U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB

(Mark one)
|X|      ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
         OF 1934 for the fiscal year ended December 31, 2004

|_|      TRANSITION REPORT UNDER SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE
         ACT OF 1934 for the transition period from ______to ______

                           Commission File No. 0-26682

                      TECHNOLOGY FLAVORS & FRAGRANCES, INC.
                 (Name of Small Business Issuer in its Charter)
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<S>                                           <C>                                       <C>
           Delaware                           10 Edison Street East                     11-3199437
(State or other Jurisdiction of            Amityville, New York 11701                (I.R.S. Employer
Incorporation or Organization)      (Address of Principal Executive Offices)      Identification Number)
</TABLE>

                                 (631) 842-7600
                (Issuer's Telephone Number, Including Area Code)

          Securities to be registered under Section 12(b) of the Act:
                     Common Stock, par value $.01 per share
                                (Title of Class)

          Securities to be registered under Section 12(g) of the Act:
                     Common Stock, par value $.01 per share
                                (Title of class)

                   Name of each exchange on which registered:
                             American Stock Exchange

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

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

         Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B is not contained in this form, and no disclosure will
be contained, to the best of the 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. |X|

         The Issuer's revenues for the fiscal year ended December 31, 2004 were
$16,047,233.

         The aggregate market value of Registrant's voting stock (Common Stock)
held by non-affiliates on March 15, 2005 was approximately $10,359,000 based on
the closing sale price of the Common Stock on such date of U.S. $1.11 per share,
as reported by the American Stock Exchange.

         The number of shares outstanding of each class of the issuer's common
equity as of March 15, 2005 was:

        Common Stock, par value $0.01 per share                    12,833,773
                            Class

         Documents Incorporated by Reference: Item 14 of Part III incorporates
information by reference from the Definitive Proxy Statement for our Annual
Meeting of Stockholders held July 27, 2004.

         Transitional Small Business Disclosure Format:   Yes         No   X
                                                              ----       -----

<PAGE>


<TABLE>
                      TECHNOLOGY FLAVORS & FRAGRANCES, INC.
                        2004 Annual Report on Form 10-KSB
                                TABLE OF CONTENTS

                                                                                             Page
                                                                                             ----
<S>                                                                                            <C>
PART I                                                                                         1
        ITEM 1         DESCRIPTION OF BUSINESS                                                 1
        ITEM 2         DESCRIPTION OF PROPERTY                                                 4
        ITEM 3         LEGAL PROCEEDINGS                                                       4
        ITEM 4         SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                     4

PART II                                                                                        5
        ITEM 5         MARKETS FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS               5
        ITEM 6         MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                       RESULTS OF OPERATIONS                                                   6
        ITEM 7         FINANCIAL STATEMENTS                                                    9
        ITEM 8         CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
                       AND FINANCIAL DISCLOSURE                                                9
        ITEM 8A        CONTROLS AND PROCEDURES                                                 9

PART III                                                                                      10
        ITEM 9         DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
                       COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT                      10
        ITEM 10        EXECUTIVE COMPENSATION                                                 13
        ITEM 11        SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT         16
        ITEM 12        CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                         18
        ITEM 13        EXHIBITS AND REPORTS ON FORM 8-K                                       18
        ITEM 14        PRINCIPAL ACCOUNTANT FEES AND SERVICES                                 19

SIGNATURES                                                                                    20

CERTIFICATIONS                                                                                21

FINANCIAL STATEMENTS                                                                         F-1

</TABLE>
                                       -i-

<PAGE>

                                     PART I

ITEM 1            DESCRIPTION OF BUSINESS

Introduction

         Technology Flavors & Fragrances, Inc. creates, develops, manufactures
and markets flavors and fragrances that are incorporated by our customers into a
wide variety of consumer and institutional products, including natural and
artificially flavored beverages, confections, foods, pharmaceuticals,
aromatherapy essential oils, perfumes and health and beauty products. We believe
our proprietary formulations are currently used in more than 1,200 products sold
by more than 500 companies worldwide, approximately 50 of which are Fortune
1,000 companies. Our executive offices, manufacturing, research and development,
sales and marketing, and distribution facilities are located in Amityville, New
York. We also have sales, marketing and warehouse facilities located in
Inglewood, California, Toronto, Canada and Santiago, Chile.

         Unless the context otherwise requires, (i) the terms "TFF", "company",
"our", "we" or "us" refer to Technology Flavors & Fragrances, Inc., a Delaware
corporation, together with its wholly-owned subsidiaries, Technology Flavors &
Fragrances, Inc. (Canada), and Technology Flavors & Fragrances S.A. (Chile), and
(ii) all references to "dollars" refer to U.S. dollars.

Background

         We were incorporated in 1989 under the name "Aroma Globe, Inc." In
1991, we changed our name to "Technology Flavors & Fragrances, Inc." when we
acquired the assets and business of another company by that name. Since then, we
have expanded our operations primarily through acquisitions of other businesses
and internal growth. In 1993, we acquired most of the assets of the Fragrance
Division of F&C International Inc. ("F&C Fragrance Division"). The F&C Fragrance
Division was engaged in the business of developing, manufacturing, marketing and
selling, domestically and internationally, fragrance products for personal care,
cosmetic and toiletry, household, industrial and commercial products.

         In 1994, we completed concurrent offerings of a total of 5,000,000
shares of our Common Stock, of which (i) 4,670,000 shares were sold to the
public in the Canadian Provinces of Ontario and British Columbia at a price of
Cdn. $2.00 per share and (ii) 330,000 shares were sold privately in the United
States for the equivalent price of U.S. $1.44 per share. In addition, our Common
Stock was listed on the Toronto Stock Exchange in 1994. The proceeds of these
sales were used to pay debt incurred to acquire the assets of the F&C Fragrance
Division.

         In 2003, we entered into a joint venture agreement from which the
operating results thereof were not material for 2004 or 2003.

Industry Overview

         We believe that changes in consumer buying habits and preferences over
the past few years have impacted on the industry as a whole and have contributed
to a demand for new and innovative products. We believe that there is a trend
toward more natural foods in the marketplace, requiring manufacturers to produce
more naturally flavored products. Not only has this translated into a steady
shift from artificial to natural ingredients, but we believe it is also placing
greater emphasis on producing flavors that more effectively impart "natural"
tastes in processed foods. We believe that a growing desire among consumers to
adopt a healthier lifestyle is increasing the demand for lighter, healthier
foods. This has posed new challenges for us to develop ways of replacing the
tastes which are lost when sugar, salt, fat and cholesterol are reduced or
eliminated from traditional food preparation.

         Another important trend in the industry, we believe, is the growing
consumption of processed foods. We believe that more than 80% of the food
consumed in the home today is in processed form, with over 1,000 natural and
synthetic flavoring agents being used to produce these foods. We believe that as
the demand for microwaving products and prepared and frozen convenience foods
continues to rise, so, too, will the need for flavor products to counteract the
adverse effects of microwaving and freezing.

         We believe that the trend towards natural, healthier products also
includes soaps, shampoos, cosmetics, detergents, and other cleaning products,
air fresheners, and numerous other household items.

Products

         Our principal product categories include natural flavors, artificial
flavors and fragrances. The five largest end-user categories of our products are
beverages, baked goods, confections, cosmetics and soaps and detergents. Our
flavor products, produced from our proprietary formulations, are sold primarily
to the beverage and food industries. Examples of consumer products containing
our flavor products include confections, toothpaste, chewing gums, prepared
foods, ice creams, animal feeds, candy, alcoholic and non-alcoholic beverages,
poultry, seafood and processed meats.

                                       1

<PAGE>

         Areas which we believe currently offer growth opportunities include
flavor products to enhance "natural food" products to restore the flavors in
non-fat and low fat, sugar, salt and cholesterol foods, and flavor products able
to withstand the effects of microwaving and freezing (i.e., convenience foods).

         Our fragrance products, produced from our proprietary formulations, are
sold primarily to the personal care, cosmetic and toiletry, and household and
industrial product industries. Fragrances are used by customers in the
manufacture of a wide variety of consumer products such as soaps, detergents,
household cleaners, cosmetic creams, lotions and powders, after-shave lotions,
deodorants, air fresheners, perfumes, colognes, aromatherapy oils and hair care
products.

Marketing

         Our marketing strategy principally involves the utilization of direct
sales and marketing personnel strategically located in regions in the U.S.,
Canada and South America and, to a lesser extent, independent sales brokers.
Typically, our research and development personnel accompany sales personnel in
making sales presentations to new and existing customers. We believe that this
strategy has worked effectively to promote our products.

         We work in association with existing and potential customers to develop
a flavor or fragrance for a new consumer product. During this process, which
generally lasts between six and 12 months, we typically present the customer
with several samples from our proprietary formulations. Generally, a particular
flavor or fragrance formulation is created and produced for one customer.

         In the last two years, we have furnished over 10,000 samples to
existing and potential customers. The typical lag time between initial sample
submissions and when customers place production orders has historically ranged
from 6 to 18 months.

Research and Development

         Our research and development activities are conducted principally at
our Amityville, New York and Fairfield, New Jersey facilities. We maintain
research and development laboratories as well as applications laboratories, both
of which we believe are necessary for the development of high quality flavor and
fragrance compounds. Our processed flavor laboratory utilizes amino acids and
sugars in a water medium to produce meat, poultry and roasted flavors and
aromas. We currently offer new and innovative products developed in this
laboratory.

         We believe that one of the most fundamental challenges in creating
flavor and fragrance formulations, from a technical standpoint, is the
development of flavors and fragrances which are able to (i) withstand the rigors
of processing, storage and final preparation, and (ii) maintain the integrity of
the basic taste and scent characteristics for the useful life of the final
product. In the case of certain products, such as perfumes, colognes and frozen
foods, the potential shelf life of the product may be a period of up to one
year.

         During the past several years, the flavor industry has had to respond
to new demands by consumers for:

          |X|  products with little or no cholesterol, fat, sugar or salt,

          |X|  products that withstand microwaving or freezing, and

          |X|  products that contain more natural ingredients.

         Each of these demands results in taste differences from what consumers
have come to expect so that new flavor formulations are necessary to satisfy
taste expectations. Consequently, we believe our research and development
abilities are increasingly important for flavor products.

         We spent $1,889,000 and $1,628,000 in research and development during
2004 and 2003, respectively. We expect our research and development expenses to
remain approximately at the year 2004 level during year 2005.

Raw Materials

         We utilize a significant number of different raw materials in the
preparation of our flavor and fragrance formulations. We devote considerable
effort to ensuring that these ingredients remain uniform and consistent over
time - a critical process because many of the raw materials we use are
inherently unstable or are derived from plants that vary naturally with seasons
and crop years. Accordingly, we routinely test and analyze shipments of raw
materials for compliance with specifications we set.

                                       2

<PAGE>

         We purchase raw materials from numerous suppliers. For the year ended
December 31, 2004, our largest supplier provided us with approximately 15% of
our raw material requirements. Our three largest suppliers provided us with
approximately 32% of our raw material requirements. Although there can be no
assurance, we believe that alternate sources of raw materials are available in
the event of an interruption in the supply of raw materials from a single
supplier.

Seasonality

         Historically, our sales tend to be higher in the calendar quarters
ending June 30 and September 30, primarily due to higher consumer demand from
our beverage customers during those periods. We cannot assure you that the
seasonality of our business will not have a material adverse effect on our
operations.

Competition

         The flavor and fragrance industry is highly fragmented with a few large
companies, such as International Flavors & Fragrances, Inc., Haarmann & Reimer
Corporation and Firmenich, Inc., competing against many smaller companies.
Certain of our competitors have substantially greater financial, marketing and
other resources than us. Recently, there have been trends toward increased
industry consolidation as companies vertically integrate with suppliers and
expand horizontally through acquisitions. The flavor and fragrance industry
sells primarily to manufacturers of consumer products. The cost of the flavor or
fragrance component of a consumer product typically represents a small portion
of the total cost of the consumer product. As a result, in selling our products,
we believe that price is not as significant as product performance and customer
service. We believe that our competitiveness depends upon our creativity,
responsiveness and reliability, as well as the diversity of our customers and
products. We expect that we will continue to sell our products to large
companies that do not purchase all of their flavor and fragrance products from a
single supplier, and to smaller companies that our large competitors choose not
to service.

Customers

         We believe our products are currently used in more than 1,200 products
sold by more than 500 companies worldwide, approximately 50 of which are Fortune
1,000 companies. We work with our customers in the development of specific
flavors or fragrances for a particular end product. For the years ended December
31, 2004 and 2003, no one customer accounted for more than 10% of our sales, and
our top ten customers accounted for approximately 42% and 43% of our sales,
respectively.

Backlog

         Customers purchase our products as required, and normally delivery can
be made within two to four weeks thereafter. Consequently, backlog is not a
significant indicator of the volume of our business over an extended period of
time.

Governmental Regulations

         Production of many of our products involves the manufacturing of
flavors for foods and beverages, the handling of alcohol and the generation,
storage, transportation and disposal of hazardous waste. Accordingly, our
operations are subject to extensive Federal, state and local laws and
regulations relating to such matters, and to the safety and health of our
employees and others. Although there can be no assurance, we believe that we
currently comply in all material respects with such applicable laws and
regulations. In the future, we could be subject to, among other things,
sanctions, penalties (including significant fines), and suspension or revocation
of required licenses or permits for failure to comply with applicable
governmental laws or regulations. Any of these actions could have a material
adverse effect on our results of operations in any given year, or materially
affect our liquidity or financial condition over a longer period of time. At
this time, we are unable to anticipate the impact, if any, that subsequent
changes or new interpretations to applicable laws and regulations may have on
our business, financial condition or results of operations.

Employees

         At March 15, 2005, we had 67 employees, 65 of whom were employed
full-time. Of our total employees, six were employed in management, nine were
employed in administrative and purchasing, eight were employed in sales and
marketing, 24 were employed in production and warehousing, 14 were employed in
research and development and quality control, and four were employed in customer
service. We consider our relationship with our employees to be satisfactory.
None of our employees is subject to a collective bargaining agreement.

                                       3

<PAGE>

Proprietary Rights

         We consider our flavor and fragrance formulas to be proprietary
information and trade secrets. We do not, however, generally rely on patents,
copyrights or trademarks to protect our proprietary rights in our flavor and
fragrance formulations. There can be no assurance that our current protections
will be adequate or that our competitors will not independently develop flavors
and fragrances that are substantially equivalent or superior to our flavors and
fragrances.

         A substantial portion of our technology and know-how are trade secrets.
We have a policy of requiring our employees and contractors to protect our
proprietary information through written agreements. In addition, we have a
policy of requiring our prospective business partners to enter into
non-disclosure agreements with us before we reveal any of our proprietary
information to them. We cannot assure that the measures taken by us to protect
our technology, products and other proprietary information will be adequate.
Further, we cannot assure that others will not independently develop
substantially equivalent proprietary information and technologies, or otherwise
gain access to our trade secrets.

         We may be required to take various forms of legal action, from time to
time, to protect our proprietary rights. Because of the rapid evolution of
technology and uncertainties in intellectual property laws both in the United
States and internationally, we cannot assure that our current or future products
or technologies will not be subject to claims of infringement. Any litigation
regarding claims against us or claims made by us against others could result in
significant expense to us, divert the efforts of our technical and management
personnel and have a material adverse effect on us, whether or not such
litigation is ultimately resolved in our favor. In the event of an adverse
result in any such litigation, we may be required to expend significant
resources to develop non-infringing products or obtain licenses from third
parties. We cannot assure you that we would be successful in such development or
that any such licenses would be available on commercially reasonable terms, if
at all.

Forward-Looking Statements

         Certain statements made herein, including without limitation,
statements containing the words "believes," "anticipates," "may," "intends,"
"expects," and words of similar import constitute "forward-looking" statements
within the meaning of the Private Securities Litigation Reform Act of 1995. Such
statements involve known and unknown risks, uncertainties, and other factors,
which may cause actual company results to differ materially from expectations.
Such factors include the following: (i) technological, manufacturing, quality
control or other circumstances which could delay the sale or shipment of
products; (ii) economic, business, and competitive conditions in the industry
and technological innovations which could affect the company's business; and
(iii) the company's ability to protect its trade secrets or other proprietary
rights, operate without infringing upon the proprietary rights of others and
prevent others from infringing on the proprietary rights of the company. Certain
of these factors are discussed in more detail elsewhere in this Form 10-KSB,
including, under the caption "Management's Discussion and Analysis of Financial
Condition and Results of Operations." Our forward-looking statements speak only
as to the date hereof and we do not undertake any obligation to update any
forward-looking statements for any reason, even if new information becomes
available or other events occur in the future.

ITEM 2   DESCRIPTION OF PROPERTY

         Our principal facility is a 35,000-square-foot headquarters and
production facility located at 10 Edison Street East, Amityville, New York. In
January 2002, the Company purchased the facility (which it had previously
leased), transferred it to the Town of Babylon Industrial Development Agency,
and then leased the facility from such agency for a term which expires on
December 1, 2021. Upon expiration of the lease term, we are entitled to
repurchase the facility for a nominal sum. We also occupy a 6,000 square-foot
warehouse under a lease which expires in 2006 and a 4,000 square-foot warehouse
on a month-to-month lease, both of which adjoin our headquarters and production
facility. We also lease a research and development laboratory in Fairfield, New
Jersey, and sales, warehouse and customer service facilities in Inglewood,
California, Toronto, Canada, and Santiago, Chile. We believe that we can
renegotiate existing leases as they expire or lease alternative properties on
acceptable terms. We believe our current facilities are adequate for our current
and anticipated operations.

ITEM 3   LEGAL PROCEEDINGS

         We are not a party to any pending legal proceedings which if adversely
determined would reasonably be expected to have a materially adverse effect on
our business.

ITEM 4   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         There were no matters submitted during the fourth quarter of the fiscal
year covered by this Annual Report on Form 10-KSB, to a vote of security holders
through the solicitation of proxies or otherwise.

                                       4

<PAGE>


                                     PART II


ITEM 5   MARKETS FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS


         American Stock Exchange. Our Common Stock is listed on the American
Stock Exchange, or AMEX (Symbol: "TFF"). The following table sets forth the
range of high and low closing prices in U.S. Dollars (as reported by the AMEX)
for our Common Stock for each calendar quarter from January 1, 2003 through
March 15, 2005.

                                                       High             Low

2003
   First Quarter                                   U.S. $ 0.94      U.S. $ 0.71
   Second Quarter                                  U.S.   0.86      U.S.   0.72
   Third Quarter                                   U.S.   0.94      U.S.   0.76
   Fourth Quarter                                  U.S.   0.85      U.S.   0.76

2004
   First Quarter                                   U.S. $ 0.81      U.S. $ 0.71
   Second Quarter                                  U.S.   0.89      U.S.   0.67
   Third Quarter                                   U.S.   0.79      U.S.   0.56
   Fourth Quarter                                  U.S.   1.10      U.S.   0.52

2005
   First Quarter (through March 15, 2005)          U.S. $ 1.16      U.S. $  .98

         The closing price of our Common Stock on the AMEX on March 15, 2005 was
U.S. $ 1.11.
         Toronto Stock Exchange. Our Common Stock traded on the Toronto Stock
Exchange, or TSE (Symbol: "TFF") from March 28, 1994 through March 27, 2003. The
following table sets forth the reported high and low closing prices (as reported
by the TSE) for our Common Stock for each calendar quarter from January 1, 2003
through March 27, 2003, in Canadian dollars and translated into U.S. dollars at
the exchange rates in effect on the last day of such period.

2003
   First Quarter (through March 27, 2003)   Cdn. $1.50 (U.S. $0.96)
   Cdn. $1.50  (U.S. $ 0.96)

         The closing price of our Common Stock on the TSE on March 27, 2003 was
Cdn. $1.50 (U.S. $0.96).

Holders

         At March 15, 2005, we had approximately 750 stockholders of record.

Dividends

         We have not paid any cash dividends on our Common Stock and we do not
anticipate paying any cash dividends in the foreseeable future. The declaration
and payment of dividends on our Common Stock is at the discretion of the Board
of Directors and will depend on, among other things, our operating results,
financial condition, capital requirements, contractual restrictions or
prohibitions and such other factors as our Board of Directors may deem relevant.
In addition, the terms of our $3.5 million revolving credit facility prohibit
the payment of cash dividends.

Recent Sales of Unregistered Securities

         None.

                                       5

<PAGE>

ITEM 6   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
         AND RESULTS OF OPERATIONS

Results of Operations

         The following information for the years ended December 31, 2004 and
2003 has been derived from our audited consolidated financial statements and
should be read in conjunction with such statements and the notes thereto
included elsewhere in this Annual Report on Form 10-KSB. The information for the
year ended December 31, 2002 is derived from the Company's audited consolidated
financial statements for the year ended December 31, 2002, which are not
included in this Annual Report on Form 10-KSB.

<TABLE>

                                                  Years ended December 31,
                                         2004               2003               2002
                                               (dollar amounts in thousands)

<S>                                  <C>       <C>      <C>       <C>      <C>       <C>
Net sales                            $16,047   100.0%   $15,587   100.0%   $16,767   100.0%
Gross profit                           6,332    39.5      6,226    39.9      7,023    41.9
Operating expenses:
  Selling                              3,130    19.5      2,936    18.8      2,763    16.4
  General and administrative           2,196    13.7      1,799    11.5      1,753    10.5
  Research and development             1,889    11.8      1,628    10.4      1,481     8.8
  Amortization                           195     1.2        195     1.3        195     1.2
(Loss) income from operations         (1,078)    6.7       (332)    2.1        831     5.0
Interest expense, net                   (218)    1.3       (187)    1.2       (181)    1.1
Tax benefit                                6       -          5       -         16     0.1
Minority interest                         24     0.1        (32)    0.2          -       -
Net (loss) income                     (1,266)    7.9       (546)    3.5        666     4.0
</TABLE>


Net sales. Net sales for 2004 increased by $460,000, or 3.0%, to $16,047,000
from $15,587,000 for 2003 due principally to increased volume of business for
existing customers of our food and beverage products. Net sales for 2003
decreased by $1,180,000, or 7.0%, to $15,587,000 from $16,767,000 for 2002 due
principally to the economic recession which caused a slowdown in customer orders
and new product launches, ongoing customer efforts to reduce inventory levels
and lost revenues from a certain customer following its acquisition.

Gross profit. Gross profit in 2004, as a percentage of net sales, decreased
slightly .4% to 39.5% on net sales of $16,047,000 from 39.9% on net sales of
$15,587,000 in 2003. Gross profit, as a percentage of sales, decreased 2.0% to
39.9% on net sales of $15,587,000 for 2003 from 41.9% on net sales of
$16,767,000 for 2002 due principally to the impact of lower sales volume, higher
manufacturing operating costs due principally to freight, outside contract
services and insurance, and to a lesser extent, unfavorable changes in product
mix.

Operating expenses:

         Selling expenses. Selling expenses for 2004 increased by $194,000, or
6.6%, to $3,130,000 from $2,936,000 for 2003 due principally to increases in
wages of $92,000, including the hiring of a salesperson and increases in outside
contractor services of $74,000. Selling expenses for 2003 increased by $173,000,
or 6.3%, to $2,936,000 from $2,763,000 for 2002 due principally to startup costs
relative to our prospective overseas business venture of $120,000 and wages and
fringes for a new sales person hired during 2003 of $60,000.

         General and administrative expenses. General and administrative
expenses for 2004 increased by $397,000, or 22.1%, to $2,196,000 from $1,799,000
for 2003 due principally to increases in bad debt expense of $395,000, of which
$350,000 was attributable to one key customer. General and administrative
expenses for 2003 increased by $46,000, or 2.6%, to $1,799,000 from $1,753,000
for 2002 due principally to retainer fees paid to a mergers and acquisitions
consulting firm.

         Research and development expenses. Research and development expenses
for 2004 increased by $261,000, or 16.0%, to $1,889,000 from $1,628,000 for 2003
due principally to increases in wages of $114,000, including the hiring of a
laboratory technician, higher outside contractor costs of $94,000, operating
supplies of $20,000, and rent expense of $22,000 on newly established
laboratory. Research and development expenses for 2003 increased by $147,000, or
9.9%, to $1,628,000 from $1,481,000 for 2002 due principally to wages and fringe
benefits for newly hired laboratory technicians.

                                       6

<PAGE>

         Amortization expense. Amortization expense of $195,000 was the same for
all of years 2004, 2003 and 2002.

         Total operating expenses. Total operating expenses for 2004 increased
by $852,000, or 13.0%, to $7,410,000 from $6,558,000 for 2003 as a result of the
factors described above. Total operating expenses for 2003 increased by
$366,000, or 5.9%, to $6,558,000 from $6,192,000 for 2002 as a result of the
factors described above.

Interest expense, net. Interest expense, net increased by $31,000 to $218,000 in
2004 from $187,000 in 2003 due principally to a higher level of borrowing under
our 2002 revolving credit facility and higher interest rates on such credit
facility and under our IDA Bond financing. Interest expense for 2003 increased
by $6,000, or 3.3%, to $187,000 due principally to higher levels of outstanding
borrowing under our revolving credit facility, partially offset by lower
interest rates on our IDA Bond financing.

Tax Benefit. Tax benefits for years 2004, 2003 and 2002 represent tax refunds
received from prior years amended tax returns, partially offset by provisions
for state franchise taxes and Federal alternative minimum tax. There were no
Federal income tax provisions for 2004, 2003 and 2002 since we had available net
operating loss carryforwards for which valuation allowances have been recorded.

Minority interest. Minority interest in 2004 and 2003 of $(24,000) and $32,000
respectively, relates to net (loss) income allocated to minority shareholders of
our overseas business venture. No such minority interest existed in 2002.

Net loss. Net loss was $1,266,000 for 2004 and $546,000 for 2003.

Foreign Operations

         Approximately 10% of our net sales for both years ended December 31,
2004 and 2003, respectively, were derived from sales denominated in foreign
currencies, principally in Canada. The effect of foreign currency exchange rate
fluctuations on such sales is largely offset to the extent expenses of our
international operations are incurred and paid for in the same currencies as
those of our sales.

Export Sales

         For the years ended December 31, 2004 and 2003, export sales were
approximately 36% and 30%, respectively, of total net sales. Our export sales
are made to entities located primarily in Canada and Central and South America.
Receivables from such foreign sales at December 31, 2004 and 2003 amounted to
approximately 57% and 53%, respectively, of total accounts receivable.

Critical Accounting Policies

General: Our discussion and analysis of the Company's financial condition and
results of operations are based upon our consolidated financial statements,
which have been prepared in accordance with accounting principles generally
accepted in the United States. The preparation of these financial statements
requires us to make estimates and judgments that affect the reported amounts of
assets, liabilities, revenues and expenses. On an on-going basis, management
evaluates its estimates and judgments, including those related to bad debts,
inventories and intangible assets. Management bases its estimates and judgments
on historical experience and on various other factors that are believed to be
reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying values of assets and liabilities that are
not readily apparent from other sources. Actual results may differ from these
estimates under different assumptions or conditions.

Our significant accounting policies are described in Note 2 to the consolidated
financial statements included herein. We believe certain accounting policies
related to the valuation of inventories, the allowance for doubtful accounts and
the impairment of intangible assets to be critical policies due to the
estimation processes involved in each.

Inventory Valuation: Inventories are stated at the lower of cost (first-in,
first-out method) or market. We evaluate the need to record adjustments for
impairment of inventory on a quarterly basis. Obsolete inventory or inventory in
excess of management's estimated usage requirements is written-down to its
estimated market value, if less than its cost. Inherent in the estimates of
market value are management's estimates related to our future manufacturing
schedules, customer demand, and possible alternative uses and ultimate
realization of excess inventory.

Allowance for Doubtful Accounts: We evaluate the need to record adjustments to
the allowance for doubtful accounts on a quarterly basis. We make estimates of
the recoverability of accounts receivable based on customer specific factors as
well as our past experience.

Intangible Asset Impairment: In assessing the recoverability of our intangible
assets, we must make assumptions regarding estimated future cash flows and other
factors to determine the fair value of the respective assets. If it is
determined that impairment indicators are present and that the assets will not
be fully recoverable, their carrying values are reduced to estimated fair value.
Impairment indicators include, among other conditions, cash flow deficits, an
historic or anticipated decline in revenue or operating profit, adverse legal or
regulatory developments, accumulation of costs significantly in excess of
amounts originally expected to acquire the asset, and a material decrease in the
fair value of some or all of the assets. Changes in strategy and/or market
conditions could significantly impact these assumptions, and thus we may be
required to record impairment charges for these assets.

                                       7

<PAGE>

The critical accounting policies described herein and the impact of management's
accounting estimates and methodology on our financial statements have been
discussed with our Audit Committee.

Liquidity and Capital Resources

         Historically, our financing needs have been met through issuance of
equity and debt securities and commercial bank loans. In April 2002, we entered
into a five-year term Loan and Security Agreement with a lender which replaced
the revolving credit facility entered into in 1999. We call this new revolving
credit facility the 2002 Credit Facility. The maximum line of credit under the
2002 Credit Facility was initially set at $3,000,000 which was increased to
$3,500,000 at our option in June 2004.

         In January 2005, we amended the 2002 Credit Facility to provide
additional borrowing up to $2,000,000 in the form of a term loan, modified the
financial covenants and extended the maturity date to April 2008. Borrowing
under the term loan shall be repaid based on a 48 month amortization schedule
bearing the same interest rate as the 2002 Credit Facility.

         Outstanding borrowings under the 2002 Credit Facility bear interest at
a rate equal to a prime lending rate plus one-quarter of a percentage point
(5.25% at December 31, 2004). Borrowings under the 2002 Credit Facility are
subject to certain eligibility requirements relating to our receivables and
inventories. Outstanding borrowings are secured by substantially all of our
assets, including our product formulations. We must comply with certain
financial and other covenants contained in the Loan and Security Agreement which
was amended in January 2005, including maintaining tangible net worth of at
least $2,392,000 at December 31, 2004 and minimum levels on a quarterly basis
thereafter, not exceeding a cash flow loss of $1,025,000 in 2004 and achieving
annual cash flow, as defined, of at least $1.00 for each year thereafter, and
incurring expenditures for capital assets of not more than $500,000 for each
year. Our subsidiaries have guaranteed our obligations under the 2002 Credit
Facility. Borrowings under the 2002 Credit Facility at December 31, 2004 were
approximately $2,826,000 and $559,000 was available for additional borrowings in
accordance with the terms of the 2002 Credit Facility.

         In January 2002, we purchased the facility (which we had previously
leased) for $1,500,000, transferred it to the Town of Babylon Industrial
Development Agency, and then leased the facility from such agency for a term
which expires on December 1, 2021. Upon expiration of the lease term, we are
entitled to repurchase the facility for a nominal sum. The purchase was financed
through the issuance of Industrial Development Agency Revenue Bonds ("IDA
Bonds"). The principal amount of the IDA Bonds, $2,200,000, was used to finance
the purchase of the building plus closing costs and future expenditures for
building improvements and capital equipment. The financing is structured as a
monthly variable rate demand revenue bond secured by a letter of credit with
Wells Fargo Bank NA. The interest rate for the month of December 2004 was 4.0%
per annum, including the letter of credit fee. The interest rate is reset
monthly based on market conditions and the IDA Bonds mature in January 2022. In
December 2004 and December 2003, we made annual principal installment payments
of $80,000 in each of those years.

         At December 31, 2004, our working capital decreased by $1,060,000, or
35.9%, to $1,890,000 from $2,950,000 at December 31, 2003 due principally to
increased borrowing under our revolving credit facility primarily to fund our
loss for year 2004.

         At December 31, 2004, our contractual cash obligations and commitments
relating to our debt obligations and lease payments during the next five years
are as follows:

<TABLE>

             Contractual
             Obligations                       Less than 1-year      1-3 years      4-5 years     Thereafter          Total
             -----------                       ----------------      ---------      ---------     ----------          -----
<S>                                                <C>               <C>           <C>            <C>             <C>
             Operating leases .................    $ 136,159         $ 126,886     $   12,948     $        -      $ 275,993
             Capital leases ....................      90,790            93,768         17,776              -        202,334
             2002 Credit Facility (*) ........             -                 -      2,825,973              -      2,825,973
             Long-term debt ..................        85,000           175,000        195,000      1,515,000      1,970,000
                                                   ---------         ---------     ----------     ----------      ----------

                    Total                          $ 311,949         $ 395,654     $3,051,697     $1,515,000      $5,274,300
                                                   =========         =========     ==========     ==========      ==========

             (*) The 2002 Credit Facility matures in April 2008.
</TABLE>

                                       8

<PAGE>

         We believe that the existing cash balances together with cash generated
from operations and amounts available under the 2002 Credit Facility will be
sufficient to meet our projected working capital and other cash flow
requirements for the foreseeable future.

Recent Accounting Pronouncements

   In December 2004, the FASB issued FASB Statement No. 123 (revised 2004),
"Shared-Based Payment." Statement 123(R) addresses the accounting for
share-based payment transactions in which an enterprise receives employee
services in exchange for (a) equity instruments of the enterprise or (b)
liabilities that are based on the fair value of the enterprise's equity
instruments or that may be settled by the issuance of such equity instruments.
Statement 123(R) requires an entity to recognize the grant-date fair-value of
stock options and other equity-based compensation issued to employees in the
income statement. The revised Statement generally requires that an entity
account for those transactions using the fair-value-based method, and eliminates
the intrinsic value method of accounting in APB Opinion No. 25, "Accounting for
Stock Issued to Employees," which was permitted under Statement 123, as
originally issued.


   The revised Statement requires entities to disclose information about the
nature of the share-based payment transactions and the effects of those
transactions on the financial statements.


   Statement 123(R) is effective for public companies that t file as small
business issuers as of the beginning of the first interim or annual reporting
period that begins afterDecember 15, 2005 (i.e., first quarter 2006 for the
Company). All public companies must use either the modified prospective or the
modified retrospective transition method. Early adoption of this Statement for
interim or annual periods for which financial statements or interim reports have
not been issued is encouraged. The Company has not yet evaluated the impact of
adoption of this pronouncement, which must be adopted in the first quarter of
fiscal year 2006.


   In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity" ("SFAS 150").
SFAS 150 establishes standards for how an issuer classifies and measures three
classes of freestanding financial instruments with characteristics of both
liabilities and equity. It requires that an issuer classify a financial
instrument that is within its scope as a liability. SFAS 150 was effective for
financial instruments entered into or modified after May 31, 2003, and otherwise
is effective at the beginning of the first interim period beginning after June
15, 2003. The Company has not entered into any financial instruments within the
scope of SFAS 150 since May 31, 2003, nor does it currently hold any significant
financial instruments within its scope.


   In January 2003, the FASB issued FASB Interpretation No. 46 ("FIN 46"),
Consolidation of Variable Interest Entities. FIN 46 clarifies the application of
Accounting Research Bulletin No. 51, Consolidated Financial Statements, to
certain entities in which equity investors do not have the characteristics of a
controlling financial interest or do not have sufficient equity at risk for the
entity to finance its activities without additional subordinated financial
support from other parties. FIN 46 requires a variable interest entity to be
consolidated by a company, if that company is subject to a majority of the risk
of loss from the variable interest entity's activities or entitled to receive a
majority of the entity's residual returns or both. FIN 46 also requires
disclosures about variable interest entities that a company is not required to
consolidate but in which it has a significant variable interest. In December
2003, the FASB issued FIN 46R. It changed the effective date for interests in
special-purpose entities for periods ending after December 15, 2003, and for all
other types of entities for periods ending after March 15, 2004. The adoption of
FIN 46R did not have a material impact on our consolidated financial statements.



ITEM 7   FINANCIAL STATEMENTS

         Our audited consolidated financial statements for the years ended
December 31, 2004 and 2003 begin on page F-1 of this Annual Report on Form
10-KSB.

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

         None.

ITEM 8A  CONTROLS AND PROCEDURES

         We evaluated, with the participation of the Company's Chief Executive
Officer and Chief Financial Officer, the effectiveness of the design and
operation of our disclosure controls and procedures as of December 31, 2004,
pursuant to Exchange Act Rule 15d-15. Based upon that evaluation, our Chief
Executive Officer and Chief Financial Officer concluded that the Company's
disclosure controls and procedures are effective in timely alerting them to
material information relating to us which is required to be included in our
periodic SEC filings. There have been no significant changes in internal
controls or in other factors that could significantly affect internal controls
during our most recent fiscal quarter.

                                       9

<PAGE>

                                    PART III

ITEM 9   DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
         COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

Information Concerning our Board of Directors and Executive Officers

<TABLE>
         The following table sets forth certain information, as of March 15,
2005, concerning our directors and executive officers:

      Name                               Age     Positions with the Company
      ----                               ---     --------------------------

<S>                                       <C>   <C>
      Philip Rosner ..................    69     Chairman of the Board of Directors and Chief Executive Officer
      A. Gary Frumberg ...............    71     Director and Executive Vice President
      Joseph A. Gemmo ................    59     Vice President, Chief Financial Officer, Secretary and Treasurer
      Ronald J. Dintemann ............    61     Vice President Operations
      Harvey Farber ..................    64     Senior Vice President-Flavor Division
      Sean Deson .....................    41     Director
      Werner F. Hiller ...............    68     Director
      Irwin D. Simon .................    46     Director
</TABLE>

         The business experience of each of the persons listed above for at
least the last five years is as follows:

         Philip Rosner has been the Chairman of the Board of Directors,
President and Chief Executive Officer of our company from its inception 1989 to
August 2000 and Chairman and Chief Executive Officer since August 2000. Mr.
Rosner has been engaged in the flavor and fragrance industry for over 48 years.
Prior to 1989, Mr. Rosner was the President of Globe Extracts, Inc. and for 15
years before that, was President of Felton Worldwide, Inc., both of which
produced and marketed flavors and fragrances.

         A. Gary Frumberg has been a Director and an Executive Vice President of
our company since 1989. Prior to 1989, Mr. Frumberg served as Vice
President-International Sales of Felton Worldwide, Inc.

         Joseph A. Gemmo has been Vice President and Chief Financial Officer of
our company since August 1996 and Secretary and Treasurer since June 1998. From
January 1994 to April 1996, Mr. Gemmo was the Chief Financial Officer of
Bio-Botanica, Inc., a developer and manufacturer of herbal extracts. From 1989
to 1994, Mr. Gemmo was Chief Financial Officer of General Aerospace Materials
Corp.

         Ronald J. Dintemann has been Vice President-Operations of our company
since 1989 after serving as Vice President-Operations of Globe Extracts, Inc.
for two years.

         Harvey Farber has been Senior Vice President-Flavor Division of our
company since October 1997. From October 1995 through October 1997, Mr. Farber
was Senior Vice President-Flavor Development of our company. Before Mr. Farber
joined our company, he was the Vice President-Flavor Development at J. Manheimer
Inc. for 12 years.

         Sean Deson has been a Director of our company since June 1998. Mr.
Deson is currently the Managing Partner of Deson Ventures, a private equity
investment firm, Managing Director of Deson & Co., a NASD Broker-Dealer, and
Managing Member of Treeline Investment Partners, a registered investment advisor
and hedge fund. Prior thereto, Mr. Deson was a Senior Vice President in the
Investment Banking Division of Donaldson, Lufkin & Jenrette Securities
Corporation, or DLJ. Mr. Deson served in various capacities at DLJ since 1990,
primarily as an advisor, financier and investor. Mr. Deson also serves as the
Chairman and CEO of ActiveWorlds, Inc., a company quoted on the OTC Bulletin
Board, Chariman of e-Centives, Inc. a company quoted on the Swiss Exchange, and
a Director of SystemsFusion, Fastxchange and Liquidxs.

         Werner F. Hiller has been a Director of our company since June 1998.
Since 1996, Mr. Hiller has been a consultant to General Spice Companies, a
division of ConAgra, and previously served as the President of General Spice
Companies from 1990 to 1996. Mr. Hiller also was the co-founder of General Spice
Companies, and from 1965 to 1990, he served as its Executive Vice President and
Treasurer.

                                       10

<PAGE>

         Irwin D. Simon has been a Director of our company since June 1998. Mr.
Simon has been the Chairman, President and Chief Executive Officer of The Hain
Celestial Group, Inc., a natural and specialty foods company listed on NASDAQ,
since May 2000, and President and Chief Executive Officer of The Hain Food
Group, Inc. from 1993 to May 2000. Prior to 1993, Mr. Simon spent 15 years in
various sales and marketing positions, including Vice President of Marketing of
Slim-Fast Foods Company, and Eastern Regional Director of Haagen-Dazs Shops, a
division of Grand Metropolitan, PLC.

         All of our directors serve for a one year term ending at the next
annual meeting of stockholders or until their respective successors are duly
elected and qualified. Officers serve at the discretion of the Board of
Directors, subject to rights, if any, under their contracts of employment. There
are no family relationships among our directors and executive officers.

         We maintain a $1,000,000 key man life insurance policy on the life of
Philip Rosner, our Chairman and Chief Executive Officer, in which we are the
beneficiary. Any cash surrender values on this policy is not material.

         There is no family relationship between any director or executive
officer of the Company and any other director or executive officer of the
Company.

Meetings of the Board of Directors and Committees

         Our business affairs are managed under the direction of the Board of
Directors. Members of the Board of Directors are informed about our affairs
through presentations, reports and documents distributed to them, through
operating and financial reports routinely presented at meetings of the Board of
Directors and committee meetings and through other means. Our directors not only
attend meetings of the Board of Directors but also have personal meetings and
other communications, including telephone contact, with management.

Board Committees

         Our Board of Directors has an Executive Committee, an Audit Committee
and a Compensation Committee. Members of these Committees are appointed by the
Board of Directors each year.

         Executive Committee. The Executive Committee of the Board of Directors
may exercise, except when the Board of Directors is in session and to the extent
permitted by the General Corporation Law of the State of Delaware, all of the
powers of the Board of Directors in the management of the affairs of our
Company. The current members of the Executive Committee are Messrs. Rosner,
Deson and Hiller.

         Audit Committee. The Audit Committee recommends to the Board of
Directors the firm to be selected each year as independent auditors of our
financial statements and to perform services related to such audit. The Audit
Committee also has responsibility for:

          |X|  approval of and reviewing the scope and results of the audit with
               the independent auditors and related fees,

          |X|  reviewing our financial condition and results of operations with
               management,

          |X|  considering the adequacy of the internal accounting, bookkeeping
               and control procedures, and

          |X|  reviewing any non-audit services and special engagements to be
               performed by the independent auditors and considering the effect
               of such performance on the auditors' independence.

         The current members of the Audit Committee are Messrs. Deson and Hiller
and both are independent directors and are financial experts based on their past
business experiences as disclosed elsewhere in ITEM 9 of this Form 10-KSB.

         Compensation Committee. The Compensation Committee recommends to the
Board of Directors the compensation to be paid to our executive officers and
other key personnel, reviews new or existing employee compensation programs and
periodically reviews management perquisites and other benefits. The current
members of the Compensation Committee are Messrs. Hiller and Simon.

                                       11

<PAGE>

         We have not established a nominating committee and/or a corporate
governance committee, however, we believe that the nomination of directors and
other issues normally considered by these committees can be effectively managed
by the Board of Directors due to its composition, or by the Audit Committee.

Director Compensation

         During 2004 and 2003, each of our non-employee directors was paid a
$20,000 annual fee plus $500 for each formal meeting attended. Alternatively, an
outside director may, at his option and in lieu of such cash remuneration, elect
to receive a non-qualified stock option grant for such earned fees. In addition,
directors are reimbursed for reasonable expenses actually incurred in connection
with attending each formal meeting of the Board of Directors or any committee
thereof. Our outside directors currently are Messrs. Deson, Hiller and Simon.

Statement of Corporate Governance Practices

         We are organized under the laws of the State of Delaware, and therefore
subject to that State's laws and principles of corporate governance. We are of
the opinion that our approach to corporate governance is in compliance in all
material respects with Delaware law.

Unrelated Directors

         We believe that three of our five directors (i.e., Messrs. Deson,
Hiller and Simon) are unrelated. We believe that the number of unrelated
directors is appropriate for the effective operations of the company.

         The Board of Directors has no formal policy setting out which specific
matters must be brought by the Chief Executive Officer or management to the
Board of Directors for approval, although generally all material transactions
are presented by management for approval by the Board of Directors.

Response to Stockholders

         Management is available to stockholders to respond to questions and
concerns. The Board of Directors believes that management is generally
responsive to the inquiries of stockholders and others interested in our
company.

Expectations of Management

         The Board of Directors works closely with members of management. The
Board's access to information relating to our operations, through membership on
the Board of several key members of management and, as necessary, attendance by
other members of management at the request of the Board, are important elements
to the effective and informed functioning of the Board of Directors.

         The Board of Directors expects our management to take the initiative in
identifying opportunities and risks affecting our business and finding means to
deal with such opportunities and risks for the benefit of our stockholders.

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

         Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires that our directors and executive officers and persons who beneficially
own more than 10% of our Common Stock (collectively, the "Reporting Persons")
file with the Securities and Exchange Commission (the "Commission") (and, if
such security is listed on a national securities exchange, with such exchange)
various reports as to their ownership of and activities relating to such Common
Stock. Such Reporting Persons are required by Commission regulations to furnish
us with copies of all Section 16 (a) reports they file. Based solely upon a
review of copies of Section 16(a) reports and representations received by us
from Reporting Persons, and without conducting any independent investigation of
our own, in 2004, all Forms 3, 4 and 5 were timely filed with the Commission by
such Reporting Person.

Code of Ethics

         We have adopted a Code of Business Conduct and Ethics in compliance
with Item 406 of Regulations S-B that applies to our Chief Executive Officer and
Chief Financial Officer. Our Code of Business Conduct and Ethics is posted on
our website, www.tffi.com, under the "Corporate Responsibility-Corporate
Governance" caption. We intend to disclose on our website any amendments to, or
waiver of, a provision of the Code of Business Conduct and Ethics that applies
to our Chief Executive Officer and our Chief Financial Officer.

                                       12

<PAGE>

ITEM 10  EXECUTIVE COMPENSATION

         The following summary compensation table sets forth the aggregate
compensation paid to or earned by our Chairman of the Board and Chief Executive
Officer and the other four most highly compensated executive officers of our
company (other than the Chairman of the Board and Chief Executive Officer) whose
total annual salaries and bonuses exceeded $100,000 for the year ended December
31, 2004 (the "Named Executive Officers"):

<TABLE>
                           SUMMARY COMPENSATION TABLE

                                                                             Annual Compensation
                                                           --------------------------------------------------------     Awards:
                                                                                                                      Securities
                                                                                                   Other Annual       Underlying
Name and Principal Position                       Year          Salary             Bonus         Compensation (1)    Options/SARs
---------------------------                       ----          ------             -----         ----------------    ------------
<S>                                               <C>          <C>                <C>                <C>              <C>    <C>
Philip Rosner...............................      2004         $268,000           $38,973(2)         $19,006          50,000 (4)
Chairman of the Board and Chief Executive         2003          275,000            20,000(2)          20,826               -
Officer                                           2002          243,338            60,000(3)           8,424               -

A. Gary Frumberg............................      2004          250,000            14,074(2)          10,016          30,000 (5)
Director and Executive Vice President             2003          250,000             6,500(2)           9,755               -
                                                  2002          224,952            30,000(3)          10,692

Harvey Farber...............................      2004          183,600                 -              4,403            5,000 (6)
Senior Vice President-Flavor Division             2003          183,600                 -              4,201                -
                                                  2002          174,825            12,000              3,437                -

Ronald J. Dintemann.........................      2004          159,500                 -             12,500           85,000 (7)
Vice President-Operations                         2003          159,500                 -             12,499                -
                                                  2002          151,842            11,000             12,329           25,000(8)

Joseph A. Gemmo.............................      2004          159,500                 -              5,715           10,000 (9)
Vice President, Chief Financial Officer,          2003          159,500                 -              5,897                -
Secretary and Treasurer                           2002          146,219            11,000              6,313                -

(1)  Represents expenses in connection with the personal use of company
     automobiles and life insurance policies on the life of such executive.

(2)  Represents bonuses paid to Messrs. Rosner and Frumberg approved by the
     Board of Directors for the purpose of paying down certain notes owed to the
     Company.

(3)  Represents bonuses paid pursuant to our Management Incentive Plan plus
     additional bonuses of $40,000 and $13,000 paid to Messrs. Rosner and
     Frumberg, respectively, approved by our Board of Directors for the purpose
     of paying down certain notes owed to the Company.

(4)  Represents five-year stock options to purchase 50,000 shares of our Common
     Stock granted in November 2004 under our 1999 Stock Option Plan at an
     exercise price of $.84 per share.

(5)  Represents five-year stock options to purchase 30,000 shares of our Common
     Stock granted in November 2004 under our 1999 Stock Option Plan at an
     exercise price of $.84 per share.

(6)  Represents ten-year stock options to purchase 5,000 shares of our Common
     Stock granted in November 2004 under our 1999 Stock Option Plan at a
     exercise price of $.76 per share.

(7)  Represents ten-year stock options to purchase 75,000 shares of our Common
     Stock granted in April 2004 under our 1999 Stock Option Plan at an exercise
     price of $.71 per share and 10,000 shares of our Common Stock granted in
     November 2004 under our 1999 Stock Option Plan at an exercise price of $.76
     per share.

(8)  Represents ten-year stock options to purchase 25,000 shares of our Common
     Stock granted in May 2002 under our 1999 Stock Option Plan at an exercise
     price of $1.05 per share.

(9)  Represents ten-year stock options to purchase 10,000 shares of our Common
     Stock granted in November 2004 under our 1999 Stock Option Plan at an
     exercise price of $.76 per share.

</TABLE>

                                       13

<PAGE>

Stock Option Grants in 2004

         The following table sets forth certain information concerning
individual stock option grants during the year ended December 31, 2004 to the
Named Executive Officers.
<TABLE>

                                       Number of             % of Total
                                       Securities           Options/SARs
                                       Underlying            Granted to
                                      Options/SARs          Employees in           Exercise Price            Expiration
     Name                               Granted             Fiscal Year              Per Share                  Date
     ----                             ------------          ------------           --------------            ----------
<S>                                      <C>                    <C>                     <C>                   <C>   <C>
     Philip Rosner                       50,000                 24%                     $.84                  11/22/09
     A. Gary Frumberg                    30,000                 14%                      .84                  11/22/09
     Harvey Farber                        5,000                  2%                      .76                  11/22/14
     Ronald J. Dintemann                 85,000                 40%                  .71-.76                  11/22/14
     Joseph A. Gemmo                     10,000                  5%                      .76                  11/22/14
</TABLE>

Aggregate Stock Option Exercises in 2004 and 2004 Year-End Stock Option Values

         The following table provides certain information concerning each
exercise of stock options during the year ended December 31, 2004 by each of the
Named Executive Officers and the year-end value of unexercised stock options.
The stock options listed below were granted without tandem stock appreciation
rights. We have no freestanding stock appreciation rights outstanding.

<TABLE>
                                Number of                           Number of Unexercised            Value of Unexercised
                                 Shares                                  Options at                 In-the-Money Options at
                               Acquired on         Value              December 31, 2004                December 31, 2004
  Name                          Exercise        Realized ($)      Exercisable/Unexercisable      Exercisable/Unexercisable (1)
  ----                          --------        ------------      -------------------------      -----------------------------

<S>                                                                      <C>     <C>                      <C>     <C>
  Philip Rosner ...........           -                -                 200,000/50,000                   $21,000/$12,500
  A. Gary Frumberg .....              -                -                 150,000/30,000                    21,000/7,500
  Harvey Farber ..........            -                -                  96,667/13,333                      4,967/333
  Ronald J. Dintemann ..              -                -                  61,667/93,333                     4,967/1,983
  Joseph A. Gemmo .....               -                -                 220,000/10,000                     8,800/3,300

</TABLE>

(1)  Value of unexercised "in-the-money" options is equal to the difference
     between the closing per share price of our Common Stock on the AMEX at
     December 31, 2004 ($1.09) and the option exercise price per share
     multiplied by the number of shares subject to options.

Employment Agreements

         In May 2002, we entered into three-year employment agreements with each
of the Company's five Named Executive Officers containing terms and conditions
which are, except for the respective amounts of salary compensation,
substantially similar. The employment agreements provide for the respective
annual base salaries for each Named Executive Officer, as in effect as of the
date of his employment agreement, which may be increased by the Board of
Directors at any time, and that each such officer shall be entitled to bonuses
or other forms of incentive compensation pursuant to the Company's Management
Incentive Plan subject to the discretion of the Board of Directors. The
employment agreements contain, among other things, customary noncompetition and
confidentiality provisions. Under the employment agreements, each Named
Executive Officer is also entitled to (i) participate in all fringe benefit
programs provided by the Company to its executive officers and (ii) provision of
an automobile with a lease value of up to $900 per month and reimbursement for
related automotive expenses in accordance with the Company's requirements and
established practices. Effective January 1, 2003, the annual base salary for
each Named Executive Officer was increased to the following amounts: Philip
Rosner, Chairman and Chief Executive Officer, $275,000; A. Gary Frumberg,
Executive Vice President, $250,000; Harvey Farber, Senior Vice President-Flavor
Division, $183,600; Ronald J. Dintemann, Vice President Operations, $159,500;
and Joseph A. Gemmo, Vice President and Chief Financial Officer, $159,500. In
January 2005, such employment agreements were automatically extended for an
additional one year term through April 2006.

         If the Company terminates a Named Executive Officer's employment before
expiration of the respective employment agreement term without Cause (as
defined), such officer will be entitled, as severance, to the ongoing payment of
his salary for the entirety of the portion of the term which remains after the
termination date. Also, the Company shall continue, at its expense, to provide
such terminated officer with all medical benefits for the remainder of the
employment agreement term.

                                       14

<PAGE>

         For purposes of the employment agreements, "Cause" would exist if a
Named Executive Officer (i) willfully or repeatedly fails in any material
respect to satisfactorily perform his duties and obligations as provided in the
employment agreement; (ii) has been convicted of a crime or has entered a plea
of guilty or nolo contendere with respect thereto; (iii) has committed any act
in connection with his employment which involved fraud, gross negligence,
misappropriation of funds, dishonesty, disloyalty, breach of fiduciary duty or
any other misconduct injurious to the Company or any affiliate thereof; (iv) has
engaged in any conduct which in the Company's reasonable determination is likely
to adversely affect in any material respect the reputation or public image of
the Company or any affiliate thereof; (v) has breached any of the restrictive
covenants contained in the employment agreement regarding noncompetition,
nonsolicitation of customers or suppliers, or nondisclosure of information; or
(vi) has materially breached his employment agreement in any manner other than
those set forth above.

         If prior to the expiration of an employment agreement term, but
following or in connection with, as a result of or in anticipation of a Change
of Control (as defined) of the Company or Potential Change of Control (as
defined) of the Company, a Named Executive Officer's employment is terminated by
the Company without Cause or by such officer for Good Reason (as defined), the
Company shall pay the officer as severance in a lump sum within 30 days after
the termination date (i) all amounts of his salary for the entirety of the
portion of the term which remains after the termination date and (ii) an amount
equal to six months to two years, depending upon the Executive Officer, of their
salary. In addition, the Company shall, at its expense, continue to provide such
officer with all medical benefits for the remainder of the employment agreement
term.

         For purposes of the employment agreements, "Good Reason" means the
occurrence (without such officer's prior consent) of any one of several acts, or
failures to act, including: (i) assignment to the officer of any
responsibilities inconsistent with his most significant position(s) as an
executive officer of the Company held during the 180-day period immediately
preceding any related Potential Change in Control or a substantial adverse
alteration of such officer's position or title(s) with the Company; (ii) a
reduction in the officer's annual base salary; (iii) certain relocations of the
Company's principal executive offices; and (iv) a material failure by the
Company to comply with the employment agreement.

1993 Stock Option Plan

         In November 1993, we adopted, and the stockholders approved, the 1993
Stock Option Plan pursuant to which we may grant to our employees options to
purchase up to 500,000 shares of our Common Stock. The options granted under the
1993 Stock Option Plan may be exercised during the ten-year period after they
are granted at an exercise price equal to the mean between the high and low
selling prices of our Common Stock on the AMEX on the date of the grant. Options
granted to any person who beneficially owns 10% or more of our Common Stock may
not be exercised after the fifth anniversary of the date of the grant and must
be granted at an exercise price equal to 110% of the market price at the date of
the grant. In May 1999, our Board of Directors terminated the 1993 Stock Option
Plan for the purpose of granting additional stock options. Termination of the
1993 Stock Option Plan will not affect options that were granted prior to the
termination date.

         As of March 15, 2005, options to purchase an aggregate of 308,500
shares of our Common Stock were outstanding under the 1993 Stock Option Plan.

1996, 1999 and 2004 Stock Option Plans

         In April 2004, the Board of Directors adopted, and in July 2004, the
stockholders approved, the 2004 Stock Option Plan. In May 1999, our Board of
Directors adopted, and in June 1999, the stockholders approved, the 1999 Stock
Option Plan. In October 1996, our Board of Directors adopted, and the
stockholders approved, the 1996 Stock Option Plan.

         The maximum number of shares of our Common Stock that may be subject to
options under each of the 1996, 1999 and 2004 Stock Option Plans may not exceed
an aggregate of 1,000,000 shares. This number may be adjusted in certain events,
such as a stock split, reorganization or recapitalization. Our employees
(including officers and directors who are employees) and employees of our
company's subsidiaries are eligible for the grant of incentive options under the
1996, 1999 and 2004 Stock Option Plans. Directors who are not employees are not
eligible to receive incentive stock options, but may receive non-qualified
options. Options may also be granted to other persons, provided that such
options are non-qualified options. In the event of incentive options, the
aggregate fair value of our Common Stock with respect to which such options
become first exercisable by the holder during any calendar year cannot exceed
$100,000. This limit does not apply to non-qualified options. To the extent an
option that otherwise would be an incentive option exceeds this $100,000
threshold, it will be treated as a non-qualified option.

         In the case of an incentive option, the exercise price cannot be less
than the fair value (as defined in the 1996, 1999 and 2004 Stock Option Plans)
of our Common Stock on the date the option is granted and, if an optionee is a
stockholder who beneficially owns 10% or more of our outstanding Common Stock,
the exercise price of incentive options may not be less than 110% of the fair
value of our Common Stock. The term of an option cannot exceed ten years and, in
the case of an optionee who owns 10% or more of the outstanding Common Stock,
cannot exceed five years.

                                       15

<PAGE>

         The 1996, 1999 and 2004 Stock Option Plans will terminate automatically
and no options may be granted more than ten years after the dates the 1996, 1999
and 2004 Stock Option Plans, respectively, were approved by our Board of
Directors. The 1996, 1999 and 2004 Stock Option Plans may be terminated at any
prior time by the Board of Directors. Termination of the 1996, 1999 and 2004
Stock Option Plans will not affect options that were granted prior to the
termination date.

         As of March 15, 2005, options to purchase an aggregate of 970,629 and
891,000 shares of our Common Stock were outstanding under the 1996 and 1999
Stock Option Plans, respectively, and an aggregate of 1,112,288 shares were
reserved for the future issuance of stock options. No grants were made under the
2004 Stock Option Plan.

Management Incentive Plan

         In 2004 and 2003, we had in effect a management incentive plan for
corporate officers and key management employees for the purpose of awarding cash
and stock bonuses based on the achievement of certain predetermined goals. These
goals are established for each participant in the plan and are set by our
Compensation Committee prior to the beginning of the year. These goals are based
on a participant's performance and may relate to a variety of factors reflecting
our objectives and performance and a participant's ability to contribute to the
overall success of our company within the context of the purposes of the plan,
our business plan and the aspects of our business which the participant's duties
involve.

         Bonuses awarded pursuant to the plan are based on a percentage of each
participant's base salary and the overall performance of our company during the
year. However, the amount of any award to a participant for any year shall not
exceed 50% of the participant's base salary, in the case of a participant who is
a corporate officer of our Company, or 25% of base salary, in the case of a
participant who is a key management employee. Further, if the aggregate amount
of all awards under the plan exceeds 10% of our net income for a particular
year, each award shall be proportionately reduced so that the aggregate amount
of all such awards does not exceed 10% of our net income for the year. No such
bonuses were awarded in 2004 and 2003 under this Plan

ITEM 11  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The following table sets forth certain information as of March 15, 2005
regarding the beneficial ownership of our Common Stock by (a) each person known
by us to own beneficially more than 5% of our Common Stock, (b) each of our
directors, (c) each of our Named Executive Officers, and (d) all of our
executive officers and directors as a group (eight persons):

<TABLE>
                                                                                                           Percentage
  Name                                                                     Number of Shares               Beneficially
  ----                                                                  Beneficially Owned (1)                Owned
                                                                        ----------------------            ------------
<S>                                                                            <C>         <C>                 <C>
  Philip Rosner (2) ..........................................                 2,310,009   (3)(4)              17.7%
  A. Gary Frumberg (2) .......................................                 1,434,674   (5)                 11.0%
  Richard R. Higgins .........................................                   750,000                        5.8%
  Sean Deson (2) .............................................                   344,231   (6)(7)(8)(10)        2.6%
  Werner F. Hiller (2) .......................................                   313,984   (6)(8)(9)(10)        2.4%
  Irwin D. Simon (2) .........................................                   233,333   (6)(8)(9)            1.8%
  Ronald J. Dintemann (2) ....................................                    80,778   (11)(12)             (*)
  Harvey F. Farber (2) .......................................                   104,267   (12)(13)             (*)
  Joseph A. Gemmo (2) ........................................                   226,100   (14)                 1.7%
  All directors and executive officers as a group (eight persons)              5,047,376                       35.1%
</TABLE>

(*) Less than 1%

(1)      As used in this table, a beneficial owner of a security includes any
         person who, directly or indirectly, through contract, arrangement,
         understanding, relationship or otherwise has or shares (i) the power to
         vote, or direct the voting of, such security or (ii) investment power
         which includes the power to dispose or to direct the disposition of
         such security. In addition, a person is deemed to be the beneficial
         owner of a security if that person has the right to acquire beneficial
         ownership of such security within 60 days of the date shown above.

                                       16

<PAGE>

(2)      The business address of each of Messrs. Rosner, Frumberg, Dintemann,
         Farber and Gemmo is c/o Technology Flavors & Fragrances, Inc., 10
         Edison Street East, Amityville, New York 11701. The business address of
         Mr. Deson is c/o Baytree Capital, 40 Wall Street, 58th Floor, New York,
         NY 10005. The business address of Mr. Hiller is 248 Locha Drive,
         Jupiter, Fl 33458. The business address of Mr. Simon is c/o The Hain
         Celestial Group, Inc., 58 South Service Road, Melville, NY 11747.

(3)      Includes five-year options to purchase an aggregate of 200,000 shares
         of our Common Stock granted to Mr. Rosner in May 2001 and October 2001
         which are fully vested and excludes options to purchase 50,000 shares
         of our Common Stock granted in November 2004 that have not yet vested.
         Of such unvested options, 16,667 shares will vest in each of years 2005
         and 2006 and 16,666 shares will vest in 2007.

(4)      Includes 36,438 shares of our Common Stock owned by Mr. Rosner's wife.
         Mr. Rosner disclaims beneficial ownership of the shares owned by his
         wife.

(5)      Includes five-year options to purchase an aggregate of 150,000 shares
         of our Common Stock granted to Mr. Frumberg in May 2001 and October
         2001 which are fully vested and excludes options to purchase 30,000
         shares of our Common Stock granted in November 2004 that have not yet
         vested. Of such unvested options, 10,000 shares will vest in each of
         years 2005, 2006 and 2007.

(6)      Includes ten-year options to purchase 100,000 shares of our Common
         Stock granted to each of Messrs. Deson, Hiller and Simon in June 1999
         which are fully vested.

(7)      Includes ten-year options to purchase 200,000 shares of our Common
         Stock granted to Mr. Deson in June 1998 and an aggregate of 10,898
         shares granted in 1999 which are fully vested.

(8)      Includes ten-year options to purchase 33,333 shares of our Common Stock
         granted to each of Messrs. Deson, Hiller and Simon in May 2002 which
         are fully vested and excludes options to purchase 16,667 shares of our
         Common Stock to each that have not yet vested. Such unvested options
         will vest in 2005.

(9)      Includes ten-year options to purchase 100,000 shares of our Common
         Stock granted to each of Messrs. Hiller and Simon in January 1998
         which are fully vested.

(10)     Includes ten-year options to purchase 6,731 shares of our Common Stock
         granted to each of Messrs. Deson and Hiller in April 1999 and 4,167
         shares granted to Mr. Deson in October 1999 which are fully vested.

(11)     Includes ten-year options to purchase an aggregate of 45,000 shares of
         our Common Stock granted to Mr. Dintemann in June 1997 and April 1999
         which are fully vested and excludes options to purchase 75,000 shares
         granted in April 2004 and 10,000 shares granted in November 2004 that
         have not yet vested. Of such unvested options, 28,333 shares will vest
         in each of years 2005 and 2006 and 28,334 shares will vest in 2007.

(12)     Includes ten-year options to purchase 16,667 shares of our Common Stock
         granted to each of Messrs. Dintemann and Farber in May 2002 which are
         fully vested and excludes options to purchase 8,333 shares of our
         Common Stock to each that have not yet vested. Such unvested options
         will vest in 2005.

(13)     Includes ten-year options to purchase an aggregate of 80,000 shares of
         our Common Stock granted to Mr. Farber in January 1996, February 1997
         and April 1999 which are fully vested and excludes options to purchase
         5,000 shares granted in November 2004 that have not yet vested. Of such
         unvested options, 1,667 will vest in each of years 2005 and 2006 and
         1,666 will vest in 2007.

(14)     Includes ten-year options to purchase an aggregate of 220,000 shares of
         our Common Stock granted to Mr. Gemmo in February 1997, December 1997,
         April 1999 and May 2001 which are fully vested and excludes options to
         purchase 10,000 shares granted in November 2004 that have not yet
         vested. Of such unvested options, 3,333 shares will vest in each of
         years 2005 and 2006 and 3,334 will vest in 2007.


                                       17

<PAGE>


Equity Compensation Plan Information

         The following table sets forth information about our Common Stock as of
December 31, 2004 that may be issued upon exercise of options, warrants and
other rights under our equity compensation plans as of December 31, 2004. All of
our equity compensation plans have been approved by our stockholders.

<TABLE>

                                                                                               Number of Shares Remaining
                                                                                                  Available for Future
                                     Number of Shares to be          Weighted Average            Issuance under Equity
                                    Issued upon Exercise of          Exercise Price of             Compensation Plans
                                      Outstanding Options           Outstanding Options       (excluding shares reflected
Plan Category                                 (a)                           (b)                      in column [a])
-------------                                                                                              (c)
                                  -----------------------------    ----------------------     -----------------------------
<S>                                        <C>                             <C>                         <C>
Equity compensation plans
approved by shareholders                   2,170,129                       $1.11                       3,282,417

Equity compensation plan not
approved by shareholders                       -                             -                             -
                                  -----------------------------    ----------------------     -----------------------------

     Total                                 2,170,129                       $1.11                       3,282,417
                                  =============================    ======================     =============================
</TABLE>

ITEM 12  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         In 2004 and 2003, we sold flavor products to The Hain Celestial Group,
Inc. ("Hain") and/or their designated co-packer. Irwin D. Simon, a director of
our company, is the Chairman, President and Chief Executive Officer of Hain. Our
sales to Hain totaled approximately $859,000 in 2004 and $1,003,000 in 2003. We
believe such sales were made on arms-length terms and conditions and at
competitive prices.

         In 2004 and 2003, we sold fragrance products to Scent-A-Vision, Inc., a
company owned by Ms. Sharon Christie who is the spouse of Mr. Philip Rosner, our
Chairman and Chief Executive Officer. Our sales to Scent-A-Vision for years 2004
and 2003 were approximately $157,000 and $109,000, respectively, which we
believe were competitive with other available sources for such fragrance
products.

         During 2004 and 2003, there existed certain loans outstanding with two
of our executive officers classified as "Notes receivable from related parties."
Such loans were fully paid in December 2004.

ITEM 13  EXHIBITS AND REPORTS ON FORM 8-K.

         (a) The exhibits listed below are filed as part of this Annual Report
on Form 10-KSB.


<TABLE>
       Exhibit
        Number                          Document
       -------                          --------
<S>       <C>  <C>
          3.1  Certificate of Incorporation and By-Laws (A).
          4.1  Form of Certificate Representing Share of Common Stock (A).
         10.1  1993 Stock Option Plan (A).
         10.2  1996 Stock Option Plan (incorporated by reference from our 1996 definitive proxy statement
               with respect to our 1996 Annual Meeting of Stockholders, held October 30, 1996, as filed
               with the Commission on September 25, 1996).
         10.3  1999 Stock Option Plan (incorporated by reference from our 1999 definitive proxy statement
               with respect to the 1999 Annual Meeting of Stockholders, held June 24, 1999, as filed
               with the Commission on May 28, 1999).
         10.8  Agreement of Purchase and Sale, dated as of November 16, 2001, between us and First
               Industrial, L.P. (filed as Exhibit 2.1 to form 8-K, Current Report of our company, filed
               with the Commission on January 15, 2002).
         10.9  Lease Agreement, dated as of January 1, 2002, between us and Town of Babylon Industrial
               Development Agency (filed as Exhibit 10.2 to Form 8-K, Current Report of our company,
               filed with the Commission on January 15, 2002).
        10.10  Reimbursement Agreement, dated as of January 1, 2002, between us and Wells Fargo Bank,
               Inc. (filed as Exhibit 10.3 to Form 8-K, Current Report of our company, filed with the
               Commission on January 15, 2002).
        10.11  Irrevocable Letter of Credit, dated January 15, 2002, issued by Wells Fargo Bank, National
               Association, in favor of the Bank of New York (filed as Exhibit 10.4 to Form 8-K, Current
               Report of our company, filed with the Commission on January 15, 2002).
</TABLE>

                                       18
<PAGE>

<TABLE>
<S>     <C>    <C>
        10.12  Guaranty Agreement dated as of January 1, 2002 from us to Wells Fargo Credit, Inc., Wells
               Fargo Bank, National Association and the Bank of New York (filed as Exhibit 10.5 to Form
               8-K, Current Report of our company, filed with the Commission on January 15, 2002).
        10.13  Mortgage, Security Agreement, Fixture Filing and Assignment of Leases and Rents, dated as
               of January 1, 2002, from us and Town of Babylon Industrial Development Agency to Wells
               Fargo Credit, Inc. (filed as Exhibit 10.6 to Form 8-K, Current Report of our company,
               filed with the Commission on January 15, 2002).
        10.14  Indenture of Trust dated as of January 1, 2002, from Town of Babylon Industrial
               Development Agency to the Bank of New York (filed as Exhibit 10.7 to Form 8-K, Current
               Report of our company, filed with the Commission on January 15, 2002).
        10.15  Amended and Restated Loan and Security Agreement, dated April 25, 2002, between us and
               Wells Fargo Credit, Inc. (filed as Exhibit 11.1 to Form 10-QSB, Current Report of our
               company, filed with the Commission on July 31, 2002).
        10.16  Executive Employment Agreements, dated May 17, 2002, between us and Messrs. Rosner,
               Frumberg, Gemmo, Dintemann and Farber (filed as Exhibit 11.2, 11.3, 11.4, 11.5 and 11.6
               to Form 10-QSB, Current Report of our company, filed with the Commission on July 31,
               2002).
        10.17  2004 Stock Option Plan (incorporated by reference from our 2004 definitive proxy statement
               with respect to our 2004 Annual Meeting of Stockholders, held July 27, 2004, as filed
               with the commission on June 4, 2004).
         21.1  Subsidiaries (filed as Exhibit 21.1 to Form 10-KSB, Annual Report of our company for the
               year ended December 31, 2000 and incorporated herein by reference).
         *31.1 Certification of the Company's Chairman and Chief Executive Officer pursuant to Rule 13a-
               14 of the Securities Exchange Act of 1934 as adopted pursuant to Section 302 of the
               Sarbanes-Oxley Act of 2002.
         *31.2 Certification of the Company's Chief Financial Officer pursuant to Rule 13a-14 of the
               Securities Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley
               Act of 2002.
         *32.1 Certification of the Company's Chairman and Chief Executive Officer pursuant to 18 U.S.C.
               Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
         *32.2 Certification of the Company's Chief Financial Officer pursuant to 18 U.S.C. Section 1350,
               as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
         *99.1 Written Statement of Chief Executive Officer and Chief Financial Officer.
</TABLE>

     (A)   Incorporated by reference to our Registration Statement on Form 10-SB
           (File No. 0-26682) filed with the Commission on August 28, 1995.

     *Filed in this Annual Report on Form 10-KSB.

         (b) Reports on Form 8-K.
             Reports on Form 8-K filed by the Company during the last quarter
             of the period covered by this Annual Report on Form 10-KSB was a
             report filed on November 15, 2004 in respect of Items 2.02, 7.01
             and 9.01 of such Form 8-K.


ITEM 14  PRINCIPAL ACCOUNTANT FEES AND SERVICES

         The information required by this Item will appear under the heading
"Corporate Governance-Independent Auditor's Fees and Services" in our Proxy
Statement which section is incorporated herein by reference.

                                       19


<PAGE>

                                   SIGNATURES

         In accordance with Section 13 or 15(d) of the Exchange Act, we have
caused this report to be signed on our behalf by the undersigned, thereunto duly
authorized.

                             TECHNOLOGY FLAVORS & FRAGRANCES, INC.

Dated: March 15, 2005        By:               /s/ JOSEPH A. GEMMO
                                ------------------------------------------------
                                                 Joseph A. Gemmo
                                      Vice President and Chief Financial Officer


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

<TABLE>
        Signature                                        Title                                           Date

<S>                                  <C>                                                           <C>
     /s/ PHILIP ROSNER               Chairman of the Board, Chief Executive Officer and            March 15, 2005
----------------------------         Director (Principal Executive Officer)
       Philip Rosner

     /s/ A.GARY FRUMBERG             Executive Vice President and Director                         March 15, 2005
----------------------------
       A. Gary Frumberg

     /s/ JOSEPH A. GEMMO             Vice President, Chief Financial Officer, Secretary and        March 15, 2005
----------------------------         Treasurer (Principal Financial and Accounting Officer)
        Joseph A. Gemmo

     /s/ SEAN DESON                  Director                                                      March 15, 2005
----------------------------
        Sean Deson

     /s/ WERNER F. HILLER            Director                                                      March 15, 2005
----------------------------
        Werner F. Hiller

     /s/ IRWIN D. SIMON              Director                                                      March 15, 2005
----------------------------
       Irwin D. Simon
</TABLE>

                                       20


                          INDEX TO FINANCIAL STATEMENTS


                                                                         Page
                                                                         ----

   Report of Independent Registered Public Accounting Firm                F-2


   Consolidated Balance Sheets as of December 31, 2004 and 2003           F-3


   Consolidated Statements of Operations for the Years Ended
   December 31, 2004 and 2003                                             F-4


   Consolidated Statements of Stockholders' Equity for the Years
   Ended December 31, 2004 and 2003                                       F-5


   Consolidated Statements of Cash Flows for the Years Ended
   December 31, 2004 and 2003                                             F-6


   Notes to Consolidated Financial Statements for the Years Ended
   December 31, 2004 and 2003                                             F-7



                                      F-1

<PAGE>


             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


To the Stockholders and Board of Directors of
Technology Flavors & Fragrances, Inc. and Subsidiaries

We have audited the accompanying consolidated balance sheets of Technology
Flavors & Fragrances, Inc. and Subsidiaries as of December 31, 2004 and 2003 and
the related consolidated statements of operations, stockholders' equity, and
cash flows for the years then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Company's internal control
over financial reporting. Accordingly, we express no such opinion. An audit also
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 consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Technology Flavors &
Fragrances, Inc. and Subsidiaries at December 31, 2004 and 2003, and the results
of their operations and their cash flows for the years then ended in conformity
with accounting principles generally accepted in the United States.



                                                            /s/ BDO SEIDMAN, LLP



Melville, New York
March 21, 2005


                                       F-2


<PAGE>

<TABLE>
                              Technology Flavors & Fragrances, Inc.

                                   Consolidated  Balance Sheets


                                                                        At December 31,

                                                             -------------------------------------
                                                                   2004                2003
                                                             -----------------   -----------------
<S>                                                                  <C>                 <C>
                       ASSETS
Current assets:
  Cash and cash equivalents                                          $223,529            $112,365
  Receivables (Note 3)                                              2,761,470           3,121,704
  Inventories (Note 4)                                              4,386,925           3,799,534
  Prepaid expenses and other current assets                            38,008             116,968
                                                             -----------------   -----------------

    Total current assets                                            7,409,932           7,150,571

Fixed assets, net (Note 5)                                          2,365,394           2,235,716
Intangible assets, net (Note 6)                                       121,616             283,771
Other assets                                                          582,222             668,104
Notes receivable from related parties (Note 7)                             --              53,047
                                                             -----------------   -----------------

    Total assets                                                  $10,479,164         $10,391,209
                                                             =================   =================

                       LIABILITIES

Current liabilities:
  Accounts payable                                                 $2,089,632          $1,812,247
  Accrued expenses                                                    450,505             460,899
  Revolving credit facility (Note 8)                                2,825,973           1,778,840
  Current portion of long-term debt (Note 9)                           85,000              80,000
  Current portion of capital lease obligations (Note 11)               77,970              69,069
                                                             -----------------   -----------------

    Total current liabilities                                       5,529,080           4,201,055

Long-term debt, less current portion (Note 9)                       1,885,000           1,970,000

Capital lease obligations, less current portion (Note 11)             101,222              75,402
                                                             -----------------   -----------------
                                                                    7,515,302           6,246,457
Minority interest (Note 12)                                            (8,762)             31,690
Commitments and contingencies (Notes 11, 14 and 15)

                       STOCKHOLDERS' EQUITY

Common stock: (Note 13)
  $ .01 par value, authorized 20,000,000 shares, issued
  13,044,473 shares in 2004 and 13,004,473 in 2003                    130,445             130,045
Paid-in capital                                                    10,387,272          10,365,272
Accumulated deficit                                                (7,505,779)         (6,239,615)
Treasury stock at cost - 210,700 shares of common                    (205,097)           (205,097)
Accumulated comprehensive gain - foreign
  currency translation                                                165,783              62,457
                                                             -----------------   -----------------

    Total stockholders' equity                                      2,972,624           4,113,062
                                                             -----------------   -----------------

    Total liabilities and stockholders' equity                    $10,479,164         $10,391,209
                                                             =================   =================

                                     See accompanying notes.
</TABLE>

                                       F-3

<PAGE>

<TABLE>
                               Technology Flavors & Fragrances, Inc.
                               Consolidated Statements of Operations


                                                              For the years ended December 31,
                                                        -------------------------------------------
                                                               2004                   2003
                                                        -------------------    --------------------

<S>                                                            <C>                     <C>
 Net sales                                                     $16,047,233             $15,587,285
 Cost of sales                                                   9,714,912               9,361,006
                                                        -------------------    --------------------

  Gross profit                                                   6,332,321               6,226,279
                                                        -------------------    --------------------

 Operating expenses:
  Selling                                                        3,130,603               2,936,161
  General and administrative                                     2,196,130               1,798,669
  Research and development                                       1,888,973               1,628,124
  Amortization                                                     195,000                 195,363
                                                        -------------------    --------------------

           Total operating expenses                              7,410,706               6,558,317
                                                        -------------------    --------------------

 Loss from operations                                           (1,078,385)               (332,038)

 Interest expense, net                                            (217,773)               (187,434)
                                                        -------------------    --------------------

 Loss before taxes and minority interest                        (1,296,158)               (519,472)

 Tax benefit (Note 10)                                               5,927                   5,164
                                                        -------------------    --------------------

 Loss before minority interest                                  (1,290,231)               (514,308)

 Minority interest (Note 12)                                        24,067                 (31,690)
                                                        -------------------    --------------------

 Net loss                                                      $(1,266,164)              $(545,998)
                                                        ===================    ====================

 Net loss per common share - basic and diluted                       $(.10)                  $(.04)
                                                        ===================    ====================

 Weighted average common shares outstanding:
  Basic                                                         12,800,440              12,793,773
                                                        ===================    ====================
  Diluted                                                       12,800,440              12,793,773
                                                        ===================    ====================


                                      See accompanying notes.
</TABLE>

                                      F-4

<PAGE>

<TABLE>
                                              Technology Flavors & Fragrances, Inc.
                                         Consolidated Statements of Stockholders' Equity
                                          For the years ended December 31, 2004 and 2003

                                                                                           Accumulated
                                    Common Stock        Paid-In    Accumulated  Treasury   Comprehensive             Comprehensive
                                  Shares     Amount     Capital      Deficit      Stock     Gain (Loss)     Total        Loss
                               ----------- --------- ------------ ------------ ---------- -------------- ----------- -------------
<S>                            <C>          <C>       <C>          <C>          <C>              <C>      <C>           <C>
 Balance at January 1, 2003    13,004,473  $130,045  $10,365,272  ($5,693,617) ($205,097)     ($103,270) $4,493,333

 Foreign currency translation
    gain                                                                                        165,727     165,727      $165,727

 Net loss                                                            (545,998)                             (545,998)     (545,998)
                               --------------------- ------------ ------------ ---------- -------------- ----------- -------------

 Balance at December 31, 2003  13,004,473   130,045   10,365,272   (6,239,615)  (205,097)        62,457   4,113,062     ($380,271)
                                                                                                                     =============

 Issuance of common stock          40,000       400       22,000                                             22,400

 Foreign currency translation
    gain                                                                                        103,326     103,326      $103,326

 Net loss                                                          (1,266,164)                           (1,266,164)   (1,266,164)
                               --------------------- ------------ ------------ ---------- -------------- ----------- -------------

 Balance at December 31, 2004  13,044,473  $130,445  $10,387,272  ($7,505,779) ($205,097)      $165,783  $2,972,624   ($1,162,838)
                               ===================== ============ ============ ========== ============== =========== =============
</TABLE>

                                      F-5

<PAGE>

<TABLE>

                         Technology Flavors & Fragrances, Inc.
                         Consolidated Statements of Cash Flows

                                                               For the years ended
                                                                  December 31,
                                                         ------------------------------
                                                             2004            2003
                                                         --------------  --------------
<S>                                                        <C>               <C>
Cash flows from operating activities:
Net loss                                                   $(1,266,164)      $(545,998)
Adjustments to reconcile net income to net cash
  used in operating activities:
      Depreciation and amortization                            443,858         466,020
      Minority interest                                        (24,067)         31,690
      Provision (recovery) for bad debts                       360,066         (20,000)
      Issuance of common stock for consulting services          22,400               -
      Changes in assets and liabilities:
      Accounts receivable                                      147,450         (23,688)
      Inventories                                             (561,784)       (337,644)
      Prepaid expenses and other current assets                 62,575          75,487
      Other assets                                             (43,029)       (242,704)
      Accounts payable                                         277,385          27,930
      Accrued expenses                                         (10,394)         (3,518)
                                                         --------------  --------------

      Net cash used in operating activities                   (591,704)       (572,425)
                                                         --------------  --------------

Cash flows from investing activities:
Purchase of fixed assets                                      (258,500)       (290,226)
Release of restricted cash                                           -         179,877
Repayment of notes receivable                                   53,047          24,473
                                                         --------------  --------------

      Net cash used in investing activities                   (205,453)        (85,876)
                                                         --------------  --------------

Cash flows from financing activities:
Repayment of long-term debt                                    (80,000)        (80,000)
Proceeds from revolving credit facility                     17,328,000      15,740,000
Repayment of revolving credit facility                     (16,280,867)    (14,934,498)
Payment of capital lease obligations                           (85,315)        (68,243)
                                                         --------------  --------------

      Net cash provided by financing activities                881,818         657,259
                                                         --------------  --------------
Effect of exchange rate changes on cash                         26,503           6,977
                                                         --------------  --------------
Increase in cash                                               111,164           5,935
Cash-beginning of period                                       112,365         106,430
                                                         --------------  --------------
Cash-end of year                                              $223,529        $112,365
                                                         ==============  ==============

Supplemental information:

Cash paid during the year for interest                        $229,824        $204,228

                                                         ==============  ==============
Cash received during the year for income tax refunds           $30,976          $1,000
                                                         ==============  ==============


Supplemental disclosures of non-cash investing and financing activities:
equipment acquired under capital lease obligations amounted to $120,036 in 2004
and none in 2003.


                                See accompanying notes.

</TABLE>

                                      F-6

<PAGE>


                      Technology Flavors & Fragrances, Inc.
                   Notes to Consolidated Financial Statements
                 For the years ended December 31, 2004 and 2003


1.  Description of Business

    Technology Flavors & Fragrances, Inc. (the "Company", "us", "we" or "our")
is a manufacturer of flavor and fragrance products used to provide or enhance
flavors or fragrances in a wide variety of consumer and industrial products.

2.  Summary of Significant Accounting Policies

Consolidation

   The accompanying consolidated financial statements include the accounts of
the Company, our wholly-owned subsidiaries and our joint venture entity. All
significant intercompany balances and transactions have been eliminated in
consolidation.

Allowance for Doubtful Accounts

   We evaluate the need to record adjustments to the allowance for doubtful
accounts on a quarterly basis. We make estimates of the recoverability of
accounts receivable based on customer specific factors as well as our past
experience.

Inventories

   Inventories are stated at the lower of cost, determined using the first-in,
first-out method, or market. The cost of raw materials is determined using the
specific identification method.

Shipping and Handling Costs

   Shipping and handling costs that are incurred are included in cost of sales,
and shipping and handling costs that are billed to customers are recorded in
sales.

Fixed Assets

   Fixed assets, including assets acquired under capital leases, are recorded at
cost and depreciated over their estimated useful lives or lease term, if
shorter, ranging from 5 to 30 years, using the straight-line method. Maintenance
and repairs are charged to expense as incurred and renewals and improvements,
which extend the life of the assets, are capitalized.

Long-Lived Assets

   Amortization of intangible assets is provided using the straight-line method
over the estimated useful lives of the assets of seven years. The carrying
values of intangible and other long-lived assets are periodically reviewed to
determine if any impairment indicators are present. If it is determined that
such indicators are present and the review indicates that the assets will not be
fully recoverable, based on undiscounted estimated cash flows over the remaining
amortization and depreciation period, their carrying values are reduced to
estimated fair value. Impairment indicators include, among other conditions,
cash flow deficits, an historic or anticipated decline in revenue or operating
profit, adverse legal or regulatory developments, accumulation of costs
significantly in excess of amounts originally expected to acquire the asset and
a material decrease in the fair value of some or all of the assets. Assets are
grouped at the lowest level for which there are identifiable cash flows that are
largely independent of the cash flows generated by other asset groups. No such
impairment existed at December 31, 2004.

Research and Development Costs

   Research and development costs are expensed as incurred.

                                      F-7

<PAGE>

                      Technology Flavors & Fragrances, Inc.
             Notes to Consolidated Financial Statements (Continued)
                 For the years ended December 31, 2004 and 2003


2. Summary of Significant Accounting Policies (Continued)

Income Taxes

   We recognize deferred tax assets and liabilities for the expected future tax
consequences of events that have been included in the financial statements or
tax returns. Under this method, deferred tax assets and liabilities are
determined based on the difference between the financial statement and tax bases
of assets and liabilities using enacted tax rates in effect for the year in
which the differences are expected to reverse. Valuation allowances are
established when necessary to reduce deferred tax assets to the amount currently
estimated to be realized.

Foreign Currency Translation

   The financial position and results of operations of our subsidiaries are
measured using local currency as the functional currency. Balance sheet accounts
are translated at the exchange rate in effect at the end of the year, and income
statement accounts are translated at the average rate of exchange prevailing
during the year.

Earnings Per Share

   Basic net loss per share for years 2004 and 2003 was calculated using the
weighted average number of shares of common stock outstanding during the year.
Diluted net loss per share for 2004 and 2003 was calculated using the weighted
average common and common stock equivalents that were outstanding during the
year. The effect of common stock equivalents for 2004 (11,322 shares) and 2003
(30,563 shares) was anti-dilutive and, thus, diluted net loss per share for 2004
and 2003 is the same as basic earnings per share.

Revenue Recognition

   We recognize revenue when inventory is shipped and title legally transfers to
the purchaser.

Advertising Costs

   We expense advertising costs as incurred. Advertising costs were
approximately $20,000 in 2004 and $68,000 in 2003.

Use of Estimates

   The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.

Fair Value of Financial Instruments

   Cash and cash equivalents, notes receivable and long-term debt are reflected
in the accompanying consolidated balance sheets at amounts considered by
management to reasonably approximate fair value. We estimate the fair value of
our fixed rate note receivable and long-term debt by using a discounted cash
flow analysis. The net book value of these accounts approximate their fair value
as of December 31, 2004.

Stock-based Compensation Plans

   We account for our stock option awards to employees under the intrinsic value
based method of accounting prescribed by Accounting Principles Board Opinion No.
25, "Accounting for Stock Issued to Employees." Under the intrinsic value based
method, compensation cost is the excess, if any, of the quoted market price of
the stock at grant date or other measurement date over the amount an employee
must pay to acquire the stock. We make pro forma disclosures of net income and
earnings per share as if the fair value based method of accounting had been
applied as required by Statement of Financial Accounting Standards No. 123
("SFAS 123"), "Accounting for Stock-Based Compensation" and SFAS No. 148,
"Accounting for Stock-Based Compensation - Transition and Disclosure." We have
never granted options below market price on the date of grant. Refer to Note 13,
Stock Based Compensation Plans for pro forma information used for the
development of the data in the table that follows.

                                       F-8

<PAGE>

<TABLE>
             Technology Flavors & Fragrances, Inc.
    Notes to Consolidated Financial Statements (Continued)
        For the years ended December 31, 2004 and 2003

                                                       December 31,              December 31,
                                                           2004                      2003
                                                           ----                      ----

<S>                                                    <C>                       <C>
       Net loss as reported                            $(1,266,164)              $ (545,998)

       Deduct: Total stock-based employee
          compensation expense determined under fair
          value method used                                (32,315)                (177,057)
                                                       -----------               ----------

       Net loss pro forma                             $ (1,298,479)              $ (723,055)
                                                      =============              ==========

       Net loss per share:
          Basic and diluted, as reported                  $(.10)                    $(.04)
                                                          ======                    ======

          Basic and diluted, pro forma                    $(.10)                    $(.06)
                                                          ======                    ======
</TABLE>

Recent Accounting Pronouncements

   In December 2004, the FASB issued FASB Statement No. 123 (revised 2004),
"Shared-Based Payment." Statement 123(R) addresses the accounting for
share-based payment transactions in which an enterprise receives employee
services in exchange for (a) equity instruments of the enterprise or (b)
liabilities that are based on the fair value of the enterprise's equity
instruments or that may be settled by the issuance of such equity instruments.
Statement 123(R) requires an entity to recognize the grant-date fair-value of
stock options and other equity-based compensation issued to employees in the
income statement. The revised Statement generally requires that an entity
account for those transactions using the fair-value-based method, and eliminates
the intrinsic value method of accounting in APB Opinion No. 25, "Accounting for
Stock Issued to Employees," which was permitted under Statement 123, as
originally issued.


   The revised Statement requires entities to disclose information about the
nature of the share-based payment transactions and the effects of those
transactions on the financial statements.


   Statement 123(R) is effective for public companies that file as small
business issuers as of the beginning of the first interim or annual reporting
period that begins after December 15, 2005 (i.e., first quarter 2006 for the
Company). All public companies must use either the modified prospective or the
modified retrospective transition method. Early adoption of this Statement for
interim or annual periods for which financial statements or interim reports have
not been issued is encouraged. The Company has not yet evaluated the impact of
adoption of this pronouncement, which must be adopted in the first quarter of
fiscal year 2006.


   In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity" ("SFAS 150").
SFAS 150 establishes standards for how an issuer classifies and measures three
classes of freestanding financial instruments with characteristics of both
liabilities and equity. It requires that an issuer classify a financial
instrument that is within its scope as a liability. SFAS 150 was effective for
financial instruments entered into or modified after May 31, 2003, and otherwise
is effective at the beginning of the first interim period beginning after June
15, 2003. The Company has not entered into any financial instruments within the
scope of SFAS 150 since May 31, 2003, nor does it currently hold any significant
financial instruments within its scope.


   In January 2003, the FASB issued FASB Interpretation No. 46 ("FIN 46"),
Consolidation of Variable Interest Entities. FIN 46 clarifies the application of
Accounting Research Bulletin No. 51, Consolidated Financial Statements, to
certain entities in which equity investors do not have the characteristics of a
controlling financial interest or do not have sufficient equity at risk for the
entity to finance its activities without additional subordinated financial
support from other parties. FIN 46 requires a variable interest entity to be
consolidated by a company, if that company is subject to a majority of the risk
of loss from the variable interest entity's activities or entitled to receive a
majority of the entity's residual returns or both. FIN 46 also requires
disclosures about variable interest entities that a company is not required to
consolidate but in which it has a significant variable interest. In December
2003, the FASB issued FIN 46R. It changed the effective date for interests in
special-purpose entities for periods ending after December 15, 2003, and for all
other types of entities for periods ending after March 15, 2004. The adoption of
FIN 46R did not have a material impact on our consolidated financial statements.

Reclassifications

   Certain amounts as previously reported have been reclassified to conform to
current year classifications.

                                       F-9

<PAGE>

                      Technology Flavors & Fragrances, Inc.
             Notes to Consolidated Financial Statements (Continued)
                 For the years ended December 31, 2004 and 2003

3. Receivables
                                                 December 31,   December 31,
                                                     2004              2003
                                                     ----             -----

Trade ........................................    $2,911,083      $3,167,302
Alcohol drawbacks ............................       214,293          77,589
Other ........................................        30,094           6,813
                                                  ----------      ----------
                                                   3,155,470       3,251,704
Allowance for doubtful accounts ..............      (394,000)       (130,000)
                                                  ----------      ----------
                                                  $2,761,470      $3,121,704
                                                  ==========      ==========

    Included within trade receivables at December 31, 2004 and 2003 is an amount
due from a party related to our executive and principal stockholder in the
amount of approximately $83,000 and $146,000, respectively.

4.   Inventories
                                                December 31,     December 31,
                                                    2004             2003
                                                    ----             ----

    Raw materials ..........................     $2,600,992       $2,380,744
    Finished goods .........................      1,785,933        1,418,790
                                                 ----------       ----------
                                                 $4,386,925       $3,799,534
                                                 ==========       ==========

<TABLE>
5.   Fixed Assets
                                                                   Useful Lives       December 31,       December 31,
                                                                     in Years             2004               2003
                                                                     --------             ----               ----
<S>                                                                    <C>             <C>                <C>
  Land .................................................                 -             $ 340,000          $ 340,000
  Building ............................................                 30             1,170,400          1,170,400
  Machinery and equipment ...........................                  3-10            1,893,327          1,704,234
  Building   improvements (*) .......................                   30             1,112,339            992,278
  Furniture and fixtures ............................                  3-10              783,658            714,276
                                                                                      ----------         ----------
                                                                                       5,299,724          4,921,188
  Less: accumulated depreciation and amortization ...                                 (2,934,330)        (2,685,472)
                                                                                      ----------         ----------
                                                                                      $2,365,394         $2,235,716
                                                                                      ==========         ==========
</TABLE>

     (*) Building improvements, prior to the purchase of our facility in January
2002 as described in Note 9, were being depreciated over the shorter of the
lease term or the estimated useful life of the assets.

     Depreciation and amortization expense relating to fixed assets for the
years ended December 31, 2004 and 2003 was approximately $249,000 and $271,000,
respectively.

<TABLE>
6.   Intangible Assets

                                                       December 31, 2004                        December 31, 2003
                                              ------------------------------------    --------------------------------------
                           Weighted average
                         amortization period      Gross carrying      Accumulated          Gross carrying     Accumulated
                                in years              amount          amortization             amount         amortization
                         -------------------      --------------      ------------         --------------     ------------
<S>                                 <C>             <C>                <C>                  <C>                 <C>
     Formulations ....              7               $1,048,979         $  936,589           $1,048,979          $786,734
     Customer lists ...             7                   86,105             76,879               86,105            64,579
                                                    ----------         ------------         ----------          --------
                                                    $1,135,084         $1,013,468           $1,135,084          $851,313
                                                    ==========         ==========           ==========          ========
</TABLE>

     Amortization expense relating to intangible assets for the years ended
December 31, 2004 and 2003 was approximately $162,000 for both years.
Amortization expense will approximate $122,000 for year 2005. Intangible assets
will be fully amortized by December 31, 2005.

                                      F-10

<PAGE>

                      Technology Flavors & Fragrances, Inc.
             Notes to Consolidated Financial Statements (Continued)
                 For the years ended December 31, 2004 and 2003


7.   Related Party Transactions

     In 2004 and 2003, we sold flavor products to The Hain Celestial Group, Inc.
("Hain") and/or their designated co-packer. Irwin D. Simon, a director of our
company, is the Chairman, President and Chief Executive Officer of Hain. Our
sales to Hain totaled approximately $859,000 in 2004 and $1,003,000 for 2003. We
believe such sales were made on arms-length terms and conditions and at
competitive prices.

         In 2004 and 2003, we sold fragrance products to Scent-A-Vision, Inc., a
company owned by Ms. Sharon Christie who is the spouse of Mr. Philip Rosner, our
Chairman and Chief Executive Officer. Our sales to Scent-A-Vision for years 2004
and 2003 were approximately $157,000 and $109,000, respectively, which we
believe were competitive with other available sources for such fragrance
products.

     During 2004 and 2003, there existed certain loans outstanding with two of
our executive officers classified as "Notes receivable from related parties."
Such loans were fully paid in December 2004.

8.   Revolving Credit Facility

     On April 25, 2002, we entered into a five-year term Loan and Security
Agreement with a lender which replaced the revolving credit facility entered
into in June 1999. We call this new revolving credit facility the 2002 Credit
Facility. The maximum line of credit under the 2002 Credit Facility was
initially set at $3,000,000 which was increased to $3,500,000 at our option in
June 2004.

     In January 2005, we amended the 2002 Credit Facility to provide additional
borrowing up to $2,000,000 in the form of a term loan, modified the financial
covenants and extended the maturity date to April 2008. Borrowing under the term
loan shall be repaid based on a 48 month amortization schedule bearing the same
interest rate as the 2002 Credit Facility.

     Outstanding borrowing under the 2002 Credit Facility bear interest at a
rate equal to a prime lending rate plus one-quarter of a percentage point (5.25%
at December 31, 2004). Borrowings under the 2002 Credit Facility are subject to
certain eligibility requirements relating to our receivables and inventories.
Outstanding borrowing is secured by substantially all of our assets, including
our product formulations. We must comply with certain financial and other
covenants contained in the Loan and Security Agreement which was amended in
January 2005, including maintaining tangible net worth of at least $2,392,000 at
December 31, 2004 and minimum levels on a quarterly basis thereafter, not
exceeding a cash loss of $1,025,000 in 2004 and achieving annual cash flow, as
defined, of at least $1.00 for each year thereafter, and incurring expenditures
for capital assets of not more than $500,000 for each year. Borrowing under the
2002 Credit Facility at December 31, 2004 was approximately $2,826,000 and
$559,000 was available for additional borrowing in accordance with the terms of
the 2002 Credit Facility.

     The Company's 100% owned subsidiaries have guaranteed its obligations under
the 2002 Credit Facility. These guarantees are full and unconditional, as well
as joint and several. The Company's only subsidiary that is not 100% owed
represents a joint venture discussed in Note 12. This joint venture does not
guarantee the Company's debt obligations, and the balance sheet and operations
of this subsidiary are not considered significant to the Company.

9.   Long-term Debt

     In January 2002, we purchased the facility (which we had previously leased)
for $1,500,000, transferred it to the Town of Babylon Industrial Development
Agency, and then leased the facility from such agency for a term which expires
on December 1, 2021. Upon expiration of the lease term, we are entitled to
repurchase the facility for a nominal sum. The purchase was financed through the
issuance of Town of Babylon Industrial Development Agency Variable Rate Revenue
Bonds ("IDA Bonds"). The principal amount of the IDA Bonds, $2,200,000, was used
to finance the purchase of the building plus closing costs and future
expenditures for building improvements and capital equipment. The financing is
structured as a monthly variable rate demand revenue bond secured by a letter of
credit with Wells Fargo Bank. The interest rate for the month of December 2004
was 4.0% per annum including the letter of credit fee. In December 2004 and
December 2003, we made scheduled annual installment payments of $80,000 in each
of those years.

                                      F-11

<PAGE>

                      Technology Flavors & Fragrances, Inc.
             Notes to Consolidated Financial Statements (Continued)
                 For the years ended December 31, 2004 and 2003


     Future minimum commitments of the IDA Bonds are as follows:

                    2005 .......................................   $   85,000
                    2006 .......................................       85,000
                    2007 .......................................       90,000
                    2008 .......................................       95,000
                    2009 .......................................      100,000
                    Thereafter .................................    1,515,000
                                                                   ----------

                          Total ................................   $1,970,000
                                                                   ==========

10.  Income Taxes

     The income tax benefits for years 2004 and 2003 principally represents tax
refunds received from the prior years partially offset by current state
franchise taxes and Federal alternative minimum tax.

     Loss before taxes includes income from foreign operations of approximately
$355,000 and $187,000 for the years ended December 31, 2004 and 2003,
respectively.

     A reconciliation of the income tax benefit at the statutory rate to income
tax benefit at the annualized effective tax rate for the years ended December
31, 2004 and 2003 is as follows:

                                                         2004           2003
                                                    ------------  -------------
Computed tax benefit at Federal statutory rate        $(440,693)    $(176,620)
Non-deductible officers' life insurance premiums
 and travel and entertainment expenses                   12,740        10,642
                                                    ------------  ------------
                                                       (427,953)     (165,978)
Change in valuation allowance                           422,026       160,814
                                                    ------------  ------------
Benefit for income taxes                                $(5,927)      $(5,164)
                                                    ============  ============

The components of deferred taxes as of
December 31, 2004 and 2003 are as follows:

                                                         2004           2003
                                                    ------------  -------------
Deferred tax assets:
  Inventory reserve                                    $107,540       $164,540
  Accounts receivable reserve                           182,400         49,400
  Capitalized inventory costs                            68,545         64,334
  Depreciation                                          123,569         88,694
  Intangibles                                           295,993        342,051
  Net operating loss carryforward -- U.S              1,323,906        983,166
  Net operating loss carryforward - Foreign              66,257        181,677
  Tax credits                                           739,860        611,787
  Other                                                  16,282         16,677
                                                    ------------  -------------
Valuation allowance                                   2,924,352      2,502,326
                                                     (2,924,352)    (2,502,326)
                                                    ------------  -------------
Net deferred tax asset                                       $-             $-
                                                    ============  =============



     We have net operating loss carryforwards relating to U.S. operations of
approximately $3,500,000 which expire at various dates from 2012 through 2024.
Pursuant to Section 382 of the Internal Revenue Code of 1986, as amended, future
ownership changes and other limitations may apply on the utilization of this
asset. We have net operating loss carryforwards relating to foreign operations
of approximately $180,000 which expires in 2006. We have research and
development tax credits of approximately $740,000 which expire at various dates
from 2008 through 2024.

                                      F-12

<PAGE>

                     Technology Flavors & Fragrances, Inc.
             Notes to Consolidated Financial Statements (Continued)
                 For the years ended December 31, 2004 and 2003


11.  Commitments

Lease Obligations

<TABLE>
   Future minimum commitments under noncancelable operating and capital leases
are as follows:

                                                                                     Operating       Capital
                                                                                      leases          leases
                                                                                    ------------    ---------
<S>     <C>                                                                           <C>            <C>
        2005 ..............................................................           $136,159       $90,790
        2006 ..............................................................             83,599        59,193
        2007 ..............................................................             43,287        34,575
        2008 ..............................................................             11,578        17,355
        2009 ..............................................................              1,370           421
        Thereafter ........................................................                  -             -
                                                                                    ------------    ---------
        Total minimum lease payments ......................................           $275,993       202,334
                                                                                    ============
        Amounts representing interest .....................................                          (23,142)
                                                                                                    ---------
        Present value of net minimum lease payments (including current
             portion of $77,970) ..........................................                         $179,192
                                                                                                    =========
</TABLE>

     Rental expense for the years ended December 31, 2004 and 2003 was $190,000
and $184,000, respectively.

     The net book value of assets under capital leases as of December 31, 2004
and 2003 was $153,000 and $98,000, respectively.

Employment Contracts

   We are obligated under employment contracts providing for annual compensation
expiring on various dates through April 2007. Certain other contracts call for
us to pay additional compensation based on sales volumes. Future fixed
compensation under these contracts, not including commissions based upon sales
volume, as of December 31, 2004 amounted to $1,326,000 in year 2005, $409,000 in
2006 and $26,000 in 2007.

12.  Minority Interest

   In August 2003, we formed a new corporate entity in South America in which we
own a 51% equity interest while minority shareholders own 49%. This entity had
net sales of $105,600 in 2004 and $190,870 in 2003 and a net loss of $48,134 in
2004 and a net profit of $63,380 in 2003 which are reflected in our consolidated
Statement of Operations. In accordance with that entity's operating agreement,
50% of the net (loss) profit, $(24,067) and $31,690 for years 2004 and 2003,
respectively, has been recorded as minority interest. As of December 31, 2004,
the Company has advanced amounts into this entity for operations and thus has
a net amount due from the entity of $8,762.

13.  Stockholders' Equity

Stock Option Plans

     In April 2004, our Board of Directors adopted, and in July 2004, our
Stockholders approved, the 2004 Stock Option Plan. No options were granted under
this option plan.

   We granted stock options under three separate plans: the 1999 Stock Option
Plan, the 1996 Stock Option Plan and the 1993 Stock Option Plan.

   Under the 2004, 1999, 1996 and 1993 Option Plans, our employees (including
officers and directors who are employees) and the employees of our subsidiaries
are eligible for the grant of incentive options to purchase up to a maximum of
1,000,000, 1,000,000, 1,000,000 and 500,000 shares, respectively, which vest
immediately or ratably over periods ranging from one to five years. Options may
also be granted to other persons, provided that such options are non-qualified
options. In the case of an incentive option, the exercise price cannot be less
than the fair market value of the shares on the date the option is granted, and
if an optionee is a shareholder who beneficially owns 10% or more of our
outstanding Common Stock, the exercise price of the incentive options cannot be
less than 110% of such fair


                                      F-13

<PAGE>

                      Technology Flavors & Fragrances, Inc.
             Notes to Consolidated Financial Statements (Continued)
                 For the years ended December 31, 2004 and 2003

market value. The exercise price of non-qualified options shall not be less than
the fair market value of our Common Stock at the date of grant and shall be
determined by our Board of Directors or the Committee appointed by the Board of
Directors. In 1999, our Board of Directors terminated the 1993 Option Plan and
no further option grants may be made under such Plan provided, however, that
such termination will not affect options that were granted prior to the date of
termination.

<TABLE>
   The following table summarizes stock option activity for the years ended
December 31, 2004 and 2003:

                                                          2004                         2003
                                               ---------------------------  ----------------------------
                                                            Weighted Avg.                 Weighted Avg.
                                                 Options   Exercise Price     Options    Exercise Price
                                               ----------- ---------------  ------------ ---------------
<S>                                             <C>                 <C>       <C>                 <C>
Outstanding at beginning of year                2,262,629           $1.16     2,269,629           $1.16
Granted                                           211,000             .77             -               -
Exercised                                               -               -             -               -
Expired                                          (303,500)           1.27        (7,000)           1.38
                                               ----------- ---------------  ------------ ---------------
Outstanding at end of year                      2,170,129           $1.11     2,262,629           $1.16
                                               =========== ===============  ============ ===============

Exercisable at end of year                      1,879,129           $1.15     1,944,995           $1.19
                                               =========== ===============  ============ ===============

Weighted average fair value of options
  granted during the year                                            $.59                            $-
                                                           ===============               ===============
</TABLE>

<TABLE>
     The following table summarizes information on stock options outstanding at
December 31, 2004:

                                    Options Outstanding                        Options Exercisable
                   ----------------------------------------------------    ---------------------------
                                   Weighted Average
                                 Remaining Contractual Weighted Average             Weighted Average
Exercise Price        Shares         Life in Years      Exercise Price    Shares     Exercise Price
---------------    ------------- --------------------- ---------------- ---------- ------------------

<C>     <C>             <C>                       <C>             <C>     <C>                   <C>
$.66 -  .97             944,962                   5.9             $.89    733,962               $.93
1.00 - 1.35             710,167                   5.3             1.15    630,167               1.15
1.37 - 1.69             515,000                   3.6             1.46    515,000               1.46
                   ------------- --------------------- ---------------- ---------- ------------------
                      2,170,129                   5.1             1.11  1,879,129               1.15
                   ============= ===================== ================ ========== ==================
</TABLE>

     At December 31, 2004, 3,282,417 shares of our Common Stock were reserved
for the future issuance of stock under the Plans.

Stock Based Compensation Plans

     We continue to follow Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees" ("APB 25") and related
interpretations in accounting for our stock-based compensation plans. Under APB
25, because the exercise price of our stock options equals or exceeds the market
price of the underlying stock on the date of the grant, no compensation expense
is recognized.

     Pro forma information regarding net income and net income per share is
determined as if we had accounted for our stock options granted subsequent to
December 31, 1994, using the fair value method estimated at the date of the
grant based upon a Black-Scholes option pricing model with the following
weighted-average assumptions: risk-free interest rate of 4.5%; no dividend
yield; volatility factor of the expected market price of our Common Stock of
72%; and a weighted-average expected life of the options of 8.3 years at
December 31, 2004.

   The Black-Scholes option valuation model was developed for use in estimating
the fair value of traded options which have no vesting restrictions and are
fully transferable. In addition, option valuation models require the input of
highly subjective assumptions including the expected stock price volatility.
Because our stock options have characteristics significantly different from
those of traded options, and because changes in the subjective input assumptions
can materially affect the fair value estimate, in management's opinion, the
existing models do not necessarily provide a reliable single measure of the fair
value of our employee stock options.

                                      F-14

<PAGE>

                      Technology Flavors & Fragrances, Inc.
             Notes to Consolidated Financial Statements (Continued)
                 For the years ended December 31, 2004 and 2003

14.  Employee Savings Plan

     We have an employee savings and retirement plan covering all non-union
employees meeting certain age and length of service requirements, pursuant to
Section 401k of the Internal Revenue Code. Participants may contribute a
percentage of compensation, but not in excess of the maximum allowable by law.

   The Plan provides for a voluntary matching contribution by us which is one
half of the amount contributed by the participant up to a maximum of 3% per
annum. Matching contributions of 1% per annum, which was discontinued in April
2004, amounted to $7,000 in 2004 and $27,000 in 2003. Employees vest in the
employer contribution at the rate of 25% per year.

15.  Concentrations of Credit Risk

   Due to the deteriorating financial condition of one of our customers, the
Company increased its allowance for doubtful accounts in the fourth quarter of
the current year by approximately $250,000.

   Financial instruments, which potentially subject us to concentrations of
credit risk, are primarily trade accounts receivable. Ongoing credit evaluation
of customers' financial condition is performed and generally no collateral is
required. Credit losses have typically been within management's expectations.

   For the years ended December 31, 2004 and 2003, no one customer accounted for
more than 10% of our net sales. At December 31, 2004 and 2003, five customers
accounted for approximately 32% and 33% of the accounts receivable balance,
respectively.

   For the years ended December 31, 2004 and 2003, export sales were
approximately 36% and 30%, respectively, of total sales. Our export sales are
made to entities located primarily in Canada (12% in 2004 and 10% in 2003) and
in Central and South America (19% in 2004 and 18% in 2003). Receivables from
such foreign sales at December 31, 2004 and 2003 were approximately 57% and 53%,
respectively, consisting of Canada (21% and 15%, respectively) and Central and
South America (33% and 36%, respectively), of total accounts receivable.

   Cash and cash equivalent balances are held primarily at one financial
institution and may, at times, exceed the amount insurable. We believe we
mitigate risk by investing in or through a major financial institution.

                                      F-15