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, 2002

                     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
$1,198,151.

    As of December 31, 2002, 11,001,038 shares of the Registrant's Common Stock
were outstanding, and the aggregate market value of the voting stock held by
non-affiliates (6,809,455 shares) was approximately $6,128,510 based on the
market price at that date.


                          DOCUMENTS INCORPORATED BY REFERENCE

Proxy Statement for the annual meeting of shareholders scheduled to be held
May 21, 2003.






                       TABLE OF CONTENTS


PART I

Item 1   Business

Item 2   Properties

Item 3   Legal Proceedings

Item 4   Submission of Matters to a Vote of Security Holders

PART II

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

Item 6   Management's Discussion and Analysis

Item 7   Financial Statements

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

PART III

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

Item 10  Executive Compensation

Item 11  Security Ownership of Certain Beneficial Owners and Management

Item 12  Certain Relationships and Related Transactions

Item 13  Exhibits and Report on Form 8-K















                                 PART I
Item 1.	Business of the Company

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 disinfestations, shelf life extension and control of certain disease
causing microorganisms. Additionally, the Company provides contract
sterilization service to the food packaging, medical device and food
ingredient industries.

The Company completed construction of its irradiation facility in
Mulberry, Florida in December 1991 and the facility became operational
on January 24, 1992.  The plant was constructed mainly 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 beneficial for the fruit and vegetable growers.

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.  However, to date only a limited amount of
packaging materials for meat and poultry have been approved for use with
irradiation.  A food industry consortium, led by a major packaging
material company, is working to gain additional approvals.  The red meat
industry, which has been faced with pathogen problems such as E. coli
0157:H7, supported a petition to allow irradiation of all meats that was
approved by the FDA on December 7, 1997.  However, the final
regulation allowing the irradiation of red meat was not published by
USDA/FSIS until February 22, 2001.  Sales of poultry and red meat have
been nominal to date, mainly because of slow consumer acceptance of
irradiated foods.  Although the Company is dedicated to the irradiation of
poultry, meats and other food products, until acceptance by the public, the
Company has and will continue to irradiate other products.  The
Company's revenue for 2002 (approximately $1,198,151) resulted
primarily from the processing of packaging, medical products and
consumer goods.

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) fresh fruits and vegetables for insect disinfestation, and
to delay maturation, which extends the shelf life of many fresh fruits and
vegetables; and (v) some meat to control pathogens and extend shelf life.

Management is working diligently with meat processors, food distributors
and with major retailers to gain consumer acceptance for irradiated
products. The Company continues 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 markets its irradiation process as a substitute for and/or a
complement to other food processing methods such as canning, freezing,
heat pasteurization and fumigation.

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 irradiation process does not make the
food radioactive.  The food is safe to eat immediately after processing.

The total time required to process different products varies, primarily
reflecting (i) the different radiation doses required for different purposes
(e.g., insect disinfestations 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.  Dosimeters, 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

	As of December 31, 2002, the Company had ten employees.

Cobalt 60 Supply

The Company has in place approximately 836,559 curies of Cobalt 60.
During March 2003, the Company ordered an additional 800,000 curies
for $1,119,413 plus freight and installation from MDS Nordion. 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. The amount of Cobalt 60 maintained is
determined by the business needs of the Company. Nordion is the
Company's supplier of Cobalt 60 and has agreed to sell to the Company all
of its requirements for Cobalt 60, and to accept the return of all used
Cobalt 60 that have reached the end of its useful life.  Cobalt 60 is
available from several sources. See "Agreements with MDS Nordion"
below.

Additional Uses for Irradiation

Research Services

	The Company currently has agreements with industries,
universities and government agencies to provide research and testing.

Medical products, books and records and packaging

The Company provides irradiation services for the sterilization of medical
products and devices, books and records and packaging materials.

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.  An irradiator is not a
nuclear reactor. The process does not involve any nuclear reaction It is
simply a processing plant containing a shielded area where items are
exposed to a source of energy.

The Company's irradiation processing activities will not produce 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.  The USDA
inspects the premises whenever the Company is processing meats or
poultry and the U.S. FDA inspects operations relating to both food and
medical items.

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 red meats, poultry and shell eggs for
the control of 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 and Ready-to-Eat luncheon meats are presently pending..

	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 certain 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.

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 stablished by the FDA, and relate to such
matters as good handling and processing ractices.  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 red meat
products.

Regulation of the Facility and the Irradiation Process

	The Company has obtained a license for the operation of its facility
from the Bureau 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 operations 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.  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.


Agreements with MDS Nordion

The Company, in September 1990, entered into an agreement with MDS
Nordion whereby MDS Nordion agreed to provide irradiation equipment
and cobalt-60 to the Company 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 December 31, 2002 was $887,584. This balance consists of $663,194
US (the "Debt"), plus interest accruing at prime plus 1% to December 31,
2002 in the amount of $224,390.

 	On October 22, 1991 the Company entered into a Reimbursement
and Indemnity agreement with Nordion whereby 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 Nordion for any liability and
expense which 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, 2001, April 17, 2001, May 18, 2001 and
November 20, 2001, 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 for 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 of Common Stock listed on NASDAQ, on the last trade date prior
to the exercise of the conversion right.  Further, by MDS Nordion's letter
dated November 26, 2002, MDS Nordion's right of conversion of interest
accruing on the Debt from January 1, 2001 to January 1, 2003 into shares
of the Company has been waived by MDS Nordion.

On February 4, 2001, 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) fixture 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 2002, there
were approximately 836,559 curies of cobalt-60 both owned and stored at
the Company's facility. Title in and to 286,777 curies of cobalt-60 located
at the facility remains the property of MDS Nordion and may be removed
by MDS Nordion at any time.




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 in 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.

	The Company's irradiation facility and executive office comprise
approximately 28,800 square feet, including a 2,600 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" positions 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 products to and from the processing chamber.
The Company's facility is designed to operate 24 hours per day, seven
days per week.  Although the Company currently has available
approximately 836,559 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 in Item I, substantially all of the assets of the
Company are pledged as collateral against the obligation to Nordion.

Item 3.		Legal Proceedings

	On March 24, 2001, 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.  This lawsuit has
been inactive since early 2002.  There is no other litigation pending
against the Company.

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

		None









                                    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
                                                              ----------
       2002                                                High      Low
         ----                                                ----      ---
     First Quarter                                          $1.68    $1.09
     Second Quarter                                          1.29      .72
     Third Quarter                                           1.73      .54
     Fourth Quarter                                          1.77      .85

       2001                                                High      Low
         ----                                                ----      ---
     First Quarter                                          $2.0625  $1.00
     Second Quarter                                          3.20     1.0938
     Third Quarter                                           2.89     1.10
     Fourth Quarter                                          5.40     1.10


(b) Approximate Number of Equity Security Holders. As of December 31, 2002,the
    approximate number of beneficial holders of Common Stock of the Company was
    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 had revenues of $1,198,151 during 2002.  This compares
to revenues of $1,509,895 for the same period in 2001 and reflects a
decrease of about 21 percent between the two years.  The company lost
($261,774) during 2002 compared to a profit of $106,251 during 2001.

Management attributes the decrease in revenue during  2002 to the
temporary departure of a non-food customer.  The Company has several
large non-food customers that require irradiation services on an
intermittent basis.  One of these customers did not require irradiation
services during the second, third and fourth quarters of 2002.  This
customer has committed to purchase irradiation services during 2003.
These intermittent customers make forecasting difficult but represent an
important source of revenue over the long term.  The Company
continues to expand and diversify the company's customer base to
minimize the impact of large intermittent customers.

Processing costs as a percentage of revenues increased from 24.5% in
FY 2001 to 30.8% in FY 2002.  However, processing costs were nearly
identical in both years and this reflects the fact that such costs are
relatively fixed at lower production volumes.  Selling, General and
Administrative expenses as a percentage of revenues increased from
42.5% in FY 2001 to 59.1% in FY 2002.  The actual increase was
$66,332 in FY 2002 versus FY 2001.  Management attributes these
increases to costs associated with the introduction of a branded line of
irradiated food products and increased insurance premiums.

The Company has made important gains in both retail grocery and food
service customers.  Production of New Generation products for
Colorado Boxed Beef Corporation and Publix Supermarkets did not
commence until the beginning of the first quarter of 2003 and are not
reflected in  2002 revenues.  Management believes that irradiation of
food will represent an important source of new revenue in  2003 and has
procured additional Cobalt to meet this demand.  In addition, the
Company has made plant upgrades to provide additional storage of
frozen and refrigerated food products.

At December 31, 2002, the Company had cash of approximately
$73,759. Operating costs in 2002 were approximately $1,459,925, up
from $1,403,644, in 2001.  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.

 	At December 31, 2002, the Company's outstanding debt to
Nordion amounted to $887,584 which is evidenced by a Note and
Mortgage and Security Agreement. The debt, which includes interest of
$224,390, bears interest at prime plus 1%. Such debt is due and payable
on demand.

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.















                                  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.

    Reference is made to the Company's Proxy Statement to be used in
conjunction with the 2002 annual Shareholders meeting scheduled to be held on


May 21, 2003.


Item 10. Executive Compensation


     Reference is made to the Company's Proxy Statement to be used in
conjunction with the 2003 annual Shareholders meeting scheduled to be held
on May 21, 2003.



Item 11. Security Ownership of Certain Beneficial Owners and Management

   Reference is made to the Company's Proxy Statement to be used in
conjunction with the 2002 annual Shareholders meeting scheduled to be held on
May 21, 2003.


Item 12. Certain Relationships and Related Transactions


    See Item 1 Business-"Agreements with MDS Nordion."


Item 13. Exhibits and Report on Form 8-K

   (a)  Exhibits
         --------
     (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, 2002.























                            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
21th day of March 2003.

                                 FOOD TECHNOLOGY SERVICE, INC.


                                 By:    /S/ Richard G. Hunter, Ph.D
                                    ---------------------------
                                    Richard G. Hunter, Ph.D,
                                    Chief Executive Officer and
                                    Chief Financial Officer



    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/  Richard G. Hunter             Director                   March 21, 2002
---------------------------
Richard G. Hunter, Ph.D.

  /S/  Thomas J. Daw                 Director                   March 21, 2002
---------------------------
Thomas J. Daw

/S/  Frank M. Fraser                 Director                   March 21, 2002
---------------------------
Frank M. Fraser

  /S/  David Nicholds                Director                   March 21, 2002
---------------------------
David Nicholds

  /S/  John T. Sinnott                 Director                   March 21, 2002
---------------------------
John T. Sinnott, M.D., F.A.C.P


  /S/ Michael W. Thomas              Director                   March 21, 2002
---------------------------
Michael W. Thomas .





























                              FOOD TECHNOLOGY SERVICE, INC.

                             INDEX TO FINANCIAL STATEMENTS


             Report of Independent Certified Public Accountants

             Financial Statements

             Balance Sheets - December 31, 2002 and 2001

             Statements of Operations - Years Ended December 31, 2002,
             2001 and 2000

             Statement of Stockholders' Equity - Years Ended
             December 31, 2002, 2001 and 2000

             Statements of Cash Flows - Years Ended December 31, 2002,
             2001 and 2000

             Notes to Financial Statements
























                  REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS



To the Board of Directors
and Stockholders
Food Technology Service, Inc.


     We conducted our audits in accordance with auditing standards
generally accepted in the United States of America.  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, 2002 and 2001 and the results
of its operations and its cash flows for each of the three years in the
period ended December 31, 2002, in conformity with accounting principles
generally accepted in the United States of America.

	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, 2002 and 2001 and the results of its
operations and its cash flows for each of the three years in the period ended
December 31, 2002, 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 accumulated 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.

/S/ FAIRCLOTH & ASSOCIATES, P.A.
Tampa, Florida
March 5, 2003




                        FOOD TECHNOLOGY SERVICE, INC.


                              BALANCE SHEETS


                                                      December 31,
                                               2002                 2001
                                            ----------           ----------

                                   ASSETS
                                   ------

Current Assets:
  Cash                                        $ 73,758             $104,946
  Accounts Receivable                          204,020              179,793
  Inventory                                     18,761                8,070
                                             ---------           ----------
    Total Current Assets                       296,539              292,809
                                             ---------           ----------
Property and Equipment:

  Building                                   2,883,675            2,883,675
  Cobalt                                     1,825,000            1,825,000
  Furniture and Equipment                    1,718,417            1,709,881
  Less Accumulated Depreciation             (3,347,656)          (3,033,768)
                                            ----------           ----------

                                             3,079,436            3,384,788

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

    Total Property and Equipment             3,251,090            3,556,442
                                             ---------           ----------

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

    Total Assets                            $3,552,629           $3,854,251
                                            ==========           ==========



                     SEE NOTES TO FINANCIAL STATEMENTS








                        FOOD TECHNOLOGY SERVICE, INC.


                              BALANCE SHEETS


                                                      December 31,
                                               2002                 2001
                                            ----------           ----------

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

Current Liabilities:
  Accounts Payable                             $77,361              $54,359
  Revolving Credit Line                           -                 250,000
  Financing Agreement and
    Debenture Payable                          887,584            1,121,894
                                            ----------           ----------
    Total Current Liabilities                  964,945            1,426,253
                                            ----------           ----------

Stockholders' Equity:
  Common Stock $.01 Par Value, Authorized
   20,000,000 Shares, Outstanding 11,001,038
   Shares in 2002 and 10,496,837 in 2001       110,010              104,968

  Paid-In Capital                           11,975,577           11,680,619
  Deficit                                   (9,413,903)          (9,152,129)
                                            ----------           ----------

                                             2,671,684            2,633,458
   Less-Common Stock Issued
      for Receivables                          (84,000)           ( 205,460)
                                            ----------           ----------

   Total Stockholders' Equity                2,587,684            2,427,998
                                            ----------           ----------
Commitments and Contingencies
  (Notes B and I)                                -                    -

    Total Liabilities and
      Stockholders' Equity                  $3,552,629           $3,854,251
                                            ==========           ==========










                         SEE NOTES TO FINANCIAL STATEMENTS



                           FOOD TECHNOLOGY SERVICE, INC.


                             STATEMENTS OF OPERATIONS



                                                    Year Ended
                                                    December 31,
                                         2000          2001         2002
                                      ----------    ----------   ----------

Net Sales                            $1,412,297    $1,509,895   $1,198,151
                                     ----------    ----------    ---------
Processing Costs                        374,043       369,218      369,399

Selling, General
 and Administrative                     802,640       641,572      707,904

Depreciation                            261,618       289,983      313,888

Interest Expense                        128,005       102,871       68,734
                                     ----------    ----------    ---------
                                      1,566,306     1,403,644    1,459,925
                                     ----------    ----------    ---------

Income/(Loss)before Income Taxes       (154,009)      106,251     (261,774)

Income Taxes                               -           32,293            -
                                     ----------    ----------   -----------
Income/(Loss)before Benefit
 of Tax Loss Carryovers                (154,009)       73,958     (261,774)


Benefit of Tax Loss Carryovers             -           32,293         -
                                     ----------    ----------   -----------

  Net Income/(Loss)                   ($154,009)     $106,251    ($261,774)
                                     ==========    ==========   ==========

Net Income/(Loss)Per Common Share        ($0.015)       $0.010     ($0.025)
                                     ==========    ==========   ==========




                        SEE NOTES TO FINANCIAL STATEMENTS




                          FOOD TECHNOLOGY SERVICE, INC.


                        STATEMENTS OF STOCKHOLDERS' EQUITY



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


Balance, December 31,1999             $103,162      $11,438,631     $(9,104,371)

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


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

  Issuance of 163,636 Shares of
    Stock for $212,584 in
    Receivables and Services             1,636         210,948            -

  Net Income for Year	                    -            -             106,251
                                    ----------      ----------       ----------
Balance, December 31,2001             $104,968     $11,680,619     ($9,152,129)
                                    ----------      ----------       ----------
  Issuance of 504,201 Shares of
    Stock for $300,000 in
    Debt to equity conversion            5,042         295,958            -

  Net Income for Year	                    -            -            (261,774)
                                    ----------      ----------       ----------
Balance, December 31,2002             $110,010     $11,975,557     ($9,413,903)
                                    ==========      ==========       ==========














                          SEE NOTES TO FINANCIAL STATEMENTS



                             FOOD TECHNOLOGY SERVICE, INC.

                              STATEMENTS OF CASH FLOWS





                                                     Year Ended
                                                     December 31,
                                            2000        2001          2002
                                         ----------  ----------    ----------

Cash Flows from Operations:
  Cash Received from Customers          $1,382,317    $1,409,409    $1,173,925
  Interest Paid                            (27,318)      (36,141)       (3,044)
  Cash Paid for Operating Expenses      (1,165,066)     (988,447)   (1,036,993)
                                          --------      --------     ---------
                                           189,933       384,821       133,888

Cash Flows from Investing:
  Purchase of Equipment and Cobalt         (26,776)     (537,979)      (8,536)
                                          --------      --------      --------
                                           (26,776)     (537,979)      (8,536)

Cash Flows from Financing
  Activities:
  Proceeds from Sale of
    Common Stock                            31,210           -          93,460
  Proceeds from Borrowing                                150,000
  Payment of Loans                        (150,000)          -        (250,000)
  Repayment of Employee Advances            42,800           -            -
                                          --------      --------      --------
                                           (75,990)      150,000      (156,540)

Net Increase (Decrease) in
  Cash                                      87,167        (3,158)      (31,188)


Cash at Beginning of Year                   20,937       108,104       104,946
                                          --------      --------      --------

Cash at End of Year                       $108,104      $104,946       $73,758
                                          ========      ========      ========
Reconciliation of Net Loss to
  Net Cash Provided/(Used) by
    Operations:
  Net Income/(Loss)                     ($154,009)    $106,251     ($261,774)

Adjustments to Reconcile
  Net Loss to Cash Used:
  Depreciation                            261,618      289,983       313,888
  Interest and Salaries
       Paid in Stock                      100,688       97,299        93,689
  (Increase) Decrease in
    Receivables                           (28,850)     (99,818)      (24,227)
  (Increase) Decrease in Inventory          3,886       (8,070)      (10,690)
  Increase (Decrease) in
    Payables and Accruals                   6,600         (754)       23,002
                                      -----------   ----------     ---------
Net Cash Provided/(Used) by
   Operating Activities                  $189,933     $384,821      $133,888
                                      ===========   ==========     =========


Supplemental schedule of noncash investing and financing activities.

The Company issued Common Stock for receivables of $182,085 and services of
$30,499 in 2001 and debt of $300,000 in 2002.

The Company also converted $100,688, $66,730 and $65,690 of interest expense
to debt in 2000, 2001, and 2002 respectively.











                        SEE NOTES TO FINANCIAL STATEMENTS



FOOD TECHNOLOGY SERVICE, INC.

NOTES TO FINANCIAL STATEMENTS
December 31, 2002


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.

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.  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.

8. Comprehensive Income

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

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 accumulated significant losses since inception.


Management is of the opinion that the company will continue operations through
December 31, 2003 based on the following plans and events:

The Company's supplier (Note D) and major creditor, MDS Nordion, 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, 2002, $500,000 of this
amount is available to fund 2003 operations.

The Company is processing poultry and meat products under the provisions of
USDA regulations.  However, revenues to date from such products have been
nominal.  The Company anticipates that revenue from processing packaging
materials and other products, together with its unused credit line of
$500,000, will be sufficient to cover operating costs through December 31,
2003. A major customer has entered into a noncancellable contract with the
Company to purchase a minimum of $938,000 of irradiation services through
September 2003.  However, there is no assurance that the anticipated revenues
will be received.

Note C - Receivables from Directors and Employees:

Pursuant to an employment agreement and stock option plans during 2001 the
Company issued to Directors and employees 142,500 shares of common stock
for receivables of $182,085.  Of this amount $112,000 was due from the
President under the provisions of an employment contract.  Such amount is
being forgiven $28,000 per year and charged to expense over a four-year period
commencing September 1, 2001. The total receivables have been recorded as a
reduction to equity pending collection or expensing.  As of March 14, 2002 all
receivables for common stock had been 	collected except for the amount due
from the President, which is scheduled to be forgiven.

Note D - Financing Agreement:

Financing agreement to supplier due on

demand plus interest at 1% over prime           $  663,194

Accrued interest                                   224,390

                                                 $ 887,584


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	in U. S. dollars, which included $22,114 accrued
interest.  The parties further agreed that the payable 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.  On November 26, 2001 Nordion agreed to waive its rights  to
convert interest accruing on the indebtedness from February 5, 2000 through
January 1, 2004.

On January 23, 2001 Nordion agreed to change the due date of the debt from
January 5, 2001 to a due on demand basis.

Effective December 17, 2002 Nordion converted $300,000 of debt for 504,201
shares of stock. Such amount was 70% of the closing market price on December
16, 2002.

All assets of the Company are pledged as collateral security for all sums
advanced by the supplier, including accrued interest.


Note E - Income Taxes:

The Company has unused operating loss carryforwards available at December
31, 2002 of $9,277,494 for tax and financial reporting purposes.  The loss
carryforwards expire as follows:

	                  Amount
Year               Tax	            	Book

2003	   $      56,842 		 $       38,112
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 		      1,292,314
2011	       1,048,800 		      1,065,209
2012	         688,497 		        983,017
2018	         647,342 		        573,699
2019	         840,410 		        881,875
2020	          86,215 		        147,912
2022	         256,356 	              256,356
        $    9,277,494 		  $   9,277,494



Deferred income taxes reflect the estimated tax effect of temporary
Differences etween 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, 2002
and 2001 were as follows:

                                      2002          2001

Net operating loss carryforwards	$3,491,121 	$3,426,345

Net deferred tax assets   	       3,491,121 	 3,426,345

Less - Reserve	                  (3,491,121)	(3,426,345)

                             	      $        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 F - Stock Offerings:

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

During 2001 the Company issued 20,000 shares to its President pursuant to an
employment 	agreement and 1,136 shares to an individual for public relations
services.  In addition 142,500 shares were issued for $182,085 in receivables
pursuant to stock option plans. Such receivables plus $23,375 remaining from
2000 were recorded as a reduction to Stockholders' Equity  pending collection
(See Note C).

All shares issued for services have been ascribed the market value on the dates
they were earned.

Note G - 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.

On November 11, 1996 the Company agreed to issue its former President
10,000 shares for services. The Company also granted him options to purchase
up to 20,000 shares of stock  per  year at $1 per share  during the five-year
period ended December 8, 2001.  Such options were exercised 20,000 shares in
1998, 32,000 shares in 1999, 8,000 shares in 2000 and 40,000 shares in 2001.

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, 202,000 were granted in 2001 and 20,000
were granted in 2002.

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 received 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.


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 plan was further amended on March 1, 2001
to grant each non-employee Director options to purchase 6,000 (16,000 for the
chairman in 2001 only)  shares annually at the market value on the date of
grant.

On March 1, 2001 options to purchase 22,000 shares at $1.375 were granted to
two directors and on May 2, 2002 options to purchase 18,000  shares at $.91 per
share were granted to three 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 2002, 2001 and 2000 net income would not have
been material.

Changes that occurred in options and warrants outstanding are summarized
below:

                               2002                  2001                  2000
                               ----                  ----                   ---
                             Average             Average                Average
                             Exercise           Exercise               Exercise
                     Shares   Price    Shares    Price        Shares    Price

Outstanding at
beginning of year  182,566      $2.11      157,156    $2.37      121,800   $2.02

Granted             38,000      $0.99      202,000    $1.43       53,356   2.91

Exercised                                 (149,000)   $1.34      (17,000)  $1.84

Expired/canceled   ( 4,000)     $2.75      (27,600)   $2.75       (1,000)  $2.53
                    -------                 -------               -------

Outstanding at end
of year            216,566      $1.90      182,556    $2.11       157,156  $2.37
                   =======                  =======               =======
Exercisable at
end of year        124,556      $2.20       71,156    $2.91        47,600  $2.53




Note H - Related Party Transactions:

The Company's supplier of Cobalt and major creditor, MDS Nordion  Inc.
(Nordion) owns approximately 40% of the Company's outstanding common stock
( see Note D for financing arrangements).

During 2001 the Company purchased 386,589 curies of Cobalt 60 from Nordion
for $514,728 and during March 2003 the Company ordered an additional 800,000
curies for $1,119,413 plus freight and installation.

At December 31, 2002 Nordion had approximately 286,000 curies of cobalt in
storage at the Company's plant.  Due to the physical layout of the Company's
plant, all product processed was exposed to Nordion's cobalt.  The Company has
not charged Nordion any cobalt storage 	fees, nor has Nordion charged the
Company for any cobalt decay.  The value of Nordion's cobalt decay is estimated
to have been $75,000, $65,000 and $55,000 for the years ended December 31,
2000, 2001 and 2002, respectively.

Note I - 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 and lost profits
in excess of $6,000,000.  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.