UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
D.C. 20549





FORM
10-K/A





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


For the
fiscal year ended December 31, 2008





OR





 ̈TRANSITION REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


For the
transition period from 
to





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, CA
              
              93230(Address
      of principal executive offices)
              
              (Zip
      Code)





558-589-0100


(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





Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act.


 ̈ Yes         
xNo





Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or 15(d) of the Act.  ̈




Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.   xYes     
  ̈No





Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not 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-K or any amendment to this
Form 10-K.  ̈




Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
definition of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act. (Check one):




Large
      accelerated filer   ̈
              Accelerated
      filer   ̈Non-accelerated
      filer     ̈   (Do
      not check if a smaller reporting company)
              Smaller
      reporting company  x





Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Act).   ̈Yes   xNo





The
aggregate market value of the voting and non-voting common equity held by
non-affiliates, computed by reference to the price at which the common equity
was last sold, or the average bid and asked price of such common equity, as of
the last day business day of the registrant’s most recently completed second
fiscal quarter (June 30, 2008) was $21,384,959.





At
January 31, 2009, the number of shares outstanding of the registrant’s Common
Stock, $.0001 par value per share, was 29,097,537.


DOCUMENTS
INCORPORATED BY REFERENCE


None.











EXPLANATORY
NOTE





We are
filing this amendment to our Form 10-K filed on February 27, 2009, for the
fiscal year ended December 31, 2008, to make the following revisions (i) to
revise the Independent Report of Registered Public Accounting Firm from Weinberg
& Company, P.A., to ensure that such report covers our Statement of
Stockholders’ equity for the applicable period noted in such report and (ii) to
revise the “Management’s Annual Report on Internal Control Over Financial
Reporting” subsection of Item 9A “Controls and Procedures” to clarify that our
management concluded that internal control over financial reporting was not
effective, for the reasons previously identified in the initial Form 10-K
filing.





Other
than as set forth above, there are no other significant changes to the original
Form 10-K for fiscal year ended December 31, 2008, and this Form 10-K/A does not
reflect events occurring after the filing of the original Form 10-K, or modify
or update disclosures therein in any other way.








GLOBAL
FOOD TECHNOLOGIES, INC.


INDEX
TO


ANNUAL
REPORT FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2008




Item
                          
                          
                          
                          PageNumber
                          
                          Description
                          
                          NumberPART I1
                          
                          Business
                          
                          11A
                          
                          Risk
      Factors
                          
                          151B
                          
                          Unresolved
      Staff Comments
                          
                          172
                          
                          Properties
                          
                          173
                          
                          Legal
      Proceedings
                          
                          174
                          
                          Submission
      of Matters to a Vote of Security Holders
                          
                          17PART II5
                          
                          Market
      for Common Equity, Related Stockholder Matters and Issuer Purchases of
      Equity Securities
                          
                          176
                          
                          Selected
      Financial Data
                          
                          197
                          
                          Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations
                          
                          197A
                          
                          Quantitative
      and Qualitative Disclosures About Market Risk
                          
                          258
                          
                          Financial
      Statements and Supplementary Data
                          
                          269
                          
                          Changes
      in and Disagreements with Accountants on Accounting and Financial
      Disclosure
                          
                          269A
                          
                          Controls
      and Procedures
                          
                          269B
                          
                          Other
      Information
                          
                          27PART III10
                          
                          Directors,
      Executive Officers and Corporate Governance
                          
                          2811
                          
                          Executive
      Compensation
                          
                          3212
                          
                          Security
      Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters
                          
                          3513
                          
                          Certain
      Relationships and Related Transactions and Director
      Independence
                          
                          3614
                          
                          Principal
      Accountant Fees and Services
                          
                          3815
                          
                          Exhibits,
      Financial Statement Schedules
                          
                          40Signatures
                          
                          42





PART
I.





ITEM
1.  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 in the research and development
of food safety technologies.  Pursuant to this Asset Acquisition
Agreement, as amended, 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.  We refer to the asset acquisition in this report as the
Transaction.  Solvis and the Pierce Mill Associates, Inc. (which were
the only two stockholders of Boulevard Acquisition Corp. prior to the
Transaction) agreed to reduce the number of shares to be held by them following
the Transaction to 100,000 shares each of GFT.  Thus, the 22,943,693
shares we issued to Tech represented approximately 99% of our issued and
outstanding common stock following the Transaction.  As of December
31, 2008, we had 29,001,739 shares issued and outstanding.





Following
the Transaction, we filed an amendment to our Certificate of Incorporation to
change our name to “Global Food Technologies, Inc.” and Tech changed its name to
“Global Food TECH, Inc.”  Pursuant to the Transaction, Tech became a
holding company with no assets other than its ownership of GFT shares, and GFT
became the operating company.





The
predecessor to 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 July 2001.  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 adopted
Tech’s business plan, purchased its assets and continue to research, develop,
market and seek to license our patented food safety technologies. To date, we
have not generated any revenues.





Business
of the Company





Overview





We are a
life sciences company engaged in the commercialization of food safety
applications for: (1) our proprietary scientific food processing technologies,
which are currently focused on increasing the quality and value of commercially
packaged seafood (and may later expand to poultry and other meats),
substantially extending their shelf-life and making these products safer for
human consumption by reducing disease-causing bacteria; (2) our iPuraTM Food
Safety and Quality Assurance Service Program (“The iPuraTM Program”),
which is a comprehensive food safety and quality assurance program focused
on  the execution of extraordinary food safety measures at the source
of food production; (3) the promotion and sales of food products that have been
treated under the iPuraTM Program
and bear our iPuraTM consumer
food safety seal; and (4) licensing of the iPura seal.


1





Currently,
we are still a pre-revenue company, and have not distributed any seafood under
our iPuralabel,
although we recently completed the installation of our first iPurasystem with a seafood
processor in China.  We have not yet executed any contracts with
retailers for the sale to consumers of  iPura branded seafood
products. Our business plans described in this Annual Report remain subject to
modification from time to time at the discretion of management and are further
subject to various risks and uncertainties, some of which are described in Part
I, Item 1A of this Annul Report.





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 by treating those products with the food safety technologies
and methods under  the iPuraTM
Program.  We believe that using our proprietary, low-cost technologies
designed to sharply reduce the presence of dangerous and often lethal pathogens
in seafood and significantly increase the shelf-life and commercial value of
these products, we could create a new paradigm in food safety. All of our
current commercialization efforts are focused on seafood, although the Company
anticipates ultimately developing applications for poultry and meat products as
well.  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. OuriPuraTMseal is a
tool that communicates 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
on-site 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 seafood industry. This is the
opportunity for GFT’s technology. GFT has invented the “kill step” that
management believes is absent in seafood processing. GFT developed the iPuraTM Seafood System (“The iPuraTMSystem”) 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, water, flow rate and an environmentally friendly organic antimicrobial
solution to mitigate disease causing bacteria (pathogens) and other spoilage
organisms, without affecting the texture, color, taste, or nutritional value of
the product.





GFT has
begun providing the technology, the equipment and personnel for the pathogenic
“kill step”, as part of an on-site food safety service. GFT plans to install its
system in food processors’ facilities at the end of the processing line. The
iPuraTM System is comprised of a large
stainless steel pressure vessels and/or spray systems with associated
subsystems, all constructed inside a controlled environment.  The
“kill step” will be performed by GFT personnel operating the iPuraTM System, immediately prior to
packaging.  After the sanitization, GFT places its “iPuraTM” logo
(seal) on the package. The seal will serve to identify food products that have a
higher level of safety and quality.




The iPura
Program represents the anticipated commercialization of our technologies. The
iPura Program embodies extraordinary precautions and world-class food safety
measures for the seafood industry by uniting green technologies with a
comprehensive daily regimen at the source of production – in food processing
facilities.The
iPura daily on-site
food safety team will include microbiologists, system operators, technicians,
and quality control personnel.  Our green technologies and “boots on
the ground” strategy assures thatiPura stands alone with its
vertically integrated controls for food safety.


2


Management
believes that it is commercially feasible to create recurring revenue streams
through service, sales, and licensing to capitalize on the potential of our
proprietary technologies, market opportunities and human resources. We have
identified three price-per-pound revenue models, with one particular model to be
tailored for use with each processor dependant upon the circumstances of and
GFT’s relationship with that processor.  In each model, GFT will
provide the daily on-site service to maintain control of The Highest Standard in
Food Safety.





A.
Service and Licensing – Under this proposed model, GFT would bill a
price-per-pound charge to the food processor for (1) the daily on-site iPura
food safety service and (2) the right, under license, to affix the iPura seal on
a package containing product processed through the iPura system. This model
provides GFT with lower required capital costs and avoids the need for us to
arrange inventory financing.  Thus, this model is designed to produce
faster and greater scalability, although it precludes GFT from earning
potentially higher profits from the premium that we believe iPura branded
products may be able to command in the marketplace. GFT may use this model in
circumstances where growth in processing volume exceeds our ability to finance
and manage inventory, especially if regional licensees are contracted (as
discussed below).





B.
Service and Sales – Under this proposed model, GFT would act as the exclusive
importer of iPura-labeled products through its wholly-owned subsidiary, iPura
Food Distribution Company (“IFD”). GFT will carry out the service, sales,
marketing and management, while IFD will manage the logistics. We believe that
this “importer” model will (1) provide the opportunity for GFT to exercise
varying degrees of control over the early supply, marketing, distribution and
price-per-pound of iPura-labeled products; (2) provide GFT the opportunity to
capture reasonable and customary gross profit margins commonly earned by
importers; (3) provide GFT the opportunity to command and capture a premium
price for iPura-labeled productthrough
negotiated sales in the marketplace; and (4) provide GFT the opportunity to
increase demand for iPura-labeled product both domestically and
internationally.  This model, however, will likely require significant
additional capital and/or commercial financing for inventory, and will also
subject GFT to any risk of loss for unsold inventory or spoilage.





C.
Regional License – Management believes that if GFT is successful in both models
discussed above, it could create demand for a third revenue model that would
envision the licensing of strategic “partners” to support the expansion of iPura
in large international consumer markets such as China, Japan, and
Europe.  If we implement such regional licenses of our iPura
technology and programs, the licensees could then utilize our technology on a
regional basis through either of the two revenue models discussed
above.  Utilizing regional licenses could accelerate growth and allow
us to increase brand awareness and market share, as well as reduce the capital
resources required by GFT to implement such expansions.  GFT could
implement such regional licenses based on a royalty fee, or pursuant to a
joint-venture model with such third-party licensees.





GFT has
elected to initially enter the market utilizing the “importer” model, as
described in “B” above. Based on our initial market research, we believe that
this model may provide superior margins and allow us to reach profitability in
the shortest course. GFT anticipates utilizing each model to maximize revenue,
based on market conditions and the circumstances and abilities of each
processor.  The “importer” model allows GFT to prove our business
model to seafood processors, as we will be responsible for generating consumer
interest and demand for our products, re-selling the iPura processed seafood
products, and negotiating pricing and margins with retailers and
distributors.


3





On
January 30, 2009, the first iPura System became operational in a major seafood
processing plant on Hainan Island in the People’s Republic of China. The terms
of the agreement are detailed in the iPura Food Safety Installation &
Services Agreement dated November 11, 2008 and the iPura Sales Agreement of the
same date, by and between Global Food Technologies, Inc. and Tongwei (Hainan)
Aquatic Products Co. Ltd. GFT anticipates the importation and sales of product
under the iPura label during the first quarter 2009.





We will
proceed to validate our iPura brand and business model through anticipated sales
in the U.S. markets. Thereafter, GFT intends to pursue the opportunity to create
growth by adding more food products and by licensing strategic partners to
distribute iPura-labeled products internationally, thereby creating additional
streams of recurring revenue. GFT has had discussions with a strategic partner
that has experience in and pathways to the food sector in China, where the
middle class has over 100 million consumers and continues
growing.  Studies indicate the Chinese middle class are as concerned
with food safety as consumers in the U.S., Japan and the European Union.
Licensing agreements can support substantially increased and faster growth,
since they allow sales and marketing to be carried out on the infrastructures of
allied partners or licensees.  We believe that there will be other
opportunities and potential strategic alliances in Europe, Japan, South Korea
and other Asian countries, and we are beginning market research in consumer
markets in Brazil and India as well.





We spent
$2,159,689 and $3,311,861 on continued research and development during the
fiscal years ended December 31, 2008 and December 31, 2007,
respectively.  As described in this report, we believe that our iPuraTM Seafood Processing System and
iPura Program have been commercialized and are now operational. GFT has been
engaged in various stages of negotiations with three additional seafood
processors, and hopes to execute final contracts with these processors in
2009.  Our other technologies for other food products remain in
various stages of research and development.  We do not anticipate
expanding our technologies to additional products, or spending any significant
research and development funds on such potential additional products during
2009, as our current focus is on successfully completing commercializing and
implementing our seafood applications.





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.





The U.S.
Center for Disease Control estimates that one third of Americans are stricken
with some form of food poisoning each year. These 100 million food poisoning
cases result in more than 325,000 hospitalizations and 5,000 deaths in America
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.


4





We
believe that the food processing industry has a critical need for a
pathogen-elimination step prior to final packaging. Making seafood (with future
potential expansion to poultry and other meats) safer for human consumption,
while at the same time substantially extending 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 seals
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 sealed 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 seal 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”.




Distributing
defective food can irreparably harm a company’s reputation and bottom line.
iPuraadds value by
satisfying consumer demand for cleaner and safer sustainable seafood. With iPura sealed products, we
believe that companies can safeguard public health, protect their brand image,
extend product shelf-life, reduce spoilage, mitigate liabilities and increase
sales.




Our
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 theiPuraTM system and iPura food safety
program.





The iPura program builds in
controls from the start that are designed to combat foodborne hazards and
prevent contaminants from entering the food supply.  iPuraintegrates
patented technologies with a varied combination of organic antimicrobial agents
and proprietary delivery systems that perform non-thermal microbial
interventions (“organic clean-steps” or “kill steps”) prior to packaging, with
additional safety and quality controls throughout the distribution
chain.


5





Under our
on-site iPuraTM Food Safety Program we are
providing the technology, equipment and personnel for the pathogenic “kill
step”, as part of the onsite food safety service. The iPura system is installed
in the food processor’s facilities at the end of the processing line, and is
comprised of large stainless steel pressure vessels and/or spray systems with
associated manifolds, hydraulics, pneumatics, loaders, un-loaders, fill/mix, and
conveyance apparatuses, all constructed inside a controlled environment. Our
methods add one additional but critical step 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 iPuraTM seal on
the package.





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 iPuraTM 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 significant development in seafood 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.


6





iPuraTM labeled
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 the
efficacy of the iPuraTM System and iPuraTM Food Safety Program. As a
result of MMIB’s involvement, iPura labeled product is insured against
regulatory intervention and product recall throughout the distribution chain.
The iPuraTMprocessor
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 iPuraTMseal. Mr. Curtis Keyes,
the CEO and founder of MMIB, also serves on our Advisory Board.





We have
established, and successfully registered the iPuraTM trade mark
to identify products processed by the iPuraTM Seafood Processing System.
iPura has been accepted as a registered trade mark in the European Union, Japan
and in the U.S., although the USPTO will not accept the trade mark in the
official registry until such time as iPura products are purchased commercially
in the U.S. With the first iPura System becoming operation on January 30, 2009,
the Company anticipates commercial sales of iPura labeled products in the first
quarter 2009. At such time, iPura will be accepted into the official registry of
the USPTO as a registered trade mark.





TheiPuraseal
is a guarantee that Global Food Technologies’ personnel provided continuous
daily on-site food safety services at the seafood processor’s facility. It is
the expectation of management that buyers will recognize iPura as
the world’s first food safety seal backed by insurance throughout the
distribution chain against regulatory rejection and product recall and that
consumers will recognize the seal as a mark of excellence signifying the iPura
slogan “The Highest Standard in Food Safety”.





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
iPuraTM
seal.  Currently, we are advertising in industry
publications.





To date,
we have tested our technology primarily on seafood products, including actual
seafood product supplied by our potential customers.  Application of
our technology to poultry and other foods will require significant additional
research and development.  Internal testing has demonstrated that 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 numbers 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
near 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 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 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.


7





iPura®Value
Points





The iPuraProgram integrates
cutting-edge technologies to mitigate dangerous pathogens and contaminants that
too frequently compromise seafood products during the processing and packaging
stages.





Safety
controls prior to packaging:





·
            Patented
      “organic clean step” or “kill step”


·
            Turn-key
      industrial hardware


·
            On-site
      food safety and quality assurance
team


·
            Multiple
      interventions to combat foodborne
hazards


·
            On-site
      microbiologist for continual testing against foodborne
    hazards


·
            Packaging
      within a  controlled
environment


·
            Independent
      third party certification


·
            Chlorine
      free





Safety
controls in the distribution chain:





·
            Temperature
      monitoring


·
            Protection
      against cross contamination


·
            Traceability


·
            Security
      authentication against
counterfeiting


·
            Insurance
      against regulatory rejection and product
recall




Proposed
Benefits to the Food Distribution Chain




·
            Protects
      public health


·
            Protects
      brand names and company image


·
            Protects
      against product rejection


·
            Protects
      against product recall


·
            Reduces
      product liability


·
            Reduces
      product waste


·
            Promotes
      extended shelf-life


·
            Provides
      seamless traceability


·
            Increases
      profitability





While our
current research and development efforts have been focused almost exclusively on
the seafood markets, subject to the availability of sufficient resources, we
intend to commence scientific research activities on applying our technology to
other meat products, including poultry and 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.


8





Distribution
and Marketing Plan





Management
has determined it is commercially feasible to create recurring revenue streams
through service, sales, and licensing to capitalize on the potential of our
proprietary technologies, market opportunities and human resources. We have
identified three price-per-pound revenue models, with one particular model to be
tailored for use with each processor dependant upon the circumstances of and
GFT’s relationship with that processor.  In each model, GFT will
provide the daily on-site service to maintain control of The Highest Standard in
Food Safety. The models are discussed in detail above, on the “Overview”
section.





A.
Service and Licensing - GFT will bill a price-per-pound charge to the food
processor for (1) the daily on-site iPura food safety service and (2) the right,
under license, to affix the iPura seal on a package containing product processed
through the iPura system.





B.
Service and Sales - GFT will act as the exclusive importer of iPura-labeled
products through its wholly-owned subsidiary, iPura® Food
Distribution Company (“IFD”). GFT will carry out the service, sales, marketing
and management, while IFD will manage the logistics.





C.
Regional License - Management believes that if GFT is successful in both models
discussed above, it could create demand for a third revenue model that would
envision the licensing of strategic “partners” to support the expansion of iPura
in large international consumer markets such as China, Japan, and
Europe.





GFT has
elected to initially enter the market utilizing the “importer” model, as
described in point “B” above. On January 30, 2009 the first iPura System became
operational in a major seafood processing plant on Hainan Island in the People’s
Republic of China. GFT anticipates the importation and sales of product under
the iPura label during the first quarter 2009.





We will
proceed to validate iPura with sales in the U.S. markets. Thereafter, GFT
intends to pursue the opportunity to create growth by adding more food products
and by licensing strategic partners to distribute iPura-labeled products
internationally, thereby creating additional streams of recurring
revenue.





Beginning
in the 4th quarter
of 2008, iPura has been advertised in various industry publications in an effort
to reach the seafood buyers and influencers. These publications include: Seafood
Business, Seafood International, Intrafish, GAA Magazine, Progressive Grocer,
Chef and Food Safety Magazine.





In order
to promote the iPuraTM seal to consumers in a
cost-effective manner, our contract with Global Media Fund, LLC, described
further below, will be a key element of our consumer-based marketing
plan.  Pursuant to the agreement, Global Media will place articles
describing iPuraTM seal and technology in various
newspapers throughout the U.S.  In addition, we intend to have
descriptive brochures and educational materials at supermarkets where seafood
with iPuraTM seal is sold.





In
addition to our first commercially installed iPuraTM Seafood Processing System, we
have further 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.


9





Vietnam





GFT has
identified Vietnam as a prime target market for its pathogen elimination
technology.  There are a number of contributing factors to the high
priority given Vietnam.  Some of those contributing factors
are:





·
            Seafood
      is one of the leading export industries in
  Vietnam.


·
            Seafood
      exports deliver much needed hard currency to the Vietnamese government and
      economy.


·
            Vietnam
      has a tremendous need for pathogen elimination systems.  They
      have had a number of rejections and retentions from the EU, U.S. and Japan
      due to microbial contamination and the filthiness of their
      exports.


·
            Vietnam
      recognizes the safety and quality issues confronting their industry and
      desires to improve their seafood quality and global
      reputation.


·
            Vietnam
      is a newly accepted participant in the World Trade
      Organization.





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.





Global
Food Technologies has two signed contracts in Vietnam. One contract is with a
major shrimp producer and the second contract is with a major pangasius (basa)
producer. Management anticipates the fulfillment of those contracts during the
second and fourth quarter 2009.





Chile





The
principal seafood exports from Chile are salmon and trout, with salmon leading
the industry.


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 iPuraTM  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 that there were no changes to the smell, texture, taste and overall
appearance of their seafood product processed in our facility.


10





Global
Food Technologies has a signed contract in Chile with a major salmon and trout
processor. Management anticipates the fulfillment of those contracts during the
third quarter 2009.





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. On
March 7, 2007, GFT signed a contract with the CEO of the CSCI, for
representation of potential customers. On March 12, 2007, GFT and CSCI sponsored
a private meeting with 36 Chinese seafood delegates at the Boston Seafood Show.
The seminar and private meetings that followed led to governmental support that
resulted in an invitation to speak to the seafood processing members at a major
seafood event in China on May 19, 2007,  GFT was presented as a guest
at the annual meeting of the China Aquatic Products Processing and Marketing
Association.





GFT
provided a keynote speech at the China International Food Safety Conference in
Beijing, on September 13, 2007. The audience included most of the major
influencers in global food safety, including the Food and Agricultural
Organization of the United Nations, European Food Safety Commission, U.S. FDA,
USDA, along with numerous regulatory agencies, universities, and multinational
corporations from around the world. After the meeting GFT signed a memorandum of
cooperation with the CIQ of the People’s Republic of China (CIQ is China’s FDA
equivalent).





As
previously stated, on January 30, 2009 the first iPura system became operational
in a major seafood processing facility in the PRC. Management anticipates
further contracting and operations throughout 2009 and beyond.





United States and Other
International Markets





Management
will focus our initial contracts in 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.


11





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 that were
part of the first iPura system installation in China. 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 iPuraTMsystems with
experienced commercial suppliers. The main system components and electronic
controls (PLC’s) will be manufactured in the United States while the supporting
system components such as pumps, chillers, etc. are industry standard and can be
procured locally in the country of installation. Following the successful
blueprint of the first iPura installation,  the integration will
continue to be handled by GFT personnel with PLC programmers from the United
States. GFT employees will operate and maintain the systems onsite and will
handle all the quality control aspects of the process.





Although
our current plans include installing our iPuraTMsystems with seafood
processors in Vietnam, Chile, and China, we believe these processors will import
most of the seafood processed into the United States.  Therefore, a
critical aspect of our business model is to promote our technology and the iPuraTMseal in the United
States as well.  We intend to educate processors, distributors,
restaurants, and other seafood providers, grocers, governments and consumers
about the risks of food-borne pathogens in seafood, and the health and economic
benefits that our technologies can produce.  To that end, have entered
into the media-buying agreement with Global Media Fund described
below.  We have also participated in trade shows in the United States,
South America, Asia, and Europe.





Processor
and Distribution Agreements





GFT has
executed contracts with four seafood processors pursuant to which GFT will
install our iPuraTM System  at the seafood processors’
facilities.  All of the current agreements are structured pursuant to
our “importer” model (model “B” as described in Part I, Item 1 “Business”), with
our wholly-owned subsidiary, iPura Food Distribution Company (IFD) responsible
for ordering and purchasing the seafood from the processors, and then importing
and distributing the seafood products to retailers or other
distributors.  IFD has also signed agreements with the same four
processors outlining the exclusive purchase terms.





Under
these agreements, GFT is generally responsible for the cost of manufacturing,
fabricating and installing the iPuraTM System  at the processors’
facilities, with the processors providing power and utility connections and
certain other operating expenses.  In one instance, GFT is also
responsible for financing a six hundred square meter expansion of the
processor’s plant to facilitate the iPuraTM System, with GFT being reimbursed by
the processor for such costs through credits against future seafood
orders.





Under
these agreements, our iPuraTM System  would typically be installed onto
one or two processing lines at the processors’ facilities.  Our iPuraTM
System  will be operated and supervised by GFT personnel, at GFT’s
expense.  Seafood processed through our iPuraTM System  will
then be packaged and labeled with our iPura seal.  IFD has the
exclusive rights to buy and distribute the seafood processed with our iPuraTM
System and the processors therefore cannot sell such seafood to any other
customers or distributors, or otherwise use our iPuraTM System for any other
seafood processing. The agreements have terms that range from one to three years
from the date of completion of the installation of our iPuraTM System at the
respective processor’s facility.  IFD has obtained most favored
nations pricing with respect to seafood purchased under all of the agreements.
None of the agreements have any minimum purchase requirements for IFD, although
one agreement has a target volume schedule, with potential increases to the per
pound seafood price if such targets are not met.


12





The
following is a summary of the processor location, the type of seafood to be
processed,  the target installation dates, and the current estimate
for installing our iPuraTM System .





COUNTRY
                
                SEAFOOD
                
                TARGET
                  INSTALL DATE
                
                EST INSTALL DATE
                  (1)China
                
                Tilapia
                
                11/18/2008
                
                Installation
      CompletedVietnam
                
                Shrimp
                
                12/1/2008
                
                4th
      Quarter 2009Vietnam
                
                Pangasius/Basa
                
                3/1/2009
                
                June
      2009Chile
                
                Salmon
      or Trout
                
                3/5/2009
                
                3rd
      Quarter 2009





(1)
Management’s current estimate of the date that the installation may be completed
is subject to a number of assumptions and variables and is subject to
change.  In cases where GFT has not met (or is anticipated not to
meet) the target installation date, GFT has, and continues to, cooperate with
the processors to provide mutually acceptable revised target installation
schedules.  In all cases, completion of pending installations is
subject to GFT obtaining sufficient capital to finance the fabrication of the
iPuraTM System and installation costs.





GFT has
completed the China installation, although no seafood has yet been ordered by
IFD or processed at such facility.  GFT expects the first seafood to
be ordered by IFD and processed at this facility in the first quarter of 2009,
with distribution and sales targeted for the U.S. There is a second iPuraTM
System located at the processor in China that is available for future
installation if sales levels require it.





IFD has
not executed any agreements with retailers or sub-distributors, but continues
negotiations with certain select U.S. grocery store retailers.  IFD
will also have to acquire commercial financing or letter of credit arrangements
in order to purchase the seafood orders with the processor and carry the seafood
inventory costs until resold to a sub-distributor or retailer.





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.  Global Media Fund’s marketing efforts will be
primarily directed at consumers as a critical component of our “pull through”
marketing plan.  During the fourth quarter of 2008, Global Media
Fund  began with marketing efforts under the contract with a
consumer-based campaign timed with the anticipated distribution of seafood
products bearing the iPuraTM seal in
the United States during the first quarter 2009.





The cost
of the contract totals $4,500,000, with cash of $50,000 and common stock with a
value of $1,100,000 paid 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 was paid in Company common stock at fair
market value, in twelve quarterly installments, being fully paid in December
2008.


13





Competition





Currently,
we believe that we face few direct competitors in the field of seafood safety
technology, and that no company known to us has technologies that are directly
similar to the technologies we propose using on seafood. Current products
designed to kill pathogens and keep bacteria from reattaching to seafood
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.





Nevertheless,
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 we believe 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 future products may be subject to review and approval by the
FDA.  Since our suppliers have already received FDA approval for the
current components of our iPuraTM Seafood Processing System that
come into contact with food, such as the liquid wash, our iPuraTM Seafood Processing System does
not require FDA approval as confirmed in writing to us by the FDA Office of
Pre-Market 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 iPuraTM 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 our proprietary technologies.  The most recently issued patent
relates to certain aspects of our iPuraTM Seafood Processing System, and
the other two relate to technologies for potential use with produce (although we
have no current plans to commercialize the patents related to produce). We also
have filed two additional patent applications that are 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. We believe that 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 iPura 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. The iPuraTM trade mark has been
allowed in each country. The US Trademark Office has issued a "Notice of
Allowance" for the iPura trademark and all that remains to complete the
registration process is to submit evidence that GFT is selling the food products
in the U.S. using / under the iPura brand. With the first iPura System becoming
operation on January 30, 2009, the Company anticipates commercial sales of iPura
labeled products in the U.S. in the first quarter 2009, although currently, no
retail distribution contracts with grocery stores or other outlets have been
executed. At such time, iPura will be accepted into the official registry of the
USPTO as a registered trade mark. The trademark applications for the iPura
trademark also cover use of the mark in connection with fish, meat, pork,
poultry, turkey, fresh fruits, and fresh vegetables.  GFT owns the rights
to the iPura mark for these goods, even though it may actually be the licensees
who are selling the processed foods.  The licensees' use of the iPura
brand in connection with the processed foods will inure to the
benefit of GFT.





Employees





As of
December 31, 2008, we had 24 full time employees.





ITEM
1A.  RISK FACTORS





A
description of risk factors is not required for smaller reporting
companies.  However, we note that a variety of factors could cause our
actual results and future experiences to differ materially from management’s
anticipated results or other expectations expressed in this Annual Report. 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 any commercial financing to allow us to purchase seafood
      inventory for processing in our iPuraTM System, and to
      obtain such financing in amounts required and on commercially reasonable
      terms;




·
            our
      ability to negotiate contracts and purchase orders with distributors and
      retailers;




·
            risks
      related to inventory costs, shipping and handling and
      spoilage;




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




15




·
            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 additional contracts with food processors, the time
      it takes for us to enter into any of these contracts and the licensing or
      pricing models we are able to
implement;




·
            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, including all required import-exporter licenses and
      permits;




·
            whether
      the introduction of the iPuraTM brand 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;




·
            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;




16




·
            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.




ITEM 1B.UNRESOLVED STAFF COMMENTS





NONE.





ITEM 2.
PROPERTIES





We have a
lease for our Corporate offices with the City of Hanford, California, for
approximately 3,420 square feet of office facilities located at 113 Court,
Hanford, California. The lease expires September 30, 2010. The monthly lease
rate is $4,623.





In August
2007, we relocated our science and engineering staff from Pocatello, Idaho to
Hanford, California. We rented approximately 15,000 square feet of warehouse in
September under a seven (7) year lease finalized in November requiring
escalating rent from an initial $10,650 per month over the term of the lease and
including a tenant improvement allowance of $250,000.  We have not
utilized our tenant improvement allowance as of December 31,
2008.





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





NONE





PART
II.





ITEM
5.   MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
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
January 31, 2009, we had 486 stockholders of record.




17




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. To date, we have not generated any revenues and we currently anticipate
that we will retain any future 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
the fourth quarter of 2008, we issued the securities described below 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.





In the
fourth quarter of 2008, a total of 93,537 shares of common stock at a price of
$4.50 per share and 62,281 warrants to purchase common stock were issued in
private placements for total proceeds of $328,771, net of costs of $92,140,
related to the issuance of 20,476 shares of common stock to
finders.





A total
of 41,667 shares of common stock valued at $4.50 per share were issued to Global
Media Fund for a total value of approximately $187,501, and recorded as
marketing expense when the shares were granted.




Accrued
Directors fees are paid in shares of common stock. A total of 13,332 shares of
common stock were issued during the fourth quarter of 2008 valued at
$59,993.




Shares
were issued for services to engineering and marketing consultants during the
fourth quarter of 2008, for a total of 48,167 shares valued at
$216,752.





Restricted
Stock awards were made under the 2006 Stock Incentive Plan to 10 employees and
consultants during the fourth quarter of 2008. 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 183,500 restricted shares were
granted during the fourth quarter of 2008. The shares were valued at $4.50 per
share for a compensation expense of $825,750.




In
December 2008, 700,000 warrants to purchase common stock were issued to an
officer and a consultant as compensation. The officer received 200,000 warrants
exercisable at $7.00 per share for a term of 5 years. The fair value of the
warrants was determined to be $289,200. The other 500,000 warrants were issued
to a consultant. These warrants are exercisable at $5.00 per share for a period
of 5 years and were valued at $935,000.  The imputed costs were
charged to compensation expense.




We did
not make any repurchases of our securities during the fourth quarter of fiscal
year 2008.




18




ITEM
6.   SELECTED FINANCIAL DATA





Not
required for smaller reporting companies.





ITEM
7.   MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS 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-K.





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 iPuraTM System (formerly
referred to as the BEST Seafood Processing System). Our iPuraTM System is ready for
market introduction as the physical embodiment of TheiPuraTMFood Safety
Program, although our other prospective products still require additional
research and development, and some customization of the iPuraTMsystem will be required
for each specific on-site installation. As of December 31, 2008, we have not
generated any revenues and since inception we have incurred accumulated losses
of $54,158,380 and negative operating cash flows of $31,978,879. 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. Further development has resulted in a more
efficient, less labor intensive and more easily maintained processing system.
This system has been fabricated and installed in a processing facility in China
in 2008, and will commence commercial production in the first quarter of
2009.





GFT began
promoting theiPuraTMlabel 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. The Company is
executing its marketing strategy by promoting the iPuraTM brand to food
processors and industry associations as the world’s first food safety
label.In 2008, we
commenced marketing the iPuraTM brand to
consumers.  The iPuraTM seal isanchored with a
descriptive and lasting slogan:“The Highest Standard in Food
SafetyTM”.





· The science and
marketing connect well with world food safety issues.


· The iPuraTM 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.





19




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





· 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 theiPuraTM 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 iPuraTMFood Safety Program is
designed to help the food distribution 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 plan
to promote the iPuraTM
brand utilizing an extensive media and educational campaign focusing on the
health and economic benefits of iPuraTMtreated 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, with a total advertising rate value of $54 million.GFT’s
pull through marketing campaign will begin with “Ask your grocer for iPuraTM”. Food safety is
public health news and we anticipate that the iPuraTMfood safety brand will
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 interest in
installing iPuraTM
systems.  Withthe official sponsorship
of government and industry associations, GFT has presented to hundreds of
processors in these countries, and has negotiated contracts with large volume
processors in each country. GFT anticipates expanding into other large seafood
producing countries such as Norway, Thailand, India, Canada, and the United
States in phase two. Seafood is expected to be followed by poultry and pork,
with plans to develop a system for meat and possibly other food products
marketed under the iPuraTM label in the
future.





GFT has
established itself in three of the world’s largest seafood exporting countries:
China, Vietnam and Chile. GFT believes that it 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 referrals by
these public entities to the Seafood Processing Associations. All were briefed
on the iPuraTM Food
Safety Program and the economic value proposition was explained.





During
the next 12 months, we will continue to  market to consumers and to
continue marketing efforts to processors and industry associations to create
awareness of our iPuraTM
brand, the iPuraTM
Seafood Processing System and other food processing technologies.




20




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





As of
December 31, 2008, we had no debt other than trade indebtedness in the ordinary
course of business and short term loans of $540,000 from a Director and a
shareholder due on demand. Based on our cash balance as of December 31, 2008, we
estimate that we will need to raise additional capital in the amount of $5
million to cover our operating costs for fiscal year 2009 and obtain a line of
credit to finance the “inventory” of iPuraTM  product.
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 exploring commercial and joint venture financing
opportunities and relationships with potential processor/customers with sale and
lease-back arrangements.





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 iPuraTM System
produced and installed beyond the first two units will likely require additional
outsourcing of fabrication, integration and installation of the units. 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.  We are classified as a
“Development Stage Company” under accounting principles generally accepted in
the United States. We expect to have revenues in the first half of
2009.





Liquidity
and Capital Resources





The
independent auditors report on our financial statements for the year ended
December 31, 2008 included in this Form 10-K states that our need to generate
sufficient cash flow to meet our obligations and sustain operations raises
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 iPuraTM Systems
within the next 12 months, any funds generated from installing and operating our
iPuraTM Systems
during fiscal year 2009 are not expected to cover our operating expenses. In
addition to cash in hand as of December 31, 2008, we believe that we will need
approximately $5 million to manufacture iPuraTM Systemsand cover operating expenses during the next 12 months, in addition to a
line of credit to finance the inventory of iPuraTM  product.
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 iPuraTM Systems, 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.




21




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.





Use
of Estimates





The
preparation of the financial statements in conformity with accounting principles
generally accepted in the United States 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.





iPuraTM(formerly the“BEST”) Seafood
Processing System





The iPuraTMSeafood 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. Two subsequent models were
developed with increased capacity and simplified operating and maintenance
parameters. The last of these models has been deemed commercially viable and has
been fabricated and installed at a processor in China and the cost has been
capitalized. Design, testing and support costs incurred on these models through
December 31, 2008 have been included in research and development
costs.





Property
and Equipment





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 iPuraTMSeafood Processing System asset was physically reconfigured for
operational efficiency in 2005. The total capitalized cost of the iPuraTMSeafood 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. In July 2007, we relocated the Research and Development activity from
Pocatello, Idaho to Hanford, California. Current Research and Development
activities can better be characterized as Commercialization Engineering
resulting in the diminished use of laboratory and scientific equipment
previously capitalized as fixed assets. The majority of these fixed assets have
been fully depreciated but have productive value for future activities when
scientific oriented projects are considered necessary. Accordingly, the fully
depreciated assets in the amount of $493,157 were retired as well as certain
similar laboratory equipment resulting in an impairment cost of $24,903. No
other impairments were recorded during the period from June 25, 2001 (Inception)
through December 31, 2008.




22




Concentration
of Credit Risk





We place
our cash with high quality financial institutions, and at times may exceed the
Federal Deposit Insurance Corporation $250,000 insurance limit.





Income
Taxes





We
account for income taxes under the Statement of Financial Accounting Standards
(“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 income tax expense
or benefit due to our not having any material operations from inception and for
the years ending December 31, 2008 and 2007. Our deferred tax asset related to
net operating loss carryforwards has been offset by a 100% valuation
allowance.





FASB
Interpretation No. 48, Accounting for Uncertainty in Income
Taxes ("FIN 48"). seeks to reduce the diversity in practice
associated with certain aspects of measurement and recognition in accounting for
income taxes. FIN 48 prescribes a recognition threshold and measurement
attribute for the financial statement recognition and measurement of a tax
position that an entity takes or expects to take in a tax return. Additionally,
FIN 48 provides guidance on de-recognition, classification, interest and
penalties, accounting in interim periods, disclosure, and transition. Under
FIN 48, an entity may only recognize or continue to recognize tax positions
that meet a "more likely than not" threshold. We adopted FIN 48 on
January 1, 2007. As a result of adoption of FIN 48, we recognized no
liability for unrecognized income tax benefits. Additionally, we recognized no
interest and penalties related to uncertain tax positions and as of and for the
year ended December 31, 2008, we have no accrued interest related to
uncertain tax positions.





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, 2008
and 2007.




23




Loss
Per Share





SFAS 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.





The
6,373,451 stock purchase warrants outstanding at December 31, 2008 were not used
in the computation of loss per share as their effect would be
antidilutive.





Stock-based
compensation





SFAS 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 SFAS No.
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.





Off-Balance
Sheet Arrangements





We do not
have any off-balance sheet arrangements.





Contractual
Cash Obligations and Contingent Liabilities and Commitments





We have
contractual obligations and commitments with regards to operating lease
arrangements. The following table quantifies our expected contractual
obligations and commitments subsequent to December 31, 2008:




24




Payments due by periodLess than
                                
                                
                                
                                
                                
                                More thanContractual Obligations
                                
                                Total
                                
                                
                                1 year
                                
                                
                                1-3 years
                                
                                
                                3 yearsOperating
      lease obligations
                                
                                $
                                945,790
                                
                                
                                $
                                226,838
                                
                                
                                $
                                328,604
                                
                                
                                $
                                390,348




Cautionary
Information Regarding “Forward-Looking Statements”




This
Annual Report on Form 10-K 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.




Forward-looking
statements made by us are based upon a knowledge of our business and the
environment in which we operate.  However, because of various risk
factors, including those briefly listed in Part II, Item 1A 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.




ITEM
7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK





Not
required for smaller reporting companies.




25




ITEM
8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA





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




ITEM
9.   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
9A.  CONTROLS AND PROCEDURES





Evaluation
of Disclosure 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-K. 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 were not effective based
on our material weakness in the form of lack of segregation of duties, which
stems from our development stage status and limited capital resources to hire
additional financial and administrative staff.




Management’s
Annual Report on Internal Control Over Financial Reporting




Section
404(a) of the Sarbanes-Oxley Act of 2002 requires that management document and
test the Company's internal control over financial reporting and include in this
Annual Report on Form 10-K a report on management's assessment of the
effectiveness of our internal control over financial reporting.




Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting, as such term is defined in Rule 13a-15(f) of
the Exchange Act. Under the supervision and with the participation of our
management, including Mr. Meeks, our Chief Executive Officer, and Mr. Sparks,
our Chief Financial Officer, we conducted an evaluation of the effectiveness of
our internal control over financial reporting based upon the framework in
Internal Control—Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO). Based on that evaluation, our
Chief Executive Officer and Chief Financial Officer concluded that our internal
control over financial reporting was not effective based on the material
weakness indicated below:




26




·
            As
      is typical with emerging companies in the development stage, we lack the
      necessary number of personnel to provide adequate segregation of duties
      within our accounting and financial reporting
  functions.




Our plan
to remediate this material weakness, subject to monetary constraints, is to hire
additional personnel and/or utilize outside consultants to provide an acceptable
level of segregation of duties. This annual report does not include an audit
report of our registered public accounting firm regarding internal control over
financial reporting. In addition, management's report on internal control over
financial reporting is not subject to attestation by our registered public
accounting firm pursuant to temporary rules of the SEC that permit us to provide
only management's report in this annual report.




Changes
in Internal Control Over Financial Reporting




There
have been no significant changes in the Company’s internal control over
financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) during
the quarter ended December 31, 2008 that have materially affected, or are
reasonably likely to materially affect, the Company’s internal control over
financial reporting.





ITEM
9B   OTHER INFORMATION





Information
Not Previously Disclosed in a Report on Form 8-K





In the
fourth quarter of 2008, GFT and our wholly owned subsidiary, IFD, signed the
following agreements with four seafood processors:





iPura Food Safety Installation &
Services Agreement dated as of November 11, 2008 by and between GFT and Tongwei
(Hainan) Aquatic Products Co., Ltd.;


iPura Sales Agreement dated as of
November 11, 2008 by and between IFD and Tongwei (Hainan) Aquatic Products Co.,
Ltd.;


iPura System Installation Agreement
dated as of September 5, 2008 by and between GFT and Procint Ltda.;


iPura Processing Agreement dated as
of September 5, 2008 by and between IFD and Procint Ltda.;


iPura Food Safety and Quality
Assurance Services Agreement dated as of September 9, 2008 by and between GFT
and FIMEX VN Sao Ta Foods Joint-Stock Company;


iPura Supplier Agreement dated as of
September 9, 2008 by and between IFD and FIMEX VN Sao Ta Foods Joint-Stock
Company;


iPura Food Safety and Quality
Assurance Services Agreement dated as of November 20, 2008 by and between GFT
and Binh An Seafood Joint Stock Company; and


iPura Supplier Agreement dated as of
November 20, 2008 by and between IFD and Binh An Seafood Joint Stock
Company.




27




These contracts are filed herewith as
exhibits and are described in greater detail in Part I, Item 1 “Business” under
the sub-heading “Processor and Distribution Agreements.”





PART
III.





ITEM
10.   DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE
GOVERNANCE





The
names, ages and positions of our directors and executive officers, as of
December 31, 2008, are set forth below.  Biographical information for
each of these persons also is presented below:





Name
                    
                    Age
                    
                    Position HeldJames
      Bouskos
                    
                    60
                    
                    Chairman
      of BoardKeith
      Meeks
                    
                    48
                    
                    President
      and Chief Executive OfficerMarshall
      F. Sparks
                    
                    68
                    
                    Chief
      Financial Officer, Secretary andTreasurerStephen
      J. Fryer
                    
                    70
                    
                    DirectorGary
      L. Nielsen
                    
                    66
                    
                    DirectorArthur
      C. Agnos
                    
                    70
                    
                    DirectorJames
      Stockland
                    
                    46
                    
                    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 served as the Chairman of our Board of Directors throughout fiscal year
2008, a position he was appointed to in August 2005 in connection with the
Transaction.  Mr. Bouskos retired effective January 8, 2009. 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.





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.  In 2008,
he was awarded the Certificate in International Food Laws from Michigan State
University, the College of Agriculture & Natural Resources, and the
Institute for Food Laws & Regulations.





28





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.





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.




29




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 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.





James
Stockland – Director





Mr.
Stockland was elected to the Board of Directors in December 2007,  Mr.
Stockland is the Founder and CEO of A&D Sales and Marketing, Inc. in
Fayetteville, Arkansas. A&D Sales procures and distributes meat and
poultry products to the retail, foodservice and industrial markets in the U.S.,
Puerto Rico, Mexico, and other international markets.  A&D Sales is a
successful meat and poultry trading companies in the United States and has an
impeccable reputation within the industry built on trust and integrity since
1991. In 1994, Mr. Stockland co-founded Ozark Consulting and Marketing,
Inc.  Ozark Consulting and Marketing represents some of the largest vendors
in the seafood and poultry industries to Wal-Mart stores and Sam’s Wholesale
Clubs.  OCM is responsible for ordering, inventory and replenishment, and
many other changing duties.





Mr.
Stockland attended the University of Central Arkansas in Conway, Arkansas and
earned a bachelors degree in History and Physical Education.  He earned a
Masters of Education degree from the University of Arkansas in
Fayetteville.




30




Outside
of work, Mr. Stockland is the President of the Donald W. Reynolds Boys and Girls
Club.  The club is a $10,000,000 facility which encompasses approximately
85,000 square feet and services over 6,000 members annually.  Most of his
board time has been spent creating and implementing a new strategic plan to keep
up with the needs of the club, including fundraising for the operational needs
as well as future growth and facility expansion.





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, 2008, our Board of Directors held three
meetings.





Our Board
of Directors has established three committees: an Audit Committee, a
Compensation Committee and a Nominating/Governance Committee. As of January 31,
2008, these committees were comprised as follows:





Audit
      Committee:
                        Gary
      L. Nielsen (Committee Chairman),
                          (Audit
      Committee Financial Expert)
                          Stephen
      J. Fryer
                          Arthur
      C. Agnos
                          James
      StocklandCompensation
      Committee:
                        Arthur
      C. Agnos (Committee Chairman)
                          Gary
      L. Nielsen
                          James
      StocklandNominating
      & Governance Committee
                        Stephen
      J Fryer (Committee Chairman)
                          Gary
      L Nielsen
                          Arthur
      C
Agnos





As of
December 31, 2008, Stephen J. Fryer, Gary L. Nielsen, Arthur C. Agnos and James
Stockland are independent directors.  The Board of Directors has
determined that Mr. Nielsen is an “audit committee financial expert” as defined
under SEC rules.





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, 2008, 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:  Mr. Agnos filed two Form 4s late that reported a total
two issuances of stock granted by the Company in connection with services as a
director and one acquisition of stock from another Company director; Mr. Fryer
filed two Form 4s late that reported a total of two issuances of stock granted
by the Company in connection with services as a director; Mr. Nielsen filed one
Form 4 late that reported the issuance of stock by the Company in connection
with a loan to the Company by Mt. Nielsen; Mr. Bouskos filed late amendments to
two previously filed Form 5s, and also filed one Form 5 late that reported
several transactions that should have been previously reported on Form 4s. These
Form 5s and amendments disclosed an aggregate of thirteen sale transactions and
four gift dispositions of Company common stock. Mr. Stockland failed to file a
Form 4 disclosing one stock grant issued in connection with services as a
director.




31







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 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.





ITEM
11.  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 2008 and our named executive
officers.


32





SUMMARY
COMPENSATION TABLE





Name and Principal
                                Position
                              
                              Year
                              
                              
                              Salary
                                ($)
                              
                              
                              Option
                                Awards
                                ($) (1)
                              
                              
                              All
                                Other
                                Compensation
                                ($) (2)
                              
                              
                              Total
                                ($)James
      Bouskos
                              
                              2008
                              
                              
                              
                              76,116
                              
                              
                              
                              —
                              
                              
                              
                              10,500
                              
                              
                              
                              86,616Chairman
      of the Board
                              
                              2007
                              
                              
                              
                              76,116
                              
                              
                              
                              
                              
                              
                              
                              10,500
                              
                              
                              
                              86,616Keith
      Meeks
                              
                              2008
                              
                              
                              
                              150,555
                              
                              
                              
                              —
                              
                              
                              
                              11,096
                              
                              
                              
                              161,651President
      and Chief Executive
                              
                              2007
                              
                              
                              
                              150,555
                              
                              
                              
                              —
                              
                              
                              
                              11,096
                              
                              
                              
                              161.651Marshall
      F Sparks
                              
                              2008
                              
                              
                              
                              111,000
                              
                              
                              
                              514,200
                              
                              
                              
                              —
                              
                              
                              
                              625,200Chief
      Financial Officer
                              
                              2007
                              
                              
                              
                              106,500
                              
                              
                              
                              
                              
                              
                              
                              —
                              
                              
                              
                              106,500





(1)
            Option
      awards for Mr Sparks included the grant of 50,000 shares of common stock
      to be issued in 2009, valued at $4.50 per shares or a total of $225,000
      and fully vested Warrants to purchase common stock at an exercise price of
      $7.00 per share, valued at $289,200. The warrants were granted in December
      2008 and have a term of 5 years. The warrant component of 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 two officers.





Stock
Option Grants





We
adopted our 2006 Stock Incentive Plan in November 2006. Directors, officers,
employees and consultants are eligible to receive awards under the
plan.





Outstanding Equity Awards at Fiscal Year-EndName
                
                Number of
                  Securities
                  Underlying
                  Unexercised
                  Options (#)
                  Exercisable
                
                
                Number of
                  Securities
                  Underlying
                  Unexercised
                  Options (#)
                  Unexercisable
                  (1)
                
                
                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.
      2011200,000
                
                
                
                
                
                
                $
                7.00
                
                Dec
      2013


33





(1) The
equity awards were in the form of warrants, which were not issued under our 2006
Stock Incentive Plan. 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.





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, 2008, our independent directors were Stephen J. Fryer, Gary L.
Nielsen, Arthur C. Agnos and James Stockland.  All directors are
entitled to be reimbursed for reasonable expenses actually incurred by them in
connection with their duties as directors.


Director compensationName
                    
                    Fees Earned or
                      Paid
                      in Cash ($) (2)
                    
                    
                    Stock Awards
                      ($)(3)
                    
                    
                    Option Awards
                      ($)
                    
                    
                    Total
                      ($)James
      Bouskos (1)
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    —Stephen
      J Fryer
                    
                    
                    —
                    
                    
                    
                    48,996
                    
                    
                    
                    
                    
                    
                    
                    48,996Gary
      L Nielsen
                    
                    
                    29,996
                    
                    
                    
                    —
                    
                    
                    
                    
                    
                    
                    
                    29,996Arthur
      C Agnos
                    
                    
                    —
                    
                    
                    
                    104,998
                    
                    
                    
                    
                    
                    
                    
                    104,998James
      Stockland
                    
                    
                    28,000
                    
                    
                    
                    135,000
                    
                    
                    
                    
                    
                    
                    
                    163,000Total
                    
                    
                    57,996
                    
                    
                    
                    288,994
                    
                    
                    
                    -
                    
                    
                    
                    346,990




(1) Mr.
Bouskos did not receive any compensation for serving as a
director.  Compensation for services as an officer is disclosed above
in the “Summary Compensation Table” disclosing named executive officer
compensation.




(2)
Director’s fees are accrued monthly and the accrual is paid in shares of common
stock annually, the timing being at the request of the individual Director, with
Directors permitted to defer all or a portion of such
compensation.  The dollar amounts in this column represent the amount
of director fees accrued, but deferred, by each director during 2008. We did not
pay any directors fees in cash in 2008, and anticipate paying any such accrued
amounts through the issuance of common stock in 2009.




(3) The
dollar amounts in this column represent the portion of directors’ fees actually
paid (in the form of common stock grants) during 2008, not deferred and the
value of stock awards for becoming a member of the Board.  A total of
59,221 shares were issued during the year for Board services and were valued at
$266,494.  The shares of stock are fully vested and not subject to any
forfeiture or repurchase restrictions.


34




ITEM
12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
AND RELATED STOCKHOLDER MATTERS





Equity
Compensation Plans





In 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 have
awarded grants of 1,181,000 shares of restricted stock to 31 individuals. 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
                                
                                
                                1,181,000
                                (1)
                                
                                None
                                
                                
                                
                                1,819,000
                                (2)Plans
      not approved by security holders
                                
                                None
                                
                                
                                None
                                
                                
                                None(1)
      Represents restricted common stock issued.


(2)
Represents the unissued balance of the 2006 Stock Incentive Plan.





Beneficial
Ownership Table





The
following table sets forth information concerning the number of shares of our
common stock as of December 31, 2008, 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.


35





Name and Address of
                        Beneficial Owner (1)
                      
                      Number of
                        Shares of
                        Our
                        Common
                        Stock
                      
                      
                      Percentage of Shares of
                        Our Common Stock (2)James
      Bouskos (3)
                      
                      
                      769,927
                      
                      
                      
                      2.7
                      %Keith
      Meeks (4)
                      
                      
                      796,933
                      
                      
                      
                      2.7
                      %Marshall
      F. Sparks (5) (9)
                      
                      
                      133,334
                      
                      
                      
                      0.5
                      %Stephen
      J. Fryer (6) (9)
                      
                      
                      316,111
                      
                      
                      
                      1.1
                      %Gary
      L. Nielsen (7) (9)
                      
                      
                      200,925
                      
                      
                      
                      0.7
                      %Arthur
      C. Agnos (8) (9)
                      
                      
                      67,777
                      
                      
                      
                      0.2
                      %James
      Stockland (9)
                      
                      
                      25,000
                      
                      
                      
                      0.1
                      %All
      directors and officers as a group
                        (7
      individuals)
                      
                      
                      2,290,007
                      
                      
                      
                      7.9
                      %Mark
      Terry
                        1060
      Cactus, Pocatello, ID 83204
                      
                      
                      1,775,178
                      
                      
                      
                      6.1
                      %Global
      Food Tech, Inc. (“TECH”)
                      
                      
                      22,945,229
                      
                      
                      
                      79.1
                      %





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


(2)
            The
      percentage ownership is based on 29,001,427 shares of GFT common stock
      outstanding as of December 31,
2008.


(3)
            Includes
      indirect beneficial ownership of 769,927shares of GFT through ownership of
      shares of TECH.


(4)
            Includes
      indirect beneficial ownership of 796,933 shares of GFT through ownership
      of shares of TECH


(5)
            Includes
      indirect beneficial ownership of 133,334 shares of GFT through ownership
      of shares of TECH.


(6)
            Includes
      indirect beneficial ownership of 291,112 shares of GFT through ownership
      of shares of TECH.


(7)
            Includes
      indirect beneficial ownership of 103,334 shares of GFT through ownership
      of shares of TECH.


(8)
            Includes
      indirect beneficial ownership of 24,334 shares of GFT through ownership of
      shares of TECH.


(9)
            Mssrs.
      Agnos, Fryer and Nielsen are the directors of TECH.   Mr.
      Fryer is also the President of TECH and Mr. Sparks is the Chief Financial
      Officer and Secretary of TECH.  Messrs. Agnos, Fryer, Nielsen
      and Sparks share voting and dispositive powers with respect to the GFT
      shares held by TECH.  Each of Messrs. Agnos, Fryer, Nielsen and
      Sparks expressly disclaims beneficial ownership of these shares solely by
      virtue of their positions as officers and directors of TECH.  As
      noted above, certain of these individuals own shares of TECH, which are
      included on a proportional basis in calculating their indirect beneficial
      ownership of GFT.





ITEM
13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE





Certain
Relationships





As of
December 31, 2008, three of our directors, Messrs. Agnos, Fryer and Nielsen,
serve as the members of Tech’s Board of Directors.  Mr. Fryer also
serves as Tech’s President, and Marshall F. Sparks, our Chief Financial Officer,
Secretary and Treasurer, also has been appointed as the Chief Financial Officer,
Secretary and Treasurer of Tech.  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.


36





Related
Party 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.





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. 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. which 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 a demand note. The loan is guaranteed by
Keith Meeks, GFT’s President.





In April
and May of 2006, we arranged three loans aggregating $290,000 from a Gary
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%.  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, which  was recorded as additional interest
expense   In August 2006 we arranged a fourth loan, a six month
bridge loan, for $100,000 from Mr. Nielsen bearing interest at 8% . The loan was
renewed each subsequent maturity for an additional six months and now matures in
May 2009. The three loans are unsecured.





In
January and May 2008, additional loans of $100,000 each were borrowed from Mr.
Nielsen by way of a margin loan from his broker. The notes were for 30 and 60
days respectively and were repaid at their due dates. Interest at 12% was paid
to the brokerage account.





In
January 2008, in recognition of the illiquidity of the loans and the
availability of the bridge loans, Mr. Nielsen was awarded 78,000 shares of
common stock valued at $351,000 in appreciation of his tolerance and patience in
his financial support.





Director
Independence





As of
January 31, 2009, our independent directors were Stephen J. Fryer, Gary L.
Nielsen, Arthur C. Agnos and James Stockland.  These independent
directors also serve on our audit committee, compensation committee and
nominating and governance committee; no non-independent directors serve on such
committees.  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 as interim CEO from December 2003 through
February 2005.  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.


37





ITEM
14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES





The Board
of Directors appointed Squar, Milner, Peterson, Miranda & Williamson, LLP
(“Squar Milner”), independent registered public accounting firm, to audit our
financial statements for the years ended December 31, 2007 and December 31,
2008.





The
following table shows the fees billed for audit and other services provided by
Squar Milner, for the years ended December 31, 2008 and 2007:





2008
                  
                  
                  2007Audit
      Fees (1)
                  
                  $
                  74,864
                  
                  
                  $
                  61,000Audit-Related
      Fees
                  
                  
                  0
                  
                  
                  
                  0Tax
      Fees
                  
                  
                  0
                  
                  
                  
                  0All
      Other Fees (2)
                  
                  
                  0
                  
                  
                  
                  0Total
                  
                  $
                  74,864
                  
                  
                  $
                  61,000


(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.





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.


38




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
2008 and 2007 were approved in accordance with the Audit Committee’s
pre-approval policies.


39





ITEM
15.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES





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, 2005.10.1(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)
              
              2006
      Stock Incentive Plan10.9(7)
              
              Lease
      Agreement dated November 1, 2007 between STG Realty Ventures Inc and
      Global Food Technologies10.10(6)
              
              Lease
      Agreement dated September 30, 2008 by and between Global Food
      Technologies, Inc. and City of Hanford10.11(7)
              
              iPura
      Food Safety Installation & Services Agreement dated as of November 11,
      2008 by and between GFT and Tongwei (Hainan) Aquatic Products Co.,
      Ltd.10.12(7)
              
              iPura
      Sales Agreement dated as of November 11, 2008 by and between IFD and
      Tongwei (Hainan) Aquatic Products Co.,
Ltd.


40





10.13(7)
              
              iPura
      System Installation Agreement dated as of September 5, 2008 by and between
      GFT and Procint Ltda.10.14(7)
              
              iPura
      Processing Agreement dated as of September 5, 2008 by and between IFD and
      Procint Ltda.10.15(7)
              
              iPura
      Food Safety and Quality Assurance Services Agreement dated as of September
      9, 2008 by and between GFT and FIMEX VN Sao Ta Foods Joint-Stock
      Company10.16(7)
              
              iPura
      Supplier Agreement dated as of September 9, 2008 by and between IFD and
      FIMEX VN Sao Ta Foods Joint-Stock Company10.17(7)
              
              iPura
      Food Safety and Quality Assurance Services Agreement dated as of November
      20, 2008 by and between GFT and Binh An Seafood Joint Stock
      Company10.18(7)
              
              iPura
      Supplier Agreement dated as of November 20, 2008 by and between IFD and
      Binh An Seafood Joint Stock Company24.1
              
              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
  2002


+
            Management
      contract or compensatory plan or
arrangement


*
            Filed
      herewith


‡
            Furnished
      herewith





(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 2, 2007, as an exhibit to our Annual Report on Form
      10-KSB.





(6)
            Filed
      on October 31, 2008, as an exhibit to Quarterly Report on Form 10-Q for
      the quarterly period ended September 30, 2008 and incorporated herein by
      reference.





(7)
            Filed
      on February 27, 2009, as an exhibit to our Annual Report on Form 10-K for
      the fiscal year ended December 31,
2008.


41


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:
      March 1, 2010
              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-K 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 Meeks
                                  
                                  President
      and Chief Executive Officer (Principal
                                  
                                  March
      1, 2010Keith
      Meeks
                                  
                                  Executive
      Officer), Director/s/ Gary L. Nielsen*
                                  
                                  Chairman
      of the Board
                                  
                                  March
      1, 2010Gary
      L. Nielsen/s/ Marshall F. Sparks
                                  
                                  Chief
      Financial Officer, Secretary and Treasurer
                                  
                                  March
      1, 2010Marshall
      F. Sparks
                                  
                                  (Principal
      Financial and Accounting Officer)/s/ Stephen J.
Fryer*
                                  
                                  Director
                                  
                                  March
      1, 2010Stephen
      J. Fryer/s/ Arthur C. Agnos*
                                  
                                  Director
                                  
                                  March
      1, 2010Arthur
      C. Agnos/s/ James Stockland*
                                  
                                  Director
                                  
                                  March
      1, 2010James
      Stockland* /s/ Marshall F. SparksMarshall
      F. Sparks
                                    Attorney-in-Fact
                                  
                                  Pursuant
      to Power of Attorney
                                  
                                  March
      1,
2010


42


GLOBAL
FOOD TECHNOLOGIES, INC


(A
DEVELOPMENT STAGE COMPANY)





TABLE
OF CONTENTS




PAGE
      44
                        REPORT
      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMPAGE
      45
                        REPORT
      OF PRIOR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMPAGE
      46
                        BALANCE
      SHEETS AS OF DECEMBER 31, 2008 AND 2007PAGE
      47
                        STATEMENTS
      OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007 AND FOR THE
      PERIOD FROM JULY 25, 2001 (INCEPTION) THROUGH DECEMBER 31,
      2008PAGE
      48
                        STATEMENT
      OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIENCY) FROM JULY 25, 2001
      (INCEPTION) TO DECEMBER 31, 2008PAGE
      49
                        STATEMENTS
      OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007 AND FOR THE
      PERIODS FROM JULY 25, 2001 (INCEPTION) TO DECEMBER 31, 2008 AND
      2006PAGES
      50-61
                        
                        NOTES
      TO FINANCIAL STATEMENTS AS OF DECEMBER 31, 2008 AND
  2007


43




REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM





To the
Board of Directors and Stockholders


Global
Food Technologies, Inc.


Hanford,
California




We have
audited the accompanying balance sheets of Global Foods Technologies, Inc. (the
“Company”), a development stage company, as of December 31, 2008 and 2007, and
the related statements of operations, stockholders’ deficit and cash flows for
the years then ended and for the period from July 25, 2001 (Inception) through
December 31, 2008. . 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. The financial statements for the
period from July 25, 2001 (Inception) through December 31, 2006  were
audited by other auditors whose report dated June 27, 2007 expressed and
unqualified opinion on those statements. The financial statements for the period
from July 25, 2001 (Inception) through December 31, 2006 included a deficit
accumulated during the development stage of approximately $36,127,000. Our
opinion on the statements of operations, stockholders’ deficit, and cash flows
for the period from July 25, 2001 (Inception) through December 31, 2008, insofar
as it relates to amounts for periods through December 31, 2006, is based on the
report of other auditors.




We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement.  The Company was
not required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting. Our audit included consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company’s internal control over financial
reporting. Accordingly, we express no such opinion. 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, based on our audits and the report of other auditors, the financial
statements referred to above present fairly, in all material respects, the
financial position of Global Food Technologies, Inc as of December 31, 2008 and
2007 and the results of operations and its cash flows for the years then ended
and for the period July 25, 2001 (Inception) through December 31, 2008 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 is in the development stage, has incurred a net loss of
$54,158,380 and negative cash flow from operations of $31,978,879 since
inception, and has negative working capital as of December 31, 2008. The
Company’s ability to continue operations is predicated on its ability to raise
additional capital and, ultimately to achieve profitability.  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.




/s/
Squar, Milner, Peterson, Miranda & Williamson, LLP





Newport
Beach, California


February  24,
2009


44





REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM





To the
Board of Directors and Stockholders of


Global
Food Technologies, Inc.





We have
audited the column in the accompanying statements of operations and cash flows
headed for the period from July 25, 2001 (Inception) to December
31, 2006 of Global Food Technologies, Inc. (a development stage company) and the
Statement of Stockholders’ equity (deficit) for the period 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 audit.




We
conducted our audit in accordance with standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit 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 audit provides a
reasonable basis for our opinion.





In our
opinion, the financial statements referred to above present fairly, in all
material respects, the results of operations and cash flows for the period from
July 25, 2001 (Inception) to December 31, 2006 and Stockholders’
Equity of Global Food Technologies, Inc. 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.  The Company has had a net loss
$36,127,217 and negative cash flow from operations of $22,521,220 since July 25,
2001 (Inception) to December 31, 2006. 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 2 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.





/s/  Weinberg
& Company, P.A.





Los
Angeles, California


June 27,
2007


45





GLOBAL
FOOD TECHNOLOGIES, INC.


(A
DEVELOPMENT STAGE COMPANY)


BALANCE
SHEETS





December 31,2008
                              
                              
                              2007ASSETSCURRENT
      ASSETSCash
                              
                              $
                              278,443
                              
                              
                              $
                              552,697Prepaid
      expenses
                              
                              
                              30,977
                              
                              
                              
                              29,246Total
      Current Assets
                              
                              
                              309,420
                              
                              
                              
                              581,943FIXED
      ASSETSiPura
      systems
                              
                              
                              691,664
                              
                              
                              
                              -Furniture
      and fixtures
                              
                              
                              73,776
                              
                              
                              
                              73,776Less
      accumulated depreciation
                              
                              
                              (45,900
                              )
                              
                              
                              (31,144
                              )Fixed
      Assets – net
                              
                              
                              719,540
                              
                              
                              
                              42,632OTHER
      ASSETS
                              
                              
                              24,889
                              
                              
                              
                              24,889TOTAL
      ASSETS
                              
                              $
                              1,053,849
                              
                              
                              $
                              649,464LIABILITIES AND STOCKHOLDERS’ EQUITY
      (DEFICIT)CURRENT
      LIABILITIESAccounts
      payable
                              
                              $
                              39,608
                              
                              
                              $
                              142,572Accrued
      liabilities
                              
                              
                              1,134,232
                              
                              
                              
                              286,340Notes
      payable – related parties
                              
                              
                              540,000
                              
                              
                              
                              540,000Total
      Current Liabilities
                              
                              
                              1,713,840
                              
                              
                              
                              968,912COMMITMENTS
      AND CONTINGENCIESSTOCKHOLDERS’
      EQUITY (DEFICIT)Preferred
      Stock, $.0001 par value, 20,000,000 shares authorized, none
      outstanding
                              
                              
                              -
                              
                              
                              
                              -Common
      Stock, $.0001 par value, 100,000,000 shares authorized, 29,001,739 and
      27,307,881 shares outstanding respectively
                              
                              
                              2,899
                              
                              
                              
                              2,731Additional
      paid-in capital
                              
                              
                              53,495,490
                              
                              
                              
                              44,819,965Deficit
      accumulated during development stage
                              
                              
                              (54,158,380
                              )
                              
                              
                              (45,142,144
                              )Total
      stockholders’ equity (deficit)
                              
                              
                              (659,991
                              )
                              
                              
                              (319,448
                              )TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
      (DEFICIT)
                              
                              $
                              1,053,849
                              
                              
                              $
                              649,464





See
accompanying notes to financial statements


46





GLOBAL
FOOD TECHNOLOGIES, INC.


(A
DEVELOPMENT STAGE COMPANY)


STATEMENTS OF
OPERATIONS





For The
                      Year Ended
                      December 31,
                      2008
                    
                    
                    For The
                      Year Ended
                      December
                      31,
                      2007
                    
                    
                    For the Period
                      From July 25,
                      2001
                      (Inception) To
                      December 31,
                      2008
                    
                    
                    For the Period
                      From July 25,
                      2001
                      (Inception) To
                      December 31,
                      2006Revenues
                    
                    $
                    -
                    
                    
                    $
                    -
                    
                    
                    $
                    -
                    
                    
                    $
                    -ExpensesMarketing
      expense
                    
                    
                    2,268,697
                    
                    
                    
                    2,711,594
                    
                    
                    
                    9,941,517
                    
                    
                    
                    4,961,226General
      and administrative expense
                    
                    
                    4,523,879
                    
                    
                    
                    2,840,884
                    
                    
                    
                    17,126,235
                    
                    
                    
                    9,761,472Research
      and development costs
                    
                    
                    2,159,689
                    
                    
                    
                    3,311,861
                    
                    
                    
                    22,574,943
                    
                    
                    
                    17,103,393Depreciation
                    
                    
                    14,756
                    
                    
                    
                    80,107
                    
                    
                    
                    539,057
                    
                    
                    
                    444,194Interest
      expense
                    
                    
                    49,215
                    
                    
                    
                    45,578
                    
                    
                    
                    344,614
                    
                    
                    
                    249,821Asset
      impairment
                    
                    
                    -
                    
                    
                    
                    24,903
                    
                    
                    
                    3,182,014
                    
                    
                    
                    3,157,111Merger
      related costs
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    450,000
                    
                    
                    
                    450,000Total
      Expenses
                    
                    
                    9,016,236
                    
                    
                    
                    9,014,927
                    
                    
                    
                    54,158,380
                    
                    
                    
                    36,127,217NET LOSS
                    
                    $
                    (9,016,236
                    )
                    
                    $
                    (9,014,927
                    )
                    
                    $
                    (54,158,380
                    )
                    
                    $
                    (36,127,217
                    )Loss
      per Share, basic and diluted
                    
                    $
                    (0.31
                    )
                    
                    $
                    (0.35
                    )Weighted
      average shares, basic and diluted
                    
                    
                    28,801,088
                    
                    
                    
                    26,076,265





See
accompanying notes to financial statements


47


GLOBAL
FOOD TECHNOLOGIES, INC.


(A
DEVELOPMENT STAGE COMPANY)


STATEMENT
OF STOCKHOLDERS’ EQUITY (DEFICIT)


FOR
THE PERIOD FROM JULY 25, 2001 (INCEPTION) TO DECEMBER 31, 2008


DeficitAccumulated
                
                
                TotalAdditional
                
                
                During the
                
                
                Stockholders’Common Stock
                
                
                Paid-in
                
                
                Development
                
                
                EquityShares
                
                
                Amount
                
                
                Capital
                
                
                Stage
                
                
                (Deficit)Issuance
      to founders at inception, at par
                
                
                10,333,333
                
                
                $
                1,033
                
                
                $
                (1,002
                )
                
                $
                -
                
                
                $
                31Sales
      of stock for cash, net
                
                
                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, net
                
                
                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, net
                
                
                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, net
                
                
                1,199,081
                
                
                
                120
                
                
                
                4,434,772
                
                
                
                -
                
                
                
                4,434,892Premium
      on preferred stock
                
                
                -
                
                
                
                -
                
                
                
                (37,501
                )
                
                
                -
                
                
                
                (37,501
                )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, net
                
                
                1,732,220
                
                
                
                173
                
                
                
                7,943,948
                
                
                
                -
                
                
                
                7,944,121Premium
      on preferred stock
                
                
                -
                
                
                
                -
                
                
                
                (271,123
                )
                
                
                -
                
                
                
                (271,123
                )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 merger
                
                
                100,000
                
                
                
                10
                
                
                
                -
                
                
                
                -
                
                
                
                10Stock
      issued for merger related costs
                
                
                100,000
                
                
                
                10
                
                
                
                449,990
                
                
                
                -
                
                
                
                450,000Stock
      issued to round up fractional shares
                
                
                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, net
                
                
                724,958
                
                
                
                73
                
                
                
                3,111,338
                
                
                
                -
                
                
                
                3,111,411Stock
      issued for services
                
                
                37,065
                
                
                
                4
                
                
                
                166,782
                
                
                
                -
                
                
                
                166,786Fair
      value of incentive stock issued
                
                
                530,000
                
                
                
                53
                
                
                
                2,384,947
                
                
                
                -
                
                
                
                2,385,000Stock
      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
                )Sales
      of stock for cash, net
                
                
                1,273,705
                
                
                
                127
                
                
                
                5,477,237
                
                
                
                -
                
                
                
                5,477,364Stock
      issued for services
                
                
                208,155
                
                
                
                21
                
                
                
                936,666
                
                
                
                -
                
                
                
                936,687Fair
      value of incentive stock issued
                
                
                460,000
                
                
                
                46
                
                
                
                2,069,954
                
                
                
                -
                
                
                
                2,070,000Stock
      issued for media contract
                
                
                166,668
                
                
                
                17
                
                
                
                749,983
                
                
                
                -
                
                
                
                750,000Fair
      value of warrants issued
                
                
                -
                
                
                
                -
                
                
                
                313,008
                
                
                
                -
                
                
                
                313,008Net
      loss
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (9,014,927
                )
                
                
                (9,014,927
                )Balance
      December 31, 2007
                
                
                27,307,881
                
                
                
                2,731
                
                
                
                44,819,965
                
                
                
                (45,142,144
                )
                
                
                (319,448
                )Sales
      of stock and warrants for cash, net
                
                
                1,090,889
                
                
                
                109
                
                
                
                4,735,623
                
                
                
                -
                
                
                
                4,735,732Stock
      issued for services
                
                
                245,301
                
                
                
                24
                
                
                
                1,103,830
                
                
                
                -
                
                
                
                1,103,854Fair
      value of incentive stock issued
                
                
                191,000
                
                
                
                19
                
                
                
                859,481
                
                
                
                -
                
                
                
                859,500Stock
      issued for media contract
                
                
                166,668
                
                
                
                16
                
                
                
                749,984
                
                
                
                -
                
                
                
                750,000Fair
      value of warrants issued
                
                
                -
                
                
                
                -
                
                
                
                1,226,607
                
                
                
                -
                
                
                
                1,226,607Net
      loss
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (9,016,236
                )
                
                
                (9,016,236
                )Balance,
      December 31, 2008
                
                
                29,001,739
                
                
                $
                2,899
                
                
                $
                53,495,490
                
                
                $
                (54,158,380
                )
                
                $
                (659,991
                )


See
accompanying notes to financial statements




48





GLOBAL
FOOD TECHNOLOGIES, INC.


(A
DEVELOPMENT STAGE COMPANY)


STATEMENTS OF CASH
FLOWS


For The
                      Year Ended
                      December
                      31, 2008
                    
                    
                    For The
                      Year
                      Ended
                      December
                      31, 2007
                    
                    
                    For The
                      Period From
                      July 25, 2001
                      (Inception) To
                      December 31,
                      2008
                    
                    
                    For The Period
                      From July 25,
                      2001
                      (Inception) To
                      December 31,
                      2006CASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      loss
                    
                    $
                    (9,016,236
                    )
                    
                    $
                    (9,014,927
                    )
                    
                    $
                    (54,158,380
                    )
                    
                    $
                    (36,127,217
                    )Adjustments
      to reconcile net loss to net cash used in operating
      activities:Depreciation
                    
                    
                    14,756
                    
                    
                    
                    80,107
                    
                    
                    
                    539,057
                    
                    
                    
                    444,194Impairment
      of assets
                    
                    
                    -
                    
                    
                    
                    24,903
                    
                    
                    
                    24,903
                    
                    
                    
                    -Fair
      value of warrants issued for services
                    
                    
                    1,226,607
                    
                    
                    
                    313,008
                    
                    
                    
                    4,546,938
                    
                    
                    
                    3,007,323Fair
      value of stock issued for services
                    
                    
                    1,103,854
                    
                    
                    
                    936,687
                    
                    
                    
                    2,579,018
                    
                    
                    
                    538,477Fair
      value of incentive plan grants
                    
                    
                    859,500
                    
                    
                    
                    2,070,000
                    
                    
                    
                    5,314,500
                    
                    
                    
                    2,385,000Fair
      value of stock issued for media services
                    
                    
                    750,000
                    
                    
                    
                    750,000
                    
                    
                    
                    4,450,000
                    
                    
                    
                    2,950,000Impairment
      of BEST system
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    3,157,111
                    
                    
                    
                    3,157,111Merger
      related costs
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    450,000
                    
                    
                    
                    450,000Changes
      in assets and liabilities:
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    -Prepaid
      expenses
                    
                    
                    (1,732
                    )
                    
                    
                    (2,898
                    )
                    
                    
                    (30,977
                    )
                    
                    
                    (26,348
                    )Other
      assets
                    
                    
                    -
                    
                    
                    
                    (13,389
                    )
                    
                    
                    (24,889
                    )
                    
                    
                    (11,500
                    )Accounts
      payable and accrued liabilities
                    
                    
                    744,929
                    
                    
                    
                    (271,327
                    )
                    
                    
                    1,173,840
                    
                    
                    
                    700,240Cash
      used in operating activities
                    
                    
                    (4,318,322
                    )
                    
                    
                    (5,127,836
                    )
                    
                    
                    (31,978,879
                    )
                    
                    
                    (22,532,720
                    )CASH
      FLOWS USED IN INVESTING ACTIVITIES:Acquisition
      of BEST system
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (3,157,111
                    )
                    
                    
                    (3,157,111
                    )Acquisition
      of  iPura systems
                    
                    
                    (691,664
                    )
                    
                    
                    -
                    
                    
                    
                    (691,664
                    )
                    
                    
                    -Increase
      in fixed assets
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    (591,836
                    )
                    
                    
                    (591,837
                    )Cash
      used in investing activities
                    
                    
                    (691,664
                    )
                    
                    
                    -
                    
                    
                    
                    (4,440,611
                    )
                    
                    
                    (3,748,948
                    )CASH
      FLOWS FROM FINANCING ACTIVITIES:Proceeds
      from notes payable – related parties
                    
                    
                    200,000
                    
                    
                    
                    -
                    
                    
                    
                    940,000
                    
                    
                    
                    740,000Principal
      payments on notes payable– related parties
                    
                    
                    (200,000
                    )
                    
                    
                    -
                    
                    
                    
                    (400,000
                    )
                    
                    
                    (200,000
                    )Sale
      of redeemable Series A preferred stock
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    2,125,405
                    
                    
                    
                    2,125,405Sale
      of common stock
                    
                    
                    4,735,732
                    
                    
                    
                    5,477,364
                    
                    
                    
                    34,032,528
                    
                    
                    
                    23,819,432Cash
      provided by financing activities
                    
                    
                    4,735,732
                    
                    
                    
                    5,477,364
                    
                    
                    
                    36,697,933
                    
                    
                    
                    26,484,837NET
      INCREASE (DECREASE) IN CASH
                    
                    
                    (274,254
                    )
                    
                    
                    349,528
                    
                    
                    
                    278,443
                    
                    
                    
                    203,169CASH
      – BEGINNING OF PERIOD
                    
                    
                    552,697
                    
                    
                    
                    203,169
                    
                    
                    
                    -
                    
                    
                    
                    -CASH – END OF PERIOD
                    
                    $
                    278,443
                    
                    
                    $
                    552,697
                    
                    
                    $
                    278,443
                    
                    
                    $
                    203,169SUPPLEMENTAL
      DISCLOSURESInterest
      paid
                    
                    $
                    15,781
                    
                    
                    $
                    4,000
                    
                    
                    $
                    113,751
                    
                    
                    $
                    93,970Noncash
      financing transactionsAccretion
      of redemption value of preferred stock
                    
                    $
                    -
                    
                    
                    $
                    -
                    
                    
                    $
                    813,719
                    
                    
                    $
                    813,719Conversion
      of Series preferred stock to common stock
                    
                    $
                    -
                    
                    
                    $
                    -
                    
                    
                    $
                    2,939,119
                    
                    
                    $
                    2,939,119Stock
      transferred in consummation of merger
                    
                    $
                    -
                    
                    
                    $
                    -
                    
                    
                    $
                    10
                    
                    
                    $
                    10


See
accompanying notes to financial statements


49





GLOBAL
FOOD TECHNOLOGIES, INC.


(A
DEVELOPMENT STAGE COMPANY)


NOTES TO
FINANCIAL STATEMENTS


DECEMBER 31, 2008 AND
2007





1.
            NATURE
      OF BUSINESS





Global
Food Technologies, Inc. (the “Company”, “we” or “us”) is a biotechnology company
focused on food safety processes for the food processing industry by using its
proprietary scientific processes to substantially increase the shelf life of
commercially packaged seafood and to make those products safer for human
consumption. The Company has developed a process using its developed technology
called the “iPuraTMFood
Processing System”. The Company’s ability to
generate revenue will depend, among other things, on its ability to demonstrate
the merits of the iPuraTMsystem as well as brand development and establishing alliances with
suppliers and vendors.  The Company has not generated revenues to date
and continues to operate as a development stage entity.





Prior to
August 2005, the Company was a public “shell” company and the Company’s assets
were held, and operations conducted by, an unrelated private
company.  In August 2005, the Company completed an asset purchase
transaction and the former shell became the operating and publicly reporting
company, with the private entity becoming the Company’s parent and majority
stockholder. The shareholders of the public shell company obtained approximately
1% of the common stock of the post-transaction publicly reporting Company. The
Company’s stock is not listed on any exchange or the Over-the-Counter Bulletin
Board.




Going
Concern





The
accompanying financial statements have been prepared on the basis that the
Company 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, the Company has primarily been engaged in product development
and pre-operational activities.  No revenue has been generated to date
and the Company has accumulated losses totaling $54,158,380 and negative cash
flows from operations of $31,978,879 from inception through December 31, 2008.
Additionally, the Company  has negative working capital at December
31, 2008 and its ability to continue as a going concern is predicated on its
ability to raise additional capital and achieve sustained profitable
operations.  The uncertainty related to these conditions raises
substantial doubt about the Company’s 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.





Based on
our cash balance as of December 31, 2008, we estimate that we will need to raise
additional capital in the amount of $5 million to cover our operating costs for
fiscal year 2009 and obtain a significant line of credit to finance the
“inventory” of iPura product. 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 exploring
commercial and joint venture financing opportunities.


50




2.
            SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES





The
summary of significant accounting policies presented below is designed to assist
in understanding the Company’s financial statements. Such financial statements
and accompanying notes are the representations of Company management, who are
responsible for their integrity and objectivity. These accounting policies
conform to accounting principles generally accepted in the United States of
America (“U.S. GAAP”) in all material respects, and have been consistently
applied in preparing the accompanying financial statements. The Company is
classified as a development stage enterprise under U.S. GAAP and has not
generated significant revenues from its principal operations.





Development
Stage and Capital Resources





Since its
inception, the Company has devoted substantially all of its efforts to business
planning, research and development, recruiting management and technical staff,
acquiring operating assets and raising capital. Accordingly, the Company is
considered to be in the development stage as defined in Statement of Financial
Accounting Standards (“SFAS”) No. 7, Accounting and Reporting by
Development Stage Enterprises. The Company has not generated any revenues
from its principal operations, and there is no assurance of future
revenues.





Use
of Estimates





The
preparation of the financial statements in conformity with accounting principles
generally accepted in the United States 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.





iPuraTM(formerly the“BEST”) Seafood
Processing System –The iPuraTMSeafood 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.  Two subsequent
models were developed with increased capacity and simplified operating and
maintenance parameters. The last of these models has been deemed commercially
viable and has been fabricated and installed at a processor in China and the
cost incurred during 2008 of $691,664 has been capitalized. Design, testing and
support costs incurred on these models through December 31, 2008 have been
included in research and development costs. Once commercial viability is
obtained, the Company capitalized costs.





Concentration
of Credit Risk





We place
our cash with high quality financial institutions, and at times may exceed the
Federal Deposit Insurance Corporation $250,000 insurance limit.


51




Property
and Equipment





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 SFAS No. 144,
“Accounting for the Impairment or Disposal of Long-Lived Assets.” In accordance
with SFAS No. 144, long lived assets are to be held and reviewed for events or
changes in circumstances that indicate that their carrying value may not be
recoverable. We periodically review the carrying value of long lived assets to
determine whether an impairment to such value has occurred.An impairment
loss is recognized when the carrying amount of the long-lived asset is not
recoverable and exceeds its fair value. The carrying amount of a long-lived
asset is not recoverable if it exceeds the sum of the undiscounted cash flows
expected to result from the use and eventual disposition of the asset. Any
required impairment loss is measured as the amount by which the carrying amount
of a long-lived asset exceeds its fair value and is recorded as a reduction in
the carrying value of the related asset and a charge to operating
results.




In July
2007, we wrote off $24,903 of laboratory equipment primarily due to the
relocation of the research and development activity from Pocatello, Idaho to
Hanford, California. Except for the impairment of the BEST system in 2005 no
other impairments were recorded during the period from June 25, 2001 (Inception)
through December 31, 2008.





Research
and Development Costs





Research
and development costs are expensed as incurred, indicating commercial viability
has not been obtained. Purchased materials that do not have an alternative
future use and the cost to develop prototypes of production equipment are also
expensed. Costs incurred after the production process is viable and a working
model of the equipment has been completed will be capitalized as long-lived
assets.





Income
Taxes





We
account for income taxes under the SFAS No. 109, “Accounting for Income
Taxes”.   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.  A valuation allowance
related to a deferred tax asset is recorded when it is more likely than not that
some or all of the deferred tax asset will not be
realized.


52


In July
2006, the Financial
Accounting Standards Board (“FASB”) issued FASB Interpretation
No. 48, Accounting for
Uncertainty in Income Taxes ("FIN 48"). FIN 48 prescribes a
recognition threshold and measurement attribute for the financial statement
recognition and measurement of a tax position that an entity takes or expects to
take in a tax return. Additionally, FIN 48 provides guidance on
de-recognition, classification, interest and penalties, accounting in interim
periods, disclosure, and transition. Under FIN 48, an entity may only
recognize or continue to recognize tax positions that meet a "more likely than
not" threshold. We adopted FIN 48 on January 1, 2007. As a result of
adoption of FIN 48, we recognized no liability for unrecognized income tax
benefits. Additionally, we recognized no interest and penalties related to
uncertain tax positions and as of December 31, 2008, we have no accrued
interest related to uncertain tax positions.





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,
2008.  The fair value of the Company’s notes payable to related
parties approximate their carrying value as the stated interest rates of these
instruments reflect rates which are otherwise currently available to the
Company.





Loss
Per Share





SFAS 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.





The
6,373,451 and 4,524,367 stock purchase warrants outstanding at December 31, 2008
and 2007, respectively, were not used in the computation of loss per share as
their effect would be antidilutive.





Stock-based
compensation





In
December 2004, the FASB issued SFAS No. 123R, “Share-Based Payment”. 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 No. 123R, using the modified prospective method. Under this
method, the provisions of SFAS No. 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.


53


Shares,
warrants and options issued to non-employees for services are accounted for in
accordance with SFAS No. 123R 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





On
December 4, 2007, the FASB issued SFAS No. 141 (R), “Business Combinations.”
  SFAS No. 141(R) will significantly change the accounting for
business combinations such that an acquiring entity will be required to
recognize all the assets acquired and liabilities assumed in a transaction at
the acquisition-date fair value with limited exceptions. SFAS 141(R) will change
the accounting treatment for certain specific items, including:





Acquisition
costs will be generally expensed as incurred;





Noncontrolling
interests (formerly known as "minority interests" — see SFAS No. 160 discussion
below) will be valued at fair value at the acquisition date;





Acquired
contingent liabilities will be recorded at fair value at the acquisition date
and subsequently measured at either the higher of such amount or the amount
determined under existing guidance for non-acquired contingencies;





In-process
research and development will be recorded at fair value as an indefinite-lived
intangible asset at the acquisition date;





Restructuring
costs associated with a business combination will be generally expensed
subsequent to the acquisition date; and





Changes
in deferred tax asset valuation allowances and income tax uncertainties after
the acquisition date generally will affect income tax expense.




FAS No.
141(R) also includes a substantial number of new disclosure requirements and
applies prospectively to business combinations for which the acquisition date is
on or after the beginning of the first annual reporting period beginning on or
after December 15, 2008. Earlier adoption is prohibited.  Management does
not believe such statement will have any impact on its future financial
statements.





Also, on
December 4, 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in
Consolidated Financial Statements - An Amendment of ARB No. 51.”
  SFAS No. 160 establishes new accounting and reporting standards for
the noncontrolling interest in a subsidiary and for the deconsolidation of a
subsidiary. Specifically, this statement requires the recognition of a
noncontrolling interest (minority interest) as equity in the consolidated
financial statements and separate from the parent's equity. The amount of net
income attributable to the noncontrolling interest will be included in
consolidated net income on the face of the income statement. SFAS No. 160
clarifies that changes in a parent's ownership interest in a subsidiary that do
not result in deconsolidation are equity transactions if the parent retains its
controlling financial interest. In addition, this statement requires that a
parent recognize a gain or loss in net income when a subsidiary is
deconsolidated. Such gain or loss will be measured using the fair value of the
noncontrolling equity investment on the deconsolidation date. This statement
also includes expanded disclosure requirements regarding the interests of the
parent and its noncontrolling interest.  SFAS No. 160 is effective for
fiscal years, and interim periods within those fiscal years, beginning on or
after December 15, 2008, and earlier adoption is
prohibited.  Management does not believe such statement will have any
impact on its future financial statements.


54





Other
recent accounting pronouncements issued by the FASB (including its Emerging
Issues Task Force), the AICPA, and the SEC did not or are not believed by
management to have a material impact on the Company's present or future
consolidated financial statements.





Reclassifications





Certain
reclassifications have been made to the fiscal 2007 financial statements to
conform to the 2008 presentation.





3.
            NOTES
      PAYABLE TO 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 and 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 the 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.   In
July 2006, $100,000 of principal was repaid.  The remaining balance of
$250,000 is due on demand. The loan is guaranteed by the President of the
Company.





In April
and May of 2006, we arranged for three loans aggregating $290,000 from a
Director of the Company. Two of the loans aggregating $190,000 are demand loans
and bear interest of 8%.  The third loan for $100,000 matured July 18,
2006, and was repaid on its due date.  The remaining balance of
$190,000 is due on demand.  Additional consideration for the three
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 the
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.   In August 2006, we arranged for a
fourth loan, a six month bridge loan, for $100,000 from the Director bearing
interest at 8%. The loan was renewed each subsequent maturity for an additional
six months and now matures in May 2009.  Such loans are
unsecured.





In
January and May 2008, additional loans of $100,000 each were borrowed from a
Director by way of a margin loan from his broker. The notes were for 30 and 60
days respectively and were repaid at their due dates, Interest at
12%  was payable to the brokerage account.





In
January 2008, in recognition of the illiquidity of the loans and the
availability of the bridge loans, the Director was awarded 78,000 shares of
common stock valued at $351,000 in appreciation of his tolerance and patience in
his financial support.


55




4.  REDEEMABLE
PREFERRED STOCK





We are
authorized to issue 20,000,000 shares of Preferred Stock with a par value of
$.0001. In 2001, 8,000,000 shares 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 is no Preferred Stock outstanding
at  December 31, 2008 and 2007.





5.
STOCKHOLDERS’ DEFICIT




Stock
Issuances





In 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 initial form of offering consisted of 500,000 units, each unit
consisting of two shares of Common Stock and one warrant to purchase one
additional share of Common Stock for a maximum offering price of $4,500,000.
Subsequently, the offering has been modified to include more or less warrants
but the selling price remained constant at $4.50 per share or per unit. In
addition, we have conducted offshore sales of common stock at a purchase price
of $4.50 per share, plus warrant coverage that varied from time to time,
pursuant to Regulation S of the Securities Act of 1933, as amended.





In 2008,
a total of 1,090,889 shares of common stock and 1,146,612 warrants to purchase
common stock were issued in private placements for total proceeds of $4,735,732,
net of commissions of $171,891. All stock and unit sales were priced at $4.50
per share or unit.





Stock
Incentive Plan





In
November 2006, we adopted a stock incentive plan to incentivize employees and
consultants with awards of 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.  In 2006, we awarded grants of 530,000
shares of restricted stock to 26 individuals upon adoption of the Plan and
recorded a compensation expense of $2,385,000.  In 2007, we awarded
460,000 shares to 16 individuals and recorded a compensation expense of
$2,070,000. In 2008, we awarded 191,000 shares to 11 individuals and recorded a
compensation expense of $859,500. All shares issued under the plan were valued
at $4.50 per share. 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.





Officers
and Directors Stock Compensation





The Board
in its January 2008 meeting awarded stock to certain Directors. The continued
faithful financial support by one Director in the form of loans when necessary
without regard to payment at maturity was recognized by an award of 78,000
shares of common stock representing a 20% equity coverage on the aggregate
amount loaned.  New independent Directors are granted an initial award
upon joining the Board and therefore the new Director in 2007 was granted 25,000
shares of common stock. Another independent Director granted an initial award of
8,333 shares in 2005 was granted an additional award of 16,667 shares of common
stock to bring him to parity with the current level of initial Director
compensation.


56





In 2006,
the Board of Directors granted warrants to purchase common stock to certain
Directors as one-time additional compensation. The warrants were fully
exercisable at date of grant, were exercisable at $5.00 per share and for a term
of 5 years. Grants were to 4 individuals for a total of 300,000 shares, with
immediate vesting. Using a Black-Scholes option pricing model with the following
weighted average assumptions: dividend yield 0; expected volatility 50%; risk
free interest rate 4.57%, expected term of the warrant 5 years, the warrants
were determined to have a fair value of $2.067 for a total of $620,190 which was
charged to compensation expense at the date of grant.





There
were no grants of options or warrants to officers or Directors in
2007.





In 2008,
an additional warrant to purchase common stock was granted to an officer in the
amount of 200,000 shares. The warrant is fully vested at date of grant, and is
exercisable at $7.00 per share and for a term of 5 years. using a Black-Scholes
option pricing modelwith the following weighted average assumptions: dividend
yield 0; expected volatility 50; risk free interest rate 1.55%, expected term of
the warrant 7 years, the warrants were determined to have a fair value of $1.446
for a total of $289,200 which was charged to compensation expense at the date of
grant.





A summary
of the status of these compensation arrangements is as follows:





Shares
                  
                  
                  Weighted
                    Exercise
                    Price
                  
                  
                  Weighted
                    Remaining
                    Contractual
                    Term
                  
                  
                  Aggregate
                    Intrinsic
                    ValueOutstanding
      at January 1, 2008
                  
                  
                  500,000
                  
                  
                  $
                  5.00Granted
                  
                  
                  200,000
                  
                  
                  $
                  7.00
                  
                  
                  
                  5.0Exercised
                  
                  
                  -
                  
                  
                  
                  -Forfeited
      or expired
                  
                  
                  -
                  
                  
                  
                  -Outstanding
      at December 31, 2008
                  
                  
                  700,000
                  
                  
                  $
                  5.57
                  
                  
                  
                  3.33
                  
                  
                  $
                  -Exercisable
      at December 31, 2008
                  
                  
                  700,000
                  
                  
                  $
                  5.57
                  
                  
                  
                  3.33
                  
                  
                  $
                  -





Warrants





At
December 31, 2008, we had issued 6,373,451 warrants, exercisable from 2 to 5
years at $4.50 to $5.70, in conjunction with sales of common stock and awards
for services.





In 2008,
we extended the expiration date of the older warrants to December 31, 2009 and
adjusted the exercise price of the warrants to $5.00 per share. These warrants
were issued in conjunction with equity sales and therefore the adjustment had no
income statement effect.





During
2007, we issued an additional 565,522 warrants, 43,877 exercisable at $5.00 for
2 years and 521,644 exercisable at $7.00 for 3 years in connection with our
equity offerings.


57


During
2007, 154,387 warrants were issued for services and relating to fund raising
efforts, all of these warrants are exercisable at $5.00 per share, 4,388
warrants are exercisable for two years and 150,000 warrants are exercisable for
5 years.  The fair value of all of the warrants issued in 2007
aggregated $313,008.  The Company used a Black-Scholes pricing model
with the following weighted average assumptions to determine the fair value of
the warrants: expected volatility of 50%, a risk-free interest rate of 4.9%, an
expected term of 4.4 years, and 0% dividend yield.





During
2008, we issued an additional 1,146,612 warrants exercisable at $7.00 for 3
years in connection with equity offerings.





During
2008, 702,471 warrants were issued for services and relating to fund raising
efforts, 2,471 warrants are exercisable for 3 years, exercisable at $7.00 per
share and, 200,000 warrants are exercisable for 5 years at $7.00 per share and
500,000 warrants are exercisable for 5 years at $5.00 per share. The fair value
of all of these service warrants issued in 2008 aggregated
$1,226,607.  The Company used a Black-Scholes-Merton pricing model
with the following weighted average assumptions to determine the fair value of
the warrants: expected volatility of 50%, a risk-free interest rate of 1.55%, an
expected term of 5 years, and 0% dividend yield.





At
December 31, 2008, warrants outstanding were as follows:


Number of Shares
                              under Warrants
                            
                            
                            Weighted Average
                              Exercise PriceWarrants
      outstanding at January 1, 2007
                            
                            
                            3,804,458
                            
                            
                            $
                            4.96Warrants
      granted
                            
                            
                            719,910
                            
                            
                            
                            6.45Warrants
      expired
                            
                            
                            -
                            
                            
                            
                            -Warrants
      outstanding at December 31, 2007
                            
                            
                            4,524,368
                            
                            
                            
                            5.19Warrants
      granted
                            
                            
                            1,849,083
                            
                            
                            
                            6.46Warrants
      expired
                            
                            
                            -
                            
                            
                            
                            -Warrants
      outstanding at December 31, 2008
                            
                            
                            6,373,451
                            
                            
                            $
                            5.56





The
following table summarizes information about warrants outstanding at December
31, 2008:


Warrants Outstanding and ExercisableNumber of Shares
                      Under Warrants
                    
                    Exercise Price
                    
                    
                    Expiration Date
                    
                    
                    Weighted Average
                      Exercise Price2,162,057
                    
                    
                    $5.00
                    
                    
                    2009
                    
                    
                    $
                    4.50588,310
                    
                    
                    $4.50-7.00
                    
                    
                    2010
                    
                    
                    $
                    6.722,509,083
                    
                    
                    $5.00-7.00
                    
                    
                    2011
                    
                    
                    $
                    5.92150,000
                    
                    
                    $5.00
                    
                    
                    2012
                    
                    
                    $
                    5.00700,000
                    
                    
                    $5.00-7.00
                    
                    
                    2013
                    
                    
                    $
                    5.3364,000
                    
                    
                    $4.50
                    
                    
                    (1)
                    
                    
                    $
                    4.50200,000
                    
                    
                    $4.50
                    
                    
                    (2)
                    
                    
                    $
                    4.506,373,451
                    
                    
                    
                    
                    
                    
                    
                    
                    $
                    5.54


(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


58





Recapitalization





Following
the asset purchase transaction in 2005, the Company amended the agreements with
our private parent company and the Company’s former shell stockholders to reduce
the total number of shares of common stock outstanding immediately following the
asset purchase transaction to 23,389,506.   These amendments were
made to recapitalize the Company in lieu of consummating a one-for-three reverse
stock split.  All shares and per share amounts reflect the
recapitalization as of the first period presented.





6.
RELATED PARTY TRANSACTIONS





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.    At such time, Mr. Fryer was a director of
Dalrada Financial Corporation, which controlled Solvis, and was also one of our
directors.   In 2005, the Stock Purchase Agreement with Solvis
was amended to reduce the number of shares granted to Solvis to 100,000 shares,
which were valued at $450,000 and charged to expenses.





Additional
related party transaction involving loans are described in Note 3.





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.  Payments under the contract have
been completed and the media services continue to be provided.





In 2005,
the Company paid $50,000 in cash and issued 244,444 shares of unrestricted stock
valued $4.50 per share, for a total of approximately $1,100,000, which 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 approximately $750,000, were issued pursuant to the media agreement,
all of which was charged to marketing expense at the date the common shares were
issued.




In 2007,
166,668 shares of restricted stock, valued at $4.50 per share, or approximately
$750,000, were issued and charged to marketing expense at the date the common
shares were issued.


59


In 2008,
166,668 shares of restricted stock, valued at $4.50 per share, or approximately
$750,000, were issued and charged to marketing expense at the date the common
shares were issued.  As of September 30, 2008, the media agreement has
been fully paid.




8.
COMMITMENTS AND CONTINGENCIES





Operating
Leases





We lease
all our headquarters and engineering facilities in Hanford, California. We also
lease automobiles for officers and office equipment.  Future minimum
lease payments required on these non-cancelable operating leases are as
follows:





Year ended December 31,
                  
                  Amount2009
                  
                  
                  226,8382010
                  
                  
                  193,6302011
                  
                  
                  134,9742012
                  
                  
                  134,1562013
                  
                  
                  138,1822014
                  
                  
                  118,010$
                  945,790





Other





In
December 2008, an award of common stock was made to a consultant for services
principally directed to obtaining and finalizing processor commitment in China.
The consultant required that he be reimbursed for any income tax consequences of
the grant including the taxation of the value of the grant as ordinary income.
It is estimated that the Company will reimburse the consultant $22,000 in
January 2010. The reimbursement obligation will continue for as long as any
adjustment by the taxing authorities is possible.





9.
INCOME TAXES





We do not
have significant income tax expense or benefit from inception through December
31, 2008.  Our tax net operating losses have resulted in a deferred
tax asset with a 100% valuation allowance applied against such asset at December
31, 2008 and 2007.  Our tax net operating loss carryforward
approximates $27 million at December 31, 2008.  Some or all of such
loss carryforward may be limited by Section 382 of the Internal Revenue
Code.





The
income tax effect of temporary differences between financial and tax reporting
gives rise to the deferred income tax assets at December 31, 2008 and 2007 as
follows:





2008
                    
                    
                    2007Net
      operating loss carryforward
                    
                    $
                    11,086,000
                    
                    
                    $
                    8,593,000Less
      valuation allowance
                    
                    $
                    (11,086,000
                    )
                    
                    $
                    (8,593,000
                    )Net
      deferred tax asset
                    
                    $
                    -
                    
                    
                    $
                    -





The
valuation allowance increased by $2,493,000 and $2,653,000 during the years
ended December 31, 2008 and 2007, respectively.


60





Reconciliation
of the effective income tax rate to the United States statutory income tax rate
for the years ended December 31, 2008 and 2007 is as follows:





2008
                  
                  
                  2007Tax
      benefit 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





Accrued
Director’s fees of $32,796 were paid with the issuance of 12,888 shares of
common stock  in January 2009.





James
Bouskos, Chairman of the Board retired on January 8, 2009 and at a Board of
Directors meeting on January 19, 2009,  Keith
Meeks, President and CEO was appointed a Director and Gary Nielsen, a Director,
was elected Chairman.


61