**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**WASHINGTON,
      D.C. 20549**





**FORM
      10-KSB**





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


SECURITIES
      EXCHANGE ACT OF 1934


For
      the
      fiscal year ended December 31, 2007





**Commission
      file number: 000-31385**





**GLOBAL
      FOOD TECHNOLOGIES, INC.**


(Name
      of
      small business issuer in its charter)





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





**558-589-0100**


(Issuer’s
      telephone number)




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




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





Check
      whether the issuer is not required to file reports pursuant to Section 13 or
      15(d) of the Exchange Act. Yes o No x





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





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





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





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





As
      of
      December 31, 2007, the aggregate market value of the registrant’s common stock
      held by non-affiliates of the registrant was $13,593,078.





At
      February 29, 2008, the number of shares outstanding of each of the issuer’s
      Common Stock, $.0001 par value per share, was 27,506,467.




**DOCUMENTS
      INCORPORATED BY REFERENCE**




Portions
      of the definitive Information Statement filed with the Securities and Exchange
      Commission on


November
      30, 2007 are incorporated by reference into Part I.




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









**GLOBAL
      FOOD TECHNOLOGIES, INC.**


**INDEX
      TO**


**ANNUAL
      REPORT FORM 10-KSB**


**FOR
      THE YEAR ENDED DECEMBER 31, 2007**





**Item**
            
            
            
            **Page****Number**
            
            **Description**
            
            **Number****PART
                I**1
            
            Description
                of Business
            
            32
            
            Description
                of Property
            
            153
            
            Legal
                Proceedings
            
            154
            
            Submission
                of Matters to a Vote of Security Holders
            
            16**PART
                II**5
            
            Market
                for Common Equity and Related Stockholder Matters
            
            166
            
            Management’s
                Discussion and Analysis or Plan of Operation
            
            177
            
            Financial
                Statements
            
            258
            
            Changes
                in and Disagreements with Accountants on Accounting and Financial
                Disclosure
            
            258A
            
            Controls
                and Procedures
            
            268B
            
            Other
                Information
            
            27**PART
                III**9
            
            Directors,
                Executive Officers, Promoters, Control Persons and Corporate Governance;
                Compliance with Section 16(a) of the Exchange Act
            
            2710
            
            Executive
                Compensation
            
            3211
            
            Security
                Ownership of Certain Beneficial Owners and Management and Related
                Stockholder Matters
            
            3412
            
            Certain
                Relationships and Related Transactions and Director
                Independence
            
            3613
            
            Exhibits
            
            3814
            
            Principal
                Accountant Fees and Services
            
            40Signatures
            
            41










**PART
      I.**





**ITEM
      1. DESCRIPTION OF BUSINESS**





On
      March
      24, 1999, Global Food Technologies, Inc., a Delaware corporation, (GFT, we
      or
      the Company) was incorporated under the laws of the State of Delaware under
      the
      name “Boulevard Acquisition Corporation” to serve as a vehicle to effect a
      merger, exchange of capital stock, asset acquisition or other business
      combination. On August 19, 2005, we executed and simultaneously consummated
      an
      Asset Acquisition Agreement with Solvis Group, Inc., a Delaware corporation,
      and
      Global Food Technologies, Inc., a privately held Delaware corporation, which
      we
      refer to as Tech, engaged in the research and development of food safety
      technologies. Pursuant to this Asset Acquisition Agreement, as amended, we
      acquired substantially all of the assets and liabilities of Tech in exchange
      for
      issuing to Tech 22,943,693 shares of our common stock. We refer to the asset
      acquisition in this report as the Transaction. Solvis and the Pierce Mill
      Associates, Inc. (which were the only two stockholder of Boulevard Acquisition
      Corp. prior to the Transaction) agreed to reduce the number of shares to be
      held
      by them following the Transaction to 100,000 shares each of GFT. Thus, the
      22,943,693 shares we issued to Tech represented approximately 99% of our issued
      and outstanding common stock following the Transaction. As of December 31,
      2007,
      we have 27,307,881 shares issued and outstanding.





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





The
      predecessor to Tech was originally formed in 2000 as a limited liability company
      to engage in research and development of food safety technologies, but had
      no
      operations until July 2001. On August 1, 2001, Tech was incorporated in the
      State of Delaware, and the limited operations of the limited liability company
      were merged into the new corporation on November 19, 2001. Immediately prior
      to
      the Transaction, Tech was engaged in the research and development of its
      proprietary scientific food safety technologies to increase the quality and
      value of commercially packaged seafood, poultry and other meats, and to make
      these products safer for human consumption by eliminating disease-causing
      bacteria and spoilage microorganisms. As a result of the Transaction, we adopted
      Tech’s business plan, purchased its assets and continue to research, develop,
      market and seek to license our patented food safety technologies. To date,
      we
      have not generated any revenues and do not have any customer contracts for
      our
      food safety technologies.





**Business
      of the Company**





**Overview**





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




3




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





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





GFT
      plans
      to provide the technology, the equipment and personnel for the pathogenic “kill
      step”, as part of an onsite food safety service. GFT plans to install its system
      in food processors’ facilities at the end of the processing line. The *iPura* TM System
      is comprised of a large stainless steel pressure vessel with associated
      manifolds, hydraulics, pneumatics, loaders, un-loaders, fill/mix, and conveyance
      apparatuses, all constructed inside a controlled environment. The “kill step”
will be performed by GFT personnel operating our *iPura* TM System,
      immediately prior to packaging. After the sanitization, GFT places its
“ *iPura* *TM* ”
logo
      (seal) on the package. The seal will serve to identify food products that have
      a
      higher level of safety and quality. GFT plans to charge the processor a food
      safety service fee and a licensing fee for the use of the *iPura* TM seal.
      GFT
      plans to ship its first system in the second quarter of 2008 for installation
      in
      a major producer’s facility.





We
      spent
      approximately $3,311,861 and $4,857,188 on continued research and development
      during the fiscal years ended December 31, 2007 and December 31, 2006,
      respectively. As described below in this report, our *iPura* TM Seafood
      Processing System is ready for commercialization (although we continue to refine
      certain aspects of the system) and we are actively seeking customer orders.
      Our
      other technologies remain in various stages of research and development.





**The
      Problems We Address**





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




4




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





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





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





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





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




5




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





**Our
      Proposed Products and Services**





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





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





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





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




6




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





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





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





The
      following definitions are related to the *iPura* *TM* ** Food
      Safety Program which we anticipate will be imbedded into the service and
      licensing contract as prerequisites to the use of the *iPura* *TM* ** seal:





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


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





o
            Hazard
                Analysis and Critical Control Points
                (HACCP)


o
            Good
                Manufacturing Practices (GMP’s)


o
            Sanitation
                Standard Operating Procedures (SSOP’s)





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





1.
      Non-thermal pathogenic kill step prior to packaging.




7




(performed
      by the *iPura* TM System).


2.
      Scientific packaging.


3.
      Independent 3 rd party
      certification of materials and procedures.


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


5.
      Product traceability and temperature monitoring.





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


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


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


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


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





*iPura* *TM*  products
      are expected to 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* TM System
      and proposed Program .
      As a
      result of MMIB’s involvement, we intend to embed into the *iPura* *TM*  seal,
      a
      seamless and risk-managed approach to food regulatory violations. The *iPura* ***TM*** **** processor
      and their downstream customers will be relieved of the significant losses and
      disruption of trade that results from food safety violations. This will provide
      the market with an unprecedented level of security and provides international
      credibility for the *iPura* *TM*  seal.
      Mr.
      Curtis Keyes, the CEO and founder of MMIB, also serves on our Advisory
      Board.





We
      believe that our *iPura* TM Seafood
      Processing System has undergone adequate testing and is now ready for market
      introduction. We will be shipping our first commercial system in the second
      quarter of 2008 for installation into a major seafood processing plant. Certain
      customization is required for the plant, including the design and building
      of
      loaders and unloaders that will integrate with the plant’s existing processing
      line. We believe that once we are able to demonstrate the system’s functionality
      and integration in a real-world environment at a commercial seafood processor,
      we will be in position to sign contracts with other processors that have been
      identified, several of which have worked with us during trials of their products
      at our R&D facility.





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




8




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





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





Benefits
      of our technology over other technologies include the following:





·
            our
                “kill step” method does not affect the size, weight, texture, taste,
                smell, appearance or nutritional value of the seafood, poultry or
                other
                meat products treated by it;


·
            our
                systems are scalable to suit the output level of each individual
                processor;


·
            installation
                can be made at little cost to the seafood, poultry or meat processor,
                since our current plan is to charge service and licensing fees based
                on
                volume; and


·
            our
                method is clean, safe to use, and environmentally friendly, because
                it
                does not rely on caustic chemicals or radiation to eliminate pathogens
                and
                spoilage organisms in the treatment
                process.





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





After
      exploring the development in-house of a proprietary film for packaging
      commercial food products using nano chemistry, we determined that certain third
      party manufacturers can supply the required packaging, which we believe will
      reduce microbial growth and further extend the product shelf-life without adding
      any harmful byproducts and without compromising the odor, texture, or flavor
      of
      the product.  We currently have identified one manufacturer of the
      packaging film, but believe other manufacturers may also be available if
      required.




9




**Distribution
      and Marketing Plan**





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





GFT
      began
      promoting the *iPura* *TM* ** technology
      through industry trade shows, trade publications, workshops, seminars, invited
      speaking engagements, and meetings sponsored on GFT’s behalf by various
      governmental agencies and industry trade associations. In 2008, the Company
      intends to begin marketing the *iPura* TM seal
      to
      consumers as the world’s first food safety seal. **** The *iPura* TM seal
      is **** anchored
      with a descriptive slogan: **** “ The
      Highest Standard in Food Safety TM ”.





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





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





Vietnam





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


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




10




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





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





Chile





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





We
      began
      to look at opportunities for our proposed products and services in Chile through
      our Director of Operations in Chile, a former Consul General and former trade
      commission of Chile, in Los Angeles, California, who has worked extensively
      with
      the Chilean trade agencies CORFO and PROCHILE. As with our experience in
      Vietnam, we undertook marketing our products and services through initial
      contacts with government and trade association leaders who want to enhance
      Chile’s reputation as a leader in the seafood export market. We sent a
      delegation to Chile in May 2005 to meet with representatives of the Chilean
      Department of Fisheries, regional government officials, trade association,
      and a
      number of large individual fish processing companies to explain our technology
      and planned commercial products and services. With the assistance of CORFO
      (the
      business development agency for Chile) five major seafood processors from Chile
      sent us their fish samples for testing by the *iPura* TM Seafood
      Processing System. In 2006, GFT was able to validate those results during a
      Science and Business Conference hosted by GFT and the Department of Biological
      Sciences at Idaho State University. GFT was able to demonstrate the system’s
      superior efficacy to leaders from the Chilean seafood industry. In addition
      to
      the validation of microbial reduction, the potential Chilean customers were
      able
      to verify that there were no changes to the smell, texture, taste and overall
      appearance of their seafood product processed in our facility. From the
      attendees at the conference, GFT selected a large seafood processor in Chile
      as
      a strategic customer. Once the system is operational and GFT is able to
      demonstrate our technology’s and system integration in an existing seafood
      processor’s plant, GFT anticipates using the data and results from the first
      fully operational unit in Chile to negotiate contract signings in our world
      wide
      target markets.




11




China





In
      2006,
      GFT met with industry and governmental leaders as the invited guests of the
      Chinese Seafood Certification Institute (“CSCI”) and Ms. Min Han, its CEO. The
      CSCI was formerly under the Ministry of Agriculture until it was privatized.
      In
      March 2007, GFT signed a contract with the CEO of the CSCI, for representation
      on the identification of potential customers for the placement of up to 265 *iPura* *TM*  food
      safety service and licensing contracts, over a 5 year period. The minimum
      production requirement on each contract (one for each system) is 15,000 metric
      tons per year. GFT accepted an invitation from the Chinese Aquatic Processing
      and Marketing Association to speak to over 100 major Chinese seafood processors
      in China, in May 2007. This high-level promotion of *iPura* TM in China
      will be an important step in the largest market in the world. China produces
      over 30% of the world’s seafood with thousands of seafood processors and more
      than 500 companies identified by GFT as “prime targets”. The Company is
      positioned for growth opportunities with a supported
      program. On January 30, 2008, GFT signed a non-binding letter of intent with
      a
      seafood processor in Hainan Province. This processor is financially supported
      by
      the central government of the People’s Republic of China. The terms of the
      letter of intent include the funding of a beta system (USD $1,500,000.00) as
      well as installation costs (USD $500,000.00). The non-binding letter of intent
      is subject to various contingencies, including securing government funding,
      but
      we believe it represents a potentially important step in bringing our technology
      to China.





United
      States and Other International Markets





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





Production





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




12




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





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





Media
      Campaign





In
      September 2005, we entered into a three-year contract for media production
      and
      distribution services with Global Media Fund, LLC to produce and distribute
      nationally-syndicated newspaper and/or radio features covering our proprietary
      products and services and their commercial launch into the food safety industry.
      These articles and radio spots, a material part of our proposed marketing plan,
      will be distributed to over 10,000 newspapers and 6,000 radio stations. Global
      Media Fund’s marketing efforts will be primarily directed at consumers as a
      critical component of our “pull through” marketing plan. Global Media Fund has
      not yet begun any marketing efforts under the contract, as we intend to
      coordinate the beginning of the consumer-based campaign closer with any
      anticipated distribution of seafood products bearing the *iPura* *TM* seal in
      the United States. We anticipate that Global Media Fund will begin distributing
      the promotional articles during the second half of 2008.





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





**Competition**





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




13




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





**Government
      Regulation**





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





**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 *iPura* TM Seafood
      Processing System, and the other two relate to technologies for potential use
      with produce. We also have filed two additional patent applications that are
      pending. These patents allow us to own and control the science that has resulted
      in our proposed line of commercial food safety solutions. We filed for patent
      protection in the U.S. and in 15 foreign countries, and in the European Union.
      We believe that this will result in patent protection in every major seafood
      and
      poultry producing and exporting countries. The countries we have selected,
      along
      with the United States, represent our management’s determination of the prime
      target markets for the food safety technologies we are developing.




14




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





·
            iPura*TM*


·
            Safer
                Processing...Safer Food*TM*


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


·
            The
                Highest Standard in Food Safety*TM*


·
            Food
                Safety Is Good Business*TM*


·
            Value
                Created and Sealed*TM*


·
            Quality
                Created and Sealed*TM*




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




**Employees**





As
      of
      December 31, 2007, we had 25 full time employees.





**ITEM
      2. DESCRIPTION OF PROPERTY**





We
      have a
      lease for our Corporate offices with the City of Hanford, California, for
      approximately 2,792 square feet of office facilities located at 113 Court,
      Hanford, California. The lease expires June 30, 2008. The monthly lease rate
      is
      $5,591.





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





Pursuant
      to an oral agreement, we rented a full service office, consisting of
      approximately 350 square feet, on a month-to-month basis for our Chief Financial
      Officer and Chief Engineer, located at 4100 Newport Place, Suite 620, Newport
      Beach, California, from two individuals, Mike Rubel and Stephen J. Fryer, at
      a
      rental rate of $2,225 per month. See also the disclosure included in Item 12
      under the heading “Related Party Transactions.” These premises were vacated in
      September 2007, and we currently have a month to month office space covering
      approximately 120 square feet for our Chief Financial Officer in Tustin,
      California, at a monthly base rental rate of $600.





**ITEM
      3. LEGAL PROCEEDINGS**





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




15




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





By
      written consent on November 27, 2007, GFT’s stockholders approved and ratified
      our 2006 Stock Incentive Plan and elected James Bouskos, Stephen J. Fryer,
      Gary
      L. Nielsen, Arthur C. Agnos and James Stockland to serve on our Board of
      Directors. A Definitive Information Statement regarding the foregoing actions
      was filed with the Securities and Exchange Commission on November 30, 2007
      and
      is incorporated by reference herein.





**PART
      II.**





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





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





**Number
      of Stockholders**





As
      of
      February 29, 2008, we had 440 stockholders of record. **





**Dividends**





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





**Recent
      Sales of Unregistered Securities**





During
      2007, we issued the securities described below which were not registered under
      the Securities Act of 1933, as amended, which we refer to as the Securities
      Act.
      We did not employ any form of general solicitation or advertising in connection
      with the offer and sale of the securities described below. In addition, we
      believe the purchasers of the securities are “accredited investors” for the
      purpose of Rule 501 of the Securities Act. For these reasons, among others,
      the
      offer and sale of the securities listed below were made in reliance on the
      exemption from registration provided by Section 4(2) of the Securities Act,
      Regulation D or Regulation S promulgated by the Securities and Exchange
      Commission, which we refer to as the SEC, under the Securities Act.





In
      2007,
      a total of 1,273,705 shares of common stock at a price of $4.50 per share and
      565,522 warrants to purchase common stock were issued in private placements
      for
      total proceeds of $5,477,364, net of costs and fees of $254,228. Costs and
      fees
      included $95,637 of cash fees, the issuance of 4,388 warrants to purchase common
      shares at $5.00 per share for a term of two years with a fair value of $4,159,
      and the issuance of 34,345 shares of common stock with a fair value of $154,543.





A
      total
      of 166,668 shares of common stock valued at $4.50 per share were issued to
      Global Media Fund for a total value of approximately $750,000, and recorded
      as
      marketing expense when the shares were granted.




16




Accrued
      Directors fees are paid in shares of common stock. A total of 14,444 shares
      of
      common stock were issued during the year valued at $64,998.




Shares
      were issued for services to engineering and marketing consultants throughout
      2007, for a total of 193,711 shares valued at $871,689.





Restricted
      Stock awards were made under the 2006 Stock Incentive Plan to 16 employees
      and
      consultants. The awards are fully vested but the shares are restricted as to
      transfer until they are registered and an actual trading market exists. A total
      of 460,000 restricted shares were granted during 2007. The shares were valued
      at
      $4.50 per share for a compensation expense of approximately $2,070,000.




In
      March
      2007, 150,000 warrants to purchase common stock were issued to a consultant
      as
      compensation. They are exercisable at $5.00 per share for a term of 5 years.
      The
      fair value of the warrants was determined to be $308,850. An additional 4,388
      warrants were issued to a finder for fundraising. These warrants are exercisable
      at $5.00 per share for a period of 2 years and were valued at $4,158 which
      was
      capitalized as a cost of funds raised.




We
      did
      not make any repurchases of our securities during fiscal year 2007 or
      2006.





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





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





**Plan
      of Operation**





From
      the
      commencement of our research and development activities in 2001, we have raised
      substantial equity capital to fund the development of our BEST Seafood
      Processing System. The BEST Seafood Processing System has been re-branded as
      the *iPuraTM
      System* and we
      believe is ready for market introduction as the embodiment of ***The*** **** ***iPura*** **TM** ***Food Safety Program*** ,
      although our other prospective products still require additional research and
      development, and some customization of the *iPura* TM ** system
      will be required for each specific on-site installation. As of December 31,
      2007, we have not generated any revenues and we have incurred accumulated losses
      of $45,142,144 and negative operating cash flows of $27,660,558. Research on
      our
      first generation prototype was completed in 2004, and development and refinement
      on the commercial system design continued through 2005, especially adapting
      the
      system to processing salmon. Production has commenced on one unit of the current
      generation of the **** ***iPura*** **TM** ****** system,
      including the material handling components necessary for processing salmon,
      which we intend to use for our first commercial installation with a customer
      in
      Chile.





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




17




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


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


·
            The
                label will serve to identify food products that have a higher level
                of
                safety and quality.


·
            GFT
                has filed trade marks for its brand and slogan in every major food
                producing and food consuming nation.


·
            Trade
                marks are expected to be listed on the primary registry at the USPTO
                and
                internationally, as a global trademark search by counsel found no
                prior
                marks or obstructions.




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





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


·
            Intelligent
                packaging of product.


·
            Product
                traceability of handling and
                temperature.


·
            An
                independent third party certification of
                standards.


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


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





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


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





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





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




18




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




We
      also
      intend to participate in the following industry conferences:


·
            Institute
                of Food Technologists Expo


·
            Food
                Marketing Institute Annual Business
                Conference


·
            Food
                Safety Conference (International Association for Food
                Protection)


·
            National
                Food Policy Conference





As
      of
      December 31, 2007, we had no debt other than trade indebtedness in the ordinary
      course of business and short term loans of $540,000 from a Director and a
      shareholder, of which $190,000 was in default. Based on our cash balance as
      of
      December 31, 2007, we estimate that we will need to raise additional capital
      in
      the amount of $7 million to cover our operating costs for fiscal year 2008
      and
      to build two units of ***The
      iPura*** **TM**  ***System*** .
      If
      additional units are required to meet customer demand, we will need to raise
      additional funds. Any additional capital we raise may involve issuing additional
      shares of common stock or other equity securities, or obtaining debt financing.
      However, at this point, we have not specifically identified the type or sources
      of this funding. We are exploring commercial and joint venture financing
      opportunities and relationships with potential processor/customers with sale
      and
      lease-back arrangements.





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





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





**Revenues**





Since
      our
      inception, we have not had any revenues from operations and have operated mainly
      as a research and development company. We are classified as a “Development Stage
      Company” under accounting principles generally accepted in the United
      States.





**Liquidity
      and Capital Resources**





The
      independent auditors report on our financial statements for the year ended
      December 31, 2007 included in this Form 10-KSB states that our difficulty in
      generating sufficient cash flow to meet our obligations and sustain operations
      raise substantial doubts about our ability to continue as a going
      concern.




19




Historically,
      our sole source of cash and for Tech has been the sale of equity to investors.
      Although we expect to generate revenue from installing and operating the initial ***iPura*** **TM**  ***Systems*** within
      the next 12 months, any funds generated from installing and operating our ***iPura*** **TM**  ***Systems*** during
      fiscal year 2008 are not expected to cover our operating expenses. In addition
      to cash in hand as of December 31, 2007, we believe that we will need
      approximately $7 million to cover operating expenses during the next 12 months,
      including costs for constructing 2 ***iPura*** **TM**  ***Systems.*** However,
      the amount of capital required will vary depending on a variety of factors,
      many
      of which are beyond our control. We believe that commercial financing is
      available to construct and install our ***iPura*** **TM**  ***System*** ***s*** ,
      but
      have not identified any sources of financing. There are government controlled
      funds available and we have solicited funding of $2,000,000 from the Peoples
      Republic of China for a Beta site in that country, although no commitment for
      such funding has been acquired. We cannot assure you that funds from our future
      operations or funds provided by our current financing activities will meet
      the requirements of our operations, and in that event, we will continue to
      seek additional sources of financing to maintain liquidity.





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





**Use
      of Estimates**





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





***iPura*TM****(formerly
      the** “ **BEST”)
      Seafood Processing System**





The
      ***iPura*TM** Seafood
      Processing System, the physical embodiment of our food processing technology,
      was completed, tested and available for commercial application (in a previous
      generation design) in 2005 and was capitalized at a construction cost of
      $3,157,111. Design, testing and support costs involved were expensed. In 2005,
      mechanical and software upgrades were implemented to optimize the mechanical
      process. The improvements were so substantial that this prior model was deemed
      inappropriate for installation in a customer’s processing facility. As a result,
      the Company recorded an asset impairment charge of $3,157,111 for the year
      ended
      December 31, 2005. A new model is being constructed with increased capacity
      and
      simplified operating and maintenance parameters. Design, testing and support
      costs incurred on this model through December 31, 2007 have been included in
      research and development costs.




20




**Property
      and Equipment**





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





**Long-lived
      Assets**





We
      account for the impairment and disposition of long-lived assets in accordance
      with Statement of Financial Accounting Standards No. 144 (“SFAS 144”),
“Accounting for the Impairment or Disposal of Long-Lived Assets.” In accordance
      with SFAS No. 144, the long lived assets are to be held and reviewed for events
      or changes on circumstances that indicate that their carrying value may not
      be
      recoverable. We periodically review the carrying value of long lived assets
      to
      determine whether or not an impairment to such value has incurred. The
***iPura*TM** Seafood
      Processing System asset was physically reconfigured for operational efficiency
      in 2005. The total capitalized cost of the ***iPura*TM** Seafood
      Processing System was considered impaired in 2005 and the Company recorded
      an
      asset impairment charge of $3,157,111 for the year ended December 31, 2005.
      In
      July 2007, we relocated the Research and Development activity from Pocatello,
      Idaho to Hanford, California. Current Research and Development activities can
      better be characterized as Commercialization Engineering resulting in the
      diminished use of laboratory and scientific equipment previously capitalized
      as
      fixed assets. The majority of these fixed assets have been fully depreciated
      but
      have productive value for future activities when scientific oriented projects
      are considered necessary. Accordingly, the fully depreciated assets in the
      amount of $493,157 were retired as well as certain similar laboratory equipment
      resulting in an impairment cost of $24,903. No other impairments were recorded
      during the period from June 25, 2001 (Inception) through December 31,
      2007.





**Concentration
      of Credit Risk**





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





**Income
      Taxes**





We
      account for income taxes under the Statement of Financial Accounting Standards
      (“SFAS”) No. 109, “Accounting for Income Taxes” (“SFAS 109”). Deferred tax
      assets and liabilities are measured using enacted tax rates expected to apply
      to
      taxable income in the years in which those temporary differences are expected
      to
      be recovered or settled. Under SFAS 109, the effect on deferred tax assets
      and
      liabilities of a change in tax rates is recognized in income in the period
      that
      includes the enactment date. There was no current or deferred income tax expense
      or benefits due to our not having any material operations for the period ending
      December 31, 2007 and 2006.





In
      July
      2006, the FASB issued FASB Interpretation No. 48, *Accounting
      for Uncertainty in Income Taxes* ("FIN 48"). FIN 48 is an interpretation of SFAS No. 109, *Accounting
      for Income Taxes* ,
      and it
      seeks to reduce the diversity in practice associated with certain aspects of
      measurement and recognition in accounting for income taxes. FIN 48
      prescribes a recognition threshold and measurement attribute for the financial
      statement recognition and measurement of a tax position that an entity takes
      or
      expects to take in a tax return. Additionally, FIN 48 provides guidance on
      de-recognition, classification, interest and penalties, accounting in interim
      periods, disclosure, and transition. Under FIN 48, an entity may only
      recognize or continue to recognize tax positions that meet a "more likely than
      not" threshold. We adopted FIN 48 on January 1, 2007. As a result of
      adoption of FIN 48, we recognized no liability for unrecognized income tax
      benefits. Additionally, we recognized no interest and penalties related to
      uncertain tax positions and as of the year ended December 31, 2007, we have
      no accrued interest related to uncertain tax positions. The tax years 2003
      through 2006 remain open to examination by the major taxing
      jurisdictions.




21




**Fair
      Value of Financial Instruments**





The
      carrying amounts of our financial instruments, including cash, accounts payable
      and accrued liabilities, approximate their fair value as of December 31, 2007
      and 2006.





**Loss
      Per Share**





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





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





**Stock-based
      compensation**





SFAS
      No.
      123, "Accounting for Stock-Based Compensation" ("SFAS No. 123"), established
      a
      fair value method of accounting for stock-based compensation plans and for
      transactions in which an entity acquires goods or services from non-employees
      in
      exchange for equity instruments. Through December 31, 2005, the Company
      accounted for stock-based compensation utilizing the fair value method of
      accounting prescribed in SFAS No. 123.





In
      December 2004, the Financial Accounting Standards Board (“FASB”) issued SFAS No.
      123R, “Share-Based Payment” (“SFAS 123R”). This statement requires that the cost
      resulting from all share-based payment transactions be recognized in the
      financial statements. This statement establishes fair value as the measurement
      objective in accounting for share-based payment arrangements and requires all
      entities to apply a fair-value based measurement method in accounting for
      share-based payment transactions with employees except for equity instruments
      held by employee share ownership plans. Effective January 1, 2006, the Company
      adopted the fair value recognition provisions of SFAS 123R, using the modified
      prospective method. Under this method, the provisions of SFAS 123R apply to
      all
      awards granted or modified after the date of adoption and all previously granted
      awards not yet vested as of the date of adoption. The initial adoption of this
      standard had no effect on the Company’s financial statements.




22




Shares,
      warrants and options issued to non-employees for services are accounted for
      in
      accordance with SFAS 123(R) and Emerging Issues Task Force Issue No. 96-18
      (“EITF 96-18”), “Accounting for Equity Instruments that are Issued to Other Than
      Employees for Acquiring or In Conjunction with Selling Goods or Services”
whereby the fair value of such option and warrant grants is determined using
      the
      Black-Scholes Model at the earlier of the date at which the non-employee’s
      performance is completed or a performance commitment is reached.





**Off-Balance
      Sheet Arrangements**





We
      do not
      have any off-balance sheet arrangements.





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




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




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




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




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




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




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




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




23




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




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




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




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




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




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




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




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




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




·
            the
                possible impact from competing products or
                technologies;




·
            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;




24




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




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




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




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




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




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




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





**ITEM
      7. FINANCIAL STATEMENTS**





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




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





In
      our
      8-K filed on December 10, 2007, as amended on January 1, 2008, we reported
      a
      change in independent registered public accounting firms. During the years
      ended
      December 31, 2006 and 2005, and in the subsequent interim period from January
      1,
      2007 through December 6, 2007 (the date of dismissal), there were no
      disagreements with the prior independent registered public accounting
      firm.




25




**ITEM
      8A. CONTROLS AND PROCEDURES**




***Internal
      Controls Over Financial Reporting***




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





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




Based
      on
      that evaluation, our Chief Executive Officer and Chief Financial Officer
      concluded that our disclosure controls and procedures were not effective based
      on the following material weaknesses: We did not have the procedures and systems
      to timely file our periodic reports. Management has instituted new procedures
      and software to assure timely preparation and dissemination of the subject
      periodic reports.




***Management’s
      Annual Report on Internal Controls 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-KSB 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). This evaluation and assessment
      led to the identification of a material weakness in our internal control over
      financial reporting as indicated below:




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




·
            As
                a result of the above described material weakness, we also have been
                non-timely in preparing and filing our financial statements with
                the
                SEC.




Our
      plan
      to remediate these material weaknesses, subject to monetary constraints, is
      to
      re-assign certain duties within our existing personnel structure and to hire
      additional personnel and/or utilize outside consultants to provide an acceptable
      level of segregation of duties. We believe that additional personnel will also
      result in timely preparation of our financial statements.




26




This
      annual report does not include an audit report of our registered public
      accounting firm regarding internal control over financial reporting. In
      addition, Management's report on internal control over financial reporting
      is
      not subject to attestation by our registered public accounting firm pursuant
      to
      temporary rules of the SEC that permit us to provide only management's report
      in
      this annual report.




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




***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, 2007 that have materially affected, or are
      reasonably likely to materially affect, the Company’s internal control over
      financial reporting.





**ITEM
      8B OTHER INFORMATION**





None.





**PART
      III.**





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





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





Name
            
            Age
            
            Position
                HeldJames
                Bouskos
            
            59
            
            Chairman
                of BoardKeith
                Meeks
            
            47
            
            President
                and Chief Executive OfficerMarshall
                F. Sparks
            
            67
            
            Chief
                Financial Officer, Secretary and TreasurerStephen
                J. Fryer
            
            70
            
            DirectorGary
                L. Nielsen
            
            65
            
            DirectorArthur
                C. Agnos
            
            69
            
            DirectorJames
                Stockland
            
            45
            
            Director




27




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





**James
      Bouskos** – **Chairman of the Board**





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





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





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





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





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




28




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





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





**Stephen
      J. Fryer – Director**





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





**Gary
      L. Nielsen – Director**





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




29




**Arthur
      C. Agnos – Director**





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





**James
      Stockland – Director**





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





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





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





**Term
      of Office**





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





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





During
      our fiscal year ended December 31, 2007, our Board of Directors held two
      meetings.




30




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





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





As
      of
      December 31, 2007, Stephen J. Fryer, Gary L. Nielsen, Arthur C. Agnos and James
      Stockland are independent directors. The Board of Directors has determined
      that
      Mr. Nielsen is an “audit committee financial expert” within the meaning of Item
      407(d)(5) of Regulation S-B.





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





Section
      16(a) of the Exchange Act and the rules thereunder require our executive
      officers, directors and greater than 10% stockholders to file reports of
      beneficial ownership of our common stock on Form 3 and changes in
      beneficial ownership on Forms 4 and 5 with the SEC.





We
      believe that during the fiscal year ended December 31, 2007, our executive
      officers, directors or beneficial owners of more than 10% of our common stock
      complied with the Section 16(a) filing requirements, with the following
      exceptions: Messrs. Agnos and Bouskos failed to file Form 4s reporting two
      common stock grants in connection with their service as directors; Mr. Fryer
      failed to file a Form 4 reporting one common stock grant in connection with
      his
      service as a director; Mr. Bouskos failed to file Form 4s reporting indirect
      dispositions of our common stock; and Mr. Stockland failed to file a Form 3
      upon
      becoming a director of GFT. The Company anticipates that filings for each of
      the
      above will be filed shortly after the filing of this report on Form 10-KSB.





**Code
      of Ethics**





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




31




**ITEM
      10. EXECUTIVE COMPENSATION**





**Executive
      Compensation**





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





The
      following table sets forth compensation information for services rendered by
      our
      Chief Executive Officer in fiscal 2007 and our named executive officers.





**SUMMARY
      COMPENSATION TABLE**





Name
                and Principal
              Position
            
            Year
            
            Salary
              ($)
            
            Option
              Awards
              ($)
                (1)
            
            All
              Other
              Compensation
              ($)
                (2)
            
            Total
              ($)James
                Bouskos
            
            2007
            
            
            76,116
            
            
            —
            
            
            10,500
            
            
            86,616Chairman
                of the
            
            2006
            
            
            76,116
            
            
            103,350
            
            
            10,500
            
            
            189,966BoardKeith
                Meeks
            
            2007
            
            
            150,555
            
            
            —
            
            
            11,096
            
            
            161,651President
                and
            
            2006
            
            
            150,555
            
            
            —
            
            
            9,295
            
            
            159,850Chief
                ExecutiveMarshall
                F Sparks
            
            2007
            
            
            106,500
            
            
            —
            
            
            —
            
            
            106,500Chief
                Financial
            
            2006
            
            
            106,500
            
            
            413,400
            
            
            —
            
            
            519,900Officer





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


(2)
            Other
                Annual Compensation represents payments made on leased vehicles provided
                to these two officers.





**Stock
      Option Grants**





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




32




**Outstanding
      Equity Awards at Fiscal Year-End**




Name
            
            Number
                of
              Securities
              Underlying
              Unexercised
              Options
                (#)
              Exercisable
            
            Number
                of
              Securities
              Underlying
              Unexercised
              Options
                (#)
              Unexercisable
                (1)
            
            Equity
              Incentive
              Plan
                Awards:
              Number
                of
              Securities
              Underlying
              Unexercised
              Unearned
              Options
            
            Option
              Exercise
              Price
                ($)
            
            Option
              Expiration
              DateJames
                Bouskos
            
            
            —
            
            
            50,000
            
            
            —
            
            $
            5.00
            
            
            Nov.
                2011Keith
                Meeks
            
            
            —
            
            
            —
            
            
            —Marshall
                F. Sparks
            
            
            —
            
            
            200,000
            
            
            —
            
            $
            5.00
            
            
            Nov.
                2011





(1)
      The
      equity awards were in the form of warrants, which were not issued under our
      2006
      Stock Incentive Plan. The warrants are not exercisable until the shares are
      registered or our common stock is listed on a stock exchange or other market
      selected by the Company. No equity grants were awarded to our named executive
      officers during 2007.





**Employment
      Agreements**





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





**Director
      Compensation**





Our
      independent directors are entitled to receive the following
      compensation:


·
            $24,000
                annual retainer fee


·
            $1,000
                per Board meeting attended


·
            $4,000
                per year per committee chairmanship





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




As
      of
      December 31, 2007, our independent directors were Stephen J. Fryer, Gary L.
      Nielsen, Arthur C. Agnos and James Stockland. All directors are entitled to
      be
      reimbursed for reasonable expenses actually incurred by them in connection
      with
      their duties as directors.




**Director
      compensation**


Name
            
            Fees
                Earned or
              Paid
              in
                Cash ($) (2)
            
            Stock
                Awards
              ($)(3)
            
            Option Awards
              ($)
            
            Total
              ($)James
                Bouskos (1)
            
            
            —
            
            
            —
            
            
            —
            
            
            —Stephen
                J Fryer
            
            
            19,000
            
            
            7,002
            
            
            
            
            
            26,002Gary
                L Nielsen
            
            
            —
            
            
            28,998
            
            
            
            
            
            28,998Arthur
                C Agnos
            
            
            —
            
            
            28,998
            
            
            
            
            
            28,998James
                Stockland
            
            
            3,000
            
            
            -
            
            
            
            
            
            3,000Total
            
            
            22,000
            
            
            64,998
            
            
            -
            
            
            86,998




33




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




(2)
      Director’s fees are accrued monthly and the accrual is paid in shares of common
      stock annually, the timing being at the request of the individual Director,
      with
      Directors permitted to defer all or a portion of such compensation. The dollar
      amounts in this column represent the amount of director fees accrued, but
      deferred, by each director during 2007. We did not pay any directors fees in
      cash in 2007, and anticipate paying such accrued amounts through the issuance
      of
      common stock in 2008.




(3)
      The
      dollar amounts in this column represent the portion of directors’ fees actually
      paid (in the form of common stock grants) during 2007, and not deferred. A
      total
      of 14,444 shares were issued during the year valued at $64,998. The shares
      of
      stock are fully vested and not subject to any forfeiture or repurchase
      restrictions.




**ITEM
      11. 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 990,000 shares of restricted stock to 31 individuals. No awards were
      made to officers or Directors under the plan.





**Equity
      Compensation Plan Information**





Plan
                category
            
            Number
                of securities
              to
                be issued upon
              exercise
                of
              outstanding
                options,
              warrants
                and rights
            
            Weighted
                average
              exercise
                price of
              outstanding
                options,
              warrants
                and rights
            
            Number
                of securities
              remaining
                available for
              future
                issuance under
              equity compensation plans
              (excluding
                securities
              reflected
                in column (a))Plans
                approved by security holders
            
            
            None
            
            
            None
            
            
            2,010,000
            (1)Plans
                not approved by security holders
            
            
            None
            
            
            None
            
            
            None





(1)
      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, 2007, 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.




34




**Name
                and Address of**
              **Beneficial
                Owner (1)**
            
            **Number
                of**
              **Shares
                of**
              **Our**
              **Common**
              **Stock**
            
            **Percentage of Shares of**
              **Our Common Stock (2)**James
                Bouskos (3)
            
            
            816,652
            
            
            3.0
            %Keith
                Meeks (4)
            
            
            796,933
            
            
            2.9
            %Marshall
                F. Sparks (5) (9)
            
            
            133,334
            
            
            0.5
            %Stephen
                J. Fryer (6) (9)
            
            
            312,000
            
            
            1.1
            %Gary
                L. Nielsen (7) (9)
            
            
            124,814
            
            
            0.5
            %Arthur
                C. Agnos (8) (9)
            
            
            26,333
            
            
            *James
                Stockland (9)
            
            
            —
            
            
            *All
                directors and officers as a group
              (7
                individuals)
            
            
            2,210,065
            
            
            8.0
            %Mark
                Terry
              1060
                Cactus, Pocatello, ID 83204
            
            
            2,376,178
            
            
            8.7
            %Global
                Food Tech, Inc. (“TECH”)
            
            
            22,945,062
            
            
            84.0
            %





*
      Less
      than one percent.





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


(2)
            The
                percentage ownership is based on 27,307,881 shares of GFT common
                stock
                outstanding as of December 31,
                2007.


(3)
            Includes
                indirect beneficial ownership of 816,652 shares of GFT through ownership
                of shares of TECH.


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


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


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


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


(8)
            Includes
                indirect beneficial ownership of 4,334 shares of GFT through ownership
                of
                shares of TECH.


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




35




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





**Certain
      Relationships**





As
      of
      December 31, 2007, three of our directors, Messrs. Agnos, Fryer and Nielsen,
      serve as the members of Tech’s Board of Directors. Mr. Fryer also serves as
      Tech’s President, and Marshall F. Sparks, our Chief Financial Officer, Secretary
      and Treasurer, also has been appointed as the Chief Financial Officer, Secretary
      and Treasurer of Tech. This commonality of our respective Boards of Directors
      and executive managements could create, or appear to create, potential conflicts
      of interest when these directors and managements are faced with decisions that
      could have different implications for Tech and us.





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





In
      November 2005, we established an office in Newport Beach, California, to provide
      space for our Chief Financial Officer. Mike Rubel and Stephen J. Fryer
      personally leased office space co-located with Grant Bettingen Inc., our former
      investment banking firm, and allocated and rented space to us, Grant Bettingen
      Inc. and three other tenants. Pursuant to an oral agreement, the rental of
      the
      space was on a month-to-month basis at an initial rate of $790 per month. In
      July 2006, an additional office for engineering staff was rented, and the rental
      was increased to $2,100 per month. These premises were vacated in September
      2007
      and the arrangement was terminated. Mr. Fryer is our Director and our former
      interim Chief Executive Officer.




On
      August
      11, 2005, we entered into a Stock Purchase Agreement with Solvis Group, Inc.
      and
      Pierce Mill Associates, Inc., pursuant to which we issued 520,000 shares of
      our
      common stock to Solvis, which were valued at $2,340,000. At such time, Mr.
      Fryer
      was a director of Dalrada Financial Corporation, which controlled Solvis, and
      was also one of our directors. The Stock Purchase Agreement with Solvis was
      amended to reduce the number of shares granted to Solvis to 100,000 shares,
      which were valued at $450,000 and charged to expenses as a cost of the
      Transaction.




36




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





On
      April
      3, 2006, we arranged a 30 day bridge loan in the amount of $350,000 from a
      non-principal shareholder. The loan bears interest at eight percent (8%) per
      annum plus an additional five points, or $17,500, which was recorded as interest
      expense. The loan is secured by all assets, including any intellectual assets,
      of the Company. Additional consideration included the issuance of warrants
      to
      purchase 35,000 shares of our common stock. The warrants are exercisable at
      $4.50 per share for two (2) years from the date of repayment. The Company
      determined the fair value of the warrants to be $49,245 based
      upon a Black-Scholes option pricing model. which was recorded
      as additional interest expense In July 2006, $100,000 of principal was repaid,
      leaving a balance of $250,000 that is currently past due. The loan is currently
      a demand note. The loan is guaranteed by the President of the Company.





In
      April
      and May of 2006, we arranged three loans aggregating $290,000 from a Director
      of
      the Company. Two loans aggregating $190,000 are demand loans. The third loan
      for
      $100,000 matured July 18, 2006, and was repaid on its due date. The loans bear
      interest of 8% plus an additional five points, aggregating $14,500, due at
      maturity, which was expensed as additional interest expense in 2006. Additional
      consideration for the 3 loans was approved by the Board in August 2006, in
      the
      form of warrants to purchase 29,000 shares of our common stock. The warrants
      are
      exercisable at $4.50 per share for two (2) years from the date of repayment.
      The
      Company determined the fair value of the warrants to be $40,803 based
      upon a Black-Scholes option pricing model, which was recorded
      as additional interest expense In August 2006 another loan for $100,000 was
      made
      for 90 days from the Director’s IRA account at 8% interest and no additional
      consideration. The loan was extended in November 2006, May 2007 and November
      2007 for an additional six months maturing in May 2008. The three loans are
      unsecured.





**Director
      Independence**





As
      of
      January 31, 2008, our independent directors were Stephen J. Fryer, Gary L.
      Nielsen, Arthur C. Agnos and James Stockman. These independent directors also
      serve on our audit committee, compensation committee and nominating and
      governance committee; no non-independent directors serve on such committees.
      Our
      common stock is not listed on any national securities exchange or other market.
      However, for purposes of determining director independence, we use the standards
      set forth by the American Stock Exchange. Mr. Fryer served as interim CEO from
      December 2003 through February 2005. In accordance with the American Stock
      Exchange rules, a director is considered independent if such service as an
      interim executive officer was for a period of less than one year. We also
      considered the related party transactions set forth in Item 12 of this report
      to
      the extent such transactions involved any of our independent directors, and
      believe that such transactions do not prevent the directors from being
      considered independent.




37




**ITEM
      13. EXHIBITS**





Exhibit
              No.
            
            Description3.1(1)
            
            Restated
                Certificate of Incorporation dated October 18, 2005.3.2(1)
            
            Second
                Amended and Restated Bylaws as of August 31, 2005.4.1(2)
            
            Lock-Up
                Agreement dated as of December 20, 2005 between Global Food Technologies,
                Inc. and Solvis Group, Inc.4.2+(2)
            
            Form
                of Lock-Up Agreement entered into by Global Food Technologies, Inc.
                and
                its officers and directors as of December 20, 2005.10.1(3)
            
            Asset
                Acquisition Agreement dated as of August 19, 2005 between Global
                Food
                Tech, Inc. (formerly known as Global Food Technologies, Inc.), Solvis
                Group, Inc. and Global Food Technologies, Inc. (formerly known as
                Boulevard Acquisition Corporation).10.2(4)
            
            Services
                Agreement dated September 30, 2005 between Global Food Technologies,
                Inc.
                and Global Media Fund, LLC.10.3(1)
            
            Stock
                Purchase Agreement dated August 11, 2005 between Global Food Technologies,
                Inc. (formerly known as Boulevard Acquisition Corporation), Pierce
                Mill
                Associates, Inc. and Solvis Group, Inc.10.4(1)
            
            Side
                Letter Agreement dated August 11, 2005 between Global Food Tech,
                Inc.
                (formerly known as Global Food Technologies, Inc.), Solvis Group,
                Inc.,
                Pierce Mill Associates, Inc. and August Law Group, P.C.10.5(1)
            
            Amendment
                No. 1 to Asset Acquisition Agreement dated November 21, 2005 between
                Global Food Tech, Inc., Solvis Group, Inc. and Global Food Technologies,
                Inc.10.6(2)
            
            Lease
                Agreement dated April 6, 2001 between Parrish Realty, Inc. and Global
                Food
                Technology, Inc.10.7(2)
            
            Lease
                Agreement Addendum dated April 22, 2002 between Parrish Realty, Inc.
                and
                Global Food Technologies, Inc.10.8(5)
            
            2006
                Stock Incentive Plan10.9*
            
            Lease
                Agreement dated November 1, 2007 between STG Realty Ventures Inc
                and
                Global Food Technologies24.1
            
            Power
                of attorney (included in signature
                page).




38




31.1*
            
            Certification
                of Chief Executive Officer pursuant to Exchange Act Rules 13a-14(a)
                and
                15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley
                Act of
                200231.2*
            
            Certification
                of Chief Financial Officer pursuant to Exchange Act Rules 13a-14(a)
                and
                15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley
                Act of
                200232.1‡
            
            Certifications
                of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as
                adopted
                pursuant to Section 906 of the Sarbanes-Oxley Act of
                200232.2‡
            
            Certifications
                of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as
                adopted
                pursuant to Section 906 of the Sarbanes-Oxley Act of
                2002





+
            Management
                contract or compensatory plan or arrangement*
            Filed
                herewith‡
            Furnished
                herewith(1)
            Filed
                on November 23, 2005 as an exhibit to our Quarterly Report on Form
                10-QSB
                for the quarterly period ended September 30, 2005 and incorporated
                herein
                by reference.(2)
            Filed
                on July 6, 2006, as an exhibit to our Annual Report on Form
                10-KSB.(3)
            Filed
                on August 19, 2005 as an exhibit to our Current Report on Form 8-K
                and
                incorporated herein by reference.(4)
            Filed
                on October 6, 2005 as an exhibit to our Current Report on Form 8-K
                and
                incorporated herein by reference.(5)
            Filed
                on August 2, 2008, as an exhibit to our Annual Report on Form
                10-KSB




39





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





The
      firm
      Weinberg & Company, P.A., independent registered public accounting firm,
      audited our financial statements for the year ended December 31, 2006. 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 year ended December 31, 2007.





The
      following table shows the fees billed for audit and other services provided
      by
      Squar Milner and Weinberg & Company, P.A., for the years ended December 31,
      2007 and 2006:





2007
            
            2006Audit
                Fees (1)
            
            $
            61,000
            
            $
            47,482Audit-Related
                Fees
            
            
            0
            
            
            35,843Tax
                Fees
            
            
            0
            
            
            0All
                Other Fees (2)
            
            
            0Total
            
            $
            61,000
            
            $
            83,325







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





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





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




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




-
      approved by our Audit Committee; or




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




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




40




**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:
                May
                15, 2008
            GLOBAL
              FOOD TECHNOLOGIES, INC.,a
              Delaware corporationBy:
            /s/
                Keith MeeksName:
                Keith MeeksTitle:
                President and Chief Executive
                Officer





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





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





Name:
            
            Title
            
            Date/s/
                Keith Meeks
            
            President
                and Chief Executive Officer (Principal
            
            May
                15, 2008Keith
                Meeks
            
            Executive
                Officer)/s/
                James Bouskos
            
            Chairman
                of the Board
            
            May
                  15, 2008James
                Bouskos/s/
                Marshall F. Sparks
            
            Chief
                Financial Officer, Secretary and Treasurer
            
            May
                  15, 2008Marshall
                F. Sparks
            
            (Principal
                Financial and Accounting Officer)/s/
                Stephen J. Fryer
            
            Director
            
            May
                  15, 2008Stephen
                J. Fryer/s/
                Gary L. Nielsen
            
            Director
            
            May
                  15, 2008Gary
                L. Nielsen/s/
                Arthur C. Agnos
            
            Director
            
            May
                  15, 2008Arthur
                C. Agnos/s/
                James Stockland
            
            Director
            
            May
                  15, 2008James
                Stockland





41


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


PAGE
                43
            REPORT
                OF INDEPENDENT REGISTERED ACCOUNTING FIRMPAGE
                44
            REPORT
                OF PRIOR INDEPENDENT REGISTERED ACCOUNTING FIRMPAGE
                45
            BALANCE
                SHEET AS OF DECEMBER 31, 2007PAGE
                46
            STATEMENTS
                OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2007 AND 2006 AND
                FOR THE
                PERIOD FROM JULY 25, 2001 (INCEPTION) THROUGH DECEMBER 31,
                2007PAGE
                47
            STATEMENT
                OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIENCY) FROM JULY 25, 2001
                (INCEPTION) TO DECEMBER 31, 2007PAGE
                48
            STATEMENTS
                OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2007 AND 2006 AND
                FOR THE
                PERIOD FROM JULY 25, 2001 (INCEPTION) TO DECEMBER 31,
                2007PAGES
                49-61
            NOTES
                TO FINANCIAL STATEMENTS AS OF DECEMBER 31, 2007 AND
                2006




42





REPORT
      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM





To
      the
      Board of Directors and Stockholders


Global
      Food Technologies, Inc.


Hanford,
      California




We
      have
      audited the accompanying balance sheet of Global Foods Technologies, Inc. (the
      “Company”), a development stage company, as of December 31, 2007, and the
      related statements of operations, stockholders’ deficit and cash flows for the
      year then ended. These financial statements are the responsibility of the
      Company’s management. Our responsibility is to express an opinion on these
      financial statements based on our audit.




We
      conducted our audit in accordance with the standards of the Public Company
      Accounting Oversight Board (United States).  Those standards require that
      we plan and perform the audit to obtain reasonable assurance about whether
      the
      financial statements are free of material misstatement.  The Company was
      not required to have, nor were we engaged to perform, an audit of its internal
      control over financial reporting. Our audit included consideration of internal
      control over financial reporting as a basis for designing audit procedures
      that
      are appropriate in the circumstances, but not for the purpose of expressing
      an
      opinion on the effectiveness of the Company’s internal control over financial
      reporting. Accordingly, we express no such opinion. An audit includes examining,
      on a test basis, evidence supporting the amounts and disclosures in the
      financial statements.  An audit also includes assessing the accounting
      principles used and significant estimates made by management, as well as
      evaluating the overall financial statement presentation. We believe that our
      audit provides a reasonable basis for our opinion.




In
      our
      opinion, the financial statements referred to above present fairly, in all
      material respects, the financial position of Global Food Technologies, Inc.
      as
      of December 31, 2007 and the results of its operations and its cash flows for
      the year then ended in conformity with accounting principles generally accepted
      in the United States of America.




The
      accompanying financial statements have been prepared assuming that the Company
      will continue as a going concern. As discussed in Note 1 to the financial
      statements, the Company is in the development stage, has incurred a net loss
      of
      $45,142,144 and negative cash flow from operations of $27,660,558 since
      inception, has negative working capital and is currently in default of certain
      debt. The Company’s ability to continue operations is predicated on its ability
      to raise additional capital and, ultimately to achieve profitability. These
      factors raise substantial doubt about the Company’s ability to continue as a
      going concern. Management’s plans in regard to these matters are also described
      in Note 1. The financial statements do not include any adjustments that might
      result from the outcome of this uncertainty.




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





Newport
      Beach, California


March
      12,
      2008




43




REPORT
      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM




To
      the
      Board of Directors and Stockholders of


Global
      Food Technologies, Inc.




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




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





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





The
      accompanying financial statements have been prepared assuming that the Company
      will continue as a going concern. The Company has had a net loss of $36,127,217
      and negative cash flow from operations of $22,521,220 since July 25, 2001
      (Inception) to December 31, 2006. These factors raise substantial doubt about
      the Company’s ability to continue as a going concern. Management’s plans in
      regard to these matters are also described in Note 1. The financial statements
      do not include any adjustments that might result from the outcome of this
      uncertainty.





As
      discussed in Note 2 to the consolidated financial statements, effective January
      1, 2006 the Company adopted Statement of Financial Accounting Standard (“SFAS”),
“Share-Based Payment” (“SFAS 123(R)”) which requires companies to estimate the
      fair value of share-based payment awards on the date of grant using an
      option-pricing model.





Weinberg
      & Company, P.A.


Los
      Angeles, California


June
      27,
      2007




44


**GLOBAL
      FOOD TECHNOLOGIES, INC.**


**(A
      DEVELOPMENT STAGE COMPANY)**


**BALANCE
      SHEET**





**December
                31,****2007****ASSETS****CURRENT
                ASSETS**Cash
            
            $
            552,697Prepaid
                expenses
            
            
            29,246Total
                Current Assets
            
            
            581,943**FIXED
                ASSETS**Furniture
                and fixtures
            
            
            73,776Less
                accumulated depreciation
            
            
            (31,144
            )Fixed
                Assets – net
            
            
            42,632**OTHER
                ASSETS**
            
            
            24,889**TOTAL
                ASSETS**
            
            $
            649,464**LIABILITIES
                AND STOCKHOLDERS’ DEFICIT****CURRENT
                LIABILITIES**Accounts
                payable
            
            $
            142,572Accrued
                liabilities
            
            
            286,340Notes
                payable – related parties
            
            
            540,000Total
                Current Liabilities
            
            
            968,912**COMMITMENTS
                AND CONTINGENCIES****STOCKHOLDERS’
                DEFICIT**Preferred
                Stock, $.0001 par value, 20,000,000 shares authorized, none
                outstanding
            
            
            -Common
                Stock, $.0001 par value, 100,000,000 shares authorized, 27,307,881
                shares
                outstanding
            
            
            2,731Additional
                paid-in capital
            
            
            44,819,965Deficit
                accumulated during development stage
            
            
            (45,142,144
            )Total
                stockholders’ deficit
            
            
            (319,448
            )**TOTAL
                LIABILITIES AND STOCKHOLDERS’ DEFICIT**
            
            $
            649,464




See
      accompanying notes to financial statements




45




**GLOBAL
      FOOD TECHNOLOGIES, INC.**


**(A
      DEVELOPMENT STAGE COMPANY)**


**STATEMENTS
      OF OPERATIONS**





**For The**
              **Year Ended**
              **December 31,**
              **2007**
            
            **For The**
              **Year EndedDecember 31,****2006**
            
            **For the PeriodFrom July 25,2001(Inception) ToDecember 31,2007**Revenues
            
            $
            -
            
            $
            -
            
            $
            -ExpensesMarketing
                expense
            
            
            2,711,594
            
            
            2,791,150
            
            
            7,672,820General
                and administrative expense
            
            
            2,840,884
            
            
            5,172,838
            
            
            12,602,356Research
                and development costs
            
            
            3,311,861
            
            
            4,857,188
            
            
            20,415,254Depreciation
            
            
            80,107
            
            
            116,072
            
            
            524,301Interest
                expense
            
            
            45,578
            
            
            157,851
            
            
            295,399Asset
                impairment
            
            
            24,903
            
            
            -
            
            
            3,182,014Merger
                related costs
            
            
            -
            
            
            -
            
            
            450,000Total
                Expenses
            
            
            9,014,927
            
            
            13,095,099
            
            
            45,142,144**NET
                LOSS**
            
            $
            (9,014,927
            )
            $
            (13,095,099
            )
            $
            (45,142,144
            )Loss
                per Share, basic and diluted
            
            $
            (0.35
            )
            $
            (0.54
            )Weighted
                average shares, basic and diluted
            
            
            26,076,265
            
            
            24,094,530





See
      accompanying notes to financial statements




46


**GLOBAL
      FOOD TECHNOLOGIES, INC.**


**(A
      DEVELOPMENT STAGE COMPANY)**


**STATEMENT
      OF STOCKHOLDERS’ EQUITY (DEFICIT)**


**FOR
      THE PERIOD FROM JULY 25, 2001 (INCEPTION) TO DECEMBER 31,
      2007**





Common
                Stock
            
            AdditionalPaid-in
            
            DeficitAccumulatedDuring
                theDevelopment
            
            TotalStockholders’Shares
            
            Amount
            
            Capital
            
            Stage
            
            DeficiencyIssuance
                to founders at inception, at par
            
            
            10,333,333
            
            $
            1,033
            
            $
            (1,002
            )
            $
            -
            
            $
            31Sales
                of stock for cash
            
            
            298,706
            
            
            30
            
            
            154,008
            
            
            -
            
            
            154,038Premium
                on preferred stock
            
            
            -
            
            
            -
            
            
            (200,800
            )
            
            -
            
            
            (200,800
            )Net
                loss
            
            
            -
            
            
            -
            
            
            -
            
            
            (
                957,269
            )
            
            (957,269
            )Balance,
                December 31, 2001
            
            
            10,632,039
            
            
            1,063
            
            
            (47,794
            )
            
            (957,269
            )
            
            (1,004,000
            )Sales
                of stock for cash
            
            
            4,848,575
            
            
            485
            
            
            4,308,374
            
            
            -
            
            
            4,308,859Premium
                on preferred stock
            
            
            -
            
            
            -
            
            
            (12,500
            )
            
            -
            
            
            (12,500
            )Net
                loss
            
            
            -
            
            
            -
            
            
            -
            
            
            (3,584,307
            )
            
            (3,584,307
            )Balance,
                December 31, 2002
            
            
            15,480,614
            
            
            1,548
            
            
            4,248,080
            
            
            (4,541,576
            )
            
            (291,948
            )Sales
                of stock for cash
            
            
            2,155,353
            
            
            216
            
            
            3,865,864
            
            
            -
            
            
            3,866,080Premium
                on preferred stock
            
            
            -
            
            
            -
            
            
            (291,800
            )
            
            -
            
            
            (291,800
            )Net
                loss
            
            
            -
            
            
            -
            
            
            -
            
            
            (4,265,029
            )
            
            (4,265,029
            )Balance,
                December 31, 2003
            
            
            17,635,967
            
            
            1,764
            
            
            7,822,144
            
            
            (8,806,605
            )
            
            (982,697
            )Sales
                of stock for cash
            
            
            1,199,081
            
            
            120
            
            
            4,434,772
            
            
            -
            
            
            4,434,892Premium
                on preferred stock
            
            
            -
            
            
            -
            
            
            (37,501
            )
            
            -
            
            
            (37,501
            )Fair
                value of warrants issued for services
            
            
            -
            
            
            -
            
            
            3,400
            
            
            -
            
            
            3,400Net
                loss
            
            
            -
            
            
            -
            
            
            -
            
            
            (2,626,785
            )
            
            (2,626,785
            )Balance,
                December 31, 2004
            
            
            18,835,048
            
            
            1,884
            
            
            12,222,815
            
            
            (11,433,390
            )
            
            791,309Sales
                of stock for cash
            
            
            1,732,220
            
            
            173
            
            
            7,943,948
            
            
            -
            
            
            7,944,121Premium
                on preferred stock
            
            
            -
            
            
            -
            
            
            (271,123
            )
            
            -
            
            
            (271,123
            )Fair
                value of warrants issued for services
            
            
            -
            
            
            -
            
            
            21,825
            
            
            -
            
            
            21,825Fair
                value of stock issued for services
            
            
            82,598
            
            
            8
            
            
            371,683
            
            
            -
            
            
            371,691Conversion
                of preferred stock
            
            
            2,400,540
            
            
            240
            
            
            2,938,879
            
            
            -
            
            
            2,939,119Stock
                transferred in consummation of merger
            
            
            100,000
            
            
            10
            
            
            -
            
            
            -
            
            
            10Stock
                issued for merger related costs
            
            
            100,000
            
            
            10
            
            
            449,990
            
            
            -
            
            
            450,000Stock
                issued to round up split
            
            
            1,369
            
            
            -
            
            
            -
            
            
            -
            
            
            -Stock
                issued for media contract
            
            
            244,444
            
            
            24
            
            
            1,099,976
            
            
            -
            
            
            1,100,000Net
                loss
            
            
            -
            
            
            -
            
            
            -
            
            
            (11,598,728
            )
            
            (11,598,728
            )Balance,
                December 31, 2005
            
            
            23,496,219
            
            
            2,349
            
            
            24,777,993
            
            
            (23,032,118
            )
            
            1,748,224Sales
                of stock for cash
            
            
            724,958
            
            
            73
            
            
            3,111,338
            
            
            -
            
            
            3,111,411Stock
                issued for services
            
            
            37,065
            
            
            4
            
            
            166,782
            
            
            -
            
            
            166,786Fair
                value of incentive stock issued
            
            
            530,000
            
            
            53
            
            
            2,384,947
            
            
            -
            
            
            2,385,000Stock
                issued for media contract
            
            
            411,111
            
            
            41
            
            
            1,849,959
            
            
            -
            
            
            1,850,000Fair
                value of warrants issued
            
            
            -
            
            
            -
            
            
            2,982,098
            
            
            -
            
            
            2,982,098Net
                loss
            
            
            -
            
            
            -
            
            
            -
            
            
            (13,095,099
            )
            
            (13,095,099
            )Balance,
                December 31, 2006
            
            
            25,199,353
            
            
            2,520
            
            
            35,273,117
            
            
            (36,127,217
            )
            
            (851,580
            )Sales
                of stock for cash , net
            
            
            1,273,705
            
            
            127
            
            
            5,477,237
            
            
            -
            
            
            5,477,364Stock
                issued for services
            
            
            208,155
            
            
            21
            
            
            936,666
            
            
            -
            
            
            936,687Fair
                value of incentive stock issued
            
            
            460,000
            
            
            46
            
            
            2,069,954
            
            
            -
            
            
            2,070,000Stock
                issued for media contract
            
            
            166,668
            
            
            17
            
            
            749,983
            
            
            -
            
            
            750,000Fair
                value of warrants issued
            
            
            -
            
            
            -
            
            
            313,008
            
            
            -
            
            
            313,008Net
                loss
            
            
            -
            
            
            -
            
            
            -
            
            
            (9,014,927
            )
            
            (9,014,927
            )Balance,
                December 31, 2007
            
            
            27,307,881
            
            $
            2,731
            
            $
            44,819,965
            
            $
            (45,142,144
            )
            $
            (319,448
            )





See
      accompanying notes to financial statements




47




**GLOBAL
      FOOD TECHNOLOGIES, INC.**


**(A
      DEVELOPMENT STAGE COMPANY)**


**STATEMENTS
      OF CASH FLOWS**





**For The YearEndedDecember 31,2007**
            
            **For The YearEndedDecember 31,2006**
            
            **For The PeriodFrom July 25,2001 (Inception)To December 31,2007****CASH FLOWS
                FROM OPERATING ACTIVITIES:**Net
                loss
            
            $
            (9,014,927
            )
            $
            (13,095,099
            )
            $
            (45,142,144
            )Adjustments
                to reconcile net loss to net cash used in operating
                activities:Depreciation
            
            
            80,107
            
            
            116,072
            
            
            524,301Impairment
                of assets
            
            
            24,903
            
            
            -
            
            
            24,903Fair
                value of warrants issued for services
            
            
            313,008
            
            
            2,982,098
            
            
            3,320,331Fair
                value of stock issued for services
            
            
            936,687
            
            
            166,786
            
            
            1,475,164Fair
                value of incentive plan grants
            
            
            2,070,000
            
            
            2,385,000
            
            
            4,455,000Fair
                value of stock issued for media services
            
            
            750,000
            
            
            1,850,000
            
            
            3,700,000Impairment
                of BEST system
            
            
            -
            
            
            -
            
            
            3,157,111Merger
                related costs
            
            
            -
            
            
            -
            
            
            450,000Changes
                in assets and liabilities:Prepaid
                expenses
            
            
            (2,898
            )
            
            125,672
            
            
            (29,246
            )Other
                assets
            
            
            (13,389
            )
            
            -
            
            
            (24,889
            )Accounts
                payable and accrued liabilities
            
            
            (271,327
            )
            
            372,439
            
            
            428,911Cash
                used in operating activities
            
            
            (5,127,836
            )
            
            (5,097,032
            )
            
            (27,660,558
            )**CASH
                FLOWS USED IN INVESTING ACTIVITIES:**Acquisition
                of BEST system
            
            
            -
            
            
            -
            
            
            (3,157,111
            )Acquisition
                of fixed assets
            
            
            -
            
            
            (22,910
            )
            
            (591,836
            )Cash
                used in investing activities
            
            
            -
            
            
            (22,910
            )
            
            (3,748,947
            )**CASH
                FLOWS FROM FINANCING ACTIVITIES:**Proceeds
                from notes payable – related parties
            
            
            -
            
            
            740,000
            
            
            740,000Principal
                payments on notes payable – related parties
            
            
            -
            
            
            (200,000
            )
            
            (200,000
            )Sale
                of redeemable Series A preferred stock
            
            
            -
            
            
            -
            
            
            2,125,405Sale
                of common stock
            
            
            5,477,364
            
            
            3,111,411
            
            
            29,296,797Cash
                provided by financing activities
            
            
            5,477,364
            
            
            3,651,411
            
            
            31,962,202**INCREASE
                (DECREASE) IN CASH**
            
            
            349,528
            
            
            (1,468,531
            )
            
            552,697CASH
                – BEGINNING OF PERIOD
            
            
            203,169
            
            
            1,671,700
            
            
            -**CASH
                – END OF PERIOD**
            
            $
            552,697
            
            $
            203,169
            
            $
            552,697**SUPPLEMENTAL
                DISCLOSURES**Interest
                paid
            
            $
            4,000
            
            $
            2,000
            
            $
            97,970Noncash
                financing transactionsAccretion
                of redemption value of preferred stock
            
            $
            -
            
            $
            -
            
            $
            813,719Conversion
                of Series A preferred stock to common stock
            
            $
            -
            
            $
            -
            
            $
            2,939,119Stock
                transferred in consummation of merger
            
            $
            -
            
            $
            -
            
            $
            10





See
      accompanying notes to financial statements




48


GLOBAL
        FOOD TECHNOLOGIES, INC.
 (A
        DEVELOPMENT STAGE COMPANY)
 NOTES
        TO
        FINANCIAL STATEMENTS
 DECEMBER
        31, 2007 AND 2006
 
 **1.**
              **NATURE
                  OF BUSINESS**
 
 Global
        Food Technologies, Inc. (the “Company”, “we” or “us”) is a biotechnology company
        focused on food safety processes for the food processing industry by using
        its
        proprietary scientific processes to substantially increase the shelf life
        of
        commercially packaged seafood, poultry and meat, and 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
        Company’s ability to generate 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 has not generated revenues to date and continues to operate as
        a
        development stage entity.
 
 **Organization**
  Prior
        to
        August 2005, the Company was a public “shell” company and the Company’s assets
        were held, and operations conducted by, an unrelated private company. In
        August
        2005, the Company completed an asset purchase transaction and the former
        shell
        became the operating and publicly reporting company, with the private entity
        becoming the Company’s parent and majority stockholder. The Company’s stock is
        not listed on any exchange or the Over-the-Counter Bulletin Board. The
        shareholders of the public shell company obtained approximately 1% of the
        common
        stock of the post-transaction publicly reporting Company.
  **Going
        Concern**
 
 The
        accompanying financial statements have been prepared on the basis that the
        Company will continue as a going concern, which assumes the realization of
        assets and the satisfaction of liabilities in the normal course of business.
        Since inception, the Company has primarily been engaged in product development
        and pre-operational activities. No revenue has been generated to date and
        the
        Company has accumulated losses totaling $45,142,144 and negative cash flows
        from
        operations of $27,660,558 from inception to date through December 31,
        2007 , has
        negative working capital and is currently in default of certain
        debt.  The
        Company’s ability to continue as a going concern is predicated on its ability to
        raise additional capital and achieve sustained profitable operations. The
        uncertainty related to these conditions raises substantial doubt about the
        Company’s ability to continue as a going concern. The accompanying financial
        statements do not include any adjustments that might result from the outcome
        of
        this uncertainty.
 
 Based
        on
        our cash balance as of December 31, 2007, we estimate that we will need to
        raise
        additional capital in the amount of $7 million to cover our operating costs
        for
        fiscal year 2008 and to build two units of ***The
        iPura*** **TM**  ***System*** .
        If
        additional units are required to meet customer demand, we will need to raise
        additional funds. Any additional capital we raise may involve issuing additional
        shares of common stock or other equity securities, or obtaining debt financing.
        However, at this point, we have not specifically identified the type or sources
        of this funding. We are exploring commercial and joint venture financing
        opportunities and relationships with potential processor/customers with sale
        and
        lease-back arrangements.
 
 49
 
 **2.**
              **SUMMARY
                  OF SIGNIFICANT ACCOUNTING
                  POLICIES**
 
 The
        summary of significant accounting policies presented below is designed to
        assist
        in understanding the Company’s financial statements. Such financial statements
        and accompanying notes are the representations of Company management, who
        are
        responsible for their integrity and objectivity. These accounting policies
        conform to accounting principles generally accepted in the United States
        of
        America (“U.S. GAAP”) in all material respects, and have been consistently
        applied in preparing the accompanying financial statements. The Company is
        classified as a development stage enterprise under U.S. GAAP and has not
        generated significant revenues from its principal operations.
 
 ***Development
        Stage and Capital Resources***
 
 Since
        its
        inception, the Company has devoted substantially all of its efforts to business
        planning, research and development, recruiting management and technical staff,
        acquiring operating assets and raising capital. Accordingly, the Company
        is
        considered to be in the development stage as defined in Statement of Financial
        Accounting Standards (“SFAS”) No. 7, *Accounting
        and Reporting by Development Stage Enterprises.* The
        Company has not generated any revenues from its principal operations, and
        there
        is no assurance of future revenues.
 
 **Use
        of Estimates**
 
 The
        preparation of the financial statements in conformity with accounting principles
        generally accepted in the United States requires management to make estimates
        and assumptions that affect the reported amounts of assets and liabilities
        and
        disclosure of contingent assets and liabilities at the date of the financial
        statements and the reported amounts of revenues and expenses during the
        reporting period. Actual results could differ from those estimates.
 
 ***iPuraTM*** **(formerly
        the** “ **BEST”)
        Seafood Processing System –** The ***iPuraTM*** Seafood
        Processing System, the physical embodiment of our food processing technology,
        was completed, tested and available for commercial application (in a previous
        generation design) in 2005 and was capitalized at a construction cost of
        $3,157,111. Design, testing and support costs involved were expensed. In
        2005,
        mechanical and software upgrades were implemented to optimize the mechanical
        process. The improvements were so substantial that this prior model was deemed
        inappropriate for installation in a customer’s processing facility. As a result,
        the Company recorded an asset impairment charge of $3,157,111 for the year
        ended
        December 31, 2005. A new model is being constructed with increased capacity
        and
        simplified operating and maintenance parameters. Design, testing and support
        costs incurred on this model through December 31, 2007 have been included
        in
        research and development costs.
 
 **Concentration
        of Credit Risk**
 
 We
        place
        our cash with high quality financial institutions, and at times may exceed
        the
        Federal Deposit Insurance Corporation $100,000 insurance limit.
  50
 **Property
        and Equipment**
 
 Property
        and equipment are stated at cost. Depreciation is computed using the straight
        line method based on the estimated useful lives of the assets, all estimated
        at
        five years. There are no capitalized leasehold improvements.
 
 **Long-lived
        Assets**
  We
        account for the impairment and disposition of long-lived assets in accordance
        with SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived
        Assets.” In accordance with SFAS No. 144, long lived assets are to be held and
        reviewed for events or changes in circumstances that indicate that their
        carrying value may not be recoverable. We periodically review the carrying
        value
        of long lived assets to determine whether an impairment to such value has
        occurred. An
        impairment loss is recognized when the carrying amount of the long-lived
        asset
        is not recoverable and exceeds
        its fair value. The carrying amount of a long-lived asset is not recoverable
        if
        it exceeds the sum of the undiscounted cash flows expected to result from
        the
        use and eventual disposition of the asset. Any required impairment loss is
        measured as the amount by which the carrying amount of a long-lived asset
        exceeds its fair value and is recorded as a reduction in the carrying value
        of
        the related asset and a charge to operating results.
  In
        July
        2007, we wrote off $24,903 of laboratory equipment primarily due to the
        relocation of the research and development activity from Pocatello, Idaho
        to
        Hanford, California. No other impairments were recorded during the period
        from
        June 25, 2001 (Inception) through December 31, 2007.
 
 ***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 after the production process
        is
        viable and a working model of the equipment has been completed will be
        capitalized as long-lived assets.
 
 **Income
        Taxes**
 
 We
        account for income taxes under the SFAS No. 109, “Accounting for Income Taxes”.
        Deferred tax assets and liabilities are measured using enacted tax rates
        expected to apply to taxable income in the years in which those temporary
        differences are expected to be recovered or settled. Under SFAS 109, the
        effect
        on deferred tax assets and liabilities of a change in tax rates is recognized
        in
        income in the period that includes the enactment date. A
        valuation allowance related to a deferred tax asset is recorded when it is
        more
        likely than not that some or all of the deferred tax asset will not be
        realized.
  51
 In
        July
        2006, the FASB issued FASB Interpretation No. 48, *Accounting
        for Uncertainty in Income Taxes* ("FIN 48"). FIN 48 is an interpretation of SFAS No. 109, *Accounting
        for Income Taxes* ,
        and it
        seeks to reduce the diversity in practice associated with certain aspects
        of
        measurement and recognition in accounting for income taxes. FIN 48
        prescribes a recognition threshold and measurement attribute for the financial
        statement recognition and measurement of a tax position that an entity takes
        or
        expects to take in a tax return. Additionally, FIN 48 provides guidance on
        de-recognition, classification, interest and penalties, accounting in interim
        periods, disclosure, and transition. Under FIN 48, an entity may only
        recognize or continue to recognize tax positions that meet a "more likely
        than
        not" threshold. We adopted FIN 48 on January 1, 2007. As a result of
        adoption of FIN 48, we recognized no liability for unrecognized income tax
        benefits. Additionally, we recognized no interest and penalties related to
        uncertain tax positions and as of the year ended December 31, 2007, we have
        no accrued interest related to uncertain tax positions. The tax years 2003
        through 2006 remain open to examination by the major taxing
        jurisdictions.
  **Fair
          Value of Financial Instruments**
 
 The
        carrying amounts of our financial instruments, including cash, accounts payable
        and accrued liabilities approximate their fair value as of December 31, 2007.
        The fair value of the Company’s notes payable to related parties approximate
        their carrying value as the stated interest rates of these instruments reflect
        rates which are otherwise currently available to the Company.
 
 **Loss
        Per Share**
 
 SFAS
        No.
        128, “Earnings per Share”, requires presentation of basic earnings per share
        (“Basic EPS”) and diluted earnings per share (“Diluted EPS”). Basic earnings
        (loss) per share is computed by dividing earnings (loss) available to common
        stockholders by the weighted average number of common shares outstanding
        during
        the period. Diluted earnings per share reflects the potential dilution, using
        the treasury stock method, that could occur if securities or other contracts
        to
        issue common stock were exercised or converted into common stock or resulted
        in
        the issuance of common stock that then shared in our earnings. In computing
        diluted earnings per share, the treasury stock method assumes that outstanding
        options and warrants are exercised and the proceeds are used to purchase
        common
        stock at the average market price during the period. Options and warrants
        will
        have a dilutive effect under the treasury stock method only when the average
        market price of the common stock during the period exceeds the exercise price
        of
        the options and warrants.
 
 The
        4,524,367 and 3,804,458 stock purchase warrants outstanding at December 31,
        2007
        and 2006, respectively, were not used in the computation of loss per share
        as
        their effect would be antidilutive.
 
 **Stock-based
        compensation**
 
 In
        December 2004, the Financial Accounting Standards Board (“FASB”) issued SFAS No.
        123R, “Share-Based Payment”. This statement requires that the cost resulting
        from all share-based payment transactions be recognized in the financial
        statements. This statement establishes fair value as the measurement objective
        in accounting for share-based payment arrangements and requires all entities
        to
        apply a fair-value based measurement method in accounting for share-based
        payment transactions with employees except for equity instruments held by
        employee share ownership plans. Effective January 1, 2006, the Company adopted
        the fair value recognition provisions of SFAS No. 123R, using the modified
        prospective method. Under this method, the provisions of SFAS No. 123R apply
        to
        all awards granted or modified after the date of adoption and all previously
        granted awards not yet vested as of the date of adoption. The initial adoption
        of this standard had no effect on the Company’s financial
        statements.
  52
 Shares,
        warrants and options issued to non-employees for services are accounted for
        in
        accordance with SFAS No. 123R and Emerging Issues Task Force Issue No. 96-18
        (“EITF 96-18”), “Accounting for Equity Instruments that are Issued to Other Than
        Employees for Acquiring or In Conjunction with Selling Goods or Services”
whereby the fair value of such option and warrant grants is determined using
        the
        Black-Scholes Model at the earlier of the date at which the non-employee’s
        performance is completed or a performance commitment is reached.
 
 **Recent
        Accounting Pronouncements**
 
 In
        September 2006, the FASB issued SFAS No. 157, *"Fair
        Value Measurements,"* which
        defines fair value, establishes a framework for measuring fair value in
        accordance with GAAP, and expands disclosures about fair value measurements.
        SFAS No. 157 simplifies and codifies related guidance within GAAP, but does
        not
        require any new fair value measurements. The guidance in SFAS No. 157 applies
        to
        derivatives and other financial instruments measured at estimated fair value
        under SFAS No. 133 and related pronouncements. SFAS No. 157 is effective
        for
        financial statements issued for fiscal years beginning after November 15,
        2007,
        and interim periods within those fiscal years. Management does not expect
        the
        adoption of SFAS No. 157 to have a significant effect on the Company's financial
        position or results of operations.
 
 On
        February 15, 2007, the FASB issued SFAS No. 159, *“The
        Fair Value Option for Financial Assets and Financial Liabilities - Including
        an
        Amendment of FASB Statement No. 115.”* This
        standard permits an entity to measure many financial instruments and certain
        other items at estimated fair value.  Most of the provisions of SFAS
        No. 159 are elective; however, the amendment to SFAS No. 115 “ *Accounting
        for Certain Investments in Debt and Equity Securities”* applies
        to all entities that own trading and available-for-sale securities. The fair
        value option created by SFAS No. 159 permits an entity to measure eligible
        items
        at fair value as of specified election dates. Among others, eligible items
        exclude (1) financial instruments classified (partially or in total) as
        permanent or temporary stockholders’ equity (such as a convertible debt security
        with a non-contingent beneficial conversion feature) and (2) investments
        in
        subsidiaries and interests in variable interest entities that must be
        consolidated. A for-profit business entity will be required to report unrealized
        gains and losses on items for which the fair value option has been elected
        in
        its statements of operations at each subsequent reporting date. The fair
        value
        option (a) may generally be applied instrument by instrument, (b) is irrevocable
        unless a new election date occurs, and (c) must be applied to the entire
        instrument and not to only a portion of the instrument. SFAS No. 159 is
        effective as of the beginning of the first fiscal year that begins after
        November 15, 2007. Early adoption is permitted as of the beginning of the
        previous fiscal year provided that the entity (i) makes that choice in the
        first
        120 days of that year, (ii) has not yet issued financial statements for any
        interim period of such year, and (iii) elects to apply the provisions of
        SFAS
        No. 157 *“Fair
        Value Measurements”.* Management does not expect the adoption of SFAS No. 157 to have a significant
        effect on the Company's financial position or results of
        operations.
 
 On
        December 4, 2007, the FASB issued SFAS No. 141 (R), *“Business
        Combinations.”* SFAS
        No. 141(R) will significantly change the accounting for business combinations
        such that an acquiring entity will be required to recognize all the assets
        acquired and liabilities assumed in a transaction at the acquisition-date
        fair
        value with limited exceptions. SFAS 141(R) will change the accounting treatment
        for certain specific items, including:
 
 Acquisition
        costs will be generally expensed as incurred;
  53
  Noncontrolling
        interests (formerly known as "minority interests" — see SFAS No. 160 discussion
        below) will be valued at fair value at the acquisition date;
 
 Acquired
        contingent liabilities will be recorded at fair value at the acquisition
        date
        and subsequently measured at either the higher of such amount or the amount
        determined under existing guidance for non-acquired contingencies;
 
 In-process
        research and development will be recorded at fair value as an indefinite-lived
        intangible asset at the acquisition date;
 
 Restructuring
        costs associated with a business combination will be generally expensed
        subsequent to the acquisition date; and
 
 Changes
        in deferred tax asset valuation allowances and income tax uncertainties after
        the acquisition date generally will affect income tax expense.
  FAS
        No.
        141(R) also includes a substantial number of new disclosure requirements
        and
        applies prospectively to business combinations for which the acquisition
        date is
        on or after the beginning of the first annual reporting period beginning
        on or
        after December 15, 2008. Earlier adoption is prohibited.  Management does
        not believe such statement will have any impact on its future financial
        statements.
 
 Also,
        on
        December 4, 2007, the FASB issued SFAS No. 160, *“Noncontrolling
        Interests in Consolidated Financial Statements - An Amendment of ARB No.
        51.”* SFAS
        No. 160 establishes new accounting and reporting standards for the
        noncontrolling interest in a subsidiary and for the deconsolidation of a
        subsidiary. Specifically, this statement requires the recognition of a
        noncontrolling interest (minority interest) as equity in the consolidated
        financial statements and separate from the parent's equity. The amount of
        net
        income attributable to the noncontrolling interest will be included in
        consolidated net income on the face of the income statement. SFAS No. 160
        clarifies that changes in a parent's ownership interest in a subsidiary that
        do
        not result in deconsolidation are equity transactions if the parent retains
        its
        controlling financial interest. In addition, this statement requires that
        a
        parent recognize a gain or loss in net income when a subsidiary is
        deconsolidated. Such gain or loss will be measured using the fair value of
        the
        noncontrolling equity investment on the deconsolidation date. This statement
        also includes expanded disclosure requirements regarding the interests of
        the
        parent and its noncontrolling interest.  SFAS No. 160 is effective for
        fiscal years, and interim periods within those fiscal years, beginning on
        or
        after December 15, 2008, and earlier adoption is
        prohibited.  Management does not believe such statement will have any
        impact on its future financial statements.
 
 Other
        recent accounting pronouncements issued by the FASB (including its Emerging
        Issues Task Force), the AICPA, and the SEC did not or are not believed by
        management to have a material impact on the Company's present or future
        consolidated financial statements.
 
 **Reclassifications**
 
 Certain
        reclassifications have been made to the fiscal 2006 financial statements
        to
        conform to the 2007 presentation.
  54
  **3.**
              **NOTES
                  PAYABLE TO RELATED PARTIES**
 
 On
        April
        3, 2006, we arranged a 30 day bridge loan in the amount of $350,000 from
        a
        non-principal shareholder. The loan bears interest at eight percent (8%)
        per
        annum plus an additional five points 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-Merton option pricing model with the following
        assumptions: expected volatility of 50%, a risk-free interest rate of 4.8%,
        an
        expected term of 2 years, and 0% dividend yield. In July
        2006, $100,000 of principal was repaid. The remaining balance of $250,000
        is due
        on demand. The loan is guaranteed by the President of the Company.
 
 In
        April
        and May of 2006, we arranged for three loans aggregating $290,000 from a
        Director of the Company. Two of the loans aggregating $190,000 are demand
        loans
        and bear interest of 8% plus an additional five points. The third loan for
        $100,000 matured July 18, 2006, and was repaid on its due date. The remaining
        balance of $190,000 is due on demand. Additional consideration for the 3
        loans
        was approved by the Board in August 2006, in the form of warrants to purchase
        29,000 shares of our common stock. The warrants are exercisable at $4.50 per
        share for two (2) years from the date of repayment. The Company determined
        the
        fair value of the warrants to be $40,803 based
        upon the Black-Scholes-Merton option pricing model with the following
        assumptions: expected volatility of 50%, a risk-free interest rate of 4.8%,
        an
        expected term of 2 years, and 0% dividend yield. In
        August 2006, we arranged for a fourth loan, a 90 day bridge loan, for $100,000
        from the Director bearing interest at 8%. The loan was extended in November
        2006, May 2007 and November 2007 for an additional six months maturing in
        May
        2008. Such loans are unsecured.
 
 **4.** **Redeemable
        Preferred Stock**
 
 We
        are
        authorized to issue Twenty Million (20,000,000) shares of Preferred Stock
        with a
        par value of $.0001. In 2001, Eight Million (8,000,000) were designated “Series
        A” Preferred Stock and 2,440,540 shares were sold for cash to investors at
        prices ranging from $0.75 to $4.50 per share through 2005, and such shares
        were
        outstanding at December 31, 2004. During 2005, 40,000 shares were redeemed
        for
        $45,000 cash and 2,400,540 shares were converted into 2,400,540 shares of
        our
        Common Stock. All shares were redeemed during 2005, and there was no Preferred
        Stock outstanding as of December 31, 2006 or 2005.
 
 The
        redemption feature required a demand by a shareholder of Series A Preferred
        Stock of sixty (60) days notice prior to the end of the calendar year for
        all or
        a portion of the Series A Preferred Stock held at redemption premiums of
        125% in
        2004, 150% in 2005 and 175% in 2006.
 
 We
        accreted the redemption value over the period on a straight-line basis with
        a
        charge to additional paid in capital and a credit to redeemable Series A
        Preferred Stock. The Series A Preferred Stock was originally classified as
        a
        liability and not in Stockholders’ equity on our historical balance sheets prior
        to the acquisition and merger discussed in Note 1. The Series A Preferred
        Stock
        transactions are set forth in the following table:
  55
 Fiscal
                  Year
                
                
                
                Sale proceeds
                
                Redemption
                  Premium
                
                Series A
                  Preferred
                  Shares
                  Outstanding2001
                
                
                Sale
                    at $.75 per share
                
                $
                803,200
                
                $
                200,800
                
                
                1,070,9332002
                
                
                Sale
                    at $.75 per share
                
                $
                50,000
                
                $
                12,500
                
                
                66,6672003
                
                
                Sale
                    at $.93 per share
                
                $
                1,167,205
                
                $
                291,800
                
                
                1,269,6072005
                
                
                Sale
                    at $4.50 per share
                
                $
                150,000
                
                $
                37,501
                
                
                33,333Balance,
                    December, 31 2005
                
                $
                2,170,405
                
                $
                542,601
                
                
                2,440,5402005
                
                
                Accretion
                
                
                
                
                $
                271,1232005
                
                
                Redemption
                    by estate
                
                $
                (30,000
                )
                $
                (15,000
                )
                
                (40,000
                )2005
                
                
                Conversion
                
                $
                (2,140,405
                )
                $
                (798,724
                )
                
                (
                    2,400,540
                )Balance
                    September 30, 2005
                
                $
                0
                
                $
                0
                
                
                0
  **5.
        STOCKHOLDERS’ DEFICIT**
  **Stock
        Issuances**
  In
        2006,
        we commenced a private placement of our securities to accredited investors
        in
        conformity with Rule 506 of Regulation D of the Securities Act of 1933, as
        amended. The initial form of offering consisted of 500,000 units, each
        consisting of two shares of Common Stock and one warrant to purchase one
        share
        of Common Stock for a maximum offering price of $4,500,000. Subsequently,
        the
        offering has been modified to include more or less warrants but the selling
        price remained constant at $4.50 per share or per unit. In addition, we have
        conducted offshore sales of common stock at a purchase price of $4.50 per
        share,
        plus warrant coverage that varied from time to time, pursuant to Regulation
        S of
        the Securities Act of 1933, as amended.
 
 In
        2007,
        a total of 1,273,705 shares of common stock and 565,522 warrants to purchase
        common stock were issued in private placements for total proceeds of $5,477,364,
        net of commissions of $254,228. All stock and unit sales were at $4.50 per
        share
        or unit.
 
 **Stock
        Incentive Plan**
 
 In
        November 2006, we adopted a stock incentive plan to incentivize employees
        and
        consultants with awards of stock options, stock appreciation rights and
        restricted stock grants. There are a maximum of 3,000,000 shares of Common
        Stock
        subject to award under the plan and the awards must be made at fair market
        value
        at the date of the award. In 2006, we awarded grants of 530,000 shares of
        restricted stock to 26 individuals upon adoption of the Plan and recorded
        a
        compensation expense of $2,385,000. In 2007, we awarded 460,000 shares to
        16
        individuals and recorded a compensation expense of $2,070,000. All shares
        issued
        under the plan were valued at $4.50 per share. The shares become fully vested
        upon registration of the shares with the Securities and Exchange Commission
        or
        upon the development of a listing in a market initiated by us.
  56
 **Officers
        and Directors Stock Compensation**
 
 In
        2006,
        the Board of Directors granted warrants to purchase common stock to officers
        and
        certain Directors as one-time additional compensation. The warrants were
        fully
        exercisable at date of grant, were exercisable at $5.00 per share and for
        a term
        of 5 years. Grants were to 5 individuals for a total of 500,000 shares, with
        immediate vesting. Using a Black-Scholes-Merton option pricing model using
        the
        following weighted average assumptions, the warrants were determined to have
        an
        total fair value of $1,033,500 which was charged to compensation expense
        at the
        date of grant. There were no grants of options or warrants to officers or
        Directors in 2007.
 Fair
                    value of warrants at grant date
                
                $
                2.067Dividend
                    vield
                
                
                0Expected
                    volatility
                
                
                50
                %Risk-free
                    interest rate
                
                
                4.57
                %Expected
                    term of the warrant
                
                
                5
                    years
 A
        summary
        of the status of this compensation arrangement is as follows:
 
 Shares
              
              ExercisePrice
              
              RemainingContractualTerm
              
              AggregateIntrinsicValueOutstanding
                  at January 1, 2007
              
              
              500,000
              
              $
              5.00Granted
              
              
              -
              
              
              -Exercised
              
              
              -
              
              
              -Forfeited
                  or expired
              
              
              -
              
              
              -Outstanding
                  at December 31, 2007
              
              
              500,000
              
              $
              5.00
              
              
              3.8
              
              $
              0Exercisable
                  at December 31, 2007
              
              
              500,000
              
              $
              5.00
              
              
              3.8
              
              $
              0
 
 **Warrants**
 
 At
        December 31, 2005, we had issued 2,122,335 warrants, exercisable from 2 to
        5
        years at $4.50 to $5.70, in conjunction with sales of common stock. We continued
        this practice in 2006 and as of December 31, 2006, had issued an additional
        236,095 warrants exercisable at $4.50 for 2 years in connection with our
        equity
        offerings. In 2005, warrants to acquire 266,666 shares at $4.50 were issued
        for
        services valued at $78,266, of which $48,220 was amortized to expense in
        2006.
        During 2006, 1,446,028 warrants were issued for services, interest on short
        term
        loans and relating to fund raising efforts, all of these warrants are
        exercisable at $5.00 per share. A total of 22,028 warrants, exercisable for
        two
        years, were issued for fund raising activities. A total of 1,360,000 warrants
        were issued to 13 individual consultants, employees and directors for management
        services, and are exercisable for 5 years. The fair value of all of the warrants
        issued in 2006 aggregated $2,928,256, of which $27,088 was considered a cost
        of
        fund raising and the remaining $2,901,168 was charged to operations. The
        Company
        used a Black-Scholes pricing model with the following assumptions to determine
        the fair value of the warrants: expected volatility of 50%, a risk-free interest
        rate of 4.6%, an expected term of 5 years, and 0% dividend yield. No warrants
        have been exercised. At December 31, 2006, there were 3,804,458 warrants
        outstanding. See Note 3 for 64,000 warrants issued as additional interest
        on
        notes payable.
  57
 In
        2007,
        we extended the expiration date of the older warrants to December 31, 2008
        and
        reduced the exercise price of some warrants from $5.70 to $4.50 per
        share.
 
 During
        2007, we issued an additional 565,522 warrants, 43,877 exercisable at $5.00
        for
        2 years and 521,644 exercisable at $7.00 for 3 years in connection with our
        equity offerings.
 
 During
        2007, 154,387 warrants were issued for services and relating to fund raising
        efforts, all of these warrants are exercisable at $5.00 per share, 4,388
        warrants are exercisable for two years and 150,000 warrants are exercisable
        for
        5 years. The fair value of all of the warrants issued in 2007 aggregated
        $313,008. The Company used a Black-Scholes-Merton pricing model with the
        following weighted average assumptions to determine the fair value of the
        warrants: expected volatility of 50%, a risk-free interest rate of 4.9%,
        an
        expected term of 4.4 years, and 0% dividend yield. See Note 3 for warrants
        issued as additional interest on notes payable.
 
 At
        December 31, 2007, warrants outstanding were as follows:
 
 Number of Sharesunder Warrants
              
              Weighted AverageExercise PriceWarrants
                  outstanding at January 1, 2006
              
              
              2,122,335
              
              $
              5.15Warrants
                  granted
              
              
              1,682,123
              
              
              4.98Warrants
                  expired
              
              
              -
              
              
              -Warrants
                  outstanding at December 31, 2006
              
              
              3,804,458
              
              
              4.71Warrants
                  granted
              
              
              719,909
              
              
              6.45Warrants
                  expired
              
              
              -
              
              
              -Warrants
                  outstanding at December 31, 2007
              
              
              4,524,367
              
              $
              4.99
 
 The
        following table summarizes information about warrants outstanding at December
        31, 2007:
 
 Warrants
                  Outstanding and Exercisable
  Number of SharesUnder
                  Warrants
              
              Exercise Price
              
              Expiration Date
              
              Weighted AverageExercise
                  Price1,855,670
              
              $                    4.50
              
              2008-2010
              
              $                        4.50258,122
              
              $                    5.00
              
              2008
              
              $                        5.0066,666
              
              $                    4.50
              
              2010
              
              $                        4.501,360,000
              
              $                    5.00
              
              2011
              
              $                        5.00521,644
              
              $                    7.00
              
              2010
              
              $                        7.00150,000
              
              $                    5.00
              
              2012
              
              $                        5.0048,265
              
              $                    5.00
              
              2009
              
              $                        5.0064,000
              
              $                    4.50
              
              (1)
              
              $                        4.50200,000
              
              $                    4.50
              
              (2)
              
              $                        4.504,524,367
              
              
              
              
              
              $                        4.99
   (1)
              Expires
                  two years after repayment of principal on notes giving rise to
                  the
                  warrants
 (2)
              Warrants
                  expire 2 years after commencement of trading of common
                  shares
  58
 **Recapitalization**
 
 Following
        the asset purchase transaction, the Company amended the agreements with our
        private parent company and the Company’s former shell stockholders to reduce the
        total number of shares of common stock outstanding immediately following
        the
        asset purchase transaction to 23,389,506. These amendments were made to
        recapitalize the Company in lieu of consummating a one-for-three reverse
        stock
        split. All shares and per share amounts reflect the recapitalization as of
        the
        first period presented.
 
 **6.
        RELATED PARTY TRANSACTIONS** ****
 
 In
        June
        2003, we relocated our scientific and engineering office from the manufacturing
        facility to a building owned by Mark Terry and Keith Meeks, who are two of
        our
        founders and officers. In July 2006, the engineering office was relocated,
        the
        building vacated and the rental arrangement was terminated. We incurred $9,786
        and $51,726 of rent expense in 2006 and from inception to date.
 
 In
        November 2005, we established an office in Newport Beach, California, to
        provide
        space for our Chief Financial Officer. These premises were vacated in September
        2007 and the arrangement was terminated. We incurred $20,590 and $41,910
        of rent
        expense in 2007 and from inception to date.
 
 On
        August
        11, 2005, we entered into a Stock Purchase Agreement with Solvis Group, Inc.
        and
        Pierce Mill Associates, Inc., pursuant to which we issued 520,000 shares
        of our
        common stock to Solvis, which were valued at $2,340,000. At such time, Mr.
        Fryer
        was a director of Dalrada Financial Corporation, which controlled Solvis,
        and
        was also one of our directors. In 2005, the Stock Purchase Agreement with
        Solvis
        was amended to reduce the number of shares granted to Solvis to 100,000 shares,
        which were valued at $450,000 and charged to expenses as a cost of the
        Transaction.
 
 In
        September 2005, we retained SC Capital Partners LLC (SCCP) to provide advisory
        services and transaction assistance on corporate matters, financing transactions
        and merger and acquisition transactions for a period of one year. The agreement
        included fees of 3% for assistance in raising sub-debt mezzanine financing,
        10%
        cash and 10% warrants and 3% non-accountable expenses for assistance in raising
        equity capital. Our former interim CEO and a current member of our Board
        of
        Directors is a principal of SCCP. The retainer was paid for the duration
        of the
        contract and a total fee of $18,260 for raising equity capital was accrued
        in
        2006 and paid in January 2007. This arrangement has expired.
 
 **7.
        MEDIA AGREEMENT**
 
 On
        September 30, 2005, we entered into a three year contract for media production
        and distribution services with Global Media Fund, LLC, which will provide
        nationally syndicated newspaper and radio features about us, our BEST food
        processing systems and food safety issues to 10,000 newspapers and 6,000
        radio
        stations. The total cost for the contract is $4,500,000. The Company agreed
        to
        pay (i) $2,250,000 in cash or unrestricted common stock of the Company and
        (ii)
        $2,250,000 in shares of restricted common stock of Company. The $2,250,000
        payable in shares of restricted common stock are to be paid in shares valued
        at
        90% of market price at the time of issuance (but not less than the market
        price
        of the unrestricted shares) in 12 quarterly installments which began in January
        2006. The maximum share commitment for restricted shares at the minimum price
        is
        500,000 shares. The contract can be cancelled at any time with no obligation
        to
        continue the quarterly payments.
  59
 In
        2005,
        the Company paid $50,000 in cash and issued 244,444 shares of unrestricted
        stock
        valued $4.50 per share, for a total of approximately $1,100,000, which was
        charged to marketing expense at the date the common shares were issued.
 
 In
        2006,
        244,444 shares of unrestricted common stock, valued at $4.50 per share, or
        $1,100,000, and 166,667 shares of restricted common stock, valued at $4.50
        per
        share, or approximately $750,000, were issued pursuant to the media agreement,
        all of which was charged to marketing expense at the date the common shares
        were
        issued.
 
 In
        2007,
        166,668 shares of restricted stock, valued at $4.50 per share, or approximately
        $750,000, were issued and charged to marketing expense at the date the common
        shares were issued.
 
 **8.
        COMMITMENTS AND CONTINGENCIES**
 
 **Operating
        Leases**
 
 We
        lease
        all our headquarters and engineering facilities in Hanford, California. We
        also
        lease automobiles for officers and office equipment. Future minimum lease
        payments required on these non-cancelable operating leases are as
        follows:
 Year
                    ended December 31,
                
                Amount2008
                
                $
                213,0132009
                
                
                152,8212010
                
                
                139,4432011
                
                
                134,9742012
                
                
                134,1562013
                
                
                138,1822014
                
                
                118,010$
                1,030,599
  **Other**
 
 We
        have
        issued purchase orders for components and engineering for the iPura1 system,
        of
        which $ 562,881 remains unpaid and committed at December 31, 2007.
 
 **9.
        INCOME TAXES**
 
 We
        do not
        have significant income tax expense or benefit from inception through December
        31, 2007. Our tax net operating losses have resulted in a deferred tax asset
        with a 100% valuation allowance on such asset at December 31, 2007. Our tax
        net
        operating loss carryforward approximates $25 million at December 31, 2007.
        Some
        or all of such loss carryforward may be limited by Section 382 of the Internal
        Revenue Code.
  60
 The
        income tax effect of temporary differences between financial and tax reporting
        gives rise to the deferred income tax assets at December 31, 2007 and 2006
        as
        follows:
 2007
                
                2006Net
                    operating loss carryforward
                
                $
                25,938,284
                
                $
                18,334,084Less
                    valuation allowance
                
                $
                (25,938,284
                )
                $
                (18,334,084
                )Net
                    deferred tax asset
                
                $
                -
                
                $
                -
  Reconciliation
        of the effective income tax rate to the United States statutory income tax
        rate
        for the years ended December 31, 2007 and 2006 is as follows:
 2007
                
                2006Tax
                    benefit at the U.S. statutory income tax rate
                
                
                (34.0
                )%
                
                (34.0
                )%Increase
                    in the valuation allowance
                
                
                34.0
                %
                
                34.0
                %Effective
                    income tax rate
                
                
                -
                %
                
                -
                %
 
 **10.
        SUBSEQUENT EVENTS**
  On
        January 1, 2008, the Company issued 41,667 shares of common stock as part
        of the
        Media Agreement.
  During
        the period January 1, 2008 through February 29, 2008, the Company sold 198,586
        shares of its common stock for total proceeds of $893,635 at a price of $4.50
        per share.
  In
        January 2008, the Board awarded stock grants to certain employees, consultants
        and advisors as compensation for services. A total of 174,322 shares were
        awarded with a fair market value of $784,449 which will be recorded as
        compensation expense in the first quarter of 2008. Of these shares 45,000
        were
        awarded in the form of restricted stock under our Stock Incentive Plan – 2006.
        One advisor also received 150,000 warrants to purchase common stock at he
        price
        of $5.00 per share for a period of 5 years. This warrant has an imputed value
        of
        $308,827 which will be recorded as compensation expense in the first quarter
        of
        2008.
 
 In
        January 2008, an additional $100,000 was borrowed from a Director by way
        of a
        margin loan from his broker. The interest will be billed directly from the
        broker at statutory margin rates. The loan was repaid in 30 days. See Note
        3 for
        other loans from this Director.
 
 The
        Board
        in its January 2008 meeting awarded stock to certain Directors. The continued
        faithful financial support by one Director in the form of loans when necessary
        without regard to payment at maturity was recognized by an award of 78,000
        shares of common stock representing a 20% equity coverage on the aggregate
        amount loaned. New independent Directors are granted an initial award upon
        joining the Board and therefore the new Director in 2007 was granted 25,000
        shares of common stock. Another independent Director granted an initial award
        of
        8,333 shares in 2005 was granted an additional award of 16,667 shares of
        common
        stock to bring him to parity with the current level of initial Director
        compensation.
 61