional interest on
      notes payable.




53





At
      December 31, 2006, warrants outstanding were as follows:


Number
                of   Shares under Warrants
            
            Weighted
                Average Exercise PriceWarrants
                outstanding at January 1, 2005
            
            
            1,348,847
            
            $
            5.50Warrants
                granted
            
            
            773,488
            
            
            4.50Warrants
                expired
            
            
            -
            
            
            -Warrants
                outstanding at December 31, 2005
            
            
            2,122,335
            
            
            5.15Warrants
                granted
            
            
            1,682,123
            
            
            4.98Warrants
                expired
            
            
            -
            
            
            -Warrants
                outstanding at December 31, 2006
            
            
            3,804,458
            
            $
            5.08





The
      following table summarizes information about warrants outstanding at December
      31, 2006:





Warrants
                Outstanding and ExercisableNumber
                ofShares
              Under
                Warrants
            Exercise
                Price
            Expiration
                Date
            Weighted
              Average
                Exercise
              Price1,148,847
            $5.70
            2008-2010
            $5.70706,823
            $4.50
            2008
            $4.50258,122
            $5.00
            2008
            $5.0066,666
            $4.50
            2010
            $4.501,360,000
            $5.00
            2011
            $5.0064,000
            $4.50
            (1)
            $4.50200,000
            $4.50
            (2)
            $4.50


(1)
            Expires
                two years after repayment of principal on notes giving rise to the
                warrants


(2)
            Warrants
                expire 2 years after commencement of trading of common
                shares





**Reverse
      Stock Split.** In
      September 2005, the Board of Directors declared a one-for-three reverse stock
      split in the shares outstanding to replace with one share each of three shares
      outstanding. This reduced the 70,164,410 shares of Common Stock outstanding
      at
      September 30, 2005 to 23,389,506 shares. In effecting the split we rounded
      up
      any fractional share to the next whole share, resulting in 1,369 additional
      shares being issued. All shares and per share amounts have been retroactively
      restated to reflect the split as of the first period presented.





**6** . **Related
      Party Transactions**





On
      March
      25, 1999, prior to our acquisition of substantially all of the assets of Tech,
      we issued a total of 333,334 shares of our common stock to Pierce Mill
      Associates, Inc., which were valued at $ 100. Of these shares, 233,334 shares
      were subsequently surrendered by Pierce Mill and cancelled by us for no
      additional consideration other than in order to facilitate the Transaction,
      thereby leaving a balance of 100,000 shares of our common stock held by Pierce
      Mill. James Cassidy, our former President and Director, is the sole director
      and
      stockholder of Pierce Mill.





In
      June
      2003, Tech relocated its scientific and engineering office from the
      manufacturing facility to a separate building. The building is owned by Mark
      Terry and Keith Meeks, who were two of Tech’s founders and officers, in the name
      of K&M Holdings LLC. The rental arrangement was on a month-to-month basis in
      the amount of $1,398 per month, which we believe represents the fair market
      rent. Pursuant to the Transaction, we assumed the lease for this facility.
      In
      July 2006, the engineering office was relocated, the building vacated and the
      rental arrangement was terminated




54




In
      November 2005, Tech established an office in Newport Beach, California, to
      provide space for its Chief Financial Officer. Mike Rubel and Stephen J. Fryer
      personally leased office space co-located with Grant Bettingen Inc., our former
      investment banking firm, and allocated and rented space to Tech, Grant Bettingen
      Inc. and three other tenants. Pursuant to an oral agreement, the rental of
      the
      space is on a month-to-month basis at an initial rate of $790 per month. In
      July
      2006 an additional office for engineering staff was rented, and the rental
      was
      increased to $2,100 per month. Mr. Fryer is our Director and our former interim
      Chief Executive Officer.





On
      August
      11, 2005, we entered into a Stock Purchase Agreement with Solvis Group, Inc.
      and
      Pierce Mill Associates, Inc., pursuant to which we issued 520,000 shares of
      our
      common stock to Solvis, which were valued at $2,340,000. Solvis received a
      controlling interest in us and therefore was able to facilitate the transactions
      contemplated by the Asset Acquisition Agreement pursuant to which we acquired
      all of the assets and liabilities of Tech. At that time, Mr. Fryer was a
      director of Dalrada Financial Corporation, which controlled Solvis, and was
      also
      one of our directors. On August 10, 2005, Solvis acquired control of us through
      its acquisition of the 520,000 shares. On August 19, 2005, we acquired the
      assets and assumed the liabilities of Tech, and Solvis became a minority
      stockholder in connection with the issuance of 22,943,693 shares to Tech. The
      Stock Purchase Agreement with Solvis has been amended to reduce the number
      of
      shares granted to Solvis to 100,000 shares, which were valued at $450,000 and
      charged to expenses as a cost of the Transaction.





In
      September 2005, we retained SC Capital Partners LLC (SCCP) to provide advisory
      services and transaction assistance on corporate matters, financing transactions
      and merger and acquisition transactions for a period of one year. A monthly
      retainer of $6,000 and reasonable expense reimbursement is included. The
      agreement included fees of 3% for assistance in raising sub-debt mezzanine
      financing, 10% cash and 10% warrants and 3% non-accountable expenses for
      assistance in raising equity capital. Our former interim CEO and a current
      member of our Board of Directors is a principal of SCCP. The retainer was paid
      for the duration of the contract and a total fee of $18,260 for raising equity
      capital was accrued in 2006 and paid in January 2007. This arrangement has
      expired.





**7.** **Media
      Agreement**





On
      September 30, 2005, we entered into a three year contract for media production
      and distribution services with Global Media Fund, LLC, which will provide
      nationally syndicated newspaper and radio features about us, our BEST food
      processing systems and food safety issues to 10,000 newspapers and 6,000 radio
      stations. The total cost for the contract is $4,500,000. The Company agreed
      to
      pay (i) $2,250,000 in cash or unrestricted common stock of the Company and
      (ii)
      $2,250,000 in shares of restricted common stock of Company. The $2,250,000
      payable in shares of restricted common stock are to be paid in shares valued
      at
      90% of market price at the time of issuance (but not less than the market price
      of the unrestricted shares) in 12 quarterly installments which began in January
      2006. The maximum share commitment for restricted shares at the minimum price
      is
      500,000 shares. The contract can be cancelled at any time with no obligation
      to
      continue the quarterly payments.




55




In
      2005,
      the Company paid $50,000 pursuant to the media agreement. In addition, the
      Company issued 244,444 shares of unrestricted stock valued $4.50 per share,
      for
      a total of $1,100,000. In 2005, there were no restricted shares issued. The
      value of the shares of commons stock of $1,100,000 was charged to marketing
      expense at the date the common shares were issued.





In
      2006,
      244,444 shares of unrestricted common stock, valued at $4.50 per share, or
      $1,100,000, and 166,667 shares of restricted common stock, valued at $4.50
      per
      share, or $750,000, were issued pursuant to the media agreement. The total
      of
      $1,850,000 was charged to marketing expense at the date the common shares were
      issued.





**8.** **Commitments**





**Operating
      Leases** -
      We
      lease our research and development laboratory & manufacturing facility
      premises located in Pocatello, Idaho and have leased three automobiles for
      three
      officers. Lease payments were made on these leases and a minor office equipment
      lease of $165,353 in 2006 and $102,799 in 2005. Future minimum lease payments
      required on these non-cancelable operating leases are as follows:




Year
                ended December 31,
            
            Amount2007
            
            $
            149,6862008
            
            
            67,0442009
            
            
            13,7442010
            
            
            4,020$
            $234,499










**9.** **Income
      Taxes**





Our
      financial statements are based on Tech being the deemed accounting acquirer
      in
      the reverse merger transaction which was effected through an asset purchase
      agreement. Typically, historical losses do not carry through to the acquirer
      in
      an asset based merger and we do not expect to use any of the tax loss
      carryforwards of Tech. Our tax loss carryforward is based on the losses
      sustained since the merger in August 2005, which is approximately $7,123,354.





The
      income tax effect of temporary differences between financial and tax reporting
      gives rise to the deferred income tax assets at December 31, 2006 and 2005
      as
      follows:




2006
              
              2005Net
                  operating loss carry forward
              
              $
              18,334,084
              
              $
              7,123,354Less
                  valuation allowance
              
              $
              (18,334,084
              )
              $
              (7,123,354
              )Net
                  deferred tax asset
              
              $
              -
              
              $
              -





The
      Company has provided a 100% valuation allowance as it cannot determine that
      it
      is more likely than not that it will realize the deferred tax assets.




56





Reconciliation
      of the effective income tax rate to the United States statutory income tax
      rate
      for the years ended December 31, 2006 and 2005 is as follows:




2006
              
              2005Tax
                  expense at the U.S. statutory income tax rate
              
              
              (34.0
              )%
              
              (34.0
              )%Increase
                  in the valuation allowance
              
              
              34.0
              %
              
              34.0
              %Effective
                  income tax rate
              
              
              -
              %
              
              -
              %


**10.**  **Subsequent
      Events**





Common
      Stock continues to be issued in accordance with the Media Agreement described
      in
      Note 7. On each of January 1, 2007 and April 1, 2007, 41,667 shares were issued
      as the fifth and sixth of twelve installments of the quarterly commitment.





The
      Company continues to sell its common shares in reference to its April 5, 2006
      private placement of its securities to accredited investors in conformity with
      Rule 506 of Regulation D of the Securities Act of 1933, as amended. The offering
      consists of 500,000 units, each consisting of two shares of Common Stock and
      one
      warrant to purchase one share of Common Stock for a maximum offering price
      of
      $4,500,000. This offering has been modified to change the warrant coverage
      periodically. In addition, we continue to sell Common Stock to non-US persons
      in
      Regulation S offerings to investors residing in foreign countries. During the
      period January 1, 2007 through June 27, 2007, the Company sold 494,959 shares
      of
      its common stock for total proceeds of $2,230,278.





In
      March
      2007, the Board awarded stock grants to certain employees, consultants and
      advisors as compensation for services. A total of 174,322 shares were awarded
      with a fair market value of $784,449 which will be recorded as compensation
      expense in the first quarter of 2007. Of these shares 45,000 were awarded in
      the
      form of restricted stock under our Stock Incentive Plan - 2006. One advisor
      also
      received 150,000 warrants to purchase common stock at he price of $5.00 per
      share for a period of 5 years. This warrant has an imputed value of $308,827
      which will be recorded as compensation expense in the first quarter of
      2007.




57