UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549



FORM 10-K/A

(Amendment No. 1)



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

For the fiscal year ended December 31,
2013

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. Employer   
|incorporation or organization)           |  | Identification No.)
|                                         |  |                    
|802 N Douty St, 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 whether the registrant has submitted
electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant
to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such files).   Yes  x    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. x



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, 2013) was $24,066,279.



At December 31, 2013, the number of shares outstanding of the
registrant’s Common Stock, $0.0001 par value, was 33,115,701.



DOCUMENTS INCORPORATED BY REFERENCE

None.











Explanatory Note



The Report of Independent Registered Public Accounting Firm
included with our original Annual Report on Form 10-K filed on March 31, 2014 inadvertently omitted the exact date of such Report
of Independent Registered Public Accounting Firm. This Amendment is being filed to include a dated copy of the Report of Independent
Registered Public Accounting Firm.



As required by Rule 12b-15 of the Securities and Exchange Act
of 1934, as amended, we are also filing as exhibits to this Amendment the certifications required under Sections 302 and 906 of
the Sarbanes-Oxley Act of 2002. Except for the foregoing, this Amendment neither alters the original Annual Report filed nor updates
the original Annual Report to reflect events or developments since the date of filing of the original Annual Report.













GLOBAL FOOD TECHNOLOGIES, INC.

INDEX TO

ANNUAL REPORT FORM 10-K FOR THE YEAR
ENDED DECEMBER 31, 2013



|Item   |  |                                                                                                                  |  | Page  
|------ |  | ---------------------------------------------------------------------------------------------------------------- |  | ------
|Number |  | Description                                                                                                      |  | Number
|       |  |                                                                                                                  |  |       
|       |  | PART I                                                                                                           |  |       
|       |  |                                                                                                                  |  |       
|1      |  | Business                                                                                                         |  | 3     
|1A     |  | Risk Factors                                                                                                     |  | 18    
|1B     |  | Unresolved Staff
    Comments                                                                                    |  | 20    
|2      |  | Properties                                                                                                       |  | 20    
|3      |  | Legal Proceedings                                                                                                |  | 20    
|4      |  | Mine Safety Disclosures                                                                                          |  | 20    
|       |  |                                                                                                                  |  |       
|       |  | PART II                                                                                                          |  |       
|       |  |                                                                                                                  |  |       
|5      |  | Market for Registrant’s
    Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |  | 20    
|6      |  | Selected Financial
    Data                                                                                      |  | 22    
|7      |  | Management’s
    Discussion and Analysis of Financial Condition and Results of Operations                        |  | 22    
|7A     |  | Quantitative
    and Qualitative Disclosures About Market Risk                                                   |  | 30    
|8      |  | Financial Statements
    and Supplementary Data                                                                  |  | 30    
|9      |  | Changes in and
    Disagreements with Accountants on Accounting and Financial Disclosure                         |  | 30    
|9A     |  | Controls and
    Procedures                                                                                      |  | 30    
|9B     |  | Other Information                                                                                                |  | 32    
|       |  |                                                                                                                  |  |       
|       |  | PART III                                                                                                         |  |       
|       |  |                                                                                                                  |  |       
|10     |  | Directors, Executive
    Officers and Corporate Governance                                                       |  | 32    
|11     |  | Executive Compensation                                                                                           |  | 35    
|12     |  | Security Ownership
    of Certain Beneficial Owners and Management and Related Stockholder Matters               |  | 38    
|13     |  | Certain Relationships
    and Related Transactions and Director Independence                                     |  | 39    
|14     |  | Principal Accountant
    Fees and Services                                                                       |  | 39    
|       |  |                                                                                                                  |  |       
|       |  | PART IV                                                                                                          |  |       
|       |  |                                                                                                                  |  |       
|15     |  | Exhibits, Financial
    Statement Schedules                                                                      |  | 41    
|       |  |                                                                                                                  |  |       
|       |  | Signatures                                                                                                       |  | 44    











ITEM 1. BUSINESS



Business of the Company



Overview



Global Food Technologies, Inc., a Delaware
corporation, (“GFT”, “we”, “our” or the “Company”) is a life sciences company
focusing on (1) the commercialization of food safety applications for our proprietary scientific food processing technologies,
which are currently focused on increasing the quality and value of commercially packaged seafood (and may expand to poultry and
other meats), and making these products safer for human consumption by reducing disease-causing bacteria; (2) our iPura®Food Safety and Quality Assurance Service Program (“The iPura® 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 to increase the safety and quality of the food; (3) the promotion and sales of food products that have
been treated under the iPura®Program and bear our iPura®consumer food safety seal;
and (4) licensing of the iPura seal.



The iPura Program represents the commercialization
of our technologies and on-site food safety and quality service program. iPura is intended to be represented in the marketplace
as a stand-alone retail brand and as a private label brand manufacturer. Both are backed by our iPura Program and its related
technologies and systems. The centerpiece of the iPura Program is microbial intervention technologies (non-thermal) and system
hardware, installed in the processing facility to apply an “organic clean step” prior to packaging. There is no use
of heat, high pressure, irradiation, chlorine, or other harmful chemicals.The result is cleaner, safer food.



The iPura seal is a guarantee that the
food has been processed and packaged according to The iPura Program, which assures a hands-on, continuous role in the product’s
safety, quality and delivery. The application of The iPura Program is pervasive – from farm to fork, specifically as follows.
During processing the program requires (1) a full time on-site food safety and quality assurance team, (2) the organic microbial
kill-step using the iPura designed equipment, (3) an on-site microbiologist for continual tests against hazards (4) multiple processing
interventions to combat foodborne hazards, (5) oversight at farm level to insure consistency, integrity and traceability of raw
materials and (6) the process remains chlorine free. During distribution the program continues to operate by, (1) ensuring traceability,
(2) continual temperature monitoring, (3) security against misbranding and counterfeiting, and (4) insurance against regulatory
intervention.



After our organic kill step, we affix
our iPura seal on the individually vacuum packed fish fillets to communicate to consumers the valued added safety and quality
assurance precautions that were taken to protect their health and well being. iPura seafood products make a commitment to sustainability
of the oceans as iPura is involved in responsible aquaculture, which helps ease the pressure on ocean stocks.



Currently, we are an early stage revenue producing company. We have made sales of iPura labeled products
to food distributors and directly to retailers in the U.S. markets. In addition to sales of iPura labeled food products, it is
our objective to win contracts for private label brand manufacturing to protect the private labels of large retailers in America.
Those private label contracts involve long sales cycles and discussions with retailers continue but are sometimes constrained
by current capacity and financing limitations.



3







In late 2011, we introduced the iPura®Tilapia
retail branded two pound bags with Food4less, an independent grocery chain in central California. In late 2012, Safeway began
promotion of iPura tilapia in the service case of Safeway stores in the Northern California division and the Vons stores in
Southern California. This co-branding project included the use of the iPura® logo and slogan
“Safety Quality Sustainability” on the individual fillet packaging, promotional “ice cards” in the
service case (fresh case) identifying the attributes of Safeway brand’s iPura® Tilapia, and
customer take home cards displayed in the seafood department that communicated the role that iPura®
plays in providing cleaner and safer food.



We priced these co-branding orders according
to iPura’s transparent “cost-plus” revenue model. This model provided full transparency which allowed our customer
to see a detailed breakdown of costs and profits so they knew what they were paying for and how much each component costs. Safeway
and iPura® had agreed on what we considered to be a fair and reasonable gross profit margin for iPura. In
mid 2013, Safeway abandoned the “cost-plus” pricing agreement and discontinued the iPura brand due to its premium pricing
and entertained only competitive commodity pricing as a cost cutting measure. Based on the change in pricing, we have not shipped
orders to Safeway since mid 2013. Concurrently Safeway put themselves “in play” as an acquisition target culminating
in a purchase offer by Cerebus Capital Management in March 2014. We do not yet know what affect, if any, that a potential acquisition
of Safeway would have on our business.



We are also approaching other major food retailers and distributors to exclusively source iPura®
labeled products to protect their own brands and take credit for their efforts by promoting the iPura®
logo next to their names on their product packaging with the iPura® seal also displayed on the individually
wrapped fillets inside the package (“iPura® inside”). This will communicate to customers that
the retailer it is doing everything possible to improve food safety, food quality and sustainability of natural resources. Our
value proposition to retailers is that sourcingiPura® products will allow the retailer to increase control
& trust of foreign suppliers, protect their brand and company image, and increase sales with repeat purchases due to superior
products. Our private label program is a cost plus price model, with iPura earning a gross profit per pound with full transparency
on cost of raw materials, the iPura®Program, logistics and a gross profit for iPura®. In
this model, the retailer knows exactly what they are paying for





4







We continue to invest in research and
development. Our iPura® Seafood Processing System and iPura® Program have been commercialized
and are now operational. Our other technologies for other food products remain in various stages of research and development.
Our shrimp processing system has been researched, designed and a prototype system was built and successfully tested. Our development
team is now investigating approaches to cost reduction of the microbiological agent used and well as designing iPura equipment
operating at higher throughput speeds necessary for poultry and other proteins.



We have focused our development efforts on products based on our technologies and methods designed to
significantly reduce 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 iPura®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 past commercialization efforts were focused on seafood, although the Company anticipates
ultimately developing we have in the fourth quarter of 2013 begunresearching the development of applications for poultry products
as well. We beleive that 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 iPura®Seafood System (“The iPura® System”) by commercializing its proprietary technology
platform and its “kill-step” process which capitalize on GFT’s expertise in cellular biology and a method combining
low pressure, water, flow rate, distance, speed, dwell time 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.



The iPura® Program embodies extraordinary precautions and world-class food safety
measures for the seafood industry by uniting green technologies and our comprehensive proprietary iPura®
delivery systems with a comprehensive daily regimen at the source of production – in food processing facilities.The
iPura® daily on-site food safety team requires microbiologists, system operators, technicians, and quality
control personnel. We believe that our green technologies, proprietary delivery systems and “boots on the ground” strategy
could provideiPura with competitive advantages with its vertically integrated controls for food safety.



Further strengthening the iPura®Program, non-proprietary yet beneficial technologies are incorporated adding critical elements such as time temperature
monitoring during the transportation cold chain and full traceability via a web-based portal allowing for identification of the
source of raw materials and following the details of that product throughout its journey from farm to fork.



5







Time temperature indicators
(TTI’s) are incorporated into each shipment of seafood product. These small tabs, when activated, take a physical
temperature reading at intervals of every five minutes l for a period of 60 days. Loaded into the shipping container in
various coordinate locations to create a full temperature profile of the product in the container at the production site
while the product is stocked, these monitor the temperature and handling conditions of the product on its journey from the
production site, to the ports, as ocean freight, and finally into domestic warehousing. The TTI’s are retrieved from
the warehouse and sent to corporate offices where data is retrieved in a plotted Excel spreadsheet fashion to validate safe
handling and transportation of iPura products.



Traceability is now recognized as an important
issue in the food industry and is becoming further required in greater detail by the supply chain.. The ability to identify the
source of any consumed food product is critical for risk mitigation and corrective actions. Web-based commercial traceability
portal systems, such as TraceRegister used in the iPura program, allow for real time input of information from each production
batch and lot as it is retrieved from a pond or fishery and follows the journey of the product as it reaches the consumers. Identification
of all individuals in the food handling chain from farm to fork develops accountability reinforcing responsibility in creating
a safe food supply.



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 Annual Report.



Commercialization



We have identified four price-per-pound
revenue models for seafood. In each model, GFT will provide the daily on-site service to maintain control of The Highest Standard
in Food Safety.



A. Service and
Sales – Under this model, GFT is acts as the exclusive importer of iPura®-labeled products
through its wholly-owned subsidiary, iPura Food Distribution Company (“IFD”). GFT carries out the service, sales,
marketing and management, while IFD manages the logistics. We believe that this “importer” model can (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; (4) provide GFT the opportunity to increase
demand for iPura-labeled product both domestically and internationally; and, (5) provide GFT the opportunity to negotiate
private label brand manufacturing contracts to protect the private labels of large food retailers with iPura treated food
products. This service and sales model requires significant additional capital and/or commercial financing for inventory and
logistics costs which is not currently available to GFT. The use of this model was discontinued in mid 2013.



B. Private Label Brand
Manufacturing - Under this model, GFT approaches large retailers to act as their private label brand
manufacturer and importer of iPura-labeled products which are produced to the customer’s specifications and packaged under
the customer’s label. It is the intention of management to convince the customer to display the iPura seal on the packaging
along with their brand name (as discussed earlier). GFT has proposed a cost plus model to eliminate price negotiations due to
market fluctuations. The final price of the product to the retailer is the sum of (1) cost of raw materials and processing; (2)
costs of executing the iPura Program on-site; (3) cost of storage and transportation logistics; and, (4) a gross profit for GFT
/ IFD based on a licensing fee per pound. Under this model, we may have to extend payment and credit terms to the private label
customers, and therefore, this model also requires additional capital to finance inventory and related costs until payment is
received from customers which, again, is unavailable to GFT at this time..



6







C. 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
gross margins 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). We do not currently have any contracts based on this model. However, based on our resource constraints and inability to obtain sufficient financing to carry inventory
and other costs, which is required for models “A” and “B” above, management believes that our future success
may depend upon our ability to enter into contracts based on this service and licensing model.



D. Regional License
– Management believes that if GFT is successful in executing the business models discussed above, it could create demand
for a fourth 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 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. We currently do not have any plans
for implementing this regional licensing model.



GFT initially entered the market
utilizing the “importer” model, as described in “A” above. 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.
Model “B” was used for private labeling and co-branding with Safeway, although sales to Safeway were discontinued in
the second half of 2013.GFT anticipates utilizing each model to maximize revenue, based on market conditions and the availability
of capital.



We have combined two of
the models (A and C) as our current approach to the international seafood market by selling to the retailer our food safety
program for customer communication and brand support based on the benefits of the iPura program. The retailer would be
charged a nominal cents per pound charge for the benefits of the iPura program. We would enter into contracts with select
distributors/importers to handle the purchase of the iPura Program treated seafood from the processors As well as the
shipping, importing and storage.Under this method these distributor/importers would be strategic partners by absorbing the
management and costs of logistics and carrying inventory. We do not currently have any contracts or sales pursuant to this
approach, but given the capital and resource constraints that we face, we believe this approach offers the greatest
opportunity to resume revenue and sales moving forward.



We are proceeding to validate our iPura® brand and business models through sales
in the U.S. markets. If we can successfully resume sales and increase volume, thereafter, GFT hopes 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.



7







We also are now in the very early stages of attempting to capitalize on our expertise and the effectiveness
of The iPura Program by applying it to the U.S. poultry and beef markets. Americans buy an estimated 83 pounds of chicken per capita
per year, an industry value of over $100 billion. The Federal CDC reports that more food related deaths were attributed to poultry
that any other commodity. Chicken related illness is caused by the same bacteria that. The iPura Program is designed to deal with
in its “kill step” – salmonela, camphylobacter, E.coli and others. Poultry processors are larger and process
at higher speeds than seafood processors, which only requires an adaptation of the existing iPura systems. We intend to investigate
the feasibility of arranging strategic partner relationships with others currently in the industry such as plant sanitation providers.



The Problems We Address



Global production of seafood, meat and
poultry products is approaching 1 trillion pounds per year. A safe food supply is vital to human health and to world economies.
Too often food products carry disease-causing bacteria before harvest. If ineffectively processed or packaged, the bacteria in
the product can rapidly multiply to dangerous levels.



When contaminated products reach the market,
consumer safety, company brand, consumer trust and market share are at stake. Maintaining brand integrity requires the use of
the best available technologies and practices. Food safety is not only a top concern in the food distribution chain, it is an
underexploited profit center. We believe that this provides the opportunity for our iPura® technologies,
services and food safety label. Our technologies and food safety strategies are designed to mitigate this critical and urgent
worldwide problem.



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 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. Centers for Disease Control and Prevention (CDC) estimates that one in six Americans is
stricken with some form of food poisoning each year.  These 48 million food poisoning cases result in more than 128,000
hospitalizations and 3,000 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).



8







We believe that the food processing industry has a critical need for a pathogen-elimination step prior
to final packaging. Making seafood(and later expanding to poultry and other proteins), safer for human consumption, while at the
same time improving the quality and substantially extending shelf-life when being marketed to consumers, is the objective of the
iPura® Program. Promoting the iPura®Program and growing sales of the iPura®
Brand and our Private Label business is the primary objective of the Company.



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 2014 issue of Consumer
Reports stated that pathogenic contamination was found on 97% of the chicken breasts they sampled from U.S. retail grocers. The
report stated that chickens sealed as organic or raised without antibiotics and costing $5 to $7 per pound were just as likely
to harbor salmonella than were conventionally labeled brands that cost approximately $4 per pound and that no major seal fared
better than others overall. Pilgrim’s Pride, Perdue and Tyson chicken all showed significant levels of bacteria with some
strains higher or lower depending on brand This Consumers Report issue also stated, “It’s unreasonable to expect that
the uncooked chicken you buy won’t contain any potentially harmful bacteria.” The report further stated that “You
take it out of the package; get bacteria on your hands then touch the handle of the faucet, trash bin, or kitchen cabinet. Once
they have bacteria on them, the pathogens can live on those surfaces for hours and sometimes days 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. We believe<that if we are successful, that iPura® will be at the top of the class
for customers who want the best product and a validation point that demonstrates they are sourcing the highest standards in food
safety and food quality and acting responsibly to sustain the natural resources of the oceans and planet.



Our Products and Services



The FDA has reported that up to 85% of
the seafood consumed in America comes from overseas. In launching our technology commercially, we have concentrated first on developing
products for use by foreign 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 theiPura® 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. iPura®integrates proprietary technologies with a varied combination of organic antimicrobial
agents and delivery systems that perform non-thermal microbial interventions (or “organic clean-steps” or “kill
steps”) prior to packaging, with additional safety and quality controls throughout the distribution chain.



9







Under our on-site iPura®Food Safety Program we are providing the technology, equipment and personnel for the pathogenic “kill step”,
as part of the on-site food safety service. The iPura® system is installed in the food processor’s
facilities at the end of the processing line and is a stainless steel antimicrobial delivery system comprised of spray systems
with associated electronic controls, mixings systems, and conveyance apparatuses. 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” is performed by GFT personnel, using our iPura® delivery systems, immediately prior to packaging.
After the sanitization, GFT places its iPura® seal on the package. An on-site team of quality assurance
(QA) personnel, including a microbiologist, use state of the art laboratory equipment with rapid testing techniques to validate
sanitation of the processing environment as well as the finished product.



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.



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.



We believe that the iPura®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.



iPura®
labeled seafood products 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 iPura® System and iPura®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 are relieved of the significant losses and disruption of trade that results from food safety violations. This provides
the market with an unprecedented level of security and provides international credibility for the iPura®
seal. Mr. Curtis Keyes, the CEO and founder of MMIB, also serves on our Advisory Board.



We have established, and successfully
registered the iPura® trade mark to identify products processed by the iPura® Seafood
Processing System. The registrations for the iPura mark have issued in the United States, Chile, the EU, Hong Kong, Iceland, Japan,
Mexico, Norway, Peru, Taiwan, Thailand, Vietnam, China (PRC) and India.  The iPura®trade mark applications
remain pending in Brazil and Canada.



TheiPura®seal
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 we believe consumers will ultimately recognize the seal as a mark of excellence signifying the iPura®slogans “The Highest Standard in Food Safety” and “Cleaner, Safer Food” and “Safety Quality
Sustainability”.



10







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 buyers about the benefits of food products bearing the iPura® seal. Currently, we are advertising
on a limited basis in industry publications, along with limited consumer point-of-sale marketing and social media marketing. See
“Distribution and Marketing Plan” below for additional information about our marketing.



To date, we have tested our technology
primarily on seafood products, including actual seafood product supplied to our 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 upfront cost to the seafood processor, if they adopt our model
                                         where we 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.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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.

iPura®raises
the bar contributing extraordinary controls, interventions and transparency



During Production



1. Full time on-site food safety and quality
assurance team

2. Organic microbial kill-step (iPura
System installed in processing plant prior to IVP, IQF)

3. On-site microbiologist for continual
tests against hazards

4. Multiple interventions to combat foodborne
hazards

5. Oversight at farm level to ensure consistency,
integrity and traceability of raw materials

6. Chlorine free



During Distribution



1. Traceability



11







2. Temperature Monitoring

3. Security against counterfeiting

4. Insurance against regulatory intervention
and product recall



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 new organic antimicrobial agents as well as research
on other meat products, including poultry and pork. Due to resource limitations, we currently have only limited research and development
ongoing at this time.



Distribution and Marketing Plan



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 four price-per-pound revenue models and in each model,
GFT will provide the daily on-site service to maintain control of The Highest Standard in Food Safety and Quality. The models
are discussed in detail above, in the “Overview” section.



We believed that our sales to Safeway would
help us validate iPura® in the U.S. markets through the “importer model” and “private label
brand manufacturer model” (co-branding). However, due to changes within Safeway and their focus on commodity based pricing,
sales ended in the first half of 2013. Therefore, we are seeking to generate sales to other retailers in order to resume ourdistribution
and marketing plan. We believe that the sales to major retailers would help the iPura® brand to gain a limited
amount of market recognition that management believes will lead to important private label brand manufacturing sales. If the private
label business has gained traction, 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. We do not have any plans to enter into international licenses within the next 12 months, s we believe
our success in branding iPura®-labeled products in the U.S. will be a prerequisite for any licenses or market
entry into other countries.



Market entry begins with the most popular aquaculture products: tilapia, striped pangasius (swai), catfish,
salmon, and shrimp. Farmed tilapia and swai are available now, with sales through the first half of 2013, guaranteed to have been
processed with the iPura®food safety and quality interventions and daily oversight described below:



| | 1. | iPura® on-site
                                         food safety and quality assurance team
| | -- | ----------------------------------------------------------------------------------------------

| | 2. | Chlorine free “organic clean
                                         step”
| | -- | ---------------------------------------------------------------------------

| | 3. | Proprietary delivery systems IP
| | -- | -------------------------------



12







| | 4. | Continual testing against foodborne
                                         hazards
| | -- | ------------------------------------------------------------------------------------

| | 5. | Protection against cross contamination
                                         (IVP)
| | -- | -------------------------------------------------------------------------------------

| | 6. | Temperature monitoring (TTI)
| | -- | ----------------------------

| | 7. | Traceability (TraceRegister)
| | -- | ----------------------------

| | 8. | Security authentication against
                                         counterfeiting & fraud
| | -- | -----------------------------------------------------------------------------------------------

| | 9. | Product insurance throughout the
                                         distribution chain
| | -- | --------------------------------------------------------------------------------------------

| | 10. | Independent third-party certification
                                         (GFSI benchmarked schemes)
| | --- | ---------------------------------------------------------------------------------------------------------



The iPura
marketing materials that target large distributors and retailers make a point that iPura®promotes their brand by differentiating their product from all others in the marketplace. The materials point out that iPura®addresses brand protection and critical food safety and quality assurance issues at a level unmatched in the industry. The
centerpiece of the iPura®Food Safety and Quality Assurance Program
are microbial intervention technologies (non-thermal) and system hardware, installed in the processing facility to incorporate
an “organic clean step” prior to packaging. There is no use of heat, high pressure, irradiation, chlorine, or other
harmful chemicals.The marketing materials indicate that the result is
cleaner, safer and better tasting seafood. They further explain thatiPura®contracts with premier aquaculture producers to assure a high quality product starting-pointfor raw materials. Our supply and processing partners contribute with committed ownership and management, independent certification
and large state-of-the-art facilities. iPura®supplies
the technology including our proprietary on-site equipment and antimicrobial agents that are FDA-approved and on the USDA organic
registry. Inside the plant, technicians execute the iPura®microbial
kill-step interventions prior to packaging. Our on-site microbiologists validate product and conduct environmental monitoring
periodically throughout the production day. Marketing materials also point out that today’s consumers expect a higher degree
of food safety and most believe that not enough is being done to protect their health. The iPura®seal represents the highest standards in food safety, quality, and sustainability.



iPura markets
a compelling case as best in class for retailers who actively pursue superior products. The iPura®label provides a validation point that demonstrates that the retailer is sourcing the highest standards in food safety and food
quality, and acting responsibly to sustain the natural resources of the planet. A private label agreement could provide the retailer
or large distributor with continuous benefits:



| | 1. | Protection of brand & company image
| | -- | -----------------------------------

| | 2. | Control & trust of foreign suppliers
| | -- | ------------------------------------

| | 3. | Increase repeat purchases with superior products
| | -- | ------------------------------------------------

| | 4. | Pricing based on a cost plus model – with full transparency
| | -- | -----------------------------------------------------------

| | 5. | Continuity of supply
| | -- | --------------------

| | 6. | Consumer communication label: food safety, quality and sustainability
| | -- | ---------------------------------------------------------------------

| | 7. | Sales support & advertisement
| | -- | -----------------------------



A critical aspect of our business
model is to promote our technology and the iPuraTMseal in the United States. We have introduced iPura to large grocery
chains, distributors, restaurants, and consumers and educated them about the risks of food-borne pathogens in seafood, and the
health and economic benefits that our technologies can produce.



13







One of the most important direct
marketing opportunities of the year is presented at the International Boston Seafood Show, held in March of each year. iPura has
continually had a significant presence, supported by brochures and members of our sales and marketing team. Meetings have been
held with top executives from our target prospect list as well as interviews with media to promote the iPura®brand and private label business. Management believes acceptance of major retailers of iPura® to protect
their brand, there will be a dramatic increase of authored articles that discuss the prudence of iPura®
on-site food safety and quality services and it will create a spike in publicity that will propel the Company’s sales. We
believe that this direct approach to large distributors and retailers, combined with media coverage and a limited amount of consumer
marketing will result in sales growth that fulfills company objectives.



The Company is using various aspects of
Social Media to publicize iPura® within industry and directly to consumers. Management has developed and
implemented a comprehensive Social Media (SM) campaign focused primarily on the following core
tools: Facebook, Twitter, YouTube and Blogger.  Each of the channels has inherent strengths and limitations that have
been identified and used to formulate a strategy that is consistent, coherent and effective.  The creation of awareness,
respect and desire that result in sales of iPura® product is the sole motivator behind the SM campaign.



Social Media tools grant individual companies unprecedented
power, flexibility and options.  Traditional Public Relations and Marketing still apply, and those campaigns gain additional
traction and mileage when integrated into iPura's Social Media channels.  All campaigns by iPura originating in print
media, television, radio or the internet are or will be promoted on each SM feed in concert with their timing and objectives. 
Additionally, SM campaigns may stand alone and be tailored to the particular strengths of an individual SM site, and deliver measurable
results.  Lead generation, prospect list building, competition monitoring, customer relations, brand messaging, loyalty
building, research, Search Engine Optimization (SEO), public relations, B2B/B2C sales and marketing are the key benefits derived
by Management's deliberate approach.



We believe our marketing program achieves
the following benefits:



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

·The
iPura® label is a tool which communicates that exceptional food safety measures have been taken to protect
consumer health.

·The
label serves 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.

·Trademarks
are listed on the primary registry at the USPTO and internationally.



Most of our retail sales, such as at grocery
stores, have been made to customers without any prominent iPuraTM branding. We hope to improve point-of-sale branding,
as well as increase industry and consumer awareness of the iPuraTM brand as resources permit. Due to the high costs
associated with creating and marketing a brand to consumers, during the next 12 months, we will continue with only very limited
marketing to consumers, as well as continuing marketing efforts to processors and industry associations to create awareness of
our iPuraTM brand. Ultimately, we believe our ability to generate sufficient sales and adequate premiums for iPuraTMproducts will depend upon our ability to successfully market our brand to consumers in the U.S.



14







Processor and Production Agreements



We now have two iPura systems installed
under installation and supplier agreements with two separate processors, both in China. The first Chinese processor, Tongwei,
has been producing tilapia fillets since 2009 as our historical source of product. The second processor at Evergreen Aquatic in
China was in production producing tilapia as a second source for Safeway. A third system is on standby in Vietnam having been
installed in Caseamex for production of pangasius/swai (a catfish).



A fourth system has not been allocated
to a production goal and will be installed as needed. Management is reviewing its options in Chile as well as Alaska for salmon
and trout production, and in the U.S. for Catfish production. As described above, we are in the final phases of testing our technology
for shrimp processing, although we will not begin negotiations with any potential shrimp processors or retailers until we have
successfully concluded such testing.



All of the current agreements are structured
pursuant to our “importer” model and “private label brand manufacturer” model (models “A”
and “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 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.



Under these agreements, our iPura®System is installed in the processing line at the processors’ facilities. Our iPura® System
is operated and supervised by GFT personnel, at GFT’s expense. Seafood processed through our iPura®
System is then packaged and labeled with our iPura® seal. IFD has the exclusive rights to buy and distribute
the seafood processed with our iPura®TM System and the processors therefore cannot sell such seafood
to any other customers or distributors, or otherwise use ouriPura® System for any other seafood processing.
In the future, we may act as brokers for selected retailers and distributors and not be the importer and reseller. The agreements
have original terms but are automatically renewable. 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.



The following is a discussion of existing
production ofiPura®labeled products:



China



In early 2009, the first iPura®system became operational in Tongwei (Hainan) Aquatic Products Co., a major seafood processing facility in the PRC. Our
first commercial product was iPura® labeled tilapia and this product has been sold in the U.S. under the
“importer model” described earlier. Late in 2012, an iPura® system was installed in Evergreen Aquatic,
a vertically integrated tilapia producer located in Zhanjiang City, Guangdong Province, China, as a second source for Safeway.



China is important because it
is the world’s largest producer and exporter of seafood products, including tilapia. The operation and production of tilapia
from two factories allows GFT to diversify the source and price to accommodate our cost plus pricing model.

Since sales to Safeway ceased after the first half of 2013, we did not process any seafood on our two
production units in China in the second half of 2013.



15







Vietnam



In 2009 an iPura®
system was installed in Binh An Seafood Joint Stock Company, a large pangasius (swai) producer in Vietnam and trained an iPura
on-site food safety and quality assurance team. However, during operational startup and testing it was determined that microbial
contamination in the processing area and on raw product did not meet iPura® requirements and an extended
study was conducted by the iPura on-site team. As such, it was determined to remove the iPura System and relocate it to Cantho
Import-Export Seafood Joint Stock Company (Caseamex). Caseamex is also a producer of swai.

GFT 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.
| | - | ----------------------------------------------------------------------------------------------------

| | · | The
                                         U.S. is a large importer of Vietnamese Swai and Shrimp
| | - | ---------------------------------------------------------------------------------------------------

| | · | Vietnam
                                         has a tremendous need for pathogen elimination systems. They have had a number of import
                                         rejections and retentions.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | We
                                         believe that Vietnam recognizes the safety and quality issues confronting their industry
                                         and desires to improve their seafood quality and global reputation.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Vietnam
                                         is a participant in the World Trade Organization.
| | - | --------------------------------------------------------------------------------------------------



Production ofiPura®Systems



Our commercialization team
consisted of seasoned experts with high-level engineering and production experience. They have had success working together
in the industry. GFT’s system is now easy to operate and maintain, and scalable for volume. Subject to receipt of
adequate funding, and if required to meet future demand, we plan to sign contracts for the manufacturing of the iPura®systems
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, mixers, fill systems, conveyors, sprayers,
chillers, etc. are industry standard and can be procured locally in the country of installation. Following the successful
blueprint of the actual iPura® installations, the integration is handled by GFT personnel with PLC
programmers from the United States. GFT employees maintain the installed systems and manage on-site quality control aspects
of the process remotely. The iPura on-site food safety and quality assurance team consists of a supervisor, microbiologist,
system operator, technician and a quality assurance person.



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 are 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.



16







Nevertheless, we recognize that growing
our proprietary products and services will require significant capital, human resources, 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.



If we create a successful brand around
our iPura® Program, then we believe that we will be offered some protection against the possibility or eventuality
of technological competition due to the fact that our technology represents only one part of the iPura®
Program. We believe that the iPura® Program, which includes our own on-site food safety and quality team,
offers further differentiation that technology alone cannot replace. If successful, we believe that our brand will represent more
than just a specific set of technologies, but rather a total commitment to food safety and quality. In addition, with the success
and demand for the iPura® brand, GFT may be able in incorporate new technologies (through licensing or acquisition)
into the iPura® Program, whether proprietary or developed by our competition.



Government Regulation



Our business is 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 or produce
our products and services (such as Vietnam, 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 iPura® Seafood Processing System that come
into contact with food, such as the liquid wash, our iPura® 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 iPura® Systems in Vietnam, or China and we do not believe that any specific
regulatory bodies will require pre-approval of our systems in those countries.



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). These patents allow us to own and control
certain aspects of 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 25 countries 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.



17







We have established, and successfully
registered the iPuraTM trade mark to identify products processed by the iPuraTM Seafood Processing System.
The registrations for the iPura mark have issued for our targeted goods and services in the US, China (PRC), Vietnam, the EU,
Hong Kong, Iceland, Japan, Mexico, Norway, Peru, Taiwan, Thailand and India. The iPura trademark applications remain pending in
Brazil and Canada.



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, 2013, we had 10 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:





| | · | our ability to resume sales, and generate revenue;
| | - | --------------------------------------------------



| | · | whether
we can successfully partner with a distributor/importer to allow us to generate sales with lower capital and financing costs;
| | - | -------------------------------------------------------------------------------------------------------------------------------------





| | · | 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
                                         we will be able to charge a premium for our products and generate adequate gross margins
                                         on our sales;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | 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;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | 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;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



18







| | · | 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;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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



19







| | · | threats
                                         or acts of terrorism or war; strikes, work stoppages or slowdowns 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 lease our Corporate offices in the City of Hanford, California,
for $1,125 per month. We have approximately 1,500 square feet of office facilities located at 802 N Douty St., Hanford, California.
The lease is annually renewable and expires June 30, 2014.



We also lease a marketing office in Los Gatos, California,
for $2,904 per month. The premises are office space of approximately 1,100 square feet and the lease rate escalates to $3,300
per month over its 3 year term. The lease expires May 31, 2015



We also lease warehouse/R&D facility in Visalia, California.
We rent approximately 3,000 square feet of warehouse space on a month to month basis at $1,230 per month.



ITEM 3. LEGAL PROCEEDINGS



A civil complaint was received dated September
10, 2013 for breach of contract involving a real property lease for a warehouse/R&D facility in Hanford CA. The lease has
a term ending in October 2014. We ceased using the facility and stopped paying rent in May 2013. The lawsuit is the culmination
of a 3 year dispute over various aspects of the lease and occurred with the change of ownership of the property. The landlord
and plaintiff, STG Realty Ventures, Inc. filed the suit in Kings County, CA Superior Court and asks for computed damages of $160,792
for failure to pay rent, plus interest and attorneys’ fees. The Company believes that it may have viable defenses with respect
to some of the damages asked for in the suit. However, no assurances can be given with respect to the outcome of the litigation
and a judgment against the Company could have a material, adverse impact on our financial condition.



ITEM 4. Mine Safety
Disclosures



Not applicable.



PART II.



ITEM 5. MARKET FOR
REGISTRANT’S 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.



20







Number of Stockholders



As of February 28, 2014, we had 733 stockholders of record.



Dividends



Common Stock: We have not paid dividends
on our common stock and we do not anticipate paying dividends on our common stock at any time in the foreseeable future. To date,
we have generated only limited revenues and we currently anticipate that we will retain any future earnings for use in developing
our business. Any determination to pay dividends on our common stock 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. Our Series C Preferred Stock has
certain dividend rights, described below. Until all such dividends are paid on the Series C Preferred Stock, we are prohibited
from declaring or paying any dividend on our Common Stock.



Preferred Stock: We do not have any Series
A Preferred Stock or Series B Preferred Stock outstanding.



In 2009, we filed a Certificate of Designation
of Rights, Preferences and Privileges with the Delaware Secretary of State to create a Series C Preferred Stock, consisting of
up to 1,500,000 shares. The Series C Preferred Stock bears an 8% annual dividend, which accrues quarterly in arrears, and is payable
prior to, and in preference to, any dividends on our common stock. Dividends on any issued and outstanding shares of Series C
Preferred shall accrue, whether or not declared by the Board of Directors; provided, that, payment of such dividends will
be subject to declaration of dividends, if, as and when, by the Board of Directors, in compliance with applicable Delaware law
regarding the payment of dividends out of surplus or net profits, and subject to the recommendation of the Company’s President
and/or Chief Financial Officer with respect to payment of dividends after review of the Company’s working capital reserves
in light of the Company’s business strategy. At this time, the Board does not anticipate having adequate revenues or cash
flow to permit any declaration and payment of the accrued dividends in the near future. Investors shall be given the option, subject
to compliance with applicable securities laws, when the cash dividend is paid, to have such dividend reinvested/paid in shares
of Common Stock (at the fair market value of the Common Stock, based on the most recent private equity sales price or the 30-day
average trailing bid price of the Company’s Common Stock, if traded on a Company-approved public stock exchange or electronic
quotation system), at the election of each shareholder.



Recent Sales of Unregistered Securities



During the fourth quarter of 2013, 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.



21







In the fourth quarter of 2013 there were
no sales of common stock



We have a short term note in the amount
of $1,300,000 that bears interest at the rate of 9% per annum with the interest payable in shares of common stock valued at a
price of $2.25. The note was renewed with an interest rate of 9% per annum, and a renewal bonus of 26,000 shares of common stock
was issued at a value of $58,000 or $2.25 per share. The note was renewed twice during 2013 and required the issuance of 104,000
shares of common stock at $2.25 per share for a value of $234,000 for both the renewal bonus and accrued interest at maturity.



Accrued Directors fees are paid in shares
of common stock. A total of 30,541 shares of common stock were issued for director fees during the fourth quarter of 2012 valued
at $72,993.



Common shares were issued for services
a consultant during the fourth quarter of 2013, for a total of 1,215 common shares valued at $2,905.



We did not make any repurchases of our
securities during the fourth quarter of fiscal year 2013.



ITEM 6. SELECTED
FINANCIAL DATA



Not required for smaller reporting companies.



ITEM 7.	 MANAGEMENT’S
DISCUSSION AND ANALYSIS of financial condition and results OF OPERATIONS



The following discussion has been prepared
by management and should be read in conjunction with the financial statements and notes thereto included in Item 8 of this Annual
Report on Form 10-K.



Company Overview



The iPura®brand and 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
iPura®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.



The iPura®Food Safety Program is the constitution of the iPura®food safety brand, which includes:



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

| | · | Intelligent
                                         packaging of product.
| | - | --------------------------------------------------------------------------

| | · | Product traceability
                                         of handling and temperature.
| | - | ------------------------------------------------------------------------------------------



22







| | · | An independent
                                         third party certification of standards.
| | - | -----------------------------------------------------------------------------------------------

| | · | A
                                         unique product insurance that follows theiPura®labeled product throughout the distribution chain.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------

| | · | A
                                         distribution chain and consumer “pull through” marketing program promoting
                                         iPura®as “The Highest Standard
                                         in Food SafetyTM.”
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The iPura®Food 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.



Our iPura®Systemis the physical on-site processing
element of The iPura®Food Safety Program,
which combines various food safety elements described above. Our latest generation iPuraTM System is designed to process
seafood, with certain customization required for different types of seafood and the specific requirements of a given installation
site.



In
2009, we completed the installation of our iPura®
Systemat a food processor located in China, Tongwei
(Hainan) Aquatic Products Co., and began producing our first order of inventory and selling it in the United States. We have
installed at another processor in China, the “Evergreen Aquatic facility” that is also operational and production
commenced in late 2012. Two other systems are in storage, one at our Hanford, California warehouse facility and one in
Vietnam at Caseamex, our contract processor. Since we did not have any sales in the second half of 2013, these iPura®
Systems did not process any seafood in the second half of 2013.



From the
commencement of our research and development activities in 2001, we have raised substantial equity capital to fund the development
of our iPura® System. At December
31, 2013, the Company has accumulated losses approximating $74,000,000 and has incurred negative cash flow from operating activities
of approximately $1,600,000 for the year ended December 31, 2013. 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. The collapse of the Chilean salmon industry shifted our focus to China produced tilapia and Vietnamese produced
swai (catfish), for which production systems were installed. Continued development has resulted in a more efficient, less labor
intensive and more easily maintained processing systems as well as adaptions for other seafood species..



The Company
has executed its marketing strategy by promoting the iPura®brand to food processors
and industry associations as the world’s first food safety label. In addition to selling to retail chains on a wholesale
basis, we have promoted a private label program to large retailers to exclusively source iPura labeled products to protect their
own brand. In our vision, an established leader would enthusiastically “champion” the iPura®brand
by promoting the iPura®logo next to its name on their product packaging, with
the iPura®seal also displayed on the individually wrapped fillets inside the
package (“iPura®inside”). This would communicate to customers that
the retailer is doing everything possible to improve food safety, food quality and sustainability of natural resources. Our value
proposition to retailers is that sourcing iPura®products will allow the retailer
to increase control & trust of foreign suppliers, protect their brand and company image, and increase sales with repeat purchases
due to superior products. Our private label program is a cost plus price model, earning a gross profit per pound with full transparency
on cost of raw materials, the iPura®Program, logistics and a gross profit for
the Company.



23







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 four price-per-pound revenue models and in each model,
GFT will provide the daily on-site service to maintain control of The Highest Standard in Food Safety and Quality. The models
are discussed in detail previously in “Business” in Part I, Item 1.



We have proceeded to validate iPura®
with sales in the U.S. markets through the “importer model” and “private label brand manufacturer model”
(co-branding). This has allowed the iPura® brand to gain a limited amount of market recognition which management believes
will lead to important private label brand sales. However, we did not have any sales in the second half of 2013.



Our current approach to the market is to combine two of the models (A and
C) by selling to the retailer a food safety program for customer communication and brand support based on the benefits if the
iPura program. The retailer would be charged a nominal cents per pound charge for the benefits of the iPura Program. We would
then enter into contracts with select distributors/importers to handle the purchase of the iPura Program treated seafood from
the processors as well as the shipping, importing and storage. Under this method selected distributor/importers would be
strategic partners by absorbing the management and costs of logistics and carrying inventory.



We do not currently have any contracts or sales pursuant to this approach, but given the capital and resource
constraints that we face, we believe this approach offers the greatest opportunity to resume revenue and sales moving forward.



The iPura®marketing materials that target large distributors and retailers make a point that iPura®promotes their brand by differentiating their product from all others in the marketplace. The
materials point out that iPura®addresses
brand protection and critical food safety and quality assurance issues at a level unmatched in the industry. Marketing materials
also point out that today’s consumers expect a higher degree of food safety and most believe that not enough is being done
to protect their health. The iPura®seal represents the highest standards
in food safety, quality, and sustainability.



One
of the most important direct marketing opportunities of the year is presented at the International Boston Seafood Show, held in
March. We have had a noticeable presence and were staffed with the sales and marketing team. We had the opportunity to meet with
top executives from our target prospect list as well as to conduct interviews with media to promote the iPura®brand and private label business. We believe that this direct approach to large distributors and retailers, combined with media
coverage and a limited amount of consumer marketing will result in the market acceptance of the iPura®brand.



Consumer marketing currently is limited to a social media presence. Most
of our retail sales, such as at grocery stores, were made to customers without any prominent iPura® branding. For any
future retail sales that we are able to generate, we hope to improve point-of-sale branding and have developed descriptive brochures
and educational materials for display at various supermarkets where seafood with the iPura® seal is sold. The Social
Media core tools: Facebook, Twitter, YouTube and Blogger are used to publicize iPura within industry thought leaders and directly
to consumers.



24









Processor and Distribution Agreements



We now have two iPura systems installed
under installation and supplier agreements with two separate processors, both in China. The first Chinese processor, Tongwei,
has been producing tilapia fillets since 2009 as our historical source of product. The second processor at Evergreen Aquatic in
China was in production producing tilapia as a second source for Safeway. A third system is on standby in Vietnam having been
installed in Caseamex for production of pangasius/swai (a catfish). Since we did not have any sales
in the second half of 2013, these iPura®Systemsdid not process any seafood in the second half of 2013.



Under these
agreements, GFT is generally responsible for the cost of manufacturing, fabricating and installing the iPura®
Systemat the processors’ facilities, with the
processors providing power and utility connections and certain other operating expenses.   Our iPura®System is typically installed onto one or two processing lines at the processors’
facilities.  Our iPura®Systemare
operated or supervised by GFT personnel, at GFT’s expense.  Seafood processed through our iPura®
Systemwill then be packaged and labeled with our
iPura®seal. Our wholly owned subsidiary, iPura Food Distribution Company
(“IFD”) has the exclusive rights to buy and distribute to customers the seafood processed with our iPura®
Systemand the processors therefore cannot sell such seafood
to any other customers or distributors, or otherwise use our iPura® Systemfor any other seafood processing. In the future, we may act as brokers for selected retailers
and distributors and not be the importer and reseller. The agreements have original terms but renew automatically. 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.



We have received limited purchase orders
to date for our products, and had no sales in the second half of 2013. We are pursuing sales with certain select U.S. grocery store
retailers, including negotiations with regional and national retailers.  Without inventory financing we intend to pursue brokering
the iPura product to other importers for distribution to our customers,since our “importer” model requires significant
working capital and inventory financing.



Liquidity and Capital Resources



The report from our independent registered
public accounting firm on our financial statements for the year ended December 31, 2013 included in this Form 10-K indicates that
factors relating to our financial condition as of December 31, 2013 and our results of operations and cashflows for the year ended
December 31, 2013 raise substantial doubt about our ability to continue as a going concern.



Historically,
our primary source of cash has been the sale of equity instruments to investors and debt financing agreements. We hope to resume sales in 2014, although we cannot currently predict the timing or level of any such
sales. Therefore, any funds generated
from installing and operating our iPura® Systemsduring
the next 12 months are not expected to cover our operating expenses.



25







Based on
our cash balance as of December 31, 2013, we are in need of immediate additional financing to fund our current operating and working
capital requirements. Furthermore, we believe that we will need approximately $5 million to manufacture iPura®
Systemsand cover operating expenses during the
next twelve months, in addition to a financing vehicle or a line of credit to finance the inventory of iPura®product
The amount of capital required will vary depending on a variety of factors, many of which are beyond our control. We cannot provide
assurance that funds from our future operations or funds provided by our current financing activities will meet our capital
requirements, and in that event, we will continue to seek additional sources of financing to maintain liquidity. Any additional
capital we raise will likely involve issuing additional shares of common stock or other equity securities, or obtaining debt financing,
which could be convertible into equity securities. However, at this point, we have not specifically identified the type or sources
of this funding.



As of December 31, 2013, we had trade
indebtedness and accrued liabilities in the ordinary course of business as well as deferred compensation of approximately $1,038,000,
other debt in the form of continuing short term loans of $640,000 from a Director and a shareholder due on demand, and a one-year
note from a third party in the amount of $246,000, due in 2014.



In August 2013 a debt financing facility
for a total commitment of $1.6 million was finalized with an existing shareholder. Upon signing, the Company received initial
loan proceeds of $700,000. The commitments include loans for an additional $900,000 in six tranches of $150,000 each due on the
first of each subsequent month, beginning on September 1, 2013. The debt carries simple interest at 3% payable at maturity. The
facility has a term of one year and is renewable for one additional year at the option of the Company. Both principal and interest,
all or in part, are convertible into shares of the Company’s Common Stock, at any time at the election of the lender, at
the rate of $2.39 per share. The balance owing at December 31, 2013 is $1,300,000. Subsequently all of the proceeds have been
received. Currently, the Company does not have the ability or resources to repay such loan if a demand is made for repayment in
full



In 2010, a stockholder resident in the
United Kingdom loaned the Company $1,300,000 on a six month note bearing interest at 9% per year. The note has been extended for
an additional six months at each maturity date and now matures in May 2013. Interest is payable at each maturity in shares of
Company common stock at the rate of $2.25 per share and is recorded as current interest expense. At the sole option of the lender,
the principal may also be converted into shares of Company common stock at the fixed rate of $2.25 per share. Pursuant to a security
agreement, the note is secured by all of the assets of the Company and is subordinate to a 2006 related party note of $250,000.
Currently, we do not have the ability or resources to repay such loans if a demand is made for repayment in full. In such event,
this secured lender could foreclose on all of our assets as part of its security interest.



We had implemented a trade financing program
consisting of promissory notes, originally secured by inventory and equipment, in a series of maturities from one to three years
with annual interest rates from 8.2% to 9.0%. The notes are currently unsecured. The funds are received and controlled by a third
party custodian. At December 31, 2013, the Company had $689,423 in trade financing debt on one year notes. They mature on their
anniversaries throughout 2014 and, based on past renewal activity we expect that the majority will be renewed upon maturity.



26







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. Since
we have not located any commercial bank inventory financing, we are developing options for inventory debt financing with other
private parties, as described in more detail above. Successful inventory financing is critical to fund the distribution of our
products and generate revenue, based on past usage of the importer model. We cannot provide assurance 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.
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. Historically, the fabrication of major components of our iPura®System have been outsourced. We will likely continue this practice, and may also elect to outsource the integration and
installation of the units depending on the number of units installed and the logistics of a particular site. We will add non-technical
support personnel as required to manage the increase in administrative activity.



Results of Operations



Sales:



We began
sales in July 2009, with nominal sales for the year ended December 31, 2009. Sales increased to $1,109,230 for the year ended
December 31, 2010, with approximately 30% of such sales to Safeway. The remainder was to regional grocery distributors that sell
to independent grocery stores and restaurants in many regions throughout the country. These sales did not command the premium
pricing necessary for the iPura®program and were terminated in 2011.

Safeway
dominated sales activity subsequently and demanded that we should have a dual source for the tilapia product for Safeway, which
required the installation of an iPura®processing system in the Evergreen
Aquatic processing plant and was accomplished by the end of 2012. This delay reduced sales to Safeway to only the individual fillets
for the service case pending delivery of tilapia from the Evergreen Aquatic processor, Evergreen Aquatic product was delivered
in early 2013.In mid 2013 Safeway ceased to support the iPura brand and reverted to traditional commodity sourcing for the lowest
price. Additionally, the regional distributor for the private branded iPura product failed to commit to the volume necessary to
continue production and China operations were put on hold. Sales in 2013 were made only in the first six months of the year. As
a result sales were $830,031and $377,036 for the years ended 2013 and 2012 respectively an increase of 120%. Sales to Safeway
represented 80% of total sales in 2013 and 71% in 2012.



We hope to resume sales with
arrangements with distributors acting as the importer and assuming the logistics costs in 2014, although no assurances can be made. We expect this model will continue
to provide gross margins in the range experienced in 2013 of 7% and 2012 of 9%. This model will continue to promote the iPura
product from the existing commodity-based product pricing model we currently experience in the marketplace.



27







Expenses:



Our
net loss for the year ended December 31, 2013 was $2,808,831compared to $3,077,352 for the previous year ended December 31,
2012, a decrease of 9%. For the year ended December 31, 2013, total operating costs decreased 8% over the year ended December
31, 2012, from $3,110,811 to $2,868,558. The reduction is general and administrative, 10%, research and development, 40% with
a marketing expenses increase of 15%. All reductions are the result of a reduction of activity and headcount while organizing
the Evergreen production for private label sales to Safeway. The increase in marketing expense reflects some of the
logistical costs of the increase in sales volume. Both years include an impairment charge $231,652 representing iPura®Systemsnot
scheduled for installation, including the one in Vietnam. Depreciation expense increased 61% reflecting the Evergreen Aquatic
equipment being placed in service and interest expense decreased 1%. The interest charges included an expense of $234,000 in
both years which is a non cash expense payable only in common stock.



Revenue increased 120% for 2013 from
2012, but the gross margin increased 79% between such years. Such increase is due solely to improved pricing to existing
customers. Marketing expenses increased 15%, from $584,660 in 2012 to $673,188 in 2013 due to the increase in logistical
costs related to a change in Safeway packaging. Both general and administrative and research and development expenses
significantly, 10% and 40%, respectively as a percentage of revenue between the years 2013 and 2012, with the administrative
function structurally established and product development function awaiting new funding for product line extension General
and administrative expenses in 2013 includes a GAAP required non cash accrual of $116,300 for litigation exposure without
which the decrease between years would have been 20% an additional 10% decrease.



Critical Accounting policies



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. Significant estimates include the valuation of deferred tax assets, inventory allowances, the allowance
for doubtful accounts receivable, fixed asset impairment charges and the fair value of equity instruments.



Revenue Recognition



The Company recognizes revenues when all
of the following conditions exist:  a) persuasive evidence of an arrangement exists in the form of an accepted purchase order;
b) delivery has occurred, based on shipping terms, or services have been rendered; c) the Company’s price to the buyer is
fixed or determinable, as documented on the accepted purchase order; and d) collectability is reasonably assured.  To date,
all of the purchase orders from our customers have met these criteria and therefore, the Company recognizes revenue when product
is shipped to the customer.



28







Long-lived Assets



We review long lived assets for events
or changes in circumstances that indicate that their carrying value may not be recoverable. 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.



Research and Development Costs



Research and development costs are expensed
as incurred. Purchased materials that do not have an alternative future use and the cost to develop prototypes of production equipment
are also expensed. Costs incurred in the fabrication, testing, installation of commercial systems are capitalized as long lived
assets.



Stock-based compensation



Accounting principles generally accepted
in the United States of America (“GAAP”) requires 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. Shares, warrants and options issued to non-employees for services are accounted for in accordance
with U.S. GAAP 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



Not required for smaller reporting companies.



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.



29







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 knowledge of our business and the environment in which we operate. However, because of various risk factors, including
those briefly listed in Part I, 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.



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 during the fourth quarter or during 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 and financial officers,
to allow timely decisions regarding required disclosure.



30







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 early 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:



| | · | As
                                         is typical with emerging companies, 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 on Form 10-K does not
include an attestation report of the Company’s independent registered public accounting firm regarding our internal control
over financial reporting since such report is not required for non-accelerated filers pursuant to certain federal legislation
enacted in July 2010.



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, 2013 that have materially affected, or are reasonably likely to materially affect, the Company’s
internal control over financial reporting.



31







ITEM 9B OTHER INFORMATION



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

None



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, 2013, are set forth below. Biographical information for each of these persons also is presented below:



|Name               |  | Age |  | Position Held                                       
|------------------ |  | --- |  | ----------------------------------------------------
|Keith Meeks        |  | 53  |  | Director, President and Chief Executive
    Officer 
|Marshall F. Sparks |  | 73  |  | Chief Financial Officer, Secretary
    and Treasurer
|Arthur C. Agnos    |  | 75  |  | Director                                            
|James Stockland    |  | 51  |  | Director                                            



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



Keith Meeks – Director, 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. He has also served as a member of our Board
since January 2009. He was also a co-founder of our parent corporation, Global Food Tech (“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. We believe that Mr. Meeks’ experience as a founder of our parent company and his extensive
knowledge about the operations of our Company make him qualified to serve as a member of the Board of Directors. 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.



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.



32







Mr. Meeks has over 20 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. 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.



Arthur C. Agnos – Director



Mr. Arthur C. Agnos currently serves as
one of our Directors, a position he was appointed to in August 2005. Mr. Agnos also serves on the Board of Directors Linear Technologies
Corporation located in Milpitas California. He formerly served as a Director of Countrywide Treasury Bank until July 2008. 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 brings his experience as a large organization manager
and the perspective of the public regulatory environment as his principal qualifications to serve on the Board. 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 company 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 is extensively experienced as an executive in the Company’s
industry and operates daily in the Company’s market and with potential customers giving the Company a unique perspective,
and qualifying him to serve on the Board.



33







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.



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 Bylaws provide for a staggered, or
classified Board, consisting of three classes of directors serving three year terms, with only one class being subject to stockholder
election at any particular annual stockholder meeting, after the initial election. Since the staggered Board was implemented pursuant
to our annual stockholders meeting held on August 24, 2011, two of the three classes will serve one and two year terms initially,
to create the staggering of the Board. Thereafter, all directors will serve three-year terms.



Vacancies on the Board of Directors by
reason of death, resignation, retirement, disqualification, removal from office, or otherwise, and newly created directorships
resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office,
although less than a quorum, or by a sole remaining director. The directors so chosen shall hold office for the remainder of the
entire applicable term of the class to which they were appointed, until the next annual meeting of the stockholders at which members
of the director’s class are elected and until their successors are duly elected. The current classes are as follows:



|CLASS |  | DIRECTORS       |  | YEAR TERM EXPIRES
|----- |  | --------------- |  | -----------------
|I     |  | James Stockland |  | 2015             
|      |  |                 |  |                  
|II    |  | Arthur C. Agnos |  | 2016             
|      |  |                 |  |                  
|III   |  | Keith Meeks     |  | 2014             



Meetings of the Board of Directors
and Information Regarding Committees



During our fiscal year ended December
31, 2013, our Board of Directors utilized numerous conference calls to supervise management but held no formal meetings. Any formal
actions were accomplished with written consents.



34







Our Board of Directors has established
three committees: an Audit Committee, a Compensation Committee and a Nominating/Governance Committee. As of January 31, 2014,
these committees were comprised as follows:



|Audit Committee:                  | Arthur C. Agnos (Committee Chairman),
        (Audit Committee
        Financial Expert)
        James Stockland
|--------------------------------- | ----------------------------------------------------------------------------------------------------------------
|Compensation Committee:           | Arthur C. Agnos (Committee Chairman)
        James Stockland                                                    
|Nominating & Governance Committee | Arthur C Agnos (Committee Chairman),
        Arthur C Agnos
        James Stockland                             



As of December 31, 2012, Arthur C.
Agnos and James Stockland are independent directors. The Board of Directors has determined that Mr. Nielsen (who resigned on
October 10, 2013) was an “audit committee financial expert” as defined under SEC rules, but Mr. Nielsen did not
qualify as an “independent director” under the standards we utilize. See “Director Independence”
under Item 13 below.



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, 2013, our executive officers, directors or beneficial owners of more than 10% of our common stock complied
with Section 16(a) filing requirements.



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 2013 and our named executive officers.



35







|SUMMARY COMPENSATION TABLE
|--------------------------
|                          
|                          
|Name and Principal        
|Position                  
|                          
|Keith Meeks               
|President and             
|Chief Executive           
|                          
|Marshall F Sparks         
|Chief Financial           
|Officer                   



| | (1) | Salary consists of compensation earned and either paid in
                                         cash or deferred until Company cash flow improves. At December 31, 2013, the cumulative
                                         deferral amounts are for: Mr. Meeks - $20,600, Mr. Sparks - $77,000.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | Other Annual Compensation represents payments made on a leased
                                         vehicle and the personal use portion of rental paid for an office apartment in San Jose,
                                         CA.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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. No awards have
been made to officers and Directors under the 2006 Stock Incentive Plan. Other awards to the named executive officers are set
forth below.



|Outstanding Equity Awards at Fiscal Year-End
|--------------------------------------------
|Name                                        
|Keith Meeks                                 
|Marshall F. Sparks                          
|Marshall F. Sparks                          



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



36







Employment Agreements



We have no 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
| | - | -----------------------------------------------------------------------------------



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. 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.



We accrued compensation for our Chairman
of the Board through 2011 at an annual amount of $93,600. Beginning in 2012, the Chairman no longer received any additional compensation
for serving as the Chairman, and received only normal Board fees in 2013. As of December 31, 2013, our independent directors were
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 compensation
|---------------------
|                     
|                     
|Name                 
|Keith Meeks (1)      
|Gary L Nielsen (2)   
|Arthur C Agnos       
|James Stockland      
|Total                



(1) Mr. Meeks 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) Mr. Nielsen has been compensated as Chairman
of the Board through 2011, however, none of this amount was paid in cash but was deferred until the cash position improves. The
total amount deferred for Mr. Nielsen for 2009 through 2013 is $211,700. As described above, his compensation reverted to only
Board fees in 2013 and $20,996 was accrued and paid in 8,785 shares of common stock. Mr. Nielsen resigned from the Board of Directors
in October 2013.



37







(3) The dollar amounts in this column represent
the portion of directors’ fees actually paid (in the form of common stock grants) during 2013, not deferred, plus any grants
of common stock for directors’ fees that were accrued in prior years but paid in 2013. A total of 30,541 shares were issued
during the year for Board services and were valued at $72,993. The shares of stock are fully vested and not subject to any forfeiture
or repurchase restrictions.



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 1,345,000 shares of restricted
stock to 33 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     |  |  | 1,345,000                                                                                   | (1) |  | Not Applicable                                                              |  |  | 1,655,000                                                                                                                                   | (2)
|Plans not approved by security holders |  |  | None                                                                                        |     |  | Not Applicable                                                              |  |  | 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 31,2013, 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.





|Name and Address of Beneficial Owner (1)               |  | Number of Shares of Our Common Stock |            |  | Percentage of Shares of Our Common Stock (2) | 
|------------------------------------------------------ |  | ------------------------------------ | ---------- |  | -------------------------------------------- | 
|Keith Meeks (3) (6)                                    |  |                                      | 678,130    |  |                                              | 
|Marshall F. Sparks (4) (6) (7)                         |  |                                      | 183,334    |  |                                              | 
|Arthur C. Agnos (5) (6)                                |  |                                      | 122,979    |  |                                              | 
|James Stockland (6)                                    |  |                                      | 88,751     |  |                                              | 
|All directors and officers as a group  (4 individuals) |  |                                      | 1,073,194  |  |                                              | 
|                                                       |  |                                      |            |  |                                              | 
|Mark Terry                                             |  |                                      |            |  |                                              | 
|1060 Cactus, Pocatello, ID 83204                       |  |                                      | 1,693,178  |  |                                              | 
|                                                       |  |                                      |            |  |                                              | 
|Global Food Tech, Inc. (“TECH”)                        |  |                                      | 22,945,229 |  |                                              | 



| | (1) | The address of the stockholders
                                         identified in this table is c/o Global Food Technologies, Inc., 802 N Douty Street, Hanford,
                                         CA 93203, unless otherwise indicated.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | The percentage ownership is based
                                         on 33,115,701 shares of GFT common stock outstanding as of December 31, 2013.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------

| | (3) | Includes indirect beneficial
                                         ownership of 678,130 shares of GFT through ownership of shares of TECH.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------

| | (4) | Includes indirect beneficial
                                         ownership of 133,334 shares of GFT through ownership of shares of TECH.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------

| | (5) | Includes indirect beneficial
                                         ownership of 24,334 shares of GFT through ownership of shares of TECH.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------

| | (6) | Messrs. Meeks, Agnos, and Stockland are the directors of TECH. Mr. Meeks is also the
                                                                 President of TECH and Mr. Sparks is the Chief Financial Officer and Secretary of TECH. Messrs. Meeks, Agnos Stockland and
                                                                 Sparks share voting and dispositive powers with respect to the GFT shares held by TECH. Each of Messrs. Meeks, Agnos,
                                                                 Stockland 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.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (7) | Does not include warrants held
                                         by Mr. Sparks to purchase 100,000 shares of common stock, since such warrants are not
                                         exercisable currently or within 60 days of the date of this chart.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



38







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



Certain Relationships



Our parent company, Global Food Tech,
Inc. (“Tech”), owns 22,945,229 shares of our Common Stock, or approximately 69% of our issued and outstanding Common
Stock. As of March 1, 2013, all of our directors, Messrs. Meeks, Agnos and Stockland, served as the members of Tech’s Board
of Directors. Mr. Meeks 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, including the
ability of the Tech directors to vote the shares of GFT held by Tech on all matters, including the election of directors of GFT.



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.



In 2006, we arranged a 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 and outstanding
at December 31, 2013. The loan is guaranteed by the President of the Company.



We currently have four loans outstanding
from Gary Nielsen, a former Director of the Company. In 2006, we arranged for two loans aggregating $190,000 from Mr. Nielsen,
which are demand loans and bear interest of 8%. Also in 2006, we arranged an additional six month bridge loan, for $100,000 from
Mr. Nielsen bearing interest at 8%. The loan was renewed each subsequent maturity for and now annually matures in November. All
such loans are unsecured. An additional loan for $100,000 was borrowed from Mr. Nielsen in September 2009 for the same 30 day
term and 12% interest rate. The loan remains unpaid at the date of these financial statements and was amended to become an unsecured
demand note.



Director Independence



Our independent directors were
Arthur C. Agnos and James Stockland. These independent directors also serve on our audit committee, compensation committee
and nominating and governance committee. Mr. Nielsen also served on such committees until his resignation in October 2013. Since our common stock is not listed on
any national securities exchange or other market, we are not subject to the independent director and audit committee
membership rules of such exchanges. However, for purposes of determining director independence, we use the standards set
forth by the American Stock Exchange.



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, 2013 and December 31, 2012.



39







The following table shows the fees billed for audit and quarterly
review services provided by Squar Milner, for the years ended December 31, 2013 and 2012:



|                   |  | 2013 |        |  | 2012 |  
|------------------ |  | ---- | ------ |  | ---- | -
|                   |  |      |        |  |      |  
|Audit Fees (1)     |  | $    | 63,000 |  |      | $
|Audit-Related Fees |  |      | 0      |  |      |  
|Tax Fees           |  |      | 0      |  |      |  
|All Other Fees     |  |      | 0      |  |      |  
|Total              |  | $    | 63,000 |  |      | $












(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.



Our Audit Committee requires advance approval
of all audit, audit-related, tax and other services performed by our independent registered public accounting firm. 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 2013 and 2012 were
approved in accordance with the Audit Committee’s pre-approval policies.





40







ITEM 15. EXHIBITS

|Exhibit No. |  | Description                                                                                                                                                                            
|----------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|            |  |                                                                                                                                                                                        
|3.1(1)      |  | Restated Certificate of Incorporation dated October 18, 2005.                                                                                                                          
|            |  |                                                                                                                                                                                        
|3.2(1)      |  | Second Amended and Restated Bylaws as of August 31, 2005.                                                                                                                              
|            |  |                                                                                                                                                                                        
|3.3(2)      |  | Certificate of Designation of Rights, Preferences and Privileges
    – Series B Preferred Stock                                                                                        
|            |  |                                                                                                                                                                                        
|3.4(3)      |  | Certificate of Designation of Rights, Preferences and Privileges
    – Series C Preferred Stock                                                                                        
|            |  |                                                                                                                                                                                        
|10.2(5)     |  | 2006 Stock Incentive Plan                                                                                                                                                              
|            |  |                                                                                                                                                                                        
|10.3(6)     |  | Lease Agreement dated November 1, 2007 between STG Realty Ventures Inc and Global Food Technologies                                                                                    
|            |  |                                                                                                                                                                                        
|10.4(7)     |  | iPura Sales Agreement dated as of November 11, 2008 by and between GFT and Tongwei (Hainan)
    Aquatic Products Co., Ltd.                                                             
|            |  |                                                                                                                                                                                        
|10.5(7)     |  | iPura Sales Agreement dated as of November 11, 2008 by and between IFD and Tongwei (Hainan)
    Aquatic Products Co., Ltd.                                                             
|            |  |                                                                                                                                                                                        
|10.6(8)     |  | Promissory Note dated November 22, 2010 for $1,300,000 to Mukesh Paripatyadar                                                                                                          
|            |  |                                                                                                                                                                                        
|10.7(8)     |  | Security Agreement dated November 22, 2010 with Mukesh Paripatyadar                                                                                                                    
|            |  |                                                                                                                                                                                        
|10.8(9)     |  | Lease agreement dated May 23, 2012 by and between Ipura Food Distribution Company, Inc.
    and Lack Properties (facility located in Los Gatos, California)                            
|            |  |                                                                                                                                                                                        
|10.9(9)     |  | Ipura Installation and Supply Agreement dated December 5, 2012 by and between Ipura Food
    Distribution Company, Inc. and Cantho Import-Export Seafood Joint Stock Company (Caseamex)
|            |  |                                                                                                                                                                                        
|24.1        |  | 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 2002              
|            |  |                                                                                                                                                                                        
|31.2*       |  | 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 2002              



41







|32.1 ‡      |  | Certifications of Chief Executive Officer pursuant to 18 USC Section
    1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002
|----------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------
|            |  |                                                                                                                                                    
|101.INS  ‡‡ |  | XBRL Instance Document                                                                                                                             
|            |  |                                                                                                                                                    
|101.SCH ‡‡  |  | XBRL Taxonomy Schema                                                                                                                               
|            |  |                                                                                                                                                    
|101.CAL ‡‡  |  | XBRL Taxonomy Calculation Linkbase                                                                                                                 
|            |  |                                                                                                                                                    
|101.DEF ‡‡  |  | XBRL Taxonomy Definition Linkbase                                                                                                                  
|            |  |                                                                                                                                                    
|101.LAB‡‡   |  | XBRL Taxonomy Label Linkbase                                                                                                                       
|            |  |                                                                                                                                                    
|101.PRE ‡‡  |  | XBRL Taxonomy Presentation Linkbase                                                                                                                



| | + | Management contract or compensatory plan or arrangement
| | - | -------------------------------------------------------

| | * | Filed herewith
| | - | --------------

| | ‡ | Furnished herewith
| | - | ------------------



| | ‡‡ | XBRL (Extensible Business
                                         Reporting Language) information is furnished and not filed or a part of a registration
                                         statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933,
                                         as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange
                                         Act of 1934, as amended, and otherwise is not subject to liability under these sections.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (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 15, 2009, as an exhibit to our Report on Form 8-K
                                         and incorporated herein by reference.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------



| | (3) | Filed on December 11, 2009, as an exhibit to our 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 and incorporated herein by reference.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------



| | (6) | Filed on February 27, 2009, as an exhibit to Annual Report on Form
                                         10-K for the annual period ended December 31, 2008 and incorporated herein by reference.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (7) | 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.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (8) | Filed on March 31, 2011, as an exhibit to our Annual Report on
                                         Form 10-K for the annual period ended December 31, 2010, and incorporated herein by reference.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (9) | Filed on March 31, 2014, as an exhibit to our Annual Report on
                                         Form 10-K for the annual period ended December 31, 2013, and incorporated herein by reference.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



42







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: April 11, 2014



| | GLOBAL FOOD TECHNOLOGIES, INC.,
| | -------------------------------
| | a Delaware corporation         
| | By:                            
| |                                
| |                                



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                  |  | April 11, 2014
|Keith Meeks            |  | (Principal Executive Officer), Director                |  |               
|                       |  |                                                        |  |               
|/s/ Marshall F. Sparks |  | Chief Financial Officer, Secretary and                 |  | April 11, 2014
|Marshall F. Sparks     |  | Treasurer (Principal Financial and Accounting Officer) |  |               
|                       |  |                                                        |  |               
|/s/ Arthur C. Agnos    |  |                                                        |  |               
|Arthur C. Agnos        |  | Director                                               |  | April 11, 2014
|                       |  |                                                        |  |               
|/s/ James Stockland    |  |                                                        |  |               
|James Stockland        |  | Director                                               |  | April 11, 2014



43







GLOBAL
FOOD TECHNOLOGIES, iNC.



CONSOLIDATED
FINANCIAL STATEMENTS



DECEMBER
31, 2013 and 2012



|PAGE 2                                                | REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
    FIRM                                        
|----------------------------------------------------- | ---------------------------------------------------------------------------------------------------
|                                                      |                                                                                                    
|PAGE 3                                                | CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2013 and 2012                                       
|                                                      |                                                                                                    
|PAGE 4                                                | CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER
    31, 2013 and 2012.          
|                                                      |                                                                                                    
|PAGE 5                                                | CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT FOR THE
    YEARS ENDED DECEMBER 31, 2013 and 2012
|                                                      |                                                                                                    
|PAGE 6                                                | CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER
    31, 2013 and 2012.          
|                                                      |                                                                                                    
|PAGES 7-16 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



44







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 consolidated
balance sheets of Global Foods Technologies, Inc. and subsidiary (the “Company”) as of December 31, 2013 and 2012,
and the related consolidated statements of operations, stockholders’ deficit and cash flows for the years then ended. These
consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.



We 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 audits to obtain reasonable assurance about whether the consolidated 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 audits 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, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.



In our opinion, the consolidated financial
statements referred to above present fairly, in all material respects, the financial position of Global Food Technologies, Inc.
and subsidiary as of December 31, 2013 and 2012 and the results of their operations and their cash flows for the years then ended
in conformity with accounting principles generally accepted in the United States of America.



The accompanying consolidated financial
statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1, the Company
has incurred a significant accumulated deficit through December 31, 2013, has significant negative cash flow from operating activities
for the year ended December 31, 2013, and has negative working capital at December 31, 2013. 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



March 28, 2014



45







GLOBAL FOOD TECHNOLOGIES, INC.

CONSOLIDATED BALANCE SHEETS



|                                                                                                                                                                                |  | December 31, |            
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------ | -----------
|                                                                                                                                                                                |  | 2013         |            
|ASSETS                                                                                                                                                                          |  |              |            
|CURRENT ASSETS                                                                                                                                                                  |  |              |            
|Cash                                                                                                                                                                            |  | $            | 78,468     
|Accounts receivable                                                                                                                                                             |  |              | -          
|Inventory                                                                                                                                                                       |  |              | -          
|Prepaid expenses                                                                                                                                                                |  |              | 10,245     
|Total Current Assets                                                                                                                                                            |  |              | 88,713     
|                                                                                                                                                                                |  |              |            
|PROPERTY AND EQUIPMENT, NET                                                                                                                                                     |  |              | 258,214    
|OTHER ASSETS                                                                                                                                                                    |  |              | 8,782      
|                                                                                                                                                                                |  |              |            
|TOTAL ASSETS                                                                                                                                                                    |  | $            | 355,709    
|                                                                                                                                                                                |  |              |            
|LIABILITIES AND STOCKHOLDERS’ DEFICIT                                                                                                                                           |  |              |            
|                                                                                                                                                                                |  |              |            
|CURRENT LIABILITIES                                                                                                                                                             |  |              |            
|Accounts payable                                                                                                                                                                |  | $            | 142,082    
|Accrued liabilities                                                                                                                                                             |  |              | 896,350    
|Notes payable – related parties                                                                                                                                                 |  |              | 640,000    
|Convertible notes payable                                                                                                                                                       |  |              | 1,546,000  
|Trade finance notes payable                                                                                                                                                     |  |              | 689,423    
|Note payable                                                                                                                                                                    |  |              | 1,300,000  
|Total Current Liabilities                                                                                                                                                       |  |              | 5,213,855  
|                                                                                                                                                                                |  |              |            
|COMMITMENTS AND CONTINGENCIES (Note 8)                                                                                                                                          |  |              |            
|                                                                                                                                                                                |  |              |            
|STOCKHOLDERS’ DEFICIT                                                                                                                                                           |  |              |            
|Convertible Series C Preferred Stock, $0.0001 par
    value, 1,500,000 shares authorized, 399,613 shares issued and outstanding,
    liquidation  preference of $4.50 per share |  |              | 40         
|Common Stock, $0.0001 par value, 100,000,000 shares authorized, 33,115,701 and 32,810,851 shares issued  and outstanding, respectively at December 31, 2013 and 2012            |  |              | 3,312      
|Additional paid-in capital                                                                                                                                                      |  |              | 69,073,837 
|Accumulated deficit                                                                                                                                                             |  |              | (73,935,335
|Total stockholders’ deficit                                                                                                                                                     |  |              | (4,858,146 
|                                                                                                                                                                                |  |              |            
|TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT                                                                                                                                     |  | $            | 355,709    



See accompanying notes
to consolidated financial statements



46







GLOBAL FOOD TECHNOLOGIES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS



|                                                              |  | For The  Years Ended  December 31, |           
|------------------------------------------------------------- |  | ---------------------------------- | ----------
|                                                              |  | 2013                               |           
|                                                              |  |                                    |           
|Sales                                                         |  | $                                  | 830,031   
|Cost of sales                                                 |  |                                    | 770,304   
|Gross profit                                                  |  |                                    | 59,727    
|Expenses                                                      |  |                                    |           
|Selling and marketing                                         |  |                                    | 673,188   
|General and administrative                                    |  |                                    | 1,013,858 
|Research and development                                      |  |                                    | 400,841   
|Depreciation                                                  |  |                                    | 139,336   
|Impairment of property and equipment                          |  |                                    | 231,652   
|Interest                                                      |  |                                    | 409,683   
|Total expenses                                                |  |                                    | 2,868,558 
|                                                              |  |                                    |           
|NET LOSS                                                      |  | $                                  | (2,808,831
|                                                              |  |                                    |           
|Undeclared dividends on Preferred Stock                       |  | $                                  | 143,860   
|                                                              |  |                                    |           
|Net loss attributable to Common Stockholders                  |  |                                    | (2,952,691
|                                                              |  |                                    |           
|Loss per common share, basic and diluted                      |  | $                                  | (0.09     
|                                                              |  |                                    |           
|Weighted average common shares outstanding, basic and diluted |  |                                    | 32,989,635



See accompanying notes to consolidated
financial statements



47











GLOBAL FOOD TECHNOLOGIES, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’
DEFICIT



|                                                                      |  |                 |         |  |              |   |    | Additional |  |  |             |  |  | Total         |      
|--------------------------------------------------------------------- |  | --------------- | ------- |  | ------------ | - | -- | ---------- |  |  | ----------- |  |  | ------------- | -----
|                                                                      |  | Preferred Stock |         |  | Common Stock |   |    | Paid-in    |  |  | Accumulated |  |  | Stockholders’ |      
|                                                                      |  | Shares          |         |  | Amount       |   |    | Shares     |  |  | Amount      |  |  | Capital       |      
|Balance, December 31, 2011                                            |  |                 | 399,613 |  |              | $ | 40 |            |  |  | 31,502,325  |  |  | $             | 3,149
|Issuance of common stock and warrants for cash –net of issuance costs |  |                 | -       |  |              |   | -  |            |  |  | 1,143,151   |  |  |               | 115  
|Common stock issued for services and accrued liabilities              |  |                 | -       |  |              |   | -  |            |  |  | 165,375     |  |  |               | 17   
|Net loss                                                              |  |                 | -       |  |              |   | -  |            |  |  | -           |  |  |               | -    
|Balance, December 31, 2012                                            |  |                 | 399,613 |  |              | $ | 40 |            |  |  | 32,810,851  |  |  | $             | 3,281
|Issuance of common stock and warrants for cash –net of issuance costs |  |                 | -       |  |              |   | -  |            |  |  | 169,094     |  |  |               | 17   
|Common stock issued for services and accrued liabilities              |  |                 | -       |  |              |   | -  |            |  |  | 135,756     |  |  |               | 14   
|Net loss                                                              |  |                 | -       |  |              |   | -  |            |  |  | -           |  |  |               | -    
|Balance, December 31, 2013                                            |  |                 | 399,613 |  |              | $ | 40 |            |  |  | 33,115,701  |  |  | $             | 3,312



See accompanying notes to consolidated
financial statements



48







GLOBAL FOOD TECHNOLOGIES, INC.

CONSOLIDATED STATEMENTS OF CASH
FLOWS



|                                                                            |  | For the Years Ended December 
31, |           
|--------------------------------------------------------------------------- |  | --------------------------------- | ----------
|                                                                            |  | 2013                              |           
|CASH FLOWS FROM OPERATING ACTIVITIES:                                       |  |                                   |           
|                                                                            |  |                                   |           
|Net loss                                                                    |  | $                                 | (2,808,831
|Adjustments to reconcile net loss to net cash used in operating activities: |  |                                   |           
|Depreciation                                                                |  |                                   | 139,337   
|Impairment of assets                                                        |  |                                   | 231,652   
|Common stock issued for services                                            |  |                                   | 75,898    
|Changes in operating assets and liabilities:                                |  |                                   |           
|Accounts receivable                                                         |  |                                   | 38,960    
|Inventory                                                                   |  |                                   | 364,320   
|Prepaid expenses                                                            |  |                                   | 20,400    
|Other assets                                                                |  |                                   | 17,318    
|Accounts payable                                                            |  |                                   | (22,878   
|Accrued liabilities                                                         |  |                                   | 366,327   
|Net cash used in operating activities                                       |  |                                   | (1,577,497
|CASH FLOWS FROM FINANCING ACTIVITIES:                                       |  |                                   |           
|Proceeds from trade finance notes payable                                   |  |                                   | 55,000    
|Principal payments on trade finance notes payable                           |  |                                   | (553,000  
|Proceeds from note payable                                                  |  |                                   | 1,300,000 
|Proceeds from sale of common stock and warrants, net                        |  |                                   | 442,700   
|Net cash provided by financing activities                                   |  |                                   | 1,244,700 
|                                                                            |  |                                   |           
|NET (DECREASE) INCREASE IN CASH                                             |  |                                   | (332,797  
|                                                                            |  |                                   |           
|CASH – BEGINNING OF YEAR                                                    |  |                                   | 411,265   
|                                                                            |  |                                   |           
|CASH – END OF YEAR                                                          |  | $                                 | 78,468    
|                                                                            |  |                                   |           
|SUPPLEMENTAL DISCLOSURES                                                    |  |                                   |           
|Interest
    paid in cash                                                   |  | $                                 | 137,987   
|Non-cash financing transactions:                                            |  |                                   |           
|Issuance
    of common stock for accrued liabilities                        |  | $                                 | 234,000   



See accompanying notes to consolidated
financial statements



49







GLOBAL FOOD TECHNOLOGIES, INC.

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS

DECEMBER 31, 2013
and 2012



1. NATURE OF BUSINESS



Global Food
Technologies, Inc. (the “Company”, “we” , “our” or “us”) is a life sciences company
focused on food safety processes for the food processing industry by applying its expertise to industrial processes for
seafood and other proteins to make those products safer for human consumption. The Company has developed a process using its developed
technology called the “iPuraTM Food Processing System”.The System is installed in processor factories in foreign countries with the product currently sold in the United States.
The Company’s ability to generate significant additional revenue will depend, among other things, on its ability to demonstrate
the merits of the iPuraTM system as well as brand development and establishing alliances with suppliers and
vendors.



The Company is a registrant under rules
and regulations of the Securities and Exchange Commission and has not yet obtained a listing on any stock exchange.



Going Concern



The accompanying consolidated 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. At December 31, 2013, the Company has an accumulated
deficit approximating $74,000,000 and for the year ended December 31, 2013 the Company incurred a net loss and negative cash flows
from operations of approximately $1,600,000. Additionally, the Company has negative working capital at December 31, 2013 of approximately
$5,100,000. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying
consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.



Based on the Company’s cash balance at December 31, 2013, management estimates that it will need
to raise additional capital in the amount of $5 million to cover operating and capital requirements for beyond fiscal year 2014.
.. Management plans on raising the additional needed capital through issuing additional shares of common stock or other equity securities,
or obtaining debt financing. In addition, management is exploring commercial and joint venture financing opportunities. Although
management has been successful to date in raising necessary funding, there can be no assurance that required future financing can
be successfully completed on a timely basis, or on terms acceptable to the Company. Any capital raised may involve issuing additional
shares of common stock or other equity securities, or obtaining debt financing.





2. SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES



The summary of significant accounting
policies presented below is designed to assist in understanding the Company’s consolidated financial statements. Such financial
statements and accompanying notes are the representations of the Company’s 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 consolidated
financial statements.



50







Use of Estimates



The preparation of the financial statements
in conformity with U.S. GAAP 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.



Principles of Consolidation



The accompanying consolidated financial
statements include the accounts of Global Food Technologies, Inc. and its wholly-owned subsidiary iPura Food Distribution Company,
Inc. All significant intercompany balances and transactions have been eliminated in consolidation.



Concentrations



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



We contract with vendors in China and
have established operations in China for the production of our iPura Tilapia product. During the years ended December 31, 2013
and 2012, 100% of our purchases were from two vendors in China. The loss of this supplier or any disruptions in China relating
to political or economic risks would have a material adverse effect on our operations as the sole source of Tilapia.



In the year ended December 31, 2013, Safeway,
Inc. accounted for 80% of sales and Tony’s Fine Foods for the remaining 20%. For the prior year ended December 31, 2012, Safeway at 71% and The Meat Market at 29%, with Safeway accounting for 73% of accounts
receivable at December 31, 2012.



Revenue Recognition



The Company recognizes revenues when all
of the following conditions exist: a) persuasive evidence of an arrangement exists in the form of an accepted purchase order;
b) delivery has occurred, based on shipping terms, or services have been rendered; c) the Company’s price to the buyer is
fixed or determinable, as documented on the accepted purchase order; and d) collectability is reasonably assured.



Inventory





Inventory is stated at the lower of cost (first-in, first-out)
or market.  Market is determined by comparison with recent sales or net realizable value. Management reviews the carrying
value of inventory in relation to its sales history and industry trends to determine an estimated net realizable value. Changes
in economic conditions or customer demand could result in obsolete or slow moving inventory that cannot be sold or must be sold
at reduced prices and could result in an inventory reserve. No inventory reserves were considered necessary as of December 31,
2013 and 2012. . There is no inventory at December 31, 2013.





51







Property and Equipment





Property
and equipment are stated at cost and consists of our iPura systems equipment. 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.
The two operational iPuraTM equipment systems are located in China at
December 31, 2013. Two other systems have not been placed in service and are considered fully impaired. . The two systems in China
remain capitalized at an installed cost of $691,664 in both 2013 and 2012. Accumulated depreciation was $433,450 and $294,114,
respectively, as of December 31, 2013 and 2012.





Long-lived Assets



We review long lived assets for events or changes in circumstances
that indicate that their carrying value may not be recoverable. 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.



During
the year ended December 31, 2013, we impaired one of our iPuraTM systems because the system was installed in Vietnam but never placed
in service. The Company does not have any current plans to place the system in service before its theoretical useful life is
exceeded. Accordingly, its cost of $231,652 was charged to impairment expense during 2013. Another iPuraTM system intended for Vietnam remains in storage in the United States and was considered impaired for the same reasons in 2012. Accordingly, its cost of $231,652 was charged to impairment expense during 2012.



Patents and Trademarks



The Company
has three U.S. patents that relate to proprietary technologies and has filed additional patent applications in both the U.S. and
several foreign countries. The Company has registered the iPuraTM brand
name in the U.S. and has filed additional applications in several foreign countries for the iPuraTM
brand name.



Costs associated with patents and trademarks
were not significant at December 31, 2013 and 2012.



Research and Development Costs



Research and development costs are expensed
as incurred. Purchased materials that do not have an alternative future use and the cost to develop prototypes of production equipment
are also expensed. Costs incurred in the fabrication, testing, installation of commercial systems are capitalized as long lived
assets.



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. 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 assets is recorded when it is more likely than not that some or all of the deferred tax asset
will not be realized.



52







Fair Value of Financial Instruments





The carrying amounts of our financial instruments,
including cash, accounts receivable, accounts payable, accrued liabilities, and notes payable approximate their fair value as of
December 31, 2013 due to their short term nature.





Loss Per Share



U.S. GAAP requires presentation of basic
earnings (loss) per share (“Basic EPS”) and diluted earnings (loss) 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 (loss) 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.



There are 9,707,821 and 9,682,463 stock
purchase warrants outstanding at December 31, 2013 and 2012, respectively, which were not used in the computation of loss per
share as their effect would be antidilutive.



The Company has outstanding Series C Preferred
Stock (see Note 7) which carries an undeclared cumulative dividend feature. Cumulative undeclared dividends are $564,420 and $420,560
as of December 31, 2013 and 2012, respectively.



Stock-based Compensation



The Company accounts for share-based payment
arrangements issued to employees using a fair-value based measurement method in accounting for share-based payment transactions.



Shares, warrants and options issued to
non-employees for services are accounted for at fair value, based on the fair value of instrument issued or the fair value of
the services received, whichever is more readily determinable.



Significant Recently Issued Accounting
Pronouncements



Management does not believe any recently
issued accounting pronouncements will have a significant future effect on the Company’s consolidated financial statements



Subsequent Events



Management has evaluated events subsequent
to December 31, 2013 through the date that the accompanying financial statements were filed with the Securities and Exchange Commission
for transactions and other events which may require adjustment of and/or disclosure in such financial statements.



53







3. TRADE AND EQUIPMENT FINANCING DEBT



As an alternative to commercial trade
financing and factoring, the Company instituted a program of issuing one year promissory notes, at the time secured by inventory
or iPura equipment systems, with annual interest rates from 8.2% to 9.0%. The funds are received and controlled by a third party
custodian. The notes are unsecured. At December 31, 2013, the Company owed $689,423 in trade financing debt. Individual
notes mature on their anniversaries throughout 2014 and based on past renewal activity the Company expects that the majority will
be renewed upon maturity. None of this debt is in default.



4. CONVERTIBLE NOTES PAYABLE



In 2010, the Company borrowed $126,000
from a third party. The note had a one year term and was renewed at its maturity. The note is now due in July 2014, bears annual
interest of 9%, is unsecured, and is convertible into common stock at any time at a fixed price of $4.50 per share. An additional
$120,000 was borrowed from the same third party in 2010 in two one year notes bearing interest of 9%. These notes were renewed
at maturity and are now due in June 2014. The original note included 14,000 warrants, with an exercise price of $7.00 per share
and a term of 2 years.



In August 2013 a debt financing facility for a total commitment of $1.6 million was finalized with an
existing shareholder. Upon signing, the Company received initial loan proceeds of $700,000. The commitments include loans for an
additional $900,000 in six tranches of $150,000 each due on the first of each subsequent month, beginning on September 1, 2013.
The debt carries simple interest at 3% payable at maturity. The facility has a term of one year and is renewable for one additional
year at the option of the Company. Both principal and interest, all or in part, are convertible into shares of the Company’s
Common Stock, at any time at the election of the lender, at the rate of $2.39 per share. The balance owing at December 31, 2013
is $1,300,000. Subsequently all of the proceeds under this commitment have been received. Currently, the Company does not have
the ability or resources to repay such loan if a demand is made for repayment in full.



5. NOTES PAYABLE TO RELATED PARTIES



Shareholder loans



In 2006, we arranged a 30 day bridge loan in the amount of
$350,000 from a non-principal shareholder. The loan bears interest at 8% and is secured by all Company assets, including any intellectual
assets. 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. 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.



Former director loan



In 2006, we arranged for three loans aggregating $290,000 from a former 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. Additional consideration for the three loans was approved by the Company’s Board of Directors
in August 2006, in the form of warrants to purchase 29,000 shares of common stock. The warrants are exercisable at $4.50 per share
for two (2) years from the date of repayment. 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 with the term extended to one year and
now matures in November 2014. In November 2010, for the same 12% interest rate, the Company borrowed an additional $100,000 from
such director, due on demand. The current indebtedness to the former director is $390,000, all of which is unsecured. The Director
resigned his position in 2013 and is no longer affiliated with the Company.



54







6. NOTE PAYABLE



On November 22, 2010, a stockholder resident in the United
Kingdom loaned the Company $1,300,000 on a six month note bearing interest at 18% per year. The note was extended for an additional
six months and has been renewed at each maturity for an additional six months. The note is now due in May 2014. The renewal involved
issuing a renewal bonus of $58,500, charged to interest expense and paid in shares of common stock at $2.25 per share, to reduce
the interest rate to 9% per year. The first six month renewal bonus was paid in November 2011 with the issuance of 26,000 shares,
additional 26,000 bonus share issuances were made at each subsequent renewal in May and November of each year. Interest is payable
at maturity in shares of Company common stock at the rate of $2.25 per share and is recorded as interest expense ratably as incurred.
At the sole option of the lender, the principal may also be converted into shares of Company common stock at the fixed rate of
$2.25 per share. The Note is secured by all of the assets of the Company and is subordinate to the 2006 shareholder note of $250,000.
Currently, the Company does not have the ability or resources to repay such loans if a demand is made for repayment in full.



7. STOCKHOLDERS’ DEFICIT



Preferred Stock Issuance



We are authorized to issue 20,000,000
shares of Preferred Stock with a par value of $0.0001. Of such amount, 8,000,000 shares were designated “Series A”
Preferred Stock. There is no Series A Preferred Stock outstanding at December 31, 2013 and 2012.



Of such 20,000,000 authorized shares,
1,000,000 shares were designated Series B Preferred Stock with a par value of $0.0001. The Series B had preferential rights in
liquidation over common stock and was convertible into common stock at a conversion rate of $4.50 per share. In December 2010,
the Series B Preferred Stock was converted to Series C Preferred Stock (below) on a share for share basis. There is no Series
B Preferred Stock outstanding at December 31, 2013 and 2012.



In October 2010, we designated a Series
C Preferred Stock and authorized the issuance of 1,500,000 shares at a par value of $0.0001. The Series C has preferential rights
in liquidation over common stock at $4.50 per share and is convertible into common stock at a one to one conversion rate. There
is mandatory conversion to common stock upon the earlier of certain events or five years. The Series C Preferred Stock bears a
dividend of 8% payable in cash upon declaration of the dividend by the Company’s Board of Directors and such accrued dividend
shall be payable in cash only in the event working capital requirements permit. Each issued share is accompanied by two warrants
to purchase common stock for a period of three years at an exercise price for the greater of $3.00 or 50% of the bid price on
an approved public exchange or the most recent private offering price if there is no exchange. At December 31, 2013, there were
399,613 shares of Series C Preferred Stock issued and outstanding.



The cumulative undeclared dividends on
the Series C Preferred Stock are $564,420 and $420,560 at December 31, 2013 and 2012, respectively.



55







Common Stock Issuances



In 2012, a total of 1,143,151 shares of
common stock and 53,357 warrants to purchase common shares were issued in private placements for net proceeds of $2,785,102. 1,087,866
of these shares were issued under the equity subscription described below. The remaining 55,285 shares and the 53,357 warrants
were issued in the ongoing private placement of units of one share and either one warrant or one-half warrant for a price of $3.50
per unit. The proceeds of $193,501 were subject to commissions of $8,400 yielding net proceeds of $185,101. The warrants are exercisable
for $7.00 per share for a 3 year term. An additional 165,375 shares were issued in 2012 for services, director’s fees and
note interest. Consultants received 17,947 shares in lieu of cash, 43,428 shares were issued for accrued Directors fees and 104,000
shares for accrued interest.



In 2013, a total of 169,094 shares of
common stock and 25,358 warrants to purchase common shares were issued in private placements for net proceeds of $442,700. 125,523
of these shares were issued under the equity subscription described below. The remaining 43,571 shares and the 25,358 warrants
were issued in the ongoing private placement of units of one share and either one warrant or one-half warrant for a price of $3.50
per unit. The private placement proceeds of $152,500 were subject to commissions of $9,800 yielding net proceeds of $142,700.
The warrants are exercisable for $7.00 per share for a 3 year term. An additional 135,756 shares were issued in 2013 for services,
director’s fees and note interest. Consultants received 1,215 shares in lieu of cash, 30,541 shares were issued for accrued
Directors fees and 104,000 shares for accrued interest.



All of the service shares above were valued
at $2.39 per share while the accrued interest was converted at the contractual rate of $2.25. The accrued interest relates to
the short term note in the principal amount of $1,300,000 (described in Note 6) which provides that the interest accrued by paid
in common stock at the rate of $2.25 per share. Interest is due every six months on maturity and requires a renewal bonus of $58,500
paid in 26,000 shares.



Equity Subscription



In April 2012, the Company entered into
a Subscription Agreement with an existing holder of shares of our Series C Preferred Stock for the purchase of additional shares
of common stock. Pursuant to the terms of the Subscription Agreement, the stockholder agreed to purchase up to $2.9 million of
Common Stock at a purchase price of $2.39 per share.  The initial purchase was for $500,000, and additional purchases were
structured as eight monthly installments of $300,000.  Through December 31, 2012, the Company received aggregate proceeds
of $2,600,000 and issued 1,087,866 shares of common stock pursuant to this agreement which are included in the common stock issuances
noted above. In January 2013, the Company received the final installment of $300,000 and issued 125,523 shares of common stock
pursuant to this agreement.



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.



There were no awards made under the plan
in 2013 or 2012. Through December 31, 2013, 1,345,000 shares of common stock have been granted and there remains 1,655,000 shares
available for grant under the plan.



The shares are fully vested and become
transferable upon registration of the shares with the Securities and Exchange Commission or upon the obtainment of a listing in
a market initiated by us.



56







Officers and Directors Stock Compensation



The Board periodically issues shares and warrants to Directors
for specific compensation elements. At December 31, 2013, there were 700,000 warrants outstanding to Officers and Directors exercisable
at $5.00 to $7.00, with an extended expiration date of December 31, 2015.



The Company’s Directors compensation and expenses are
paid in shares of common stock as long as cash flow from operations is negative. Common shares were issued to Directors for accrued
compensation in the amount of 30,541 shares in 2013 and 43,428 shares in 2012 valued at $72,993 and $ 101,989, respectively.



There were no grants of options or warrants to officers or
Directors in 2013 or in 2012.



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



|                                 |  | Warrants For Shares |         |  | Weighted Exercise Price |   |      | Weighted Average Remaining Contractual Term (years) |  |  | Aggregate Intrinsic Value | 
|-------------------------------- |  | ------------------- | ------- |  | ----------------------- | - | ---- | --------------------------------------------------- |  |  | ------------------------- | 
|Outstanding at December 31, 2011 |  |                     | 700,000 |  |                         | $ | 5.57 |                                                     |  |  | 2.0                       | 
|Granted                          |  |                     | -       |  |                         |   | -    |                                                     |  |  |                           | 
|Exercised                        |  |                     | -       |  |                         |   | -    |                                                     |  |  |                           | 
|Forfeited or expired             |  |                     | -       |  |                         |   | -    |                                                     |  |  |                           | 
|Outstanding at December 31, 2012 |  |                     | 700,000 |  |                         | $ | 5.57 |                                                     |  |  | 1.0                       | 
|Granted                          |  |                     | -       |  |                         |   | -    |                                                     |  |  |                           | 
|Exercised                        |  |                     | -       |  |                         |   | -    |                                                     |  |  |                           | 
|Forfeited or expired             |  |                     | -       |  |                         |   | -    |                                                     |  |  |                           | 
|Outstanding at December 31, 2013 |  |                     | 700,000 |  |                         | $ | 5.57 |                                                     |  |  |                           | 
|Exercisable at December 31, 2013 |  |                     | 700,000 |  |                         | $ | 5.57 |                                                     |  |  | 2.0                       | 



Warrants



Through December 31, 2013 we had issued
9,707,821 warrants, exercisable for various terms at exercise prices of $3.00 to $7.00, in conjunction with sales of common and
preferred stock and awards for services, including the 700,000 warrants noted above.



In 2011, we extended the expiration date
of all warrants to December 31, 2015 without modifying the exercise price. These warrants were issued in conjunction with equity
sales and therefore no adjustment was charged to paid in capital and there was no income statement effect.



At December 31, 2013, warrants outstanding were as follows:





|                                 |  | Number of Shares 
under
    Warrants |           |  | Weighted Average 
Exercise Price |  
|-------------------------------- |  | ------------------------------------ | --------- |  | -------------------------------- | -
|Wutstanding at December 31, 2011 |  |                                      | 9,629,106 |  |                                  | $
|Granted                          |  |                                      | 53,357    |  |                                  |  
|Expired                          |  |                                      | -         |  |                                  |  
|Outstanding at December 31, 2012 |  |                                      | 9,682,463 |  |                                  | $
|Granted                          |  |                                      | 25,358    |  |                                  |  
|Expired                          |  |                                      | -         |  |                                  |  
|Outstanding at December 31, 2013 |  |                                      | 9,707,821 |  |                                  | $







57







The following table summarizes information about warrants outstanding
at December 31, 2013:

|Warrants Outstanding and Exercisable |          
|------------------------------------ | ---------
|                                     |          
|Number of Shares                     |          
|Under Warrants                       |          
|                                     | 3,679,066
|                                     | 5,764,755
|                                     | 64,000   
|                                     | 200,000  
|                                     | 9,707,821

| | (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
| | --- | ---------------------------------------------------------------------------------------------------------------



8. COMMITMENTS AND CONTINGENCIES



We lease our headquarters in Hanford,
California, an R&D/warehouse facility in Visalia California and an office in Los Gatos, California. We also lease an automobile
for an officer and office equipment. Future minimum lease payments required on these non-cancelable operating leases are as follows:



|Years ended December 31, |  | Amount |       
|------------------------ |  | ------ | ------
|2014                     |  |        | 60,296
|2015                     |  |        | 19,800
|                         |  | $      | 80,096



Facilities rent expense for the year ended
December 31, 2013 was $123,328 and is included in general and administrative expenses on the accompanying consolidated statement
of operations.



A civil complaint was received
dated September 10, 2013 for breach of contract involving a real property lease for a warehouse/R&D facility in Hanford
CA. The lease has a term ending in October 2014. We ceased using the facility and stopped paying rent in May 2013. The
lawsuit is the culmination of a 3 year dispute over various aspects of the lease and occurred with the change of ownership of
the property. The landlord and plaintiff, STG Realty Ventures, Inc. filed the suit in Kings County, CA Superior Court and
asks for computed damages of $160,792 for failure to pay rent, plus interest and attorneys’ fees. The Company believes
that it may have viable defenses with respect to some of the damages asked for in the suit. However, no assurances can be
given with respect to the outcome of the litigation and a judgment against the Company could have a material, adverse impact
on our financial condition. Such amount was recorded in accrued liabilities on the accompanying consolidated balance sheet at
December 31, 2013.



9. INCOME TAXES



The Company does not have significant
income tax expense or benefit from inception through December 31, 2013. The tax net operating losses have resulted in a deferred
tax asset with a 100% valuation allowance applied against such asset at December 31, 2013 and 2012. The tax net operating loss
carryforward (“NOL”) approximates $43 million at December 31, 2013. Some or all of such NOL may be limited by Section
382 of the Internal Revenue Code. Such NOL’s expire at various dates through 2033.



The income tax effect of temporary differences
between financial and tax reporting gives rise to a deferred income tax asset at December 31, 2013 and 2012 as follows:



|                          |  | 2013 |             |   | 2012 |  
|------------------------- |  | ---- | ----------- | - | ---- | -
|Deferred tax asset –NOL’s |  | $    | 17,684,000  |   |      | $
|Less valuation allowance  |  | $    | (17,684,000 | ) |      | $
|Net deferred tax asset    |  | $    | -           |   |      | $



The valuation allowance increased by approximately
$850,000 and $530,000 during the years ended December 31, 2013 and 2012, respectively.



A reconciliation of the effective income
tax rate to the United States statutory income tax rate for the years ended December 31, 2013 and 2012 is as follows:



|                                                  |  | 2013 |       |    | 2012 | 
|------------------------------------------------- |  | ---- | ----- | -- | ---- | 
|Tax benefit at the U.S. statutory income tax rate |  |      | (34.0 | )% |      | 
|Increase in the valuation allowance               |  |      | 34.0  | %  |      | 
|Effective income tax rate                         |  |      | -     | %  |      | 



The
Company’s income tax returns may be subject to examination by federal and state taxing authorities. Because application
of tax laws and regulations for many types of transactions is susceptible to varying interpretations, amounts reported in the
accompanying financial statements could be changed at a later date upon final determination by taxing authorities. Based on management’s
assessment of ASC Topic 740, management concluded that the Company does not have any uncertain tax positions as of December 31,
2013.  There have been no income tax related interest or penalties assessed or recorded and if interest and penalties
were to be assessed, the Company would charge interest and penalties to income tax expense. The Company’s federal and state
income tax returns remain open after filing for 3 years and 4 years, respectively.





58