Unassociated Document

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

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

SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2007

Commission file number: 000-31385

GLOBAL FOOD TECHNOLOGIES, INC.

(Name of small business issuer in its charter)

DELAWARE		52-2257546
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

113 Court Street, Hanford, CA		93230
(Address of principal executive offices)		(Zip Code)

(Issuer’s telephone number)

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

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

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

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

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

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

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

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

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

DOCUMENTS INCORPORATED BY REFERENCE

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

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

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

GLOBAL FOOD TECHNOLOGIES, INC.

ANNUAL REPORT FORM 10-KSB

FOR THE YEAR ENDED DECEMBER 31, 2007

Item			Page
Number		Description	Number

		PART I

	1	Description of Business	3
	2	Description of Property	15
	3	Legal Proceedings	15
	4	Submission of Matters to a Vote of Security Holders	16

		PART II

	5	Market for Common Equity and Related Stockholder Matters	16
	6	Management’s Discussion and Analysis or Plan of Operation	17
	7	Financial Statements	25
	8	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	25
	8A	Controls and Procedures	26
	8B	Other Information	27

		PART III

	9	Directors, Executive Officers, Promoters, Control Persons and Corporate Governance; Compliance with Section 16(a) of the Exchange Act	27
	10	Executive Compensation	32
	11	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	34
	12	Certain Relationships and Related Transactions and Director Independence	36
	13	Exhibits	38
	14	Principal Accountant Fees and Services	40

		Signatures	41

ITEM 1. DESCRIPTION OF BUSINESS

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

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

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

Business of the Company

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

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

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

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

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

The Problems We Address

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

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

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

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

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

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

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

Our Proposed Products and Services

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

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

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

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

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

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

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

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

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

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

o	Hazard Analysis and Critical Control Points (HACCP)

o	Good Manufacturing Practices (GMP’s)

o	Sanitation Standard Operating Procedures (SSOP’s)

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

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

(performed by the iPura™ System).

2. Scientific packaging.

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

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

5. Product traceability and temperature monitoring.

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

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

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

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

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

iPura™ products are expected to carry a unique food regulatory intervention insurance, not currently available in the marketplace. Marine Management Insurance Brokers, Inc. (“MMIB”), a leader in providing specialized insurance products and risk management services to the international trade of seafood, has investigated the efficacy of the iPura™ System and proposed Program. As a result of MMIB’s involvement, we intend to embed into the iPura™ seal, a seamless and risk-managed approach to food regulatory violations. The iPura^TMprocessor and their downstream customers will be relieved of the significant losses and disruption of trade that results from food safety violations. This will provide the market with an unprecedented level of security and provides international credibility for the iPura™ seal. Mr. Curtis Keyes, the CEO and founder of MMIB, also serves on our Advisory Board.

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

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

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

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

Benefits of our technology over other technologies include the following:

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

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

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

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

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

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

Distribution and Marketing Plan

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

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

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

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

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

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

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

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

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

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

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

United States and Other International Markets

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

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

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

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

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

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

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

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

Government Regulation

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

Intellectual Property

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

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

·	Safer Processing…Safer Food™

·	Revolutionizing Food Safety…Through Innovation™

·	The Highest Standard in Food Safety™

·	Food Safety Is Good Business™

·	Value Created and Sealed™

·	Quality Created and Sealed™

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

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

ITEM 2. DESCRIPTION OF PROPERTY

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

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

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

ITEM 3. LEGAL PROCEEDINGS

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

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

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

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

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

Number of Stockholders

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

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

Recent Sales of Unregistered Securities

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

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

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

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

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

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

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

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

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

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

Plan of Operation

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

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

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

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

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

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

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

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

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

·	Intelligent packaging of product.

·	Product traceability of handling and temperature.

·	An independent third party certification of standards.

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

·	A distribution chain and consumer “pull through” marketing program promoting iPura™ as “The Highest Standard in Food Safety™.”

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

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

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

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

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

We also intend to participate in the following industry conferences:

·	Institute of Food Technologists Expo

·	Food Marketing Institute Annual Business Conference

·	Food Safety Conference (International Association for Food Protection)

·	National Food Policy Conference

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

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

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

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

Liquidity and Capital Resources

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

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

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

Use of Estimates

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

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

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

Property and Equipment

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

Long-lived Assets

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

Concentration of Credit Risk

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

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

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

Fair Value of Financial Instruments

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

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

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

Stock-based compensation

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

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

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

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

Cautionary Information Regarding “Forward-Looking Statements”

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

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

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

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

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

Compensation Committee:		Arthur C. Agnos (Committee Chairman) Gary L. Nielsen James Stockland

Nominating & Governance Committee		Stephen J Fryer (Committee Chairman) Gary L Nielsen Arthur C Agnos

Name and Principal Position	Year	Salary ($)		Option Awards ($) (1)		All Other Compensation ($) (2)		Total ($)

James Bouskos	2007		76,116		—		10,500		86,616
Chairman of the	2006		76,116		103,350		10,500		189,966
Board

Keith Meeks	2007		150,555		—		11,096		161,651
President and	2006		150,555		—		9,295		159,850
Chief Executive

Marshall F Sparks	2007		106,500		—		—		106,500
Chief Financial	2006		106,500		413,400		—		519,900
Officer

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

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

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

Name	Age	Position Held
James Bouskos	59	Chairman of Board
Keith Meeks	47	President and Chief Executive Officer
Marshall F. Sparks	67	Chief Financial Officer, Secretary and Treasurer
Stephen J. Fryer	70	Director
Gary L. Nielsen	65	Director
Arthur C. Agnos	69	Director
James Stockland	45	Director

Name and Address of Beneficial Owner (1)	Number of Shares of Our Common Stock		Percentage of Shares of Our Common Stock (2)
James Bouskos (3)		816,652		3.0	%
Keith Meeks (4)		796,933		2.9	%
Marshall F. Sparks (5) (9)		133,334		0.5	%
Stephen J. Fryer (6) (9)		312,000		1.1	%
Gary L. Nielsen (7) (9)		124,814		0.5	%
Arthur C. Agnos (8) (9)		26,333		*
James Stockland (9)		—		*
All directors and officers as a group (7 individuals)		2,210,065		8.0	%

Mark Terry 1060 Cactus, Pocatello, ID 83204		2,376,178		8.7	%

Global Food Tech, Inc. (“TECH”)		22,945,062		84.0	%

Exhibit No.		Description

3.1(1)		Restated Certificate of Incorporation dated October 18, 2005.

3.2(1)		Second Amended and Restated Bylaws as of August 31, 2005.

4.1(2)		Lock-Up Agreement dated as of December 20, 2005 between Global Food Technologies, Inc. and Solvis Group, Inc.

4.2+(2)		Form of Lock-Up Agreement entered into by Global Food Technologies, Inc. and its officers and directors as of December 20, 2005.

10.1(3)		Asset Acquisition Agreement dated as of August 19, 2005 between Global Food Tech, Inc. (formerly known as Global Food Technologies, Inc.), Solvis Group, Inc. and Global Food Technologies, Inc. (formerly known as Boulevard Acquisition Corporation).

10.2(4)		Services Agreement dated September 30, 2005 between Global Food Technologies, Inc. and Global Media Fund, LLC.

10.3(1)		Stock Purchase Agreement dated August 11, 2005 between Global Food Technologies, Inc. (formerly known as Boulevard Acquisition Corporation), Pierce Mill Associates, Inc. and Solvis Group, Inc.

10.4(1)		Side Letter Agreement dated August 11, 2005 between Global Food Tech, Inc. (formerly known as Global Food Technologies, Inc.), Solvis Group, Inc., Pierce Mill Associates, Inc. and August Law Group, P.C.

10.5(1)		Amendment No. 1 to Asset Acquisition Agreement dated November 21, 2005 between Global Food Tech, Inc., Solvis Group, Inc. and Global Food Technologies, Inc.

10.6(2)		Lease Agreement dated April 6, 2001 between Parrish Realty, Inc. and Global Food Technology, Inc.

10.7(2)		Lease Agreement Addendum dated April 22, 2002 between Parrish Realty, Inc. and Global Food Technologies, Inc.

10.8(5)		2006 Stock Incentive Plan

10.9*		Lease Agreement dated November 1, 2007 between STG Realty Ventures Inc and Global Food Technologies

24.1		Power of attorney (included in signature page).

31.1*		Certification of Chief Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2*		Certification of Chief Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1‡		Certifications of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2‡		Certifications of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

+	Management contract or compensatory plan or arrangement
*	Filed herewith
‡	Furnished herewith

(1)	Filed on November 23, 2005 as an exhibit to our Quarterly Report on Form 10-QSB for the quarterly period ended September 30, 2005 and incorporated herein by reference.

(2)	Filed on July 6, 2006, as an exhibit to our Annual Report on Form 10-KSB.

(3)	Filed on August 19, 2005 as an exhibit to our Current Report on Form 8-K and incorporated herein by reference.

(4)	Filed on October 6, 2005 as an exhibit to our Current Report on Form 8-K and incorporated herein by reference.

(5)	Filed on August 2, 2008, as an exhibit to our Annual Report on Form 10-KSB

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

Total	$	61,000	$	83,325

Dated: May 15, 2008	GLOBAL FOOD TECHNOLOGIES, INC.,
	a Delaware corporation

	By:	/s/ Keith Meeks
		Name: Keith Meeks
		Title: President and Chief Executive Officer

Name:	Title	Date

/s/ Keith Meeks	President and Chief Executive Officer (Principal	May 15, 2008
Keith Meeks	Executive Officer)

/s/ James Bouskos	Chairman of the Board	May 15, 2008
James Bouskos

/s/ Marshall F. Sparks	Chief Financial Officer, Secretary and Treasurer	May 15, 2008
Marshall F. Sparks	(Principal Financial and Accounting Officer)

/s/ Stephen J. Fryer	Director	May 15, 2008
Stephen J. Fryer

/s/ Gary L. Nielsen	Director	May 15, 2008
Gary L. Nielsen

/s/ Arthur C. Agnos	Director	May 15, 2008
Arthur C. Agnos

/s/ James Stockland	Director	May 15, 2008
James Stockland

PAGE 43	REPORT OF INDEPENDENT REGISTERED ACCOUNTING FIRM

PAGE 44	REPORT OF PRIOR INDEPENDENT REGISTERED ACCOUNTING FIRM

PAGE 45	BALANCE SHEET AS OF DECEMBER 31, 2007

PAGE 46	STATEMENTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2007 AND 2006 AND FOR THE PERIOD FROM JULY 25, 2001 (INCEPTION) THROUGH DECEMBER 31, 2007

PAGE 47	STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIENCY) FROM JULY 25, 2001 (INCEPTION) TO DECEMBER 31, 2007

PAGE 48	STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2007 AND 2006 AND FOR THE PERIOD FROM JULY 25, 2001 (INCEPTION) TO DECEMBER 31, 2007

PAGES 49-61	NOTES TO FINANCIAL STATEMENTS AS OF DECEMBER 31, 2007 AND 2006

	December 31,
	2007
ASSETS

CURRENT ASSETS
Cash	$	552,697
Prepaid expenses		29,246
Total Current Assets		581,943

FIXED ASSETS
Furniture and fixtures		73,776
Less accumulated depreciation		(31,144	)
Fixed Assets – net		42,632

OTHER ASSETS		24,889

TOTAL ASSETS	$	649,464

LIABILITIES AND STOCKHOLDERS’ DEFICIT

CURRENT LIABILITIES
Accounts payable	$	142,572
Accrued liabilities		286,340
Notes payable – related parties		540,000
Total Current Liabilities		968,912

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS’ DEFICIT
Preferred Stock, $.0001 par value, 20,000,000 shares authorized, none outstanding		-
Common Stock, $.0001 par value, 100,000,000 shares authorized, 27,307,881 shares outstanding		2,731
Additional paid-in capital		44,819,965
Deficit accumulated during development stage		(45,142,144	)
Total stockholders’ deficit		(319,448	)

TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	649,464

	For The Year Ended December 31, 2007			For The Year Ended December 31, 2006			For the Period From July 25, 2001 (Inception) To December 31, 2007

Revenues	$	-		$	-		$	-

Expenses
Marketing expense		2,711,594			2,791,150			7,672,820
General and administrative expense		2,840,884			5,172,838			12,602,356
Research and development costs		3,311,861			4,857,188			20,415,254
Depreciation		80,107			116,072			524,301
Interest expense		45,578			157,851			295,399
Asset impairment		24,903			-			3,182,014
Merger related costs		-			-			450,000
Total Expenses		9,014,927			13,095,099			45,142,144

NET LOSS	$	(9,014,927	)	$	(13,095,099	)	$	(45,142,144	)

Loss per Share, basic and diluted	$	(0.35	)	$	(0.54	)

Weighted average shares, basic and diluted		26,076,265			24,094,530

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

	For The Year Ended December 31, 2007			For The Year Ended December 31, 2006			For The Period From July 25, 2001 (Inception) To December 31, 2007
CASH FLOWS FROM OPERATING ACTIVITIES:

Net loss	$	(9,014,927	)	$	(13,095,099	)	$	(45,142,144	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		80,107			116,072			524,301
Impairment of assets		24,903			-			24,903
Fair value of warrants issued for services		313,008			2,982,098			3,320,331
Fair value of stock issued for services		936,687			166,786			1,475,164
Fair value of incentive plan grants		2,070,000			2,385,000			4,455,000
Fair value of stock issued for media services		750,000			1,850,000			3,700,000
Impairment of BEST system		-			-			3,157,111
Merger related costs		-			-			450,000
Changes in assets and liabilities:
Prepaid expenses		(2,898	)		125,672			(29,246	)
Other assets		(13,389	)		-			(24,889	)
Accounts payable and accrued liabilities		(271,327	)		372,439			428,911
Cash used in operating activities		(5,127,836	)		(5,097,032	)		(27,660,558	)

CASH FLOWS USED IN INVESTING ACTIVITIES:
Acquisition of BEST system		-			-			(3,157,111	)
Acquisition of fixed assets		-			(22,910	)		(591,836	)
Cash used in investing activities		-			(22,910	)		(3,748,947	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from notes payable – related parties		-			740,000			740,000
Principal payments on notes payable – related parties		-			(200,000	)		(200,000	)
Sale of redeemable Series A preferred stock		-			-			2,125,405
Sale of common stock		5,477,364			3,111,411			29,296,797
Cash provided by financing activities		5,477,364			3,651,411			31,962,202

INCREASE (DECREASE) IN CASH		349,528			(1,468,531	)		552,697

CASH – BEGINNING OF PERIOD		203,169			1,671,700			-

CASH – END OF PERIOD	$	552,697		$	203,169		$	552,697

SUPPLEMENTAL DISCLOSURES
Interest paid	$	4,000		$	2,000		$	97,970

Noncash financing transactions
Accretion of redemption value of preferred stock	$	-		$	-		$	813,719
Conversion of Series A preferred stock to common stock	$	-		$	-		$	2,939,119
Stock transferred in consummation of merger	$	-		$	-		$	10

Fiscal Year		Sale proceeds			Redemption Premium			Series A Preferred Shares Outstanding
2001	Sale at $.75 per share	$	803,200		$	200,800			1,070,933
2002	Sale at $.75 per share	$	50,000		$	12,500			66,667
2003	Sale at $.93 per share	$	1,167,205		$	291,800			1,269,607
2005	Sale at $4.50 per share	$	150,000		$	37,501			33,333
	Balance, December, 31 2005	$	2,170,405		$	542,601			2,440,540
2005	Accretion				$	271,123
2005	Redemption by estate	$	(30,000	)	$	(15,000	)		(40,000	)
2005	Conversion	$	(2,140,405	)	$	(798,724	)		( 2,400,540	)
	Balance September 30, 2005	$	0		$	0			0

Fair value of warrants at grant date	$	2.067
Dividend vield		0
Expected volatility		50	%
Risk-free interest rate		4.57	%
Expected term of the warrant		5 years

	Shares		Exercise Price		Remaining Contractual Term		Aggregate Intrinsic Value
Outstanding at January 1, 2007		500,000	$	5.00
Granted		-		-
Exercised		-		-
Forfeited or expired		-		-
Outstanding at December 31, 2007		500,000	$	5.00		3.8	$	0
Exercisable at December 31, 2007		500,000	$	5.00		3.8	$	0

	Number of Shares under Warrants		Weighted Average Exercise Price

Warrants outstanding at January 1, 2006		2,122,335	$	5.15
Warrants granted		1,682,123		4.98
Warrants expired		-		-
Warrants outstanding at December 31, 2006		3,804,458		4.71
Warrants granted		719,909		6.45
Warrants expired		-		-

Warrants outstanding at December 31, 2007		4,524,367	$	4.99

Number of Shares Under Warrants	Exercise Price	Expiration Date	Weighted Average Exercise Price
1,855,670	$ 4.50	2008-2010	$ 4.50
258,122	$ 5.00	2008	$ 5.00
66,666	$ 4.50	2010	$ 4.50
1,360,000	$ 5.00	2011	$ 5.00
521,644	$ 7.00	2010	$ 7.00
150,000	$ 5.00	2012	$ 5.00
48,265	$ 5.00	2009	$ 5.00
64,000	$ 4.50	(1)	$ 4.50
200,000	$ 4.50	(2)	$ 4.50
4,524,367			$ 4.99

Year ended December 31,	Amount

2008	$	213,013
2009		152,821
2010		139,443
2011		134,974
2012		134,156
2013		138,182
2014		118,010
	$	1,030,599

	2007			2006
Net operating loss carryforward	$	25,938,284		$	18,334,084
Less valuation allowance	$	(25,938,284	)	$	(18,334,084	)
Net deferred tax asset	$	-		$	-

	2007			2006
Tax benefit at the U.S. statutory income tax rate		(34.0	)%		(34.0	)%
Increase in the valuation allowance		34.0	%		34.0	%
Effective income tax rate		-	%		-	%