SECURITIES AND EXCHANGE COMMISSION
                        WASHINGTON, D. C. 20549

                             FORM 10-KSB
                             (Mark One)
        [X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                    SECURITIES EXCHANGE ACT OF 1934

                 For the year ended December 31, 2000

                     Commission File No. 0-19047


                     FOOD TECHNOLOGY SERVICE, INC.
           (Exact name of Registrant as specified in its charter)

                FLORIDA                                    59-2618503
   (State of incorporation or organization)   (Employer Identification Number)

   502 Prairie Mine Road, Mulberry, FL         33860
   (Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (863)425-0039
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Common Stock, $.01
par value

    Indicate by check mark whether the Registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

                            Yes               No
                             X
                           -----             -----

    Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-B is not contained herein, 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.  [ ]

    The Registrant's operating revenues for its most recent fiscal year were
$387,966.

    As of December 31, 2000, 10,333,201 shares of the Registrant's Common Stock
were outstanding, and the aggregate market value of the voting stock held by
non-affiliates (4,877,757 shares) was approximately $1.09 based on the
market price at that date.


                          DOCUMENTS INCORPORATED BY REFERENCE

                                       None

<PAGE>




                       TABLE OF CONTENTS


PART I                                                                 PAGE NO.

Item 1   Business ..........................................................1

Item 2   Properties.........................................................5

Item 3   Legal Proceedings..................................................6

Item 4   Submission of Matters to a Vote of Security Holders................6

PART II

Item 5   Market for Registrant's Common Equity and Related
         Stockholder Matters................................................7

Item 6   Management's Discussion and Analysis...............................7

Item 7   Financial Statements.............................................. 9

Item 8   Changes in and Disagreements with Accountants on
         Accounting and Financial Disclosure............................... 9

PART III

Item 9   Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act.........................10


Item 10  Executive Compensation............................................11

Item 11  Security Ownership of Certain Beneficial Owners and Management....14

Item 12  Certain Relationships and Related Transactions....................15

Item 13  Exhibits and Report on Form 8-K...................................15

<PAGE>





                                 PART I

Item 1. Business

    Food Technology Service, Inc., (the "Company"), was organized
as a Florida corporation on December 11, 1985. The Company owns and operates
an irradiation facility located in Mulberry, Florida, that uses gamma
radiation produced by Cobalt 60 to treat or process various foods for
insect disinfestation, shelf life extension and control of certain disease
causing microorganisms. Operations commenced in January 1992 upon completion
of its facility.

    Since 1992 numerous delays have been encountered in gaining the necessary
FDA and USDA approvals, and revenues to date have been nominal as a result.
Revenues for 2000 were $1,412,297 of which approximately 60% was attributable
to the processing of packaging materials, 15% for personal care products, and
15% for miscellaneous food products.

    The benefits of irradiation in preventing food-borne illness are well
known. Food irradiation is supported by the United States Department of
Agriculture ("USDA"), the World Health Organization, the United States Public
Health Service, the American Medical Association, the Institute of Food
Technologists, and reputable scientific and medical organizations throughout
America. In addition, more than forty countries have approved the irradiation
of food products. The United States Food & Drug Administration ("FDA") has
approved irradiation as a safe and effective means of processing a variety of
foods. To date, the FDA has approved the irradiation of (i) pork, to control
trichinosis; (ii) poultry and shell eggs, for the control of disease-causing
pathogens; (iii) spices, for sterilization; (iv) all fresh fruits and
vegetables, for insect disinfestation, and to delay maturation, which extends
the shelf life of many fresh fruits and vegetables; and (v) uncooked meat to
control pathogens and extend shelf life.

    The Company expects that its success will be dependent upon the processing
of poultry, meat and shellfish. The USDA published the final rules for
irradiation of meat and meat products on February 22, 2000. The Company
believes these rules will positively impact the Company's business in the
long term, to produce profitable results for the Company's shareholders.

    Management is working diligently with meat processors, food distributors
and with major retailers to get them to use this technology, which can protect
consumers from dangerous pathogens. On February 16, 1999 the Company signed a
Distribution and Sale Agreement with Colorado Boxed Beef Company with the
purpose and intent to promote the marketing and sale of irradiated meat and
poultry. The Company continues to work with Colorado Boxed Beef to introduce
marketing programs that would allow irradiated beef/poultry to be sold in the
marketplace. Food Technology Service presently irradiates meat under a special
FDA approval, for the NASA Astronauts. There are currently several petitions
awaiting FDA approval. The shellfish industry is waiting for FDA approval for
shellfish. The USDA and the Food Irradiation Processing Alliance, of which the
Company is a member, has petitioned the FDA to allow the irradiation of
processed meats to control Listeria. The USDA has also petitioned the FDA to
raise the maximum dose allowed for poultry and remove the requirement for
non-barrier packaging for poultry.

    The Company does not intend to produce or sell foods. The Company will
market its irradiation process to growers and producers, as a substitute
for and/or a complement to other food processing methods, such as canning,
freezing, heat pasteurization and fumigation. The cost to a customer of the
Company's irradiation services will vary depending on such factors as the
amount of time the customer's food products occupy the radiation chamber,
the costs and availability of competing methods of food processing, and
general supply and demand and other economic factors.

<PAGE>

Processing Plant Operations

Procedures

    Products to be irradiated are placed onto the conveying system. Some
products, because of their density and pallet size, may have to be depalletized
for radiation processing to ensure that the appropriate radiation dose is
applied to the product.  The conveying system automatically moves the product
through the irradiation chamber at a predetermined rate specified by the
Company's personnel.  The positioning of the product relative to the radiation
source and the distance of the product from the radiation source are fixed. The
proper radiation dose is determined by the duration of the exposure of the
product to the radiation source, which is carefully controlled to provide the
desired dose.  The exposure time required to achieve the desired dose will
depend on the amount of Cobalt 60 in use and the density of the material
exposed.

    Like an airport x-ray system, the process does not make the food
radioactive. The food is safe to eat immediately after processing.

    The total time required to process different products will vary, primarily
reflecting (i) the different radiation doses required for different purposes
(e.g., insect disinfestation requires a lower dose than does elimination of
microorganisms), and (ii) the density of the product being irradiated (e.g.,
irradiation of relatively dense bulk poultry takes longer than irradiation of
less dense retail packaged poultry).  A higher or lower dose (but always within
the range approved) can be applied by increasing or decreasing the time of
exposure of the food to the radioactive source.  Devices which measure the

level of irradiation are placed in and around the product being irradiated,
and they allow the Company's personnel to ensure that proper levels have been
achieved. With the addition of refrigeration inside the facility, and the
current supply of Cobalt 60, the plant can handle any and all products in an
efficient manner.

Personnel

    At December 31, 2000, the Company employed eleven persons, made up of two
salesmen, four administration personnel and four licensed plant operators. If
and when the facility becomes fully operational, the Company anticipates that
it will need to hire approximately seven additional employees.

    Required personnel will included a shift supervisor, a controller/
scheduler, a quality assurance supervisor, a plant operator, and three
loaders/unloaders. MDS Nordion, a corporation located in Kanata, Ontario,
Canada, Parent of the Company ("Nordion") does all handling of the Cobalt 60
source, which occurs periodically. See "Agreements with MDS Nordion" below.

Cobalt 60 Supply

    The Company has in place approximately 680,000 thousand curies of Cobalt
60 The level of radioactivity of Cobalt 60 declines at approximately 12% per
year, and new Cobalt 60 must from time to time be purchased to maintain an
appropriate radiation level. Nordion is the Company's sole supplier of Cobalt
60 and has agreed to sell the Company all its requirements for Cobalt 60, and
to accept the return of all used Cobalt 60 that has reached the end of its
useful life. Cobalt 60 is available from several sources. See "Agreements with
MDS Nordion" below.

<PAGE>



Additional Uses for Irradiation

Research Services

    The Company uses its facility to irradiate various products as required in
research activities being conducted by others, including state and federal
government agencies and academia.

Medical and Consumer Products

    The Company will provide irradiation services for the treatment for medical
products. In 2000, the Company processed a significant amount of packaging
materials, making use of excess capacity without interfering with its focus on
food.

Plant Safety

Safety to Surrounding Community

    While a radiation source does require special handling, the necessary
precautions are well understood and practiced daily at numerous medical supply

irradiation plants already in operation. Unlike a nuclear power plant, the
process does not involve any nuclear reaction. An irradiator is not a nuclear
reactor. It is simply a processing plant containing a shielded area where
foods are exposed to a source of ionizing radiation.

    The Company's irradiation activities will produce no harmful solid, liquid
or gas effluents or pollutants.

Safety to Plant Workers

    As a result of long experience in designing and operating similar types of
irradiation facilities, the necessary precautions for worker safety in an
irradiation facility are well understood. These precautions are enforced by
several federal and state agencies in the United States. The Bureau of
Radiation Control, Radioactive Materials Section, of the Florida Department
of Health inspects the facility on an annual basis as does the U.S. Food and
Drug Administration. The USDA inspects the premises whenever the Company is
processing meats or poultry.

Regulatory Matters

Regulation of Irradiated Foods

    In the United States, primary responsibility for approval of food
irradiation rests with the FDA. No irradiated food can be sold, unless the FDA
has found that irradiation of a particular food, at specified doses, is both
safe and generally effective for the intended purpose. To date, the FDA has
approved the irradiation of poultry and shell eggs for the control of
Salmonella and certain other disease causing microorganisms, the irradiation
of all fresh fruits and vegetables for insect disinfestation and shelf life
extension, the irradiation of spices for sterilization, and the irradiation
of pork for the control of trichinosis. Petitions for the approval of the
irradiation of shellfish are presently pending. On July 7, 1994, a
petition was submitted to the FDA by the meat industry to gain approvals to
irradiate all meats, so that E. coli: 0157 H7 and other pathogens can be
removed from meat products. The FDA approved irradiation of meat products
for controlling disease-causing microorganisms on December 2, 1997. On
February 22, 2000 the USDA/FSIS released the final rule for the irradiation
of meat and meat products.

<PAGE>

    In general, no further approvals are necessary for the sale of irradiated
fresh fruits and vegetables for shelf life-extension or quarantine treatment in
the United States. However, the shipment of any irradiated food for export
will be subject to the rules of the country of destination. There have been
illnesses caused by bacteria and parasites in fresh foods and the dose level
required for irradiation to provide safety from these organisms is higher than
currently allowed and will require an additional approval from the FDA.

    Some states and countries require that certain foods be quarantined on
import to prevent the establishment or spread of insects commonly carried by
the food. The Company has had discussions with a number of parties regarding
the use of irradiation for fruit and vegetables for export and for shipment
between the southern states in the United States and has successfully
irradiated products for quarantine treatment that have been accepted by
California and Texas.

    Quarantine restrictions also apply to certain foods imported into the
United States. The USDA has established rules approving irradiation, at the
point of shipping, in satisfaction of the quarantine requirements for papayas.
The Company is currently working with the USDA Animal and Plant Inspection
Service to allow the USDA to approve irradiation at the point of import as
satisfying such requirements, but the Company cannot predict whether such
approvals will be forthcoming. The port facility at Tampa is a major point of
import of produce, much of which is subject to USDA quarantine requirements.

    The USDA also regulates any processing of meat and poultry, whether for
irradiation, packaging or otherwise. The USDA has promulgated rules relating
to such processing to ensure that the food remains safe and wholesome.
In general, such rules establish standards for the implementation of the
approval established by the FDA, and relate to such matters as good handling
and processing practices. These rules deal with such matters as (i) minimum
irradiation levels to assure effective treatment, (ii) temperature standards to
prevent thawing of frozen foods, (iii) requirements for the separation of
processed from non-processed foods, and (iv) labeling requirements. The USDA
has already adopted rules relating to irradiation processing of pork, poultry
and has now finalized the regulations for the processing of meat products.


Regulation of the Facility and the Irradiation Process

    The Company has obtained a license for the operation of its facility from
the Office of Radiation Control, Florida Department of Health, which regulates
the ownership and operation of all irradiation facilities and equipment in
the State of Florida (including, for example, hospital x-ray equipment). The
agency monitors the facility's operation to make certain that all safety
regulations are being met.

Other Considerations

    The Company recognizes that it is seeking to extend the commercial
irradiation industry into new fields in the United States, and governmental
bodies may seek to impose on the Company and its business regulatory
requirements not now anticipated. In addition, the long-term course of
regulatory policy cannot be predicted and, although regulatory approvals have
been forthcoming, there can be no assurance that laws and regulations will not
be applied in a manner that adversely affects the Company. Currently, the
transportation and sale of irradiated foods is now permitted in all 50 states.
Although the Company is not aware of any significant regulatory requirements
applicable to its proposed business, there can be no assurance that the Company
will not encounter unanticipated regulatory requirements.

<PAGE>



Agreements with MDS Nordion

    The Company, in September 1990, entered into an agreement with MDS
Nordion, the principal shareholder, providing for the purchase and sale
of irradiation equipment and cobalt-60 necessary to operate its irradiation
facility. In order to secure payment of the purchase price, additional loans
and future advances by MDS Nordion to the Company, the Company and MDS
Nordion executed a Convertible Debenture and Mortgage and Security Agreement,
both dated January 15, 1992. The balance of the debt at February 4, 2000
was $963,194 US (the "Debt"), plus interest accruing to December 31,2000
in the amount of $91,970 accruing at the rate of Bank of America's
prime rate in effect from time to time plus 1%, resulted in a total amount
owing of $1,055,164 at December 31, 2000.

    On October 22, 1991, the Company entered into a Reimbursement and
Indemnity Agreement with MDS Nordion whereby MDS Nordion assisted the Company
in obtaining a surety bond in the sum of $600,000 in order to meet State of
Florida facility permit bonding requirements. In connection therewith, the
Company agreed to reimburse MDS Nordion for any liability and expense which
MDS Nordion may sustain as a result of its commitments to the bond issuer
and secured such obligation under a Mortgage and Security Agreement dated
October 22, 1991. The bond continues to be in effect.

    By agreements dated March 6, 2000, April 17, 2000, May 18,2000 and
November 20,2000, the Company and MDS Nordion agreed and further confirmed
that the Debt, and any future advances, including payment of guarantees or
indemnities to third parties made by MDS Nordion to the Company's benefit,
shall be convertible at MDS Nordion's option, at any time, into common stock
of the Company. The applicable conversion rate is determined based on 70% of
the closing price of the Company's shares listed on NASDAQ, on the last trade
date prior to the exercise of the conversion right. Further, MDS Nordion's
right of conversion of interest accruing on the Debt from February 5, 2000
to January 1, 2002, into shares of the Company, have been waived by MDS
Nordion.

    On February 4, 2000, in order to simplify and consolidate the existing
security interests securing repayment of the (i) Debt and interest, (ii)
indemnity and reimbursement obligations arising from guarantees or indemnities
provided by MDS Nordion to third parties for the Company's benefit, and (iii)
future loans or advances, the Company and MDS Nordion, entered into a new
Mortgage and Security Agreement. Substantially all of the assets of the
Company continue to be pledged as collateral against the obligations of the
Company to MDS Nordion.

    In addition to cobalt-60 purchased from MDS Nordion, MDS Nordion has stored
an additional amount of cobalt-60 at the Company's facility in anticipation
of the Company's future needs. At the end of 2000, there were approximately
680,900 curies of cobalt-60 both owned and stored at the Company's facility.
Title in and to 373,200 curies of cobalt-60 located at the facility remains
the property of MDS Nordion and may be removed by MDS Nordion at any time.

    In the past, under the terms of its agreement with Nordion, the Company was
under some circumstances be prohibited from processing any product other than
food and related products. In 2001, MDS Nordion removed this restriction.

    In 1999, Nordion agreed to guarantee a line of credit of $500,000 from a
bank. On December 31, 2000 $450,000 of this amount is available to fund 2001
operations.

Item 2. Properties
------------------

    The Company's irradiation facility and executive office are located on an
approximately 4.33 acre site owned by the Company in Mulberry, Polk County,
Florida. The Company purchased the site because of its convenient access to
State Road 60, a major transportation artery between central Florida produce
growers and the port facility at Tampa.  Should the Company's first facility
prove successful, the site is sufficiently large to add one or two additional
irradiation chambers, thereby increasing the capacity of the facility.

<PAGE>

    The Company's irradiation facility and executive office comprises
approximately 28,800 square feet, including a 22,600 square foot warehouse and
loading and unloading area, a 3,200 square foot office area, and a 3,000 square
foot irradiation chamber and Cobalt 60 storage cell. The Company's
irradiation processing plant consists of a radiation source, an automated
conveying system, and operating safety controls.  The heart of the plant is
the radiation source. Within the processing chamber, a water-filled pool,
approximately 28 feet deep, is used to shield and store the radiation source in
the "off" position. The pool is enclosed in a radiation proof chamber, a double
safeguard against the escape of any radiant energy. The concrete walls and
roof of the processing chamber are approximately 6 feet thick and, during the
times that the source is out of the pool in the "on" position, will provide
safe shielding of adjacent areas such as the control room, work floor, offices
and outdoor grounds. The control room contains operating and safety controls.
The conveying system is used to transport foods to and from the processing
chamber. The Company's facility is designed to operate 24 hours a day, seven
days a week. Although the Company currently has available approximately
680,000 thousand curies of Cobalt 60, the facility is designed to meet
international standards of radiation protection with an installed source of
7,000,000 curies. The capacity of the source racks, however, will only permit
a maximum of 5,000,000 curies of Cobalt 60 to be installed.

    As indicated under Item 1 Business - "Agreements with MDS Nordion"
substantially all of the assets of the Company are pledged as collateral
against the obligation to Nordion.

Item 3. Legal Proceedings
-------------------------

    On March 24, 2000, Pegasus Foods Canada, Inc. filed a lawsuit
against the Company alleging that certain seafood products irradiated by the
Company were adversely affected by the process. The lawsuit alleges damages in
excess of $2,000,000 and lost profits of $4,743,400. The Company denies the
allegations and intends to vigorously defend the lawsuit. The outcome of this
litigation is uncertain at this time; accordingly, no provision has been made
in the accompanying financial statements for this contingency.

Item 4. Submission of Matters to a Vote of Security Holders
-----------------------------------------------------------
    None

<PAGE>

                                    PART II

Item 5. Market for Registrant's Common Equity and Related Stockholder Matters
-----------------------------------------------------------------------------

(a) The following table shows the range of closing bid prices for the Company's
    Common Stock in the NASDAQ SmallCap market for the calendar quarters
    indicated. The quotations represent prices in the over-the-counter market
    between dealers in securities, do not include retail mark-up, markdown, or
    commissions and do not necessarily represent actual transactions.

                                                              BID PRICES
                                                              ----------
         2000                                                High      Low
         ----                                                ----      ---
     First Quarter                                          $9.125   $4.00
     Second Quarter                                          4.50     2.50
     Third Quarter                                           5.438    2.50
     Fourth Quarter                                          3.094     .875

         1999
         ----
     First Quarter                                          $6.219   $2.25
     Second Quarter                                          5.50     2 938
     Third Quarter                                           6.68     2.50
     Fourth Quarter                                          8.625    3.375

(b)  Approximate Number of Equity Security Holders.
     ----------------------------------------------

      As of December 31, 2000, the approximate number of beneficial holders of
      Common Stock of the Company was approximately 3,500.

(c)  Dividend History and Policy
     ---------------------------

      The Company has paid no dividends to date and does not anticipate paying
      any for the foreseeable future.

Item 6. Management's Discussion and Analysis
--------------------------------------------

Plan of Operations

    The Company completed construction of its irradiation facility in Mulberry,
Florida in December 1991 and the facility became operational on January 24,
1992. For the reasons set forth below, the Company is still in the
developmental stage. The plant was constructed to irradiate fruits and
vegetables for the primary purpose of extending shelf life and poultry to
control salmonella and other illness causing bacteria. Soon after the
commencement of operations, it was recognized that the success of the Company
would be dependent on the irradiation of poultry and red meats. This was due
to the fact that most of the fresh fruits and vegetables are pre-sold in the
Florida area where the extension of shelf life is not necessarily a help for
the fruit and vegetable growers. In addition, although the FDA has approved
the use of irradiation for the extension of shelf life, the USDA Animal and
Plant Health Inspection Service (APHIS) has not completed their approval for
the use of irradiation for post harvest quarantine treatment.

<PAGE>

    Although the rules for the irradiation of poultry were finalized by the
U. S. Department of Agriculture and published in the Federal Register on
September 22, 1992, the Company is processing minimum amounts of poultry at
the present time. While awaiting action by the FDA and the USDA, the Company's
revenue (approximately $1,412,297 for 2000) has been realized primarily from
the processing of packaging materials and consumers goods, food ingredients,
seasonings and spices and from testing of various other food commodities. The
red meat industry, which has been faced with pathogen problems such as E. Coli:
0157 H7, supported a petition to irradiate all meats that was approved by the
FDA on December 7, 1997. On February 22, 2000 the USDA/FSIS published the final
regulation.

    At December 31, 2000, the Company had cash of approximately $108,104,
up from $20,937 at December 31, 1999. The loss from operations for the year
ended December 31, 2000 was $154,009,on sales of $1,412,297, a considerable
improvement from the loss of $888,029 on sales of $387,966 in 1999. Operating
costs in 2000 were approximately $1,566,306, up from $1,250,597 in 1999. The
increase in operating costs resulted primarily from increases in legal costs,
processing labor and marketing. The Company believes that increased revenues
will have a significant positive impact since processing costs and General,
Administrative and Developmental costs will not increase significantly as
a result of an increase in revenue.

    Since 1992 Nordion has stored varying amounts of cobalt at the Company's
plant with the amount being approximately 373,200 curies at the end of 2000.
Such cobalt was stored in anticipation that it would be needed in the
Company's operations; however, such cobalt has not been needed because of
low processing volume due to the lack of necessary Governmental approvals
and marketing demand. Due to physical layout of the Company's plant, all
product processed was exposed to Nordion's cobalt. If Nordion's cobalt had
been owned by the Company, or had been required for increased processing
volume or speed, the decay of such cobalt would have been charged to
operations, resulting in an increased expense of approximately $200,000,
$150,000, $75,000 for the years ended December 31, 1998, 1999, and 2000,
respectively. The net losses for such periods would have been $821,456,
$1,018,824 and $233,883 respectively. At such time that the Company's
operations increase to such an extent that the Nordion cobalt is required
for increased processing volume or speed, the Company will begin charging
its decay to operations.

    At December 31, 2000, the Company's outstanding debt amounted to
$1,155,164, which consisted of a Mortgage and Security Agreement
with Nordion due January 5, 2001 plus interest at prime plus 1% and as
Convertible Debenture payable to Nordion due January 5, 2001 plus interest
at prime plus 1%. The amounts owing to Nordion are now due on a demand basis.
The debt amount includes a credit line of $100,000.

    Last year no funding was required from Nordion and it is anticipated that
revenues and available credit line will fund the company's operation in the
coming year.


<PAGE>



Item 7. Financial Statements
----------------------------

    Reference is made to the Company's Financial Statements included herewith.

Item 8. Changes in and Disagreements with Accountants on Accounting and
        Financial Disclosure
-------------------------------------------------------------------------

    None.

<PAGE>



                                  PART III

Item 9. Directors, Executive Officers, Promoters and Control Persons;
        Compliance with Section 16(a) of the Exchange Act
------------------------------------------------------------------------------

Directors and Executive Officers of the Company.

    As of December 31, 2000, the Directors and Executive Officers of the
Company are as follows:

Name                       Age            Position with the Company
----                       ---            -------------------------

Thomas J. Daw              62             Director

E. W. (Pete) Ellis         59             President/Chief Executive Officer/
                                          Director

Frank M. Fraser            65             Director

R. Craig Hunter            49             Director

David Nicholds             53             Director

    All Directors of the Company hold office until the next annual meeting of
shareholders or until their successors have been duly elected and qualified.
Officers are elected annually by the Board of Directors to hold office until
their successors are duly elected and qualified.


    Thomas J. Daw has served as a Director since July 19, 2000. He brings over
40 years of sales and marketing experience with ConAgra and Rath Packaging
Company. He designed and implemented Con-Agra's successful "Country Pride"
brand of fresh prepackaged poultry. He served as Vice President of Sales of the
Con-Agra Butterball Division. Prior to retirement after 22 years with the
company, was Vice President of Con-Agra's Western Retail Division.

    E. W. (Pete) Ellis has been President, Chief Executive Officer and Director
since December 1996. He has been in the food business for the past 33 years,
ten years of which were spent with Oscar Mayer & Co., and fifteen years with
ConAgra. He was employed in sales and marketing with both companies. He was
President and owner of Ellis, Harris, and Associates, Inc., a food brokerage
company, from 1986 to 1988.

    Frank M. Fraser has served as a Director of the Company from May 1992
through September 1993. He was reelected as a Director in July 1996. In June
1964, Mr. Fraser joined Atomic Energy of Canada Limited (now MDS Nordion) as a
project engineer. He was Vice President of Market Development at Nordion prior
to his retirement in 1998. He is past Chairman of the Association of
Industrial Irradiators International and has Chaired the International Meeting
on Radiation Processing.


<PAGE>


    R. Craig Hunter has served as a Director of the Company since September
1998. He is Vice President of Business Development of MDS Nordion's Industrial
Irradiation Business Unit. Prior to this, he spent six (6) years in the
cosmetics industry; half of that time running Kolmar Laboratories' operation
in Sydney, Australia and then as Vice President International at Kolmar
Laboratories Inc.

    David Nicholds has served as a Director of the Company since September
1998. He is the Vice President, General Counsel and Corporate Secretary of MDS
Nordion. He joined MDS Nordion in 1989.


    Compliance with Section 16(a) of the Securities Exchange Act of 1934
    --------------------------------------------------------------------

    The Company believes that the reporting requirements, under Section 16(a)
of the Exchange Act, for all its executive officers, directors, and each person
who is the beneficial owner of more than 10% of the common stock of a company
were satisfied except as follows: Nordion, owners in excess of 10% of the
companies outstanding shares of common stock, filed one Form 4 report one month
late, covering an aggregate of 18 transactions.

Director Meetings and Committees
--------------------------------

    During the year ended December 31, 2000, the Board of Directors of the
Company held a total of five (5) meetings. Each of the Directors attended more
than 75% of the total number of meetings of the Board of Directors

    The Board of Directors has a standing Audit Committee, which is the only
committee of the Board. The Audit Committee is responsible for recommending
to the Board of Directors the engagement or discharge of the independent
public accountants, meeting with the independent public accountants to review
the plans and results of the audit engagement, approving the services to be
performed by the independent public accountants, considering the range of the
audit and non-audit fees, reviewing the adequacy of the Company's system of
internal accounting, reviewing the scope and results of the Company's internal
audit procedures. The Audit Committee is comprised of Messrs. Daw and Fraser.
The Audit Committee met once during 2000.

Item 10. Executive Compensation
-------------------------------

Compensation of Directors
-------------------------

    On February 9, 1999 the Board of Directors approved an option plan for non-
employee Directors. Under the plan, independent Directors receive options to
purchase 3,000 shares per year plus 1,000 shares per meeting attended. Such
options are granted in January of each year at the quoted market price at the
beginning of the previous year and must be exercised on or before five years
from the date of grant. The options are granted pro rata if a Director
terminates during the year. During 1999, 23,000 options accrued to three
Directors. The difference between the option price and the market price of the
shares on the dates earned was $19,205 and has been charged to income.

    Such plan was amended on May 18, 2000 to grant such options on the date a
Director is elected rather than January at the average quoted market price for
the five days preceding the date of grant. Also such options may be exercised
after one year. No more than 10,000 shares may be granted to each Director per
year. During 2000 options to purchase 25,356 shares at $3.38 per share were
granted to four directors.

    Non-employee Directors are also reimbursed for out-of-pocket expenses.

<PAGE>

Compensation of Chief Executive Officer
---------------------------------------

    The following tables set forth certain information relating to the
compensation earned by the Chief Executive Officer of the Company for the
years indicated. No officer received compensation in excess of $100,000
for the past year.

                          Summary Compensation Table

                                                              Long-Term
                                                             Compensation
                                                                Awards
                                                                ------
                                                                     Securities
                               Annual Compensation       Restricted  Underlying
                               Year       Salary($)        Stock     Options(#)
                               ----  ------------------- ---------- -----------
E. W. (Pete) Ellis
 President and
 Chief Executive Officer(1)   2000        $ 70,000
                              1999        $ 70,000
                              1998        $ 70,000                10,000 shares
___________

(1)  On December 9, 1996 the Company entered into a five-year employment
     agreement with Mr. Ellis which provides for an annual compensation of
     $70,000. In addition, Mr. Ellis was granted a five year option to
     purchase 100,000 shares of the Company's common stock. The option vests
     20% per year commencing December 9, 1997 and is exercisable at $1.00
     per share, the fair market value on the date of grant.

Option Exercises in 2000

     The following table sets forth information regarding options exercised
     during the Company's last fiscal year and the value of unexercised options
     at December 31, 2000. The market value price on that date was $1.09.
<PAGE>



                     Aggregate Option Exercises in Last Fiscal Year
                            and Year End Option Values

                                           Number                 Value
                                       of Securities          of Unexercised
                                         Underlying               in-the
                                        Unexercised            Money Option
                                          Options              At Year End
                                        At Year End               (1)(3)
                                        -------------         --------------
           Shares
          Acquired   Value
             On     Realized
 Name       Exercise (1)    Exercisable Unexercisable Exercisable Unexercisable
 ----     --------  --------    ----------- ----------- ----------- -----------
E.W. (Pete)
Ellis         10,000 $51,300(2)      20,000       24,000      $1,800    $1,800
___________

   (1)  Value calculated by determining the difference between the fair market
        value of the Common Stock underlying options and the exercise or base
        price of the options at exercise or at the fiscal year end, as
        appropriate.

   (2)  The exercise price for 10,000 shares is $1.00. The fair market value
        was $5.13 at March 6, 2000 (the date of exercise).

   (3)  The exercise price for 40,000 and 4,000 shares is $1.00 and $2.75
        respectively. The fair market value was $1.09 at December 31, 2000.

Stock Option Plan
-----------------

    The Company has an Incentive and Non-Statutory Stock Option Plan covering
500,000 shares of Common Stock (the "Plan"). There are currently outstanding
five-year options to purchase an aggregate of (i) 67,800 shares of Common
Stock of the Company, exercisable at $2.75 per share (granted in 1998) and (ii)
48,000 shares at $1.00 per share (granted in 1996). The options are
exercisable 20% per year with the first 20% available on August 7, 1998.
ISO's and NQO's granted to an optionee terminate, 90 days after
termination of employment or other relationship, except that ISO's and NQO's
terminate the earlier of the expiration date of the option or six months after
termination in the event of disability, and 180 days in the event of death.

    On February 9, 1999 the Board of Directors approved an option plan for
non-employee Directors. Under the plan, non-employee Directors receive
options to purchase 3,000 shares per year plus 1,000 shares per meeting
attended. Such options are granted in January of each year at the
quoted market price at the beginning of the previous year and must be
exercised on or before five years from the date of grant. The options
are granted pro rata if a director terminates during the year. During 1999,
23,000 options accrued to three Directors. The difference between the option
price and the market price of the shares on the dates earned was $19,205
and has been charged to income.

    Such plan was amended on May 18, 2000 to grant such options on the date a
Director is elected rather than January at the average quoted market price for
the five days preceding the date of grant. Also such options may be exercised
after one year. No more than 10,000 shares may be granted to each Director per
year. During 2000 options to purchase 25,356 shares at $3.38 per share were
granted to four directors.

    The market price of the Company's Common Stock at December 31, 2000 was
$1.09 per share.

<PAGE>



Item 11. Security Ownership of Certain Beneficial Owners and Management

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

    The following table sets forth as of December 31, 2000, the ownership of
Common Stock of the Company of (i) all persons known by the Company to own
beneficially 5% or more of such Common Stock, (ii) each current director and
officer of the Company and (iii) all current directors and officers as a group,
together with their percentage holdings at such date.  The addresses of all
holders of 5% or more of the Common Stock are included in the table.

                                          Number and Percent
                                               Of Shares
                                          Beneficially Owned
                                         At December 31, 2000
                                         --------------------
Name and Address                         Number      Percent
----------------------------             ------      -------
MDS Nordion                            5,455,444 <F1>  52.80
  447 March Road-Kanata Ontario
  Canada K2K 1X8

Thomas J. Daw                              4,356 <F2>   (*)

E. W. (Pete) Ellis                        15,200        (*)

Frank M. Fraser                           16,000 <F3>   (*)

Craig Hunter                           5,455,444 <F1>  52.80

David Nicholds                         5,455,444 <F1>  52.80

All Directors and Officers             5,491,000 <F4>  53.14
  as a group (5 persons)

* Less than 1%

<FN1>
(1) Includes 801,923 shares of Common Stock which are issuable upon
    conversion of $1,055,163 of indebtedness owed Nordion by the Company.
    See "Business - Agreements with MDS Nordion." Messrs. Hunter and Nicholds
    are designees of Nordion to serve on the Company's Board of Directors.
    Messrs. Hunter and Nicholds own less than 1% each of the Capital Stock of
    Nordion and they disclaim beneficial ownership of the Common Stock of the
    Company which Nordion owns or has the right to acquire. Approximately 100%
    of the outstanding shares of Nordion's common stock is owned by MDS Inc.
    a Canadian Corporation, whose shares are traded on the Toronto Stock
    Exchange and MDS Laboratories Inc, a subsidiary of MDS Inc.
<FN2>
(2) Includes 4,356 shares underlying options which are currently exercisable or
    exercisable within the next sixty (60) days.
<FN3>
(3) Includes 16,000 shares underlying options which are currently exercisable
    or exercisable within the next sixty (60) days.
<FN4>
(4) Includes shares underlying options which are currently exercisable or
    exercisable within the next sixty (60) days and shares underlying
    convertible debt.

<PAGE>


Item 12. Certain Relationships and Related Transactions
--------------------------------------------------------

    See "Business-Agreements with MDS Nordion."


Item 13. Exhibits and Report on Form 8-K
----------------------------------------

    (a)  Exhibits

  Letter(h) MORTGAGE AND SECURITY AGREEMENT

  Prepared by and return to:
  Lee E. Nelson, Esq.
  Williams Schifino, Mangione
    & Steady, P.A.
  One Tampa City Center, Suite 2600
  Tampa, FL  33602





  MORTGAGE AND SECURITY AGREEMENT


       THIS MORTGAGE AND SECURITY AGREEMENT (the "Mortgage") is made and
  entered into effective as of February 4, 2000 ("Effective Date"), by and
  between FOOD TECHNOLOGY SERVICE, INC., a Florida corporation, whose post
  office address is 502 Prairie Mine Road, Mulberry, Florida 33860 (hereinafter
  called "Mortgagor"), and MDS NORDION INC., a Canadian corporation, whose post
  office address is 447 March Road, Kanata, Ontario Canada K2K 1X8 (hereinafter
  called "Mortgagee").

  W I T N E S S E T H:

       Mortgagor, in consideration of the sum of Ten Dollars ($10.00) and other
  good and valuable consideration to Mortgagor paid by Mortgagee, the receipt
  and sufficiency of which are hereby acknowledged, does hereby grant, bargain,
  sell, assign, transfer, convey and confirm unto Mortgagee the following
  described Mortgaged Property:

       A.     The Land.     All of the land located in Polk County, Florida and
  described as follows:

    A parcel of land being in the SW 1/4 of Section 2, TOWNSHIP 30 SOUTH, RANGE
    23 EAST, Polk County, Florida, being more particularly described as
    follows:

    Commence at the Southwest corner of said Section 2; thence North 00* 07'
    56" West along the West line of said SW 1/4 a distance of 1614.06 feet to
    the South line of the North 990 feet of said SW 1/4; thence North 88* 34'
    00" East along said South Line and parallel with the North line of said SW
    1/4 a distance of 1643.3 feet to the point of beginning; thence South 01*
    26' 00" East, 360.00 feet; thence North 88* 34' 00" East parallel with said
    North line of the SW 1/4 a distance of 317.31 feet to the point of
    curvature of a curve concaved Northwesterly having a radius of 570.00 feet,
    a central angle of 18* 51' 00", a chord bearing of North 79* 08' 30" East,
    and a chord distance of 186.68 feet; thence Northeasterly along said 187.53
    feet to the point of tangency; thence North 69* 43' 00" East, 56.11 feet to
    point of curvature of a curve concaved Northwesterly having a radius of
    30.00 feet, a central angle of 90* 00' 00", a chord bearing of North 24*
    43' 00" East, and a chord distance of 42.43 feet; thence Northeasterly
    along said curve 47.12 feet to the point of tangency, said point being on
    the Westerly     Right-of-way line of Prairie Mine Road; thence North 20*
    17' 00" West along said right-of-way line 288.70 feet to said South line of
    the North 990 feet of said SW 1/4; thence South 88* 34' 00" West along said
    South line and parallel with said North line of the SW 1/4 a distance of
    480.00 feet to the  point of beginning.

  (the "Land")

       B.     Improvements.    All buildings, structures, betterments and other
  improvements of any nature owned by Mortgagor now or hereafter situated, or
  intended to be situated, in whole or in part upon the Land, regardless of
  whether physically affixed or now or hereafter severed or capable of
  severance from the Land (the "Improvements").

       C.     Personal Mortgaged Property and Fixtures. All of Mortgagor's
  personal Mortgaged Property of every nature and fixture, including without
  limitation all furnishings, fixtures, machinery, tools and equipment used in,
  necessary for or related to the Mortgagor's facility, whether now owned or
  hereafter acquired or used in connection therewith and located thereon (the
  "Personal Mortgaged Property and Equipment").

       D.     Accounts.     All debts, accounts, claims, money and choses in
  action which are, or which at any time hereafter be due or owing to or owned
  by the Mortgagor, and also securities, mortgages, bills, notes, and
  other documents, now held or owned, or which may be hereafter taken, held or
  owned by or on behalf of the Mortgagor in respect of the said debts,
  accounts, claims, moneys and choses in action or any part thereof, and also
  all books, documents and papers recording, evidencing or relating to the said
  debts, accounts claims, moneys and choses in action or any part thereof (the
  "Accounts Receivable").

       E.     Easements or Other Rights.     Together with all easements,
  rights of way, gores of land streets, ways, alleys, passages, sewer rights,
  waters, water courses, water rights and powers, and all estates, rights,
  titles, interests, privileges, liberties, tenements, hereditaments and
  appurtenances whatsoever, in any way belonging, relating or appertaining to
  any of the Land and Improvements, or which hereafter shall in any way belong,
  relate or be appurtenant thereto, now owned or hereafter acquired by
  Mortgagor and the reversion and reversions, remainder and remainders, and all
  of the estate, rights, title, interests, Mortgaged Property, possession,
  claim and demand whatsoever, at law as well as in equity, of Mortgagor, in
  and to the same, including but not limited to all judgments, awards or
  damages and settlements hereafter made resulting from condemnation
  proceedings or taking of the Mortgaged Property described in paragraphs A, B,
  C or D hereof or any part thereof under the power of eminent domain, or for
  any damage (whether caused by such taking or otherwise) to the Mortgaged
  Property described in paragraphs A, B, C or D hereof or any part thereof, or
  to any rights appurtenant thereto.

       Everything referred to in paragraphs A, B, C, D or E is herein referred
  to collectively as the "Mortgaged Property."

       The Mortgagor undertakes that it shall, at its own expense, register the
  security interests created hereby, in accordance with the Uniform Commercial
  Code, and shall record this Mortgage in the public records in and for Polk
  County, Florida and with the Florida Secretary of State.

       Until the security created hereby becomes enforceable the Mortgagor will
  not without the prior written consent of the Mortgagee create or assume or
  have outstanding, except to the Mortgagee, any mortgage, charge or other
  encumbrance on any part of the Mortgaged Property ranking or purporting to
  rank or capable of being enforced in priority to or pari passu with the
  security hereby created, other than liens for taxes, assessments and charges
  or levies not due at the date hereof or which are paid before delinquency.

  Except as otherwise provided herein, the Mortgagor shall not without the
  prior written consent of the Mortgagee, sell, lease, release, surrender,
  abandon or otherwise dispose of or move or transfer from its present
  location, the Mortgaged Property or any part thereof; however, the
  Mortgagor may at any time without consent of the Mortgagee, lease or sell
  items of inventory in the ordinary course of its business so that purchasers
  thereof take title clear of the mortgages and charges created hereby but if
  such sale or lease results in Accounts Receivable such Accounts Receivable
  shall be subject to the mortgages, security interests and charges created
  hereby.

       The Mortgagee may at its discretion at any time release from the charges
  and security interests contained herein any part or parts of the Mortgaged
  Property or any of the security either with or without sufficient
  consideration therefore, without responsibility therefore and without
  releasing any other part of the Mortgaged Property or from any of the
  covenants herein contained.  Every part of the Mortgaged Property into which
  the Mortgaged Property is or may hereinafter be divided does and shall stand
  charged of payment of the indebtedness and no person shall have the right to
  require that the indebtedness be apportioned.


       Mortgagor hereby grants to Mortgagee a mortgage and a security interest
  in all of the Mortgaged Property and in addition to the rights of a mortgagee
  under applicable law and hereunder, Mortgagee shall have all rights of a
  secured party under the Florida Uniform Commercial Code.

       TO HAVE AND TO HOLD the Mortgaged Property unto Mortgagee forever.

       Mortgagor hereby covenants with Mortgagee that Mortgagor is indefeasibly
  seized with the absolute and fee simple title to the Mortgaged Property; that
  Mortgagor has full power and lawful authority to sell, convey, assign,
  transfer and mortgage the same; that it shall be lawful for Mortgagee at any
  time hereafter peaceably and quietly to enter upon, have, hold and enjoy the
  Mortgaged Property and every part thereof.

       Mortgagor covenants that Mortgagor, at Mortgagor's own expense, will
  execute such other and further instruments and assurances to vest absolute
  and fee simple title to the Mortgaged Property in Mortgagee that may be
  requested by Mortgagee and that Mortgagor will warrant and defend the title
  to the Mortgaged Property unto Mortgagee against the lawful claims and
  demands of all persons whomsoever.

       This Mortgage is given to secure the following obligations including
  interest and other charges accruing thereon: (i) indebtedness of Mortgagor to
  Mortgagee as more particularly described in that certain Convertible
  Debenture  dated January 15, 1992, as amended, by Mortgagor in favor of
  Mortgagee in the  original principal amount of $900,000.00 (the "Convertible
  Debenture"); (ii)any payment, up to $600,000.00, to be made by Mortgagor to
  Mortgagee pursuant to that certain Reimbursement and Indemnity Agreement,
  dated October 22, 1991,by and between Mortgagor and Mortgagee whereby
  Mortgagor has agreed to indemnify Mortgagee against any payment, up to
  $600,000.00, required to be made by Mortgagee to Acstar Insurance Company
  ("Acstar") pursuant to indemnities entered into by Mortgagee with Acstar to
  secure a license and permit bond between Mortgagor and Acstar for the benefit
  of the State of Florida, in the amount of $600,000.00; and (iii) indemnity and
  reimbursement obligations of Mortgagor to Mortgagee arising from guaranties
  or indemnities by Mortgagee to third party lenders and other parties for the
  benefit of Mortgagor, including but not limited to, the Unlimited Guaranty
  and Indemnity Agreements dated October 29, 1998 and December 17, 1999,
  respectively, each executed by Mortgagee and delivered to Fleet National Bank
  on behalf of Mortgagor.  Mortgagor represents to Mortgagee that, as of the
  date hereof, the total indebtedness secured by this Mortgage and Security
  Agreement as of the Effective Date is $963,194.00.

       This Mortgage is given to secure not only the Convertible Debenture, but
  also such additional advances under debentures as may be issued from time to
  time by Mortgagor to Mortgagee or other advances and indebtedness as may be
  extended from time to time by Mortgagee to Mortgagor and such other future
  obligations, letters of credit, indemnities or guaranties as may be
  undertaken by Mortgagee to third parties on Mortgagor's behalf, so long as
  any of such events occur within twenty (20) years from the date hereof, to
  the same extent as if such additional advances, debentures or other
  indebtedness, obligations and guaranties were issued on the date of the
  execution of this Mortgage.  Such debentures or other indebtedness,
  obligations and guaranties shall constitute future advances under this
  Mortgage.  The total amount of debentures or other indebtedness, obligations
  and guaranties that may be so secured may decrease or increase from time to
  time, but the total unpaid amount so secured at one time shall not exceed
  $7,000,000, plus interest thereon and any disbursements made for the payment
  of taxes, levies or insurance on the Mortgaged Property and interest on such
  disbursements.

       Mortgagor hereby further covenants to pay all taxes and assessments
  levied or assessed upon the Mortgaged Property before the same become
  delinquent, and in no event to permit the Mortgaged Property, or any part
  thereof, to be sold for nonpayment of taxes or assessments; to keep the
  Mortgaged Property in good repair and to permit, commit or suffer no waste,
  impairment or deterioration thereof; to comply strictly with all laws and
  governmental regulations and rules affecting the Mortgaged Property or its
  operation to pay all taxes that may be levied or assessed on this Mortgage
  or the moneys secured hereby; to permit no mechanic's or other liens arising
  either by contract or by law to be created or rest upon all or any part of
  the Mortgaged Property for ten days without the same being paid or released
  and discharged of the Mortgaged Property; and to pay all costs and expenses
  incurred or paid by Mortgagee in collecting the moneys hereby secured or in
  enforcing or protecting the rights and security of the Mortgagee hereunder,
  including reasonable attorney's fees incurred out of court, at trial, on
  appeal, or in bankruptcy proceedings, in the event this Mortgage and the
  liability be placed in the hands of an attorney for collection.

       Mortgagor further covenants to keep the buildings, structures and other
  improvements now or hereafter erected or placed on the Land and constituting
  a part of the Mortgaged Property constantly insured against all loss or
  damage for the full insurable value thereof for fire, windstorm and extended
  coverage in insurance companies satisfactory to Mortgagee (but Mortgagee
  shall not be liable for the insolvency or irresponsibility of any such
  companies) which policies shall provide for not less than ten (10) days
  prior written notice of cancellation to Mortgagee, and to pay promptly all
  premiums for such insurance, the policies representing which shall be
  delivered to and held by Mortgagee as additional security for the payment
  of the indebtedness and liability secured hereby.  All sums recoverable on
  any such insurance policies shall be made payable to Mortgagee by a loss
  payable clause satisfactory to Mortgagee, to be attached to such policies.
  In the event any such insurance policy shall expire during the life hereof,
  Mortgagor agrees to procure and pay for renewal thereof, with the above
  requirements, replacing such expired policy, ten days prior to the expiration
  date of such policy.  In case of loss, Mortgagee is hereby authorized to
  adjust and settle any claim under any such policy and Mortgagee is authorized
  to collect and receipt for any such insurance money and to apply the same, at
  Mortgagee's option, in reduction of the indebtedness hereby secured, whether
  due or not, or to allow Mortgagor to use such insurance money, or any part
  thereof, in repairing the damage or restoring the improvements or other
  Mortgaged Property without affecting the lien hereof for the full amount
  secured hereby.

       It is further covenanted that Mortgagee may (but shall not be obligated
  to) advance moneys that should have been paid by Mortgagor hereunder for
  taxes, insurance or in order to protect the lien or security hereof, and
  Mortgagor agrees without demand to forthwith repay such money, which amount
  shall bear interest from the date so advanced until paid at the annual rate
  of three (3) percentage points above the "prime rate" for similarly sized
  commercial obligations as published from time to time in the Wall Street
  Journal (the "Default Rate") and all such advance monies, including interest
  thereon and attorneys fees and costs, shall be considered as so much
  additional indebtedness secured hereby; but no payment by Mortgagee of any
  such moneys shall be deemed a waiver of any rights of Mortgagee hereunder.

       Mortgagor further covenants that granting any extension or extensions
  of the time for payment of any part or all of the total indebtedness or
  liability secured hereby, or any modifications or changes to the Convertible
  Debenture, or taking other or additional security for payment thereof, shall
  not affect this Mortgage or the rights of Mortgage hereunder, or operate as a
  release from any liability upon any part of the indebtedness hereby secured or
  under any covenant herein contained.

       It is further covenanted and made of the essence hereof that in case of
  failure to make any payment when due under the Convertible Debenture, this
  Mortgage, or under any other agreement between Mortgagor and Mortgagee or
  default for thirty (30) days in the performance of any of the other covenants
  herein on the part of Mortgagor, then the Mortgagee may consider all
  unmatured indebtedness or liability secured hereby, and accrued interest
  thereon, if any, as immediately due and payable, without demand and without
  notice or declaration, and Mortgagee shall have the right forthwith to
  institute proceedings to enforce the collection of all moneys secured hereby
  and/or to foreclose the lien hereof and to seek any other remedy available to
  Mortgagee.

       Mortgagee may proceed by suit or suits at law or in equity or by any
  other appropriate proceeding or remedy: (i) to foreclose the lien of this
  Mortgage or obtain possession of the Mortgaged Property, or both, under the
  judgment or decree of a court or courts of competent jurisdiction; (ii) to
  realize upon any and all other security for the sums due under the Debenture
  as Mortgagee may elect; and no such action, suit, proceeding, judgment, levy,
  execution, or other process will constituted an election of remedies by
  Mortgagee, or will in any manner alter, diminish, or impair the lien created
  by this Mortgage, unless and until the sums due under the Debenture are paid
  in full, and (iii) to pursue any other remedy available to it, all as
  Mortgagee shall deem more effectual for such purpose; and the costs of such
  actions and proceedings shall be secured by this Mortgage, including interest
  at the Default Rate on such costs, and shall be paid by Mortgagor.

       Mortgagee may apply, on ex parte motion to any court of competent
  jurisdiction, for the appointment of a receiver to take charge of,
  management,preserve, protect, complete construction of, and operate the
  Mortgaged Property and any business or businesses situated thereon, or any
  combination; to collect the rents; to make all necessary and needed repairs;
  to pay all taxes, assessments, insurance premiums, and all other costs
  incurred in connection with the Mortgaged Property; and, after payment of the
  expenses of the receivership, including reasonable attorney's fees, and after
  compensation to the receiver for management and completion of the Mortgaged
  Property to apply all net proceeds derived therefrom in reduction of the
  indebtedness secured hereby; or in such other manner as the court shall
  direct.  The appointment of such receiver shall be a matter of strict right
  to Mortgagee, regardless of the adequacy of the security or of the solvency
  of any party obligated for payment of the indebtedness secured hereby.  All
  expenses, fees, and compensation incurred pursuant to any such receivership
  shall be secured by the lien of this mortgage until paid.  The receiver,
  personally or through agents, may exclude Mortgagor wholly from the Mortgaged
  Property and have, hold, use, operate, manage and control the Mortgaged
  Property, and may in the name of the Mortgagor exercise all of Mortgagor's
  rights and powers to maintain, construct, operate, restore, insure, and keep
  insured the Mortgaged Property in such manner as such receiver deems
  appropriate.

       No delay or omission of Mortgagee or of any Mortgagee of the
  indebtedness secured hereby to exercise any right, power or remedy accruing
  upon a default shall exhaust or impair any such right, power or remedy or
  shall be construed to waive any such default or to constitute acquiescence
  therein.  Every right, power and remedy given by this Mortgage to Mortgagee
  may be exercised from time to time and as often as may be deemed expedient
  by Mortgagee.

       At any time and from time to time upon request by Mortgagee, Mortgagor
  will make, execute and deliver or cause to be made, executed and delivered
  to the Mortgagee, any and all further instruments, certificates and other
  documents as may, in the opinion of Mortgagee, be necessary or desirable to
  effectuate, complete or perfect or to continue and preserve (i) the
  obligations of Mortgagor under the Convertible Debenture (ii) the security
  interest of this Mortgage, or (iii) the mortgage lien hereunder.  It is
  contemplated that Mortgagor will pay documentary stamp taxes and any other
  fees and taxes applicable to the full face amount of the Convertible
  Debenture and any other obligations secured hereunder.  If any additional
  stamp or excise tax shall become applicable with respect to this Mortgage,
  the Convertible Debenture, any conditional or unconditional guaranty or
  similar instrument, any loan or credit extended hereunder or any security
  agreement, guaranty, or other document, Mortgagor shall promptly pay such
  tax in full (including interest and penalties, if any) and shall hold
  Mortgagee harmless with respect thereto and Mortgagor's liability hereunder
  shall survive the repayment of the indebtedness under the Convertible
  Debenture and all other such taxable instruments and obligations.

       The lien priority of this Mortgage shall not be affected by any changes
  in the Convertible Debenture or any other instrument secured hereby,
  including but not limited to, increases or decreases in the interest rate
  charged pursuant to the Convertible Debenture.  Any parties acquiring an
  interest in the Mortgaged Property subsequent to the date of this Mortgage
  is recorded shall acquire such interest in the Mortgaged Property with
  notice that Mortgagee may increase the interest rate or otherwise modify,
  amend or substitute the Convertible Debenture or other instrument secured
  hereunder, and the Convertible Debenture and other instruments secured
  hereunder, as modified, and the Mortgage shall remain superior to the
  interest of any party in the Mortgaged Property acquired subsequent to the
  date this Mortgage is recorded.

       No waiver of any default hereunder shall extend to or affect any
  subsequent or any other default then existing, or impair any rights, powers
  or remedies consequent thereon.  If Mortgagee (a) grants forbearance of an
  extension of time for the payment of any sums secured hereby (b) takes other
  or additional security for the payment thereof (c) waives or does not
  exercise any right granted in the Mortgage (d) releases any part of the
  Mortgaged Property from the lien of this Mortgage (e) consents to the filing
  of any map, plat or replat of the Land (f) consents to the granting of any
  easement on the Land; or (g) makes or consents to any agreement changing the
  terms of the indebtedness hereby secured by this Mortgage, including the
  Convertible Debenture, or subordinating the lien or any charge hereof, no
  such act or omission shall release, discharge, modify, change or affect the
  original liability under this Mortgage or otherwise of Mortgagor, or any
  subsequent purchaser of the Mortgaged Property or any part thereof or any
  maker, co-signer, endorser, surety or guarantor.  Nor shall any such act or
  omission preclude Mortgagee from exercising any right, power or privilege
  herein granted or intended to be granted in case of any default then existing
  or of any subsequent default; nor, except as otherwise expressly provided in
  an instrument or instruments executed by Mortgagee, shall the lien of this
  Mortgage be altered thereby.  In the event of the sale or transfer by
  operation of law or otherwise of all or any part of the Mortgaged Property,
  Mortgagee, without notice to any person, firm or corporation, is hereby
  authorized and empowered to deal with any such vendee or transferee with
  reference to the Mortgaged Property or the indebtedness secured hereby, or
  with reference to any of the terms or conditions hereof, as fully and to
  the same extent as it might deal with the original parties hereto and
  without in any way releasing or discharging any of the liabilities or
  undertakings hereunder.

  No right, power or remedy conferred upon or reserved to Mortgagee by this
  Mortgage is intended to be exclusive of any other right, power or remedy,
  but each and every such right, power and remedy shall be cumulative and
  concurrent and shall be in addition to any other right, power and remedy
  given hereunder or now or hereafter existing at law or in equity or by
  statute.

        It is further stipulated and agreed by and between the parties that
  Mortgagee shall have the right to exercise any option or privilege herein
  given or reserved and to enforce any duty of Mortgagor at any time without
  further or other notice regardless of any prior waiver by Mortgagee or
  default of Mortgagor or delay by Mortgagee in exercising any right, option,
  or privilege or enforcing such duty of Mortgagor and no waiver by Mortgagee
  or default of Mortgagor nor delay of Mortgagee in exercising any right,
  privilege or option or in enforcing any duty of Mortgagor shall be deemed,
  held, or construed to be a waiver or any of the terms or provisions of this
  Mortgage or of any subsequent or continuing default.

       This instrument also serves as a security agreement and creates a
  security interest in the Mortgaged Property in favor of Mortgagee herein
  under the Uniform Commercial Code as adopted in Florida, and Mortgagee
  shall also have all rights, privileges and remedies including notice of a
  secured party under the Florida Uniform Commercial Code and without
  limitation upon or in derogation of the rights and remedies created under
  and accorded Mortgagee by this Mortgage pursuant to the common law or any
  other laws of the State of Florida or any other jurisdiction it being
  understood that the rights and remedies of Mortgagee under the Florida
  Uniform Commercial Code shall be cumulative and in addition to all other
  rights and remedies of Mortgagee arising under the common law or any other
  laws of the State of Florida or of any other jurisdiction.  On demand
  Mortgagor shall promptly pay all costs and expenses of filing statements,
  continuation statements, partial releases and termination statements deemed
  necessary or appropriate by Mortgagee to establish and maintain the validity
  and priority of the security interest of Mortgagee.  It is expressly agreed
  in  accordance with the provisions of the Florida Uniform Commercial Code,
  ten (10) days notice by Mortgagee to Mortgagor shall be deemed to be
  reasonable notice under any provisions of the Florida Uniform Commercial Code
  requiring such notice.

  Mortgagor hereby waives all rights of homestead exemption granted by the
  Constitution and laws of Florida.  All covenants and obligations of the
  respective parties hereto shall extend to and be binding upon their respective
  heirs, personal representatives, successors and assigns.

  IN WITNESS WHEREOF, Mortgagor has executed this Mortgage effective as of the
  day and year first above written.

  Signed, sealed and delivered in
  the presence of:                               FOOD TECHNOLOGY SERVICE, INC.,
                                                 a Florida corporation


  _____________________________
  Print name: ___________________


  _____________________________            By: _______________________________
  Print name: ____________________         Print Name: ________________________
                                         Title: ______________________________

  STATE OF FLORIDA

  COUNTY OF POLK

       The foregoing instrument was acknowledged before me this __ day of July,
  2000, by _____________________, the _________________ of FOOD TECHNOLOGY
  SERVICE, INC., a Florida corporation, on behalf of the corporation.  (He)
  (She) is personally known to me or has produced _______________ as
  identification.

                                          _______________________________
                                          Notary Public

                                          My commission expires:


  Letter(i) SIMPLIFICATION OF SECURITY INTEREST DATED MARCH 6, 2000

  March 6, 2000

  Food Technology Service, Inc.
  502 Prairie Mine Road
  Mulberry, Florida  33860
  USA

  Attention: 	Pete Ellis, President

  Dear Sirs:

  Re:	Simplification of Security Interests

  The parties desire to simplify and consolidate the security interests securing
  Food Technology Service, Inc.'s ("FTSI") outstanding debt and other
  obligations.

  Indebtedness

  FTSI as at November 30, 1999, acknowledges its indebtedness to MDS Nordion
  Inc. ("Nordion") in the amount of $900,000US and accrued interest in the
  amount of $22,374.50US (the "Debt"), pursuant to cash advances made by
  Nordion to FTSI under the Agreement dated December 11, 1991, which sum is
  currently secured by a Convertible Debenture (the "Debenture") and Mortgage
  and Security Agreement, respectively dated January 15, 1992.  The Debt and
  any future payment or advance of funds to FTSI or to its benefit by Nordion
  after November 30,1999, continue to bear annual interest, until full payment,
  at the rate of the Nations Bank prime rate in effect from time to time plus
  one percent (1%).  The Debt, interest accruing thereon and any future
  advances or payments including payment of guarantees or indemnities to third
  parties made by Nordion to FTSI's benefit (collectively the "Indebtedness")
  remain, at Nordion's option, convertible at any time into common shares of
  FTSI based on the conversion rate of 70% of the closing price of FTSI's
  shares listed on NASDAQ on the last trade date prior to exercise of the
  conversion right.

  Simplification and Consolidation

  In order to simplify and consolidate the security interest securing the
  Indebtedness Nordion agrees (i) to release and discharge all underlying
  security interests registered in the State of Florida, with respect to the
  purchase of equipment and cobalt 60 which Nordion holds under the Uniform
  Commercial Code and which were registered prior to the date of this letter
  agreement, excluding the Debenture and notification of retention of ownership
  of 2.6m Curies of cobalt-60 under the agreement dated September 11,1992, (ii)
  to discharge the Mortgage and Security Agreement dated October 22,1991 which
  secures payment to MDS Nordion by FTSI of up to $600,000 US under the terms
  of the Reimbursement and Indemnity Agreement dated October 22,1991
  ("Indemnity Agreement"), and (iii) to discharge the Mortgage and Security
  Agreement dated January 15,1992, in favour of securing the Indebtedness under
  a new mortgage and security agreement.

  Florida State Requirements

  The parties further agree to amend the Indemnity Agreement in order to
  replace "Bank of Montreal" in such agreement, with "Canadian Imperial Bank of
  Commerce or such other bank as may be designated by Nordion from time to
  time".

  Line of Credit

  Additionally, FTSI agrees to indemnify and reimburse Nordion for any payment
  Nordion may otherwise make to Fleet National Bank, pursuant to its
  obligations under the Unlimited Guaranty and Indemnity Agreement dated
  October 29, 1998, issued by Nordion to Fleet National Bank, for the purpose
  of guaranteeing repayment of the line of credit granted to and in favour of
  FTSI, as amended and as increased in amount from time to time including
  interest, costs and expenses.

  General Indemnity

  FTSI agrees to indemnify and reimburse Nordion for any payment made by
  Nordion to third parties arising from guarantees or indemnities to third
  parties issued by Nordion for the benefit of FTSI.

  Implementation

  In order to implement the foregoing the parties agree to register a new
  mortgage and security agreement replacing the Mortgage and Security Agreement
  dated January 15, 1992, which shall be substantially in the same form and
  which shall provide as follows:


  (1) provide security for payment of the Debt and interest accruing thereon as
   set out in the Debenture;

  (2)eliminate the total overall mortgage cap (currently capped at
   $2,000,000US), and replace it with a total overall mortgage cap of
   $7,000,000US;

  (3)provide security to Nordion for any payment up to $600,000 US, to be paid
  by FTSI to Nordion pursuant to the Indemnity Agreement, wherein, FTSI has
  agreed to indemnify Nordion against payment, up to $600,000 US, required to
  be made by Nordion to Acstar Insurance Company ("Acstar") pursuant to
  indemnities entered into by Nordion with Acstar to secure a License and
  Permit Bond between FTSI and Acstar for the benefit of the State of Florida,
  in the amount   $600,000 US;

  (4)eliminate the limit on the amount of additional loans from Mortgagee to
  Mortgagor under the January 15, 1992 Mortgage and Security Agreement,
  (currently capped at $500,000 US in additional loans), to provide that the
  new mortgage and security agreement, to the greatest extent possible, secure
  (i) FTSI's present or future obligations to Nordion, including but not
  limited to additional loans interest, costs and expenses; (ii) reimbursement
  to Nordion for any amount expended by Nordion pursuant to any guarantee,
  letter of credit, indemnity or any other commitment of any type by Nordion
  to a third party for the benefit of FTSI including without limitation, any
  guarantee by Nordion of a present or future  working capital loan or line of
  credit by a third party (including Fleet National Bank), to FTSI.

  Costs and Expenses

  FTSI further agrees that it shall pay all taxes and penalties including
  without limitation, documentary stamp taxes and intangible taxes, now or
  hereafter imposed by applicable governmental authority regarding all prior,
  existing or future, financing
  guarantees, indemnities or security transactions between the parties, and
  shall pay all legal costs and attorney's fees incurred in carrying out the
  transactions contemplated herein.

  Waiver

  Nothing contained in this letter agreement invalidates any security now held
  by Nordion for payment of the Indebtedness and FTSI hereby waives in favour
  of Nordion and its successors and assigns any claims or defenses which FTSI
  may have regarding or in any way related to the Indebtedness from actions or
  events prior to this date and further agrees not to raise any such claims or
  defenses, if any, against Nordion or its successors or assigns in civil
  proceedings or otherwise.

  If you concur with the foregoing, please sign in the space provided.


                               MDS NORDION INC.

                               by:

  We concur this       day of
                     , 2000

  FOOD TECHNOLOGY SERVICE, INC.

  by:


  doc#35417



         --------

    (1)  Articles of Incorporation. Reference is made to Exhibit 3.1 included
         in the Company's Registration Statement on Form S-18 (File No. 33-
         36838-A).
    (2)  By-Laws. Reference is made to Exhibit 3.2 included in the Company's
         Registration Statement on Form S-18 (File No. 33-36838-A).
    (3)  Agreements entered into by the Company with MDS Nordion

              *(a) Reimbursement and Indemnity Agreement dated October 22, 1991
              *(b) Agreement dated December 11, 1991
              *(c) Debenture dated January 15, 1992
              *(d) Copy of Security & Mortgage Agreement dated January 15, 1992
              *(e) Financing Agreement dated February 21, 1992
              *(f) Security Agreement dated February 21, 1992
             **(g) Letter Agreement dated March 31, 1994 and April 13, 1994.
            ***(h) Modification Agreement

    *   Reference is made to Exhibit (c)(3) included in the Company's Form 10-K
        Report filed for the year ended December 31, 1991.

    **  Reference is made to Exhibit 3(g) included in the Company's Form
        10-KSB Report filed for the year ended December 31, 1993.

    *** Filed herewith.

    (b)  Reports on Form 8-K
         -------------------
         No reports on Form 8-K were filed during the fourth quarter of the
         year ended December 31, 2000.


                            SIGNATURES
                            ----------

    Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized as of the
__________day of March 2001.

                                 FOOD TECHNOLOGY SERVICE, INC.


                                 By:    /S/ E.W. (Pete) Ellis
                                    ---------------------------
                                    E.W. (Pete) Ellis, Chief Executive Officer

<PAGE>




    Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the Company
and in the capacities and on the dates indicated:

                 Name                       Title                     Date
                 ----                       -----                     ----

  /S/  E.W. (Pete) Ellis            Chief Executive Officer     March __, 2001
---------------------------             and Director
E.W. (Pete) Ellis

  /S/  Thomas J. Daw                 Director                   March __, 2001
---------------------------
Thomas J. Daw

  /S/  Frank M. Fraser               Director                   March __, 2001
---------------------------
Frank M. Fraser

  /S/  R. Craig Hunter               Director                   March __, 2001
---------------------------
R. Craig Hunter

  /S/  David Nicholds                Director                   March __, 2001
---------------------------
David Nicholds

<PAGE>



                              FOOD TECHNOLOGY SERVICE, INC.


                              INDEX TO FINANCIAL STATEMENTS


             Report of Independent Certified Public Accountants

             Financial Statements

             Balance Sheets - December 31, 2000 and 1999

             Statements of Operations - Years Ended December 31, 2000,
             1999 and 1998

             Statement of Stockholder's Equity - Years Ended
             December 31, 2000, 1999 and 1998

             Statements of Cash Flows - Years ended December 31, 2000,
             1999 and 1998

             Notes to Financial Statements

<PAGE>


                  REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors
and Stockholders
Food Technology Service, Inc.


     We have audited the accompanying balance sheets of Food Technology
Service, Inc. as of December 31, 2000 and 1999 and the related statements of
operations, Stockholders' equity and cash flows for each of the three years in
the period ended December 31, 2000. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

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

     In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Food Technology Service,
Inc. as of December 31, 2000 and 1999 and the results of its operations and its
cash flows for each of the three years in the period ended December 31, 2000,
in conformity with generally accepted accounting principles.

     The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note B to the
financial statements, the Company has not received significant revenues and
has incurred losses since inception. Accordingly, there is 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 B. The financial
statements do not include adjustments that might result from the outcome of
this uncertainty.





FAIRCLOTH & ASSOCIATES, P.A.



Tampa, Florida
February 14, 2001




<PAGE>





                        FOOD TECHNOLOGY SERVICE, INC.


                              BALANCE SHEETS


                                                      December 31,
                                               2000                 1999
                                            ----------           ----------

                                   ASSETS
                                   ------

Current Assets:
  Cash                                        $108,104              $20,937
  Accounts Receivable                           79,975               51,125
  Due from Employees                            23,375               66,175
  Inventory                                       -                   3,886
                                             ---------           ----------
    Total Current Assets                       211,454              142,123

Property and Equipment:

  Building                                   2,883,675            2,883,675
  Cobalt                                     1,310,272            1,310,272
  Furniture and Equipment                    1,686,630            1,659,854
  Less Accumulated Depreciation             (2,743,785)          (2,482,167)
                                            ----------           ----------

                                             3,136,792            3,371,634

  Land                                         171,654              171,654
                                            ----------           ----------

    Total Property and Equipment             3,308,446            3,543,288


Other Assets:                                    5,000                5,000
                                            ----------           ----------

    Total Assets                            $3,524,900           $3,690,411
                                            ==========           ==========


                        SEE NOTES TO FINANCIAL STATEMENTS

<PAGE>




                        FOOD TECHNOLOGY SERVICE, INC.


                              BALANCE SHEETS


                                                      December 31,
                                               2000                 1999
                                            ----------           ----------

                      LIABILITIES AND STOCKHOLDERS' EQUITY
                      ------------------------------------

Current Liabilities:
  Accounts Payable                             $55,113              $48,513
  Revolving credit line                        100,000              250,000
  Financing Agreement and
    Debenture Payable                        1,055,164                 -
                                            ----------           ----------
    Total Current Liabilities                1,210,277              298,513

Financing Agreement and
  Debenture Payable                               -                 954,476

Stockholders' Equity:
  Common Stock $.01 Par Value, Authorized
   20,000,000 Shares, Outstanding 10,333,201
   Shares in 2000 and 10,316,201 in 1999       103,332              103,162

  Paid-In Capital                           11,469,671           10,982,963
  Deficit Accumulated During
    Development Stage                       (9,258,380)          (9,104,371)
                                            ----------           ----------

                                             2,314,623            2,437,422
Commitments and Contingencies
  (Note B and I)

    Total Liabilities and
      Stockholders' Equity                  $3,524,900           $3,690,411
                                            ==========           ==========



                        SEE NOTES TO FINANCIAL STATEMENTS

<PAGE>




                              FOOD TECHNOLOGY SERVICE, INC.


                                STATEMENTS OF OPERATIONS



                                                    Year Ended
                                                    December 31,
                                         1998          1999         2000
                                      ----------    ----------   ----------

Net Sales                              $562,552      $387,966   $1,412,297
                                     ----------    ----------    ---------
Processing Costs                        323,918       304,028      374,043

General, Administrative
 and Development                        539,421       588,724      802,640

Depreciation                            274,449       265,442      261,618

Interest Expense                         75,337       92,403       128,005
                                     ----------    ----------    ---------
                                      1,213,125     1,250,597    1,566,306
                                     ----------    ----------    ---------

  Loss from Operations                (650,573)      (862,631)    (154,009)

Other Income (Loss):
  Foreign Exchange                      29,117        (25,398)        -
                                     ----------    ----------   -----------

Loss before Income Taxes              (621,456)      (888,029)    (154,009)

Income Taxes                                  0             0            0
                                     ----------    ----------   -----------

  Net Loss                           ($621,456)     ($888,029)   ($154,009)
                                     ==========    ==========   ==========

Net Loss Per Common Share               ($0.06)        ($0.09)       ($.01)
                                     ==========    ==========   ==========


                        SEE NOTES TO FINANCIAL STATEMENTS

<PAGE>



                        FOOD TECHNOLOGY SERVICE, INC.


                     STATEMENTS OF STOCKHOLDERS' EQUITY



                                     Common          Paid-In
                                      Stock          Capital          Deficit
                                    ----------      ----------       ----------


Balance, December 31,1997             $100,522    $10,923,339      ($7,594,886)

  Sale of 37,785 Shares of Stock
    for $60,000 in Cash and
    Services                               378         59,624             -

  Net Loss for Year	                    -            -            (621,456)
                                    ----------      ----------       ----------
Balance, December 31,1998              100,900      10,982,963            -

  Sale of 226,200 Shares of Stock
    for $438,725 in Cash and
    Services                             2,262        436,463             -

  Directors Stock Option Compensation                  19,205

  Net Loss for Year	                    -            -            (888,029)
                                    ----------      ----------       ----------
Balance, December 31,1999              103,162      11,438,631       (9,104,371)

Sale of 17,000 Shares of Stock
    for $31,210 in Cash                    170          31,040             -

  Net Loss for Year	                    -            -            (154,009)
                                    ----------      ----------       ----------
Balance, December 31,2000             $103,332     $11,469,671     ($9,258,380)
                                    ==========      ==========       ==========



                        SEE NOTES TO FINANCIAL STATEMENTS

<PAGE>



                               FOOD TECHNOLOGY SERVICE, INC.


                                  STATEMENTS OF CASH FLOWS





                                                     Year Ended
                                                     December 31,
                                            1998        1999          2000
                                         ----------  ----------    ----------

Cash Flows from Operations:
  Cash Received from Customers            $566,234      $358,341    $1,382,317
  Interest Received
  Interest Paid                             (2,346)      (13,526)      (27,318)
  Cash Paid for Operating Expenses        (891,536)     (872,219)   (1,265,754)
                                          --------      --------     ---------
                                          (327,648)     (527,404)       89,245

Cash Flows from Investing:
  Purchase of Equipment                     (4,269)         (705)      (26,776)
                                          --------      --------      --------
                                            (4,269)         (705)      (26,776)

Cash Flows from Financing
  Activities:
  Proceeds from Sale of
    Common Stock                            30,000       368,000        31,210
  Proceeds from Borrowing                  295,732       175,000       100,688
  Payment of Loans                            -             -         (150,000)
  Repayment of Employee Advances              -             -           42,800
                                          --------      --------      --------
                                           325,732       543,000        24,698

Net Increase (Decrease) in
  Cash                                      (6,185)       14,891        87,167

Cash at Beginning of Year                   12,231         6,046        20,937
                                          --------      --------      --------

Cash at End of Year                         $6,046       $20,937      $108,104
                                          ========      ========      ========


                        SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>




                        FOOD TECHNOLOGY SERVICE, INC.


                          STATEMENTS OF CASH FLOWS





                                                       Year Ended
                                                       December 31,
                                            1998         1999         2000
                                         ---------    ---------    ---------


Reconciliation of Net Loss to
  Net Cash Used by Operations:
  Net Loss                              ($621,456)   ($888,029)    ($154,009)

Adjustments to Reconcile
  Net Loss to Cash Used:
  Depreciation                            274,449      265,442       261,618
  Loss on Sale of Equipment
  Imputed Interest on
    Financing Agreement
  Foreign Exchange (Gain) Loss            (29,117)      25,398          -
  (Increase) Decrease in
    Receivables                            11,921      (28,301)      (28,850)
  (Increase) Decrease in Inventory         (8,452)       4,566         3,886
  Increase (Decrease) in
    Payables and Accruals                  15,007       (9,112)        6,600
  Value Ascribed to Stock
   Issued for Services and Int.            30,000      102,632          -
                                      -----------   ----------     ---------
Net Cash Used by Operating
  Activities                            ($432,016)   ($327,648)    ($527,404)
                                      ===========   ==========     =========


Supplemental schedule of noncash investing and financing activities.

During 1999 the Company issued common stock for receivables of $66,175.



                        SEE NOTES TO FINANCIAL STATEMENTS

<PAGE>



                              FOOD TECHNOLOGY SERVICE, INC.

                              NOTES TO FINANCIAL STATEMENTS
                                   DECEMBER 31, 2000




Note A - Summary of Significant Accounting Policies:

A summary of the Company's significant accounting policies consistently
applied in the preparation of the accompanying financial statements follows:

1. Nature of Business

The Company was organized in December 1985 to engage in the business of
operating a gamma irradiation facility using Cobalt 60 to extend the shelf
life of and/or disinfect fruits, vegetables and meat products and for the
sterilization of medical, surgical, pharmaceutical and packaging materials.

Since its inception, the Company has been devoting its efforts to research and
development, planning for and construction of facilities, planning for
operations, raising capital and informing agricultural interests and other
potential users of the Company's intentions and progress. During 1992, the
plant was completed and commenced operations.

2. Use of Estimates

Management uses estimates and assumptions in preparing financial statements
in accordance with generally accepted accounting principles. These estimates
and assumptions affect the reported amounts of assets and liabilities, the
disclosure of contingent assets and liabilities, and the reported revenues
and expenses. Actual results could vary from the estimates that were assumed
in preparing the financial statements.

3. Fair Value of Financial Instruments

The fair value of financial instruments has been valued at the prevailing
prime interest rate plus 1%. The fair value approximates the carrying amount
of debt.

4. Revenue Recognition

Sales are recorded by the Company when the customer's product has been
processed.


<PAGE>




                              FOOD TECHNOLOGY SERVICE, INC.

                              NOTES TO FINANCIAL STATEMENTS
                                    DECEMBER 31, 2000




Note A - Summary of Significant Accounting Policies (continued):

5. Research and Development Costs

Research and development costs are charged to expense as incurred. Such
costs have not been significant to date.

6. Depreciation

Assets other than Cobalt have been depreciated using the straight-line
method over the following lives for both financial statement and tax purposes:

    Building                      31.5 Years

    Furniture and Equipment        5-15 Years

Cobalt has been depreciated using engineering estimates from published tables
under which one-half of the remaining value is written off over 5.26 year
periods.

Estimated useful lives are periodically reviewed and if warranted, changes will
be made resulting in acceleration of depreciation.

7. Foreign Exchange

Debt payable in Canadian currency has been translated at the Exchange Rates in
effect at the Balance Sheet dates and any gain or loss has been included in
results of operations.

8. Net Loss Per Share

Basic net loss per share is computed using the weighted average number of
common shares outstanding. Diluted earnings per share are not presented because
the result of using common stock equivalents in the computation is
antidilutive.

9. Comprehensive Income

The only component of comprehensive income the Company has is net income.



<PAGE>


                              FOOD TECHNOLOGY SERVICE, INC.

                              NOTES TO FINANCIAL STATEMENTS
                                    DECEMBER 31, 2000

Note B - The Company as a Going Concern:

The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles, which contemplate continuation of the
Company as a going concern. However, the Company has not received significant
revenues and has incurred significant losses since inception.

Management is of the opinion that the company will continue operations through
December 31, 2001 based on the following plans and events:

The Company's supplier (Note C ) and major creditor, MDS Nordion Inc., has
guaranteed a line of credit of $500,000 from a bank. Any future draws against
this line must be approved by Nordion. At December 31, 2000, $400,000 of this
amount is available to fund 2001 operations.

The Company began processing certain meat products on February 23, 2000 under
the provisions of new USDA regulations. The Company anticipates that revenues
from processing, packaging materials, consumer goods, food and other products
together with its unused credit line of $400,000 will be sufficient to cover
operating costs through December 31, 2001.However, there is no assurance that
the anticipated revenues will be received.

Note C - Financing Agreement:

Financing agreement to supplier due on
demand plus interest at 1% over prime                   $963,194

Accrued interest                                          91,970
                                                      ----------
                                                      $1,055,164
                                                      ==========



At December 31, 1999 the Company owed MDS Nordion, Inc. $378,598 (payable In
Canadian currency), $375,732 in cash advances and $200,146 in accrued interest
totaling $954,476. Such debt was all due January 5, 2001.

On March 6, 2000, as amended on May 18, 2000 the parties agreed to simplify
and consolidate the debt as follows. The total amount of the indebtedness at
February 4, 2000 was $963,194 payable in U. S. dollars, which included $22,114
accrued interest. The parties further agreed that the debt, interest accruing
thereon, and any future advances remain, at Nordion's option, convertible at
any time into common shares of the Company at 70% of the market value at date
of conversion. At various times during the year Nordion agreed to waive its
rights to convert interest accruing on the indebtedness through
January 1, 2002



<PAGE>



                              FOOD TECHNOLOGY SERVICE, INC.

                              NOTES TO FINANCIAL STATEMENTS
                                   DECEMBER 31, 2000



Note C - Financing Agreement (continued):

On January 23, 2001 Nordion agreed to change the due date of the debt from
January 5, 2001 to a due on demand basis. Such debt is not in default and no
such demand has been made.

All assets of the Company collateralize all sums advanced by the supplier,
including accrued interest.

Note D - Income Taxes:

The Company has unused operating loss carry-forwards available at December 31,
2000 of $9,215,997 for tax purposes and $9,235,202 for financial reporting
purposes. The loss carry-forwards expire as follows:


                                                     Amount
                            Year             Tax                     Book
                            ----          ---------              ------------

                            2001            $28,141                  $28,141
                            2002             45,859                   45,859
                            2003             73,687                   73,687
                            2004             23,345                   23,345
                            2005             77,909                   77,909
                            2006            400,332                  400,332
                            2007          1,352,015                1,352,015
                            2008          1,297,455                  945,703
                            2009          1,239,590                1,239,696
                            2010          1,262,386                1,327,385
                            2011          1,048,800                1,066,986
                            2012            688,497                1,006,131
                            2018            647,342                  618,226
                            2019            840,712                  881,875
                            2020            189,927                  147,912
                                         ----------               ----------
                                         $9,215,997               $9,235,202
                                         ----------               ----------
                                         ----------               ----------

Deferred income taxes reflect the estimated tax effect of temporary differences
between assets and liabilities for financial reporting purposes and those
amounts as measured by tax laws and net operating losses. The components of
deferred income tax assets and liabilities at December 31, 1999 and 2000
were as follows:

<PAGE>


                              FOOD TECHNOLOGY SERVICE, INC.

                              NOTES TO FINANCIAL STATEMENTS
                                   DECEMBER 31, 2000

Note D - Income Taxes (continued):
                                              1999                2000
                                           ----------          ----------

      Net operating loss carryforwards     $3,396,510          $3,467,980

      Foreign exchange                        (23,217)

      Stock option compensation                 5,932               5,932

      Equity in loss of affiliate              39,319
                                           ----------          ----------
          Net deferred tax assets           3,418,544           3,473,912

          Less- Reserve                    (3,418,544)         (3,473,912)
                                           ----------          ----------
                                           $    -0-            $    -0-
                                           ----------          ----------
                                           ----------          ----------


The net deferred tax assets have been fully reserved because there is less
than a 50% chance that they will be utilized.

Note E - Stock Offerings:

During 1998 the Company sold 3,333 unregistered shares for $10,000 in cash
to an individual and 20,000 shares for $20,000 in cash to its President
pursuant to an employment agreement. In addition, 14,286 shares were issued
for legal services and $30,000 was charged to operations. Also, 166 shares
were exchanged for 2,000 shares of an affiliate.

During 1999 the Company sold 150,000 shares for $286,125 in cash to a beef
and poultry distributor. In addition 74,200 shares were sold for $148,050
in cash and receivables pursuant to stock option plans. Also 2,275 shares
with an ascribed value of $4,550 were donated to an educational institution.

During 2000 the Company sold 17,000 shares for $31,210 in cash and receivables
pursuant to stock option plans.

All shares issued for services have been ascribed the market value on the
dates they were earned.
Note F - Stock Purchase Warrants and Stock Options:

The company's policy is to issue warrants and options at or above the market
value on the issue date, except for non-employee Directors in 1999.
Accordingly, compensation has been recorded for warrants or options granted
only to such Directors.


<PAGE>

                              FOOD TECHNOLOGY SERVICE, INC.

                              NOTES TO FINANCIAL STATEMENTS
                                   DECEMBER 31, 2000


Note F - Stock Purchase Warrants and Stock Options (continued):

On November 11, 1996 the Company agreed to issue its President 10,000 shares
for services. The Company also granted to him options to purchase up to 20,000
shares of stock per year at $1 per share during the five year period ending
December 8, 2001. Such options were exercised 20,000 shares in 1998, 32,000
shares in 1999 and 8,000 shares in 2000.

On May 18, 1992, the Stockholders approved the 1992 Incentive and Non-Statutory
Stock Option Plan (the "1992 Plan") and on June 23, 2000 the Stockholders
approved the 2000 Incentive and Non-Statutory Stock Option Plan (the "2000
Plan").

The Plans are administered by the Board of Directors who are authorized to
grant incentive stock options ("ISO's") or non-statutory options ("NQO's"),
to Officers and employees of the Company and for certain other individuals
providing services to or serving as Directors of the Company.

Upon approval of the 2000 Plan no further options will be granted under
the 1992 Plan. The maximum number of shares of the Company's Stock that may
be issued under the 2000 Plan is 500,000 shares of which options to purchase
9,356 shares were granted in 2000.

The aggregate fair market value (determined at the time an ISO is granted) of
the Common Stock with respect to which ISO's are exercisable for the first
time by any person during any calendar year under the Plans shall not exceed
$100,000. Any option granted in excess of the foregoing limitation shall be
specifically designated as being a NQO.

On August 25, 1992, the Board of Directors authorized and issued options to
buy 122,000 shares at $8.75 per share. On August 7, 1998 the remaining 78,000
of these options were canceled and new options to purchase 105,000 shares at
$2.75 per share were issued. Such price was the market value on August 7, 1998;
accordingly, no compensation was charged to operations.

The options are exercisable 20% of the authorized amount immediately and 20%
in each of the following four years. ISO's and NQO's granted to an optionee
terminate 30 to 90 days after termination of employment or other relationship,
except that ISO's and NQO's terminate the earlier of the expiration date of
the option, or 90 to 180 days in the event of death and 180 days to one year
in the event of disability.

On February 9, 1999 the Board of Directors approved an option plan for
non-employee Directors. Under the plan, non-employee Directors receive options
to purchase 3,000 shares per year plus 1,000 shares per meeting attended. Such
options were granted in January of each year at the quoted market price at the
beginning of the previous year and must be exercised on or before five years
from the date of grant. The options are granted pro rata if a director
terminates during the year. During 1999, 23,000 options accrued to three
Directors. The difference between the option price and the market price of the
shares on the dates earned was $19,205 and has been charged to income.

<PAGE>

                              FOOD TECHNOLOGY SERVICE, INC.

                              NOTES TO FINANCIAL STATEMENTS
                                   DECEMBER 31, 2000


Note F - Stock Purchase Warrants and Stock Options (continued):

Such plan was amended on May 18, 2000 to grant such options on the date a
director is elected rather than January at the average quoted market price
for the five days preceding the date of grant. Also such options may be
exercised after one year. No more than 10,000 shares may be granted to each
Director per year. During 2000 options to purchase 25,356 shares at $3.38 to
$4.02 per share were granted to four directors.

Statement of Financial Accounting Standards No. 123 "Accounting for Stock-Based
Compensation" was implemented in January, 1996. As permitted by the Standard,
the Company retained its prior method of accounting for stock compensation.
If the accounting provisions of Statement No. 123 had been adopted, the net
impact on the 2000, 1999 and 1998 net income would not have been material.

Changes that occurred in options and warrants outstanding in 2000, 1999 and
1998 are summarized below:


                      2000                  1999                  1998
                      ----                ----                  ----
                             Average             Average                Average
                             Exercise           Exercise               Exercise
                     Shares   Price    Shares    Price        Shares    Price

Outstanding at
beginning of year     115,800  $2.30    403,000   $2.30       273,000    $5.73

Granted               53,356  $2.96                          273,000    $2.29

Exercised            (17,000) $1.84   (224,200)  $1.94       (20,000)   $1.00

Expired/canceled      (4,250) $3.18    (63,000)  $7.12      (123,000)   $8.55
                     -------           -------               -------

Outstanding at end
of year              147,906  $2.35    115,800   $2.02       403,000    $2.06
                     =======           =======               =======
Exercisable at
end of year           41,600  $2.50      6,000   $2.75       200,000    $3.21



Note G - Related Party Transactions:

The Company's supplier of Cobalt and major creditor, MDS Nordion Inc. (Nordion)
owns over 50% of the Company's outstanding common stock ( see Note C for
financing arrangements).


<PAGE>

                              FOOD TECHNOLOGY SERVICE, INC.

                              NOTES TO FINANCIAL STATEMENTS
                                   DECEMBER 31, 2000



Note G - Related Party Transactions (continued):

On September 25, 1992 Nordion stored approximately 2,600,000 curies of cobalt
at the Company's plant. Subsequently 700,000 curies were returned and 1,510,000
 curies decayed, leaving approximately 390,000 curies at the Company's plant.
Such cobalt was stored in anticipation that it would be needed in the Company's
 operations: however, such cobalt has not been needed because of low processing
volume due to the lack of necessary Governmental approvals and marketing
demand. Due to the physical layout of the Company's plant, all product
processed was exposed to Nordion's cobalt. If Nordion's cobalt had been owned
by the Company, or had been required for increased processing volume or speed,
the decay of such cobalt would have been charged to operations, resulting in an
increased expense of approximately $200,000, $150,000 and $75,000 for the years
ended December 31,1998, 1999 and 2000, respectively. The net losses for such
periods would have been $821,456, $1,018,824 and $233,883 respectively. At such
time that the Company's operations increase to such an extent that the Nordion
cobalt is required for increased processing volume or speed, the Company will
begin charging its decay to operations.

Note H - Commitments and Contingencies:
On March 24, 2000, Pegasus Foods Canada, Inc. filed a lawsuit against the
Company alleging that certain seafood products irradiated by the Company were
adversely affected by the process. The lawsuit alleges damages in excess of
$2,000,000 and lost profits of $4,743,400. The Company denies the allegations
and intends to vigorously defend the lawsuit. The outcome of this litigation
is uncertain at this time; accordingly, no provision has been made in the
accompanying financial statements for this contingency. Approximately 50% of
the company's sales in 2000 were to one customer. The loss of this business
could have a severe impact on future results of operations. In February 1999,
the Company entered into an agreement with a beef and poultry distributor to
provide meat and poultry irradiation services. During February 1999, under
the terms of the agreement, the Company sold 150,000 shares of its common
stock to the stockholders of the distributor for $286,125 in cash. In addition,
the Company agreed to grant stock options of up to 105,000 shares at $2.75 per
share. Such options were to be granted in 10,000 share increments based on
10,000 share options for each $200,000 in sales to customers for irradiation
services during the two year period ending November 30, 2000. If the agreement
was still in effect on November 30, 2000 the Company agreed to grant to the
stockholders of the distributor additional stock options equal to the number of
options they exercised in the previous two years. Sales resulting from this
agreement through November 30, 2000 were less than $200,000; accordingly, no
options were granted.





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