10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2013

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from [                    ] to [                    ]

Commission File Number 0-19047

FOOD TECHNOLOGY SERVICE, INC.

(Exact name of Registrant as specified in its charter)

FLORIDA	59-2618503
(State of Incorporation or Organization)	(Employer Identification Number)

502 Prairie Mine Road, Mulberry, FL	33860
(Address of Principal Executive offices)	(Zip code)

(863) 425-0039

(Registrant’s telephone number, including area code)

Indicate by check mark if the registrant is not required to file reports pursuant to section 13 or 15(d) of the Exchange Act.    Yes  ¨    No  x

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Sec. 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of “accelerated filer”, “large accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated Filer	¨	Accelerated Filer	¨
Non-Accelerated Filer	¨	Smaller Reporting Company	x

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

There were 2,837,133 shares of the Registrant’s common stock, $.01 par value per share, issued and outstanding as of October 31, 2013.

TABLE OF CONTENTS

		Page
PART I. FINANCIAL INFORMATION
Item 1	Financial Statements:
	Balance Sheets – As of September 30, 2013 and December 31, 2012		3
	Statements of Operations – For the Three Months Ended September 30, 2013 and 2012		5
	Statements of Operations – For the Nine Months Ended September 30, 2013 and 2012		6
	Statements of Cash Flows – For the Nine Months Ended September 30, 2013 and 2012		7
	Notes to Financial Statements		8
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations		16
Item 3	Quantitative and Qualitative Disclosures About Market Risk		16
Item 4T	Controls and Procedures		16
PART II. OTHER INFORMATION
Item 1	Legal Proceedings		17
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds		17
Item 3	Defaults Upon Senior Securities		17
Item 4	Submission of Matters to a Vote of Security Holders		17
Item 5	Other Information		17
Item 6	Exhibits		17
SIGNATURES			18

PART I: FINANCIAL INFORMATION

Item 1. Financial Statements

FOOD TECHNOLOGY SERVICE, INC.

BALANCE SHEETS

	As of September 30, 2013			As of December 31, 2012
	(Unaudited)			(Audited)
ASSETS
Current Assets:
Cash	$	3,557,977		$	2,336,814
Certificate of Deposit, Restricted		—			150,169
Accounts Receivable, Less Allowance for Doubtful Accounts of $5,000		615,093			444,902
Other Receivable		9,521			11,390
Prepaid Expenses		42,521			16,979
Deferred Tax Asset		94,900			521,000
Total Current Assets		4,320,012			3,481,254
Property, Plant and Equipment:
Buildings		3,493,643			3,488,668
Cobalt		6,934,390			6,934,390
Furniture and Equipment		1,309,884			2,835,228
Land		171,654			171,654
Less: Accumulated Depreciation		(6,177,658	)		(7,249,229	)
Total Property, Plant and Equipment		5,731,913			6,180,711
Other Assets:
Certificate of Deposit, Restricted		150,345			—
Utility Deposits		5,000			5,000
Loan Fees – Net		4,588			4,192
Total Other Assets		159,933			9,192
Total Assets	$	10,211,858		$	9,671,157

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

3

FOOD TECHNOLOGY SERVICE, INC.

BALANCE SHEETS

	As of September 30, 2013			As of December 31, 2012
	(Unaudited)			(Audited)
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts Payable	$	21,132		$	196,338
Accrued Liabilities		159,100			256,117
Total Current Liabilities		180,232			452,455
Deferred Tax Liabilities		154,900			125,400
Total Liabilities		335,132			577,855
Stockholders’ Equity:
Common Stock $.01 Par Value, Authorized 5,000,000 Shares, Issued 2,837,133 and 2,827,980		28,370			28,354
Paid-In Capital		12,411,344			12,391,689
Deficit		(2,544,497	)		(3,308,250	)
Less, 5,154 Treasury Shares at Cost		(18,491	)		(18,491	)
Total Stockholders’ Equity		9,876,726			9,093,302
Total Liabilities and Stockholders’ Equity	$	10,211,858		$	9,671,157

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

4

FOOD TECHNOLOGY SERVICE, INC.

STATEMENTS OF OPERATIONS

	Three Months Ended September 30,
	2013			2012
	(Unaudited)			(Unaudited)
Net Revenues	$	1,027,510		$	925,654
Costs and Operating Expenses
Processing Costs		168,939			148,413
Selling, General and Administrative		346,768			292,442
Depreciation and Amortization		165,604			153,332
Total Costs and Operating Expenses		681,311			594,187
Income from Operations		346,199			331,467
Interest Income		231			220
Income before Income Taxes		346,430			331,687
Income Tax Expense		(127,800	)		(125,200	)
Net Income	$	218,630		$	206,487
Net Income Per Common Share
-Basic	$	0.077		$	0.073
-Diluted	$	0.075		$	0.070
Weighted Average Number of Common Shares Used in Computation
-Basic		2,837,133			2,827,042
-Diluted		2,924,133			2,937,542

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

5

FOOD TECHNOLOGY SERVICE, INC.

STATEMENTS OF OPERATIONS

	Nine Months Ended September 30,
	2013			2012
	(Unaudited)			(Unaudited)
Net Revenues	$	3,237,412		$	2,996,094
Costs and Operating Expenses
Processing Costs		505,598			480,263
Selling, General and Administrative		1,001,613			916,719
Depreciation and Amortization		508,792			411,751
Total Costs and Operating Expenses		2,016,003			1,808,733
Income from Operations		1,221,409			1,187,361
Interest Income		744			610
Income before Income Taxes		1,222,153			1,187,971
Income Tax Expense		(458,400	)		(448,300	)
Net Income	$	763,753		$	739,671
Net Income Per Common Share
-Basic		0.269			0.263
-Diluted		0.261			0.253
Weighted Average Number of Common Shares
Used in Computation
-Basic		2,836,344			2,817,790
-Diluted		2,923,344			2,928,290

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

6

FOOD TECHNOLOGY SERVICE, INC.

STATEMENTS OF CASH FLOWS

	Nine Months Ended September 30,
	2013			2012
	(Unaudited)			(Unaudited)
Cash Flows from Operations:
Cash Received from Customers	$	3,067,221		$	3,045,998
Interest Received		744			610
Interest Paid		(3,148	)		(482	)
Cash Paid for Operating Expenses		(1,785,310	)		(1,367,082	)
Net Cash Provided by Operations		1,279,507			1,679,044
Cash Flows from Investing Activities:
Certificate of Deposit		(176	)		(150,112	)
Letter of Credit Costs		(12,234	)		(12,269	)
Purchase of Cobalt, Delivery & Installation					(898,405	)
Purchase of Equipment		(43,259	)		(20,006	)
Equipment Deposit					(393,968	)
Building Improvements		(4,975	)		(44,945	)
Net Cash (Used) by Investing		(60,644	)		(1,519,705	)
Cash Flows from Financing Activities
Excess Tax Benefit From Share Based Compensation		2,300			42,000
Net Increase in Cash		1,221,163			201,339
Cash at Beginning of Period		2,336,814			2,000,367
Cash at End of Period	$	3,557,977		$	2,201,706
Reconciliation of Net Income to Net Cash Provided by Operations:
Net Income	$	763,753		$	739,671
Adjustments to Reconcile Net Income to Cash Provided or Used:
Amortization		11,838			11,851
Depreciation		496,954			399,900
Loss on disposal of assets		80			—
Deferred Income Tax		456,300			448,300
Excess Tax Benefit From Share Based Compensation		(2,300	)		(42,000	)
Share-Based Compensation		18,971			32,067
(Increase)/Decrease in Receivables		(170,191	)		49,904
(Increase)/Decrease in Other Receivables		1,869			—
(Increase)/Decrease in Prepaid Expenses		(25,543	)		(11,469	)
Increase/(Decrease) in Payables		(175,207	)		(7,944	)
Increase/(Decrease) in Accruals		(97,017	)		58,764
Net Cash Provided by Operations	$	1,279,507		$	1,679,044
Non-cash Financing Transactions:
Fair Value of Common Stock Issued Pursuant to Exercised Stock Options	$	4,260		$	153,315

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

7

FOOD TECHNOLOGY SERVICE, INC.

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2013

Note A - Basis of Presentation

The accompanying financial statements of Food Technology Service, Inc. (the “Company,” “we” or “our”) have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission and the instructions to Form 10-Q and, therefore, do not include all information and footnotes normally included in financial statements prepared in accordance with generally accepted accounting principles. These interim financial statements should be read in conjunction with the financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012.

In the opinion of management, these financial statements reflect all adjustments, including normal recurring adjustments, necessary for a fair presentation of the financial position as of September 30, 2013, and the results of operations and cash flows for the interim periods presented. Operating results for the period ended September 30, 2013, are not necessarily indicative of the results that may be expected for the full year. We have evaluated subsequent events for recognition or disclosure through the date this Form 10-Q is filed with the Securities and Exchange Commission.

Note B - Business Description and Summary of Significant Accounting Policies

The Company was organized in December 1985 and is engaged in the business of operating a gamma irradiation facility using Cobalt 60 for the sterilization of medical, surgical, pharmaceutical and packaging materials. It also disinfects fruits, vegetables, oysters and meat products to enhance safety or eliminate insect pests.

1. Use of Estimates

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

2. Revenue Recognition

The primary source of revenue is from treating products with gamma radiation from Cobalt 60. Net Revenue is the gross income from such processing less allowances, if any. Revenues are recorded after the Company’s performance obligation is completed and product has been processed in accordance with the customer’s specifications and collection of the resulting receivable is probable.

3. Accounts Receivable and Allowances for Doubtful Accounts

Accounts receivable are customer obligations arising from the sale of services and are due under normal trade terms requiring payment within 30 days from the invoice date. Accounts over ninety days are monitored closely by Management and delinquencies are determined based on payment history, aging analysis and any specific known troubled assets. Receivables are charged off to the allowance for doubtful accounts once Management determines that they are uncollectible.

4. Property, Plant and Equipment

Property, plant and equipment are stated at cost. Before 2012, depreciation for assets other than cobalt has been computed on the straight-line method for both financial reporting and income tax purposes. Beginning in 2012, depreciation for assets other than cobalt has been computed on the straight-line method for financial reporting purposes and on the accelerated methods for income tax purposes for any new assets.

The useful lives of property, plant and equipment for purposes of computing depreciation are:

Building	31.5-40 Years
Furniture and Equipment	5-15 Years

8

FOOD TECHNOLOGY SERVICE, INC.

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2013

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

Estimated useful lives are periodically reviewed and if warranted, changes will be made accordingly.

Nordion is the Company’s supplier of Cobalt 60. When Cobalt is purchased, Nordion agrees to accept the return of all Cobalt 60 that has reached the end of its useful life for a fee. The Company’s facility has the capacity to store the Cobalt 60 and there is no regulatory or industry requirement stating when the Cobalt needs to be returned. Management periodically reviews the value of the Cobalt 60 and has determined an environmental remediation liability is not necessary since the value of the Cobalt 60 exceeds the disposal costs.

5. Cash and Cash Equivalents

All highly liquid investments with original maturities of three months or less are considered to be cash and cash equivalents.

6. Concentration of Credit Risk

The Company maintains its cash in three financial institutions. The Federal Deposit Insurance Corporation insured up to $250,000 per legal entity per financial institution and all funds in noninterest-bearing transaction accounts until December 31, 2012. As of January 1, 2013 noninterest-bearing transaction accounts no longer receive unlimited deposit insurance coverage. The Company’s uninsured balances totaled approximately $2,905,822 as of September 30, 2013 and $144,736 as of December 31, 2012.

7. Earnings Per Share

Basic earnings per share are computed using the weighted average number of common shares outstanding. Diluted earnings per share are computed by the weighted average number of common shares outstanding, plus the effect of common stock equivalents that are dilutive.

8. Fair Value of Financial Instruments

The carrying value of cash, accounts receivable, prepaid expenses, deposits, accounts payable and accrued liabilities approximate fair value.

9. Stock Option Plans

The Company has various stock option plans for employees and other individuals providing services to or serving as Directors of the Company. (See Note H - Stock Options) Compensation cost under the plans is recognized using the fair value recognition provisions of FASB ASC 718. Such cost is recognized for shares expected to vest on a straight-line basis over the requisite service period of the award using the Black-Scholes option-pricing model. FASB ASC 718 requires the benefits of tax deductions in excess of the compensation cost recognized for those options to be classified as financing cash inflows rather than operating cash inflows. This amount is shown as excess tax benefit from share based compensation on the statements of cash flows. The excess tax benefits from the expired options are recorded in additional paid-in capital and any tax benefits from stock options expired unexercised are offset to the extent of any remaining balance.

10. Advertising

The Company expenses all advertising costs when incurred. Advertising expense recognized for the three months ended September 30, 2013 and 2012 was $1,237 and $2,675, respectively, and for the nine months ended September 30, 2013 and 2012 was $16,053 and $5,327, respectively.

9

FOOD TECHNOLOGY SERVICE, INC.

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2013

11. Reclassification

Certain reclassifications have been made to the prior year’s financial statements to conform to the current year’s presentation.

Note C - Certificate of Deposit

Certificate of deposit totaling $150,345 bears interest of 0.10% that compounds quarterly and matures on November 4, 2014 with penalties for early withdrawal. Any penalties for early withdrawal would not have a material effect on the financial statements. The certificate of deposit is restricted as collateral for the company’s letter of credit with Regions bank.

Note D - Loan Fees

During the first quarter of 2013, renewal fees in the amount of $12,269 were incurred in connection with the Regions letter of credit (See Note E - Letter and Line of Credit). As of September 30, 2013 and December 31, 2012, total loan fees were $20,821 and $20,856, respectively. These fees were amortized based on the life of the loans and written off upon completion. Amortization expense for the three months ended September 30, 2013 and 2012 was $3,264 and $3,272, respectively and for the nine months ended September 30, 2013 and 2012 was $11,838 and $11,851, respectively.

Note E - Letter and Line of Credit

The State of Florida requires, as a condition of the Company’s Radioactive Materials License, a $600,000 irrevocable standby letter of credit. This letter of credit with Regions Bank was renewed at similar terms prior to its February 24, 2013 expiration to satisfy the state’s requirements. The letter of credit has an annual fee of $12,269 and is collateralized by the Company’s real estate and a $150,345 certificate of deposit.

The Company has a separate $400,000 line of credit with Regions Bank that is available for the short term capital needs of the Company. The line of credit is secured by the Company’s real estate and incurs interest at prime plus 1.35%. As of September 30, 2013, the Company has not used the line of credit.

Note F - Income Taxes and Available Tax Loss Carryforwards

The components of income tax / (benefit) are as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2013		2012		2013		2012
Current
Federal	$	—	$	—	$	—	$	—
State		2,100		—		2,100		—
Total Current		2,100		—		2,100		—
Deferred-Benefit
Federal		113,000		106,900		395,300		382,800
State		12,700		18,300		61,000		65,500
Total Deferred-Benefit		125,700		125,200		456,300		448,300
Total Income Tax Expense/(Benefit)	$	127,800	$	125,200	$	458,400	$	448,300

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FOOD TECHNOLOGY SERVICE, INC.

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2013

Income taxes differ from the amounts computed by applying the effective income tax rates of 37.63% to income before income taxes as a result of the following:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2013		2012		2013		2012
Expected Provision at US Statutory Rate	$	117,800	$	112,800	$	415,600	$	403,900
State Income Tax Net of Federal Benefit		9,600		12,000		41,500		43,200
Nondeductible Expenses		400		400		1,300		1,200
Income Tax Expense / (Benefit)	$	127,800	$	125,200	$	458,400	$	448,300

The Company had income tax net operating loss (“NOL”) carryforwards for federal income tax purposes. The NOL will expire in various years ending through the year 2030.

The Company’s NOL carryforward is as follows:

	As of September 30, 2013						As of December 31, 2012
	Federal			State			Federal			State
NOL Carryforward - Beginning Of Period		1,605,865			1,108,671			2,071,925			2,071,925
Less Used		(1,235,750	)		(1,108,671	)		(466,060	)		(963,254	)
NOL Carryfoward - End Of Period		370,115			—			1,605,865			1,108,671

The components of the Company’s deferred tax assets and (liabilities) are as follows:

	As of September 30, 2013					As of December 31, 2012
	Current		Noncurrent			Current		Noncurrent
NOL Carryforward	$	94,900	$	24,000		$	521,000	$	56,000
Accured Liabilities		—		19,500			—		19,500
Share-Based Compensation		—		43,300			—		38,500
Property, Plant & Equipment		—		(241,700	)		—		(239,400	)
Net Deferred Tax Asset/(Liability)	$	94,900	$	(154,900	)	$	521,000	$	(125,400	)

Deferred income taxes reflect the net tax effects of the temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

As of September 30, 2013, no further changes to the valuation allowance have been made. The Company believes that its estimate of future operations is conservative and reasonable, but inherently uncertain. If the Company realizes unforeseen material losses in the future and its future projections of income decrease, the allowance could be increased resulting in a charge to income.

The Company’s tax years 2010 through 2012 remain open to examination by taxing jurisdictions.

Note G - Accrued Liabilities

Effective January 1, 2011, the Board of Directors modified the President’s employment contract to include a resignation clause. This clause provides two weeks base pay for every full year worked for the company, if a nine month notice is received before the President leaves. As of September 30, 2013, an accrual of $51,700 is recorded in relation to the resignation clause.

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FOOD TECHNOLOGY SERVICE, INC.

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2013

Note H - Stock Options

On February 9, 1999, the Board of Directors approved an option program for non-employee Directors.

The program was amended in 2001 and 2005 to provide for the annual granting to each non-employee Director of five year options to purchase 1,500 shares of common stock, exercisable at the end of one year at the market value of the shares of common stock on the date of grant. Also, the Chairman of the Board is awarded annually five year options to purchase an additional 2,500 shares. Options outstanding under this plan as of September 30, 2013 and 2012 are 0 and 8,500, respectively.

No further options are being issued under the 1999 Plan.

On May 14, 2009, the Stockholders approved the 2009 Incentive and Non-Statutory Stock Option Plan (the “2009 Plan”).

The 2009 Plan is administered by the Board of Directors who is authorized to grant incentive stock options (“ISO’s”) to Officers and employees of the Company and non-qualified options (“NQO’s”) for certain other individuals providing services to or serving as Directors of the Company

The maximum number of shares of the Company’s Stock that may be issued under the 2009 Plan is 125,000 shares. Options granted and outstanding under this plan are as follows:

Year	Granted		Outstanding
Before 2011		23,000		17,000
2011		10,000		10,000
2012		10,000		10,000
		43,000		37,000

The aggregate fair market value (determined at the time an ISO is granted) of the Common Stock with respect to which ISO’s are exercisable for the first time by any person during any calendar year under the Plans shall not exceed $100,000.

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

In 2003 and 2008 the company reached the maximum number of stock options allowed to be issued under the respective current stock option plan. The company therefore issued 60,000 stock options outside of aforementioned plans. Options outstanding outside a specific plan as of September 30, 2013 and 2012 are 60,000 and 65,000, respectively.

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FOOD TECHNOLOGY SERVICE, INC.

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2013

A summary of the status of the Company’s stock options is as follows:

	Number of Shares			Wtd. Avg. Exercise Price		Wtd. Avg. Remaining Contractual Life (Yrs)
Outstanding At December 31, 2012		105,500		$	2.10		4.50
Granted		—		$	—
Exercised		(3,000	)	$	2.18
Expired/Forfeited		(5,500	)	$	2.18
Outstanding At September 30, 2013		97,000		$	2.09		4.11
Vested/Exercisable At September 30, 2013		85,000		$	2.25		3.95

A summary of the status of the Company’s nonvested stock options is as follows:

	Number of Shares		Wtd. Avg. Grant Date Fair Value
Nonvested, At December 31, 2012		12,000	$	0.28
Granted		—	$	—
Vested		—	$	—
Nonvested, At September 30, 2013		12,000	$	0.28
Expired/Forfeited During Period		5,500	$	0.75

The Company estimated the fair value at the date of grant using the Black Scholes option valuation model with the following assumptions:

	Nine Months Ended September 30,
	2013	2012
Risk Free Interest Rate	—	0.62-1.04%
Expected Volatility	—	80.06-80.25%
Expected Life	—	5 years
Dividend Yield	—	0.00%

Option valuation models require the input of highly subjective assumptions including the expected option life. Because the Company’s employee stock options have characteristics significantly different from those of traded options, and because changes in the subjective assumptions can materially affect the fair value estimate, the existing models do not necessarily provide a reliable single measure of the fair value of its employee stock options.

For the three months ended September 30, 2013 and 2012, 1,500 and 1,500 stock options were exercised under a cashless program resulting in the issuance of 834 and 938 shares and an excess tax benefit of $1,100 and $1,700, respectively. For the nine months ended September 30, 2013 and 2012, 3,000 and 36,000 stock options were exercised under a cashless program resulting in the issuance of 1,682 and 22,808 shares and an excess tax benefit of $2,300 and $42,000, respectively.

The Company recognized $831 and $11,821 stock-based compensation expense for the three months ended September 30, 2013 and 2012, respectively and $18,971 and $32,067 for the nine months ended September 30, 2013 and 2012, respectively.

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FOOD TECHNOLOGY SERVICE, INC.

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2013

As of September 30, 2013, there was $832 of unrecognized compensation costs related to non-vested stock options, which will be amortized to expense over future periods. The Company expects to recognize that cost over the weighted average vesting period of 0.25 years.

Note I - Earnings Per Share

Earnings per share are calculated in accordance with ASC 260-10, “Earnings Per Share”. Basic earnings per share are computed by dividing net income by the weighted average number of common shares outstanding during the years. Diluted earnings per share reflect the potential dilution that could occur if securities or other contracts to issue common shares were exercised or converted into common shares. Common share equivalents are excluded from the computation of diluted earnings per share if their effects would be anti-dilutive.

ASC 260-10 requires the presentation of both Basic EPS and Diluted EPS on the face of the Company’s Statements of Operations.

The following table sets forth the computation of basic and diluted per share information:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2013		2012		2013		2012
Numerator:
Net Income	$	218,630	$	206,487	$	763,753	$	739,671
Denominator:
Wtd. Avg. Common Shares Outstanding		2,837,133		2,827,042		2,836,344		2,817,790
Dilutive Effect of Stock Options		87,000		110,500		87,000		110,500
Wtd. Avg. Common Shares Outstanding, Assuming Dilution		2,924,133		2,937,542		2,923,344		2,928,290

Out of the money options excluded from the computation of diluted EPS:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2013		2012		2013		2012
Stock option with exercise price of $6.26		10,000		—		10,000		—

Note J - Concentration and Credit Risk

Although the Company continues to diversify its customer base it does a significant amount of its total business with the following customers.

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2013			2012			2013			2012
Customer 1		27	%		30	%		31	%		31	%
Customer 2		20	%		24	%		22	%		29	%
Total		47	%		54	%		53	%		60	%

14

FOOD TECHNOLOGY SERVICE, INC.

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2013

The Company’s cash and accounts receivable are subject to potential credit risk. Management continuously monitors the credit standing of the financial institutions and customers with which the Company deals. A provision has been made for doubtful accounts which historically have not been significant.

The Company’s supplier of Cobalt 60 is Nordion (Canada) Inc. In the event it is unavailable from Nordion the Company can obtain Cobalt 60 from one other source.

Note K - Subsequent Events

In October, 2013 the Company entered into an agreement with Nordion for the purchase and installation of 200,000 curies of Cobalt at an estimated cost of $675,000. The Cobalt shipment and installation date will not be known until completed.

15

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Food Technology Service, Inc. had revenues of $1,027,510 during the third quarter of 2013 compared to revenues of $925,654 for the same period in 2012. This is an increase of approximately 11 percent. The Company had net income during the third quarter of 2013 of $218,630 versus net income of $206,487 during the same period in 2012, an increase of approximately 5.9 percent.

For the first three quarters of 2013, the Company had revenues of $3,237,412 and net income of $763,753. Revenues during the first three quarters of 2012 were $2,996,094 and the Company had net income of $739,671. Revenues increased by about 8.1 percent and net income increased by approximately 3.3 percent in the first three quarters of 2013 compared to the same period in 2012.

Management attributes increased revenue to continued growth in customer demand.

During the third quarter of 2013, processing costs as a percentage of sales were 16.4 percent compared to 16 percent during the third quarter of 2012. These costs are relatively fixed and the slight increase in 2013 is not significant. General, administrative and development costs as a percentage of sales during the third quarter of 2013 were 33.7 percent. This compares to 31.6 percent in the third quarter of 2012. The increase in general, administrative and development expenses, as a percentage of sales, is due primarily to increased contracted professional services associated with Board activities.

During the first nine months of 2013, processing costs and general, administrative and development costs as a percentage of sales remained relatively constant at approximately 15.6% and 30.9% respectively. As previously noted, these cost are relatively fixed.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not Applicable.

Item 4T. Controls and Procedures

The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Securities Exchange Act Rules 13a-15(f) and 15d-15(f). The Company’s internal control system was designed to provide reasonable assurance to the Company’s management and board of directors regarding the preparation and fair presentation of published financial statements. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

As of the end of the period covered by this report, an evaluation was performed on the effectiveness of the design and operation of our disclosure controls and procedures by our Chief Executive Officer who also acts as the Company’s Chief Financial Officer. Based upon that evaluation, our Chief Executive/Chief Financial Officer concluded that the design and operation of our disclosure controls and procedures were effective as of the end of the period covered by this report.

In accordance with Rule 13a-15 of the General Rules and Regulations promulgated under the Securities Exchange Act of 1934 (the “Act”), the term “disclosure controls and procedures” means controls and other procedures of an issuer that are designed to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Act is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

The Company’s management assessed the effectiveness of the Company’s internal control over financial reporting as of September 30, 2013, by using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control - Integrated Framework. Based on this assessment, management believes that as of September 30, 2013, the Company’s internal controls over financial reporting is effective.

16

There have been no changes in the Company’s internal control over financial reporting that occurred during the Company’s last fiscal quarter that materially affected, or are reasonably likely to materially affect the Company’s internal control over financial reporting.

PART II: OTHER INFORMATION

Item 1. Legal Proceedings

The company is not involved in any legal proceedings.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Not applicable

Item 3. Defaults upon Senior Securities

Not applicable

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

Not applicable

Item 5. Other Information

Not applicable

Item 6. Exhibits

Number	Description
31	Certifications of Officers pursuant to Rule 13a-14(a)/15d-14(a)
32	Certifications of Officers pursuant to Section 1350, of the Sarbanes - Oxley Act of 2002
101.INS	XBRL Instance Document
101.SCH	XBRL Schema Document
101.CAL	XBRL Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition
101.LAB	XBRL Label Linkbase Document
101.PRE	XBRL Presentation Linkbase Document

17

SIGNATURES

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

FOOD TECHNOLOGY SERVICE, INC.
By:	/s/ Richard G. Hunter, Ph.D.
	Richard G. Hunter, Ph.D.
	Chief Executive Officer and
	Chief Financial and Accounting Officer

Date: November 13, 2013

18

EX-31

Exhibit 31

CERTIFICATIONS OF OFFICERS PURSUANT

TO RULE 13A-14(A)/15D-14(A)

I, Richard G. Hunter, Ph.D., certify that:

1) I have reviewed this quarterly report on Form 10-Q for the quarter ended September 30, 2013 of Food Technology Service, Inc.;

2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statement made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects, the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4) The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures, and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5) The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

19

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

FOOD TECHNOLOGY SERVICE, INC.
By:	/s/ Richard G. Hunter, Ph.D.
	Richard G. Hunter, Ph.D.
	Chief Executive Officer and
	Chief Financial and Accounting Officer

Date: November 13, 2013

20

EX-32

Exhibit 32

CERTIFICATIONS OF OFFICERS PURSUANT TO SECTION 1350,

OF THE SARBANES - OXLEY ACT OF 2002

In connection with the quarterly report of Food Technology Service, Inc. (the “Company”) on Form 10-Q for the quarter ending September 30, 2013 as filed with the Securities and Exchange Commission (the “Report”), I, Richard G. Hunter, Chief Executive and Financial Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1) The Report fully complies with the requirements of Section 13(a) and 15(d) of the Securities Exchange Act of 1934; and

2) The information contained in the Report fairly represents, in all material respects, the financial condition and results of operations of the Company at the end of, and for, this period covered by the Report.

FOOD TECHNOLOGY SERVICE, INC.
By:	/s/ Richard G. Hunter, Ph.D.
	Richard G. Hunter, Ph.D.
	Chief Executive Officer and
	Chief Financial and Accounting Officer

Date: November 13, 2013

21

XML

Business Description and Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2013

Accounting Policies [Abstract]

Use of Estimates

1. Use of Estimates

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

Revenue Recognition

2. Revenue Recognition

The primary source of revenue is from treating products with gamma radiation from Cobalt 60. Net Revenue is the gross income from such processing less allowances, if any. Revenues are recorded after the Company’s performance obligation is completed and product has been processed in accordance with the customer’s specifications and collection of the resulting receivable is probable.

Accounts Receivable and Allowances for Doubtful Accounts

3. Accounts Receivable and Allowances for Doubtful Accounts

Accounts receivable are customer obligations arising from the sale of services and are due under normal trade terms requiring payment within 30 days from the invoice date. Accounts over ninety days are monitored closely by Management and delinquencies are determined based on payment history, aging analysis and any specific known troubled assets. Receivables are charged off to the allowance for doubtful accounts once Management determines that they are uncollectible.

Property, Plant and Equipment

4. Property, Plant and Equipment

Property, plant and equipment are stated at cost. Before 2012, depreciation for assets other than cobalt has been computed on the straight-line method for both financial reporting and income tax purposes. Beginning in 2012, depreciation for assets other than cobalt has been computed on the straight-line method for financial reporting purposes and on the accelerated methods for income tax purposes for any new assets.

The useful lives of property, plant and equipment for purposes of computing depreciation are:

Building	31.5-40 Years
Furniture and Equipment	5-15 Years

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

Estimated useful lives are periodically reviewed and if warranted, changes will be made accordingly.

Nordion is the Company’s supplier of Cobalt 60. When Cobalt is purchased, Nordion agrees to accept the return of all Cobalt 60 that has reached the end of its useful life for a fee. The Company’s facility has the capacity to store the Cobalt 60 and there is no regulatory or industry requirement stating when the Cobalt needs to be returned. Management periodically reviews the value of the Cobalt 60 and has determined an environmental remediation liability is not necessary since the value of the Cobalt 60 exceeds the disposal costs.

Cash and Cash Equivalents

5. Cash and Cash Equivalents

All highly liquid investments with original maturities of three months or less are considered to be cash and cash equivalents.

Concentration of Credit Risk

6. Concentration of Credit Risk

The Company maintains its cash in three financial institutions. The Federal Deposit Insurance Corporation insured up to $250,000 per legal entity per financial institution and all funds in noninterest-bearing transaction accounts until December 31, 2012. As of January 1, 2013 noninterest-bearing transaction accounts no longer receive unlimited deposit insurance coverage. The Company’s uninsured balances totaled approximately $2,905,822 as of September 30, 2013 and $144,736 as of December 31, 2012.

Earnings Per Share

7. Earnings Per Share

Basic earnings per share are computed using the weighted average number of common shares outstanding. Diluted earnings per share are computed by the weighted average number of common shares outstanding, plus the effect of common stock equivalents that are dilutive.

Fair Value of Financial Instruments

8. Fair Value of Financial Instruments

The carrying value of cash, accounts receivable, prepaid expenses, deposits, accounts payable and accrued liabilities approximate fair value.

Stock Option Plans

9. Stock Option Plans

The Company has various stock option plans for employees and other individuals providing services to or serving as Directors of the Company. (See Note H - Stock Options) Compensation cost under the plans is recognized using the fair value recognition provisions of FASB ASC 718. Such cost is recognized for shares expected to vest on a straight-line basis over the requisite service period of the award using the Black-Scholes option-pricing model. FASB ASC 718 requires the benefits of tax deductions in excess of the compensation cost recognized for those options to be classified as financing cash inflows rather than operating cash inflows. This amount is shown as excess tax benefit from share based compensation on the statements of cash flows. The excess tax benefits from the expired options are recorded in additional paid-in capital and any tax benefits from stock options expired unexercised are offset to the extent of any remaining balance.

Advertising

10. Advertising

The Company expenses all advertising costs when incurred. Advertising expense recognized for the three months ended September 30, 2013 and 2012 was $1,237 and $2,675, respectively, and for the nine months ended September 30, 2013 and 2012 was $16,053 and $5,327, respectively.

Reclassification

11. Reclassification

Certain reclassifications have been made to the prior year’s financial statements to conform to the current year’s presentation.

XML

Statements of Operations (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Income Statement [Abstract]
Net Revenues	$ 1,027,510	$ 925,654	$ 3,237,412	$ 2,996,094
Costs and Operating Expenses
Processing Costs	168,939	148,413	505,598	480,263
Selling, General and Administrative	346,768	292,442	1,001,613	916,719
Depreciation and Amortization	165,604	153,332	508,792	411,751
Total Costs and Operating Expenses	681,311	594,187	2,016,003	1,808,733
Income from Operations	346,199	331,467	1,221,409	1,187,361
Interest Income	231	220	744	610
Income before Income Taxes	346,430	331,687	1,222,153	1,187,971
Income Tax Expense	(127,800)	(125,200)	(458,400)	(448,300)
Net Income	$ 218,630	$ 206,487	$ 763,753	$ 739,671
Net Income Per Common Share
-Basic	$ 0.077	$ 0.073	$ 0.269	$ 0.263
-Diluted	$ 0.075	$ 0.070	$ 0.261	$ 0.253
Weighted Average Number of Common Shares Used in Computation
-Basic	2,837,133	2,827,042	2,836,344	2,817,790
-Diluted	2,924,133	2,937,542	2,923,344	2,928,290

XML

Letter and Line of Credit

9 Months Ended

Sep. 30, 2013

Text Block [Abstract]

Letter and Line of Credit

Note E - Letter and Line of Credit

The State of Florida requires, as a condition of the Company’s Radioactive Materials License, a $600,000 irrevocable standby letter of credit. This letter of credit with Regions Bank was renewed at similar terms prior to its February 24, 2013 expiration to satisfy the state’s requirements. The letter of credit has an annual fee of $12,269 and is collateralized by the Company’s real estate and a $150,345 certificate of deposit.

The Company has a separate $400,000 line of credit with Regions Bank that is available for the short term capital needs of the Company. The line of credit is secured by the Company’s real estate and incurs interest at prime plus 1.35%. As of September 30, 2013, the Company has not used the line of credit.

XML

Business Description and Summary of Significant Accounting Policies - Property, Plant and Equipment (Detail)	9 Months Ended
	Sep. 30, 2013
Minimum Life [Member] | Building [Member]
Property Plant And Equipment Estimated Useful Lives [Line Items]
Property, Plant and Equipment	31 years 6 months
Minimum Life [Member] | Furniture and Equipment [Member]
Property Plant And Equipment Estimated Useful Lives [Line Items]
Property, Plant and Equipment	5 years
Maximum Life [Member] | Building [Member]
Property Plant And Equipment Estimated Useful Lives [Line Items]
Property, Plant and Equipment	40 years
Maximum Life [Member] | Furniture and Equipment [Member]
Property Plant And Equipment Estimated Useful Lives [Line Items]
Property, Plant and Equipment	15 years

XML

Business Description and Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2013

Accounting Policies [Abstract]

Property, Plant and Equipment

The useful lives of property, plant and equipment for purposes of computing depreciation are:

Building	31.5-40 Years
Furniture and Equipment	5-15 Years

XML

Stock Options - Estimated Fair Value Using Black Scholes Option Valuation Model (Detail)	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Risk Free Interest Rate, Minimum		0.62%
Risk Free Interest Rate, Maximum		1.04%
Expected Volatility, Minimum		80.06%
Expected Volatility, Maximum		80.25%
Expected Life		5 years
Dividend Yield		0.00%

XML

Letter and Line of Credit - Additional Information (Detail) (USD $)	9 Months Ended
	Sep. 30, 2013
Credit Facilities [Line Items]
Annual fee on letter of credit collateralized by real property	$ 12,269
Letter of credit is collateralized for certificate of deposit	150,345
Renewal of letter of credit	Feb. 24, 2013
Separate line of credit for the short term capital needs of the Company	400,000
Line of credit secured by the Company's real property on interest at prime plus	1.35%
Standby Letters of Credit [Member]
Credit Facilities [Line Items]
Letter of credit	$ 600,000

XML

Loans Fees - Additional Information (Detail) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012	Mar. 31, 2013 Line of Credit [Member]
Credit Facilities [Line Items]
Renewal fees in connection for letter of credit						$ 12,269
Total loan fees	20,821		20,821		20,856
Amortization expense of Loan	$ 3,264	$ 3,272	$ 11,838	$ 11,851

XML

Stock Options - Additional Information (Detail) (USD $)	3 Months Ended		9 Months Ended								44 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013 Chairman [Member]	Sep. 30, 2013 Director [Member]	Sep. 30, 2013 1999 Plan [Member]	Sep. 30, 2012 1999 Plan [Member]	Sep. 30, 2013 1999 Plan [Member] Chairman [Member]	Sep. 30, 2013 2009 Plan [Member]	Dec. 31, 2012 2009 Plan [Member]	Sep. 30, 2013 2009 Plan [Member] Director [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granting to each non-employee Director/Chairman					5 years	5 years
Options to purchase	60,000	65,000	60,000	65,000						125,000		1,500
Non employee director options to purchase exercisable period						1 year
Options to purchase additional shares					2,500
Options outstanding under plan							0	8,500
Stock options granted									0		43,000
Aggregate fair market value of common stock with respect to ISO										$ 100,000
ISO's exercisable immediately, percentage of authorized amount										20.00%
ISO's exercisable in following years										4 years
ISO's granted to an option for termination of employment, Minimum										30 days
ISO's granted to an option for termination of employment, Maximum										90 days
ISO's terminate the expiration date of the option, in the event of death, Minimum										90 days
ISO's terminate the expiration date of the option, in the event of death, Maximum										180 days
ISO's terminate the expiration date of the option in the event of disability, Minimum										180 days
ISO's terminate the expiration date of the option in the event of disability, Maximum										1 year
Stock options issued										60,000
Exercised, Number of Shares	1,500	1,500	3,000	36,000
Cashless program resulting in the issuance of shares	834	938	1,682	22,808
Excess tax benefit	1,100	1,700	2,300	42,000
Company recognized stock-based compensation expense	831	11,821	18,971	32,067
Unrecognized share-based compensation costs related to non-vested stock options	$ 832		$ 832
Amortized expense of non-vested stock options over future weighted average vesting period			3 months

XML

Earnings Per Share - Out of Money Stock Options Excluded from Computation of Diluted EPS (Detail)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Earnings Per Share [Abstract]
Stock option with exercise price of $6.26	10,000		10,000

XML

Income Taxes and Available Tax Loss Carryforwards - NOL Carryforwards (Detail) (USD $)	9 Months Ended	12 Months Ended
	Sep. 30, 2013	Dec. 31, 2012
Federal [Member]
Operating Loss Carryforwards [Line Items]
NOL Carryforward - Beginning Of Period	$ 1,605,865	$ 2,071,925
Less Used	(1,235,750)	(466,060)
NOL Carryfoward - End Of Period	370,115	1,605,865
State [Member]
Operating Loss Carryforwards [Line Items]
NOL Carryforward - Beginning Of Period	1,108,671	2,071,925
Less Used	(1,108,671)	(963,254)
NOL Carryfoward - End Of Period		$ 1,108,671

XML

Subsequent Events - Additional Information (Detail) (Subsequent Event [Member], USD $)	1 Months Ended
	Oct. 31, 2013 Unit
Subsequent Event [Member]
Subsequent Event [Line Items]
Purchase and installation of curies of Cobalt	200,000
Estimated cost of curies of Cobalt	$ 675,000

XML

Certificate of Deposit - Additional Information (Detail) (USD $)	9 Months Ended
	Sep. 30, 2013
Cash Equivalents At Carrying Value [Abstract]
Certificate of deposit totaling	$ 150,345
Deposit interest	0.10%
Maturity of certificate of deposit	Nov. 04, 2014

XML

Basis of Presentation

9 Months Ended

Sep. 30, 2013

Accounting Policies [Abstract]

Basis of Presentation

Note A - Basis of Presentation

The accompanying financial statements of Food Technology Service, Inc. (the “Company,” “we” or “our”) have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission and the instructions to Form 10-Q and, therefore, do not include all information and footnotes normally included in financial statements prepared in accordance with generally accepted accounting principles. These interim financial statements should be read in conjunction with the financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012.

In the opinion of management, these financial statements reflect all adjustments, including normal recurring adjustments, necessary for a fair presentation of the financial position as of September 30, 2013, and the results of operations and cash flows for the interim periods presented. Operating results for the period ended September 30, 2013, are not necessarily indicative of the results that may be expected for the full year. We have evaluated subsequent events for recognition or disclosure through the date this Form 10-Q is filed with the Securities and Exchange Commission.

XML

Certificate of Deposit (Certificates of Deposit [Member])

9 Months Ended

Sep. 30, 2013

Certificates of Deposit [Member]

Certificate of Deposit

Note C - Certificate of Deposit

Certificate of deposit totaling $150,345 bears interest of 0.10% that compounds quarterly and matures on November 4, 2014 with penalties for early withdrawal. Any penalties for early withdrawal would not have a material effect on the financial statements. The certificate of deposit is restricted as collateral for the company’s letter of credit with Regions bank.

XML

Income Taxes and Available Tax Loss Carryforwards

9 Months Ended

Sep. 30, 2013

Income Tax Disclosure [Abstract]

Income Taxes and Available Tax Loss Carryforwards

Note F - Income Taxes and Available Tax Loss Carryforwards

The components of income tax / (benefit) are as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2013		2012		2013		2012
Current
Federal	$	—	$	—	$	—	$	—
State		2,100		—		2,100		—
Total Current		2,100		—		2,100		—
Deferred-Benefit
Federal		113,000		106,900		395,300		382,800
State		12,700		18,300		61,000		65,500
Total Deferred-Benefit		125,700		125,200		456,300		448,300
Total Income Tax Expense/(Benefit)	$	127,800	$	125,200	$	458,400	$	448,300

Income taxes differ from the amounts computed by applying the effective income tax rates of 37.63% to income before income taxes as a result of the following:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2013		2012		2013		2012
Expected Provision at US Statutory Rate	$	117,800	$	112,800	$	415,600	$	403,900
State Income Tax Net of Federal Benefit		9,600		12,000		41,500		43,200
Nondeductible Expenses		400		400		1,300		1,200
Income Tax Expense / (Benefit)	$	127,800	$	125,200	$	458,400	$	448,300

The Company had income tax net operating loss (“NOL”) carryforwards for federal income tax purposes. The NOL will expire in various years ending through the year 2030.

The Company’s NOL carryforward is as follows:

	As of September 30, 2013						As of December 31, 2012
	Federal			State			Federal			State
NOL Carryforward - Beginning Of Period		1,605,865			1,108,671			2,071,925			2,071,925
Less Used		(1,235,750	)		(1,108,671	)		(466,060	)		(963,254	)
NOL Carryfoward - End Of Period		370,115			—			1,605,865			1,108,671

The components of the Company’s deferred tax assets and (liabilities) are as follows:

	As of September 30, 2013					As of December 31, 2012
	Current		Noncurrent			Current		Noncurrent
NOL Carryforward	$	94,900	$	24,000		$	521,000	$	56,000
Accured Liabilities		—		19,500			—		19,500
Share-Based Compensation		—		43,300			—		38,500
Property, Plant & Equipment		—		(241,700	)		—		(239,400	)
Net Deferred Tax Asset/(Liability)	$	94,900	$	(154,900	)	$	521,000	$	(125,400	)

Deferred income taxes reflect the net tax effects of the temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

As of September 30, 2013, no further changes to the valuation allowance have been made. The Company believes that its estimate of future operations is conservative and reasonable, but inherently uncertain. If the Company realizes unforeseen material losses in the future and its future projections of income decrease, the allowance could be increased resulting in a charge to income.

The Company’s tax years 2010 through 2012 remain open to examination by taxing jurisdictions.

XML

Loan Fees

9 Months Ended

Sep. 30, 2013

Text Block [Abstract]

Loan Fees

Note D - Loan Fees

During the first quarter of 2013, renewal fees in the amount of $12,269 were incurred in connection with the Regions letter of credit (See Note E - Letter and Line of Credit). As of September 30, 2013 and December 31, 2012, total loan fees were $20,821 and $20,856, respectively. These fees were amortized based on the life of the loans and written off upon completion. Amortization expense for the three months ended September 30, 2013 and 2012 was $3,264 and $3,272, respectively and for the nine months ended September 30, 2013 and 2012 was $11,838 and $11,851, respectively.

XML

Earnings Per Share - Out of Money Stock Options Excluded from Computation of Diluted EPS (Parenthetical) (Detail) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Earnings Per Share [Abstract]
Exercise price of stock option excluded from computation of diluted EPS	$ 6.26	$ 6.26	$ 6.26	$ 6.26

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Income Taxes and Available Tax Loss Carryforwards - Components of Income Tax / (Benefit) (Detail) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Current
Federal
State	2,100		2,100
Total Current	2,100		2,100
Deferred-Benefit
Federal	113,000	106,900	395,300	382,800
State	12,700	18,300	61,000	65,500
Deferred Income Tax Expense Benefit	125,700	125,200	456,300	448,300
Income Tax Expense / (Benefit)	$ 127,800	$ 125,200	$ 458,400	$ 448,300

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Income Taxes and Available Tax Loss Carryforwards - Deferred Tax Assets and (Liabilities) (Detail) (USD $)	Sep. 30, 2013	Dec. 31, 2012
Current [Member]
Components Of Deferred Tax Asset And Liabilities [Line Items]
NOL Carryforward	$ 94,900	$ 521,000
Net Deferred Tax Asset/(Liability)	94,900	521,000
Noncurrent [Member]
Components Of Deferred Tax Asset And Liabilities [Line Items]
NOL Carryforward	24,000	56,000
Accrued Liabilities	19,500	19,500
Share-Based Compensation	43,300	38,500
Property, Plant & Equipment	(241,700)	(239,400)
Net Deferred Tax Asset/(Liability)	$ (154,900)	$ (125,400)

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Stock Options - Company's Nonvested Stock Options (Detail) (USD $)	9 Months Ended
	Sep. 30, 2013
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Beginning balance nonvested, Number of Shares	12,000
Granted, Number of Shares
Vested, Number of Shares
Ending balance nonvested, Number of Shares	12,000
Expired/Forfeited During Period, Number of Shares	5,500
Beginning balance nonvested, Wtd. Avg. Grant Date Fair Value	$ 0.28
Granted, Wtd. Avg. Grant Date Fair Value
Vested, Wtd. Avg. Grant Date Fair Value
Ending balance nonvested, Wtd. Avg. Grant Date Fair Value	$ 0.28
Expired/Forfeited During Period, Wtd. Avg. Grant Date Fair Value	$ 0.75

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Balance Sheets (Parenthetical) (USD $)	Sep. 30, 2013	Dec. 31, 2012
Statement Of Financial Position [Abstract]
Accounts receivable, allowance for doubtful accounts	$ 5,000	$ 5,000
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	5,000,000	5,000,000
Common stock, shares issued	2,837,133	2,827,980
Treasury stock, shares	5,154	5,154

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Earnings Per Share

9 Months Ended

Sep. 30, 2013

Earnings Per Share [Abstract]

Earnings Per Share

Note I - Earnings Per Share

Earnings per share are calculated in accordance with ASC 260-10, “Earnings Per Share”. Basic earnings per share are computed by dividing net income by the weighted average number of common shares outstanding during the years. Diluted earnings per share reflect the potential dilution that could occur if securities or other contracts to issue common shares were exercised or converted into common shares. Common share equivalents are excluded from the computation of diluted earnings per share if their effects would be anti-dilutive.

ASC 260-10 requires the presentation of both Basic EPS and Diluted EPS on the face of the Company’s Statements of Operations.

The following table sets forth the computation of basic and diluted per share information:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2013		2012		2013		2012
Numerator:
Net Income	$	218,630	$	206,487	$	763,753	$	739,671
Denominator:
Wtd. Avg. Common Shares Outstanding		2,837,133		2,827,042		2,836,344		2,817,790
Dilutive Effect of Stock Options		87,000		110,500		87,000		110,500
Wtd. Avg. Common Shares Outstanding, Assuming Dilution		2,924,133		2,937,542		2,923,344		2,928,290

Out of the money options excluded from the computation of diluted EPS:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2013		2012		2013		2012
Stock option with exercise price of $6.26		10,000		—		10,000		—

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Statements of Cash Flows (USD $)	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Cash Flows from Operations:
Cash Received from Customers	$ 3,067,221	$ 3,045,998
Interest Received	744	610
Interest Paid	(3,148)	(482)
Cash Paid for Operating Expenses	(1,785,310)	(1,367,082)
Net Cash Provided by Operations	1,279,507	1,679,044
Cash Flows from Investing Activities:
Certificate of Deposit	(176)	(150,112)
Letter of Credit Costs	(12,234)	(12,269)
Purchase of Cobalt, Delivery & Installation		(898,405)
Purchase of Equipment	(43,259)	(20,006)
Equipment Deposit		(393,968)
Building Improvements	(4,975)	(44,945)
Net Cash (Used) by Investing	(60,644)	(1,519,705)
Cash Flows from Financing Activities
Excess Tax Benefit From Share Based Compensation	2,300	42,000
Net Increase in Cash	1,221,163	201,339
Cash at Beginning of Period	2,336,814	2,000,367
Cash at End of Period	3,557,977	2,201,706
Reconciliation of Net Income to Net Cash Provided by Operations:
Net Income	763,753	739,671
Adjustments to Reconcile Net Income to Cash Provided or Used:
Amortization	11,838	11,851
Depreciation	496,954	399,900
Loss on disposal of assets	80
Deferred Income Tax	456,300	448,300
Excess Tax Benefit From Share Based Compensation	(2,300)	(42,000)
Share-Based Compensation	18,971	32,067
(Increase)/Decrease in Receivables	(170,191)	49,904
(Increase)/Decrease in Other Receivables	1,869
(Increase)/Decrease in Prepaid Expenses	(25,543)	(11,469)
Increase/(Decrease) in Payables	(175,207)	(7,944)
Increase/(Decrease) in Accruals	(97,017)	58,764
Net Cash Provided by Operations	1,279,507	1,679,044
Non-cash Financing Transactions:
Fair Value of Common Stock Issued Pursuant to Exercised Stock Options	$ 4,260	$ 153,315

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Balance Sheets (USD $)	Sep. 30, 2013	Dec. 31, 2012
Current Assets:
Cash	$ 3,557,977	$ 2,336,814
Certificate of Deposit, Restricted		150,169
Accounts Receivable, Less Allowance for Doubtful Accounts of $5,000	615,093	444,902
Other Receivable	9,521	11,390
Prepaid Expenses	42,521	16,979
Deferred Tax Asset	94,900	521,000
Total Current Assets	4,320,012	3,481,254
Property, Plant and Equipment:
Buildings	3,493,643	3,488,668
Cobalt	6,934,390	6,934,390
Furniture and Equipment	1,309,884	2,835,228
Land	171,654	171,654
Less: Accumulated Depreciation	(6,177,658)	(7,249,229)
Total Property, Plant and Equipment	5,731,913	6,180,711
Other Assets:
Certificate of Deposit, Restricted	150,345
Utility Deposits	5,000	5,000
Loan Fees - Net	4,588	4,192
Total Other Assets	159,933	9,192
Total Assets	10,211,858	9,671,157
Current Liabilities:
Accounts Payable	21,132	196,338
Accrued Liabilities	159,100	256,117
Total Current Liabilities	180,232	452,455
Deferred Tax Liabilities	154,900	125,400
Total Liabilities	335,132	577,855
Stockholders' Equity:
Common Stock $.01 Par Value, Authorized 5,000,000 Shares, Issued 2,837,133 and 2,827,980	28,370	28,354
Paid-In Capital	12,411,344	12,391,689
Deficit	(2,544,497)	(3,308,250)
Less, 5,154 Treasury Shares at Cost	(18,491)	(18,491)
Total Stockholders' Equity	9,876,726	9,093,302
Total Liabilities and Stockholders' Equity	$ 10,211,858	$ 9,671,157

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Income Taxes and Available Tax Loss Carryforwards - Additional Information (Detail) (USD $)	9 Months Ended
	Sep. 30, 2013
Income Tax Disclosure [Abstract]
Effective income tax rate	37.63%
NOL expiry period	2030
Change in valuation allowance	$ 0
Open tax year, Start	2010
Open tax year, End	2012

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Business Description and Summary of Significant Accounting Policies - Additional Information (Detail) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012
Accounting Policies [Abstract]
Accounts receivable arising from the sale of services requires payment within			30 days
Accounts receivable monitored closely by management and delinquencies			90 days
Written off Period of remaining value of Cobalt			5 years 3 months 4 days
Uninsured cash balances	$ 2,905,822		$ 2,905,822		$ 144,736
Funds in non interest-bearing transaction accounts for Federal Deposit Insurance Corporation	250,000		250,000
Advertising expense	$ 1,237	$ 2,675	$ 16,053	$ 5,327

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Earnings Per Share - Computation of Basic and Diluted Per Share (Detail) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Numerator:
Net Income	$ 218,630	$ 206,487	$ 763,753	$ 739,671
Denominator:
Wtd. Avg. Common Shares Outstanding	2,837,133	2,827,042	2,836,344	2,817,790
Dilutive Effect of Stock Options	87,000	110,500	87,000	110,500
Wtd. Avg. Common Shares Outstanding, Assuming Dilution	2,924,133	2,937,542	2,923,344	2,928,290

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Stock Options - Stock Options Granted and Outstanding (Detail)	9 Months Ended		44 Months Ended
	Sep. 30, 2013	Dec. 31, 2012	Dec. 31, 2012 2009 Plan [Member]	Dec. 31, 2012 2009 Plan [Member] Before 2011 [Member]	Dec. 31, 2012 2009 Plan [Member] 2011 [Member]	Dec. 31, 2012 2009 Plan [Member] 2012 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options granted			43,000	23,000	10,000	10,000
Total stock option outstanding	97,000	105,500	37,000	17,000	10,000	10,000

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Stock Options - Company's Stock Options (Detail) (USD $)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Beginning balance, Number of Shares			105,500
Granted, Number of Shares
Exercised, Number of Shares	(1,500)	(1,500)	(3,000)	(36,000)
Expired/Forfeited, Number of Shares			(5,500)
Ending balance, Number of Shares	97,000		97,000		105,500
Vested/Exercisable At September 30, 2013, Number of shares	85,000		85,000
Beginning balance, Wtd. Avg. Exercise Price			$ 2.10
Granted, Wtd. Avg. Exercise Price
Exercised, Wtd. Avg. Exercise Price			$ 2.18
Expired/Forfeited, Wtd. Avg. Exercise Price			$ 2.18
Ending balance, Wtd. Avg. Exercise Price	$ 2.09		$ 2.09		$ 2.10
Vested/Exercisable At September 30, 2013, Wtd. Avg. Exercise Price	$ 2.25		$ 2.25
Beginning balance, Wtd. Avg. Remaining contractual Life (Yrs)			4 years 1 month 10 days		4 years 6 months
Vested/Exercisable, Wtd. Avg. Remaining Contractual Life (Yrs)			3 years 11 months 12 days

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Stock Options

9 Months Ended

Sep. 30, 2013

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock Options

Note H - Stock Options

On February 9, 1999, the Board of Directors approved an option program for non-employee Directors.

The program was amended in 2001 and 2005 to provide for the annual granting to each non-employee Director of five year options to purchase 1,500 shares of common stock, exercisable at the end of one year at the market value of the shares of common stock on the date of grant. Also, the Chairman of the Board is awarded annually five year options to purchase an additional 2,500 shares. Options outstanding under this plan as of September 30, 2013 and 2012 are 0 and 8,500, respectively.

No further options are being issued under the 1999 Plan.

On May 14, 2009, the Stockholders approved the 2009 Incentive and Non-Statutory Stock Option Plan (the “2009 Plan”).

The 2009 Plan is administered by the Board of Directors who is authorized to grant incentive stock options (“ISO’s”) to Officers and employees of the Company and non-qualified options (“NQO’s”) for certain other individuals providing services to or serving as Directors of the Company

The maximum number of shares of the Company’s Stock that may be issued under the 2009 Plan is 125,000 shares. Options granted and outstanding under this plan are as follows:

Year	Granted		Outstanding
Before 2011		23,000		17,000
2011		10,000		10,000
2012		10,000		10,000
		43,000		37,000

The aggregate fair market value (determined at the time an ISO is granted) of the Common Stock with respect to which ISO’s are exercisable for the first time by any person during any calendar year under the Plans shall not exceed $100,000.

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

In 2003 and 2008 the company reached the maximum number of stock options allowed to be issued under the respective current stock option plan. The company therefore issued 60,000 stock options outside of aforementioned plans. Options outstanding outside a specific plan as of September 30, 2013 and 2012 are 60,000 and 65,000, respectively.

A summary of the status of the Company’s stock options is as follows:

	Number of Shares			Wtd. Avg. Exercise Price		Wtd. Avg. Remaining Contractual Life (Yrs)
Outstanding At December 31, 2012		105,500		$	2.10		4.50
Granted		—		$	—
Exercised		(3,000	)	$	2.18
Expired/Forfeited		(5,500	)	$	2.18
Outstanding At September 30, 2013		97,000		$	2.09		4.11
Vested/Exercisable At September 30, 2013		85,000		$	2.25		3.95

A summary of the status of the Company’s nonvested stock options is as follows:

	Number of Shares		Wtd. Avg. Grant Date Fair Value
Nonvested, At December 31, 2012		12,000	$	0.28
Granted		—	$	—
Vested		—	$	—
Nonvested, At September 30, 2013		12,000	$	0.28
Expired/Forfeited During Period		5,500	$	0.75

The Company estimated the fair value at the date of grant using the Black Scholes option valuation model with the following assumptions:

	Nine Months Ended September 30,
	2013	2012
Risk Free Interest Rate	—	0.62-1.04%
Expected Volatility	—	80.06-80.25%
Expected Life	—	5 years
Dividend Yield	—	0.00%

Option valuation models require the input of highly subjective assumptions including the expected option life. Because the Company’s employee stock options have characteristics significantly different from those of traded options, and because changes in the subjective assumptions can materially affect the fair value estimate, the existing models do not necessarily provide a reliable single measure of the fair value of its employee stock options.

For the three months ended September 30, 2013 and 2012, 1,500 and 1,500 stock options were exercised under a cashless program resulting in the issuance of 834 and 938 shares and an excess tax benefit of $1,100 and $1,700, respectively. For the nine months ended September 30, 2013 and 2012, 3,000 and 36,000 stock options were exercised under a cashless program resulting in the issuance of 1,682 and 22,808 shares and an excess tax benefit of $2,300 and $42,000, respectively.

The Company recognized $831 and $11,821 stock-based compensation expense for the three months ended September 30, 2013 and 2012, respectively and $18,971 and $32,067 for the nine months ended September 30, 2013 and 2012, respectively.

As of September 30, 2013, there was $832 of unrecognized compensation costs related to non-vested stock options, which will be amortized to expense over future periods. The Company expects to recognize that cost over the weighted average vesting period of 0.25 years.

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Income Taxes and Available Tax Loss Carryforwards - Difference in Income Taxes Computed by Applying Effective Income Tax Rates (Detail) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Income Tax Disclosure [Abstract]
Expected Provision at US Statutory Rate	$ 117,800	$ 112,800	$ 415,600	$ 403,900
State Income Tax Net of Federal Benefit	9,600	12,000	41,500	43,200
Nondeductible Expenses	400	400	1,300	1,200
Income Tax Expense / (Benefit)	$ 127,800	$ 125,200	$ 458,400	$ 448,300

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Concentration and Credit Risk - Company's Customer Base (Detail)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Risks And Uncertainties [Abstract]
Customer 1	27.00%	30.00%	31.00%	31.00%
Customer 2	20.00%	24.00%	22.00%	29.00%
Total	47.00%	54.00%	53.00%	60.00%

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Subsequent Events

9 Months Ended

Sep. 30, 2013

Subsequent Events [Abstract]

Subsequent Events

Note K - Subsequent Events

In October, 2013 the Company entered into an agreement with Nordion for the purchase and installation of 200,000 curies of Cobalt at an estimated cost of $675,000. The Cobalt shipment and installation date will not be known until completed.

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Accrued Liabilities

9 Months Ended

Sep. 30, 2013

Payables And Accruals [Abstract]

Accrued Liabilities

Note G - Accrued Liabilities

Effective January 1, 2011, the Board of Directors modified the President’s employment contract to include a resignation clause. This clause provides two weeks base pay for every full year worked for the company, if a nine month notice is received before the President leaves. As of September 30, 2013, an accrual of $51,700 is recorded in relation to the resignation clause.

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Business Description and Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2013

Accounting Policies [Abstract]

Business Description and Summary of Significant Accounting Policies

Note B - Business Description and Summary of Significant Accounting Policies

The Company was organized in December 1985 and is engaged in the business of operating a gamma irradiation facility using Cobalt 60 for the sterilization of medical, surgical, pharmaceutical and packaging materials. It also disinfects fruits, vegetables, oysters and meat products to enhance safety or eliminate insect pests.

1. Use of Estimates

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

2. Revenue Recognition

The primary source of revenue is from treating products with gamma radiation from Cobalt 60. Net Revenue is the gross income from such processing less allowances, if any. Revenues are recorded after the Company’s performance obligation is completed and product has been processed in accordance with the customer’s specifications and collection of the resulting receivable is probable.

3. Accounts Receivable and Allowances for Doubtful Accounts

Accounts receivable are customer obligations arising from the sale of services and are due under normal trade terms requiring payment within 30 days from the invoice date. Accounts over ninety days are monitored closely by Management and delinquencies are determined based on payment history, aging analysis and any specific known troubled assets. Receivables are charged off to the allowance for doubtful accounts once Management determines that they are uncollectible.

4. Property, Plant and Equipment

Property, plant and equipment are stated at cost. Before 2012, depreciation for assets other than cobalt has been computed on the straight-line method for both financial reporting and income tax purposes. Beginning in 2012, depreciation for assets other than cobalt has been computed on the straight-line method for financial reporting purposes and on the accelerated methods for income tax purposes for any new assets.

The useful lives of property, plant and equipment for purposes of computing depreciation are:

Building	31.5-40 Years
Furniture and Equipment	5-15 Years

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

Estimated useful lives are periodically reviewed and if warranted, changes will be made accordingly.

Nordion is the Company’s supplier of Cobalt 60. When Cobalt is purchased, Nordion agrees to accept the return of all Cobalt 60 that has reached the end of its useful life for a fee. The Company’s facility has the capacity to store the Cobalt 60 and there is no regulatory or industry requirement stating when the Cobalt needs to be returned. Management periodically reviews the value of the Cobalt 60 and has determined an environmental remediation liability is not necessary since the value of the Cobalt 60 exceeds the disposal costs.

5. Cash and Cash Equivalents

All highly liquid investments with original maturities of three months or less are considered to be cash and cash equivalents.

6. Concentration of Credit Risk

The Company maintains its cash in three financial institutions. The Federal Deposit Insurance Corporation insured up to $250,000 per legal entity per financial institution and all funds in noninterest-bearing transaction accounts until December 31, 2012. As of January 1, 2013 noninterest-bearing transaction accounts no longer receive unlimited deposit insurance coverage. The Company’s uninsured balances totaled approximately $2,905,822 as of September 30, 2013 and $144,736 as of December 31, 2012.

7. Earnings Per Share

Basic earnings per share are computed using the weighted average number of common shares outstanding. Diluted earnings per share are computed by the weighted average number of common shares outstanding, plus the effect of common stock equivalents that are dilutive.

8. Fair Value of Financial Instruments

The carrying value of cash, accounts receivable, prepaid expenses, deposits, accounts payable and accrued liabilities approximate fair value.

9. Stock Option Plans

The Company has various stock option plans for employees and other individuals providing services to or serving as Directors of the Company. (See Note H - Stock Options) Compensation cost under the plans is recognized using the fair value recognition provisions of FASB ASC 718. Such cost is recognized for shares expected to vest on a straight-line basis over the requisite service period of the award using the Black-Scholes option-pricing model. FASB ASC 718 requires the benefits of tax deductions in excess of the compensation cost recognized for those options to be classified as financing cash inflows rather than operating cash inflows. This amount is shown as excess tax benefit from share based compensation on the statements of cash flows. The excess tax benefits from the expired options are recorded in additional paid-in capital and any tax benefits from stock options expired unexercised are offset to the extent of any remaining balance.

10. Advertising

The Company expenses all advertising costs when incurred. Advertising expense recognized for the three months ended September 30, 2013 and 2012 was $1,237 and $2,675, respectively, and for the nine months ended September 30, 2013 and 2012 was $16,053 and $5,327, respectively.

11. Reclassification

Certain reclassifications have been made to the prior year’s financial statements to conform to the current year’s presentation.

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Accrued Liabilities - Additional Information (Detail) (USD $)	9 Months Ended
	Sep. 30, 2013
Payables And Accruals [Abstract]
Change other employee related liabilities	$ 51,700
Employee termination clause	Two weeks base pay for every full year worked for the company, if a nine month notice is received before the President leaves

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Income Taxes and Available Tax Loss Carryforwards (Tables)

9 Months Ended

Sep. 30, 2013

Income Tax Disclosure [Abstract]

Components of Income Tax / (Benefit)

The components of income tax / (benefit) are as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2013		2012		2013		2012
Current
Federal	$	—	$	—	$	—	$	—
State		2,100		—		2,100		—
Total Current		2,100		—		2,100		—
Deferred-Benefit
Federal		113,000		106,900		395,300		382,800
State		12,700		18,300		61,000		65,500
Total Deferred-Benefit		125,700		125,200		456,300		448,300
Total Income Tax Expense/(Benefit)	$	127,800	$	125,200	$	458,400	$	448,300

Difference in Income Taxes Computed by Applying Effective Income Tax Rates

Income taxes differ from the amounts computed by applying the effective income tax rates of 37.63% to income before income taxes as a result of the following:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2013		2012		2013		2012
Expected Provision at US Statutory Rate	$	117,800	$	112,800	$	415,600	$	403,900
State Income Tax Net of Federal Benefit		9,600		12,000		41,500		43,200
Nondeductible Expenses		400		400		1,300		1,200
Income Tax Expense / (Benefit)	$	127,800	$	125,200	$	458,400	$	448,300

NOL Carryforwards

The Company’s NOL carryforward is as follows:

	As of September 30, 2013						As of December 31, 2012
	Federal			State			Federal			State
NOL Carryforward - Beginning Of Period		1,605,865			1,108,671			2,071,925			2,071,925
Less Used		(1,235,750	)		(1,108,671	)		(466,060	)		(963,254	)
NOL Carryfoward - End Of Period		370,115			—			1,605,865			1,108,671

Deferred Tax Assets and (Liabilities)

The components of the Company’s deferred tax assets and (liabilities) are as follows:

	As of September 30, 2013					As of December 31, 2012
	Current		Noncurrent			Current		Noncurrent
NOL Carryforward	$	94,900	$	24,000		$	521,000	$	56,000
Accured Liabilities		—		19,500			—		19,500
Share-Based Compensation		—		43,300			—		38,500
Property, Plant & Equipment		—		(241,700	)		—		(239,400	)
Net Deferred Tax Asset/(Liability)	$	94,900	$	(154,900	)	$	521,000	$	(125,400	)

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Concentration and Credit Risk

9 Months Ended

Sep. 30, 2013

Risks And Uncertainties [Abstract]

Concentration and Credit Risk

Note J - Concentration and Credit Risk

Although the Company continues to diversify its customer base it does a significant amount of its total business with the following customers.

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2013			2012			2013			2012
Customer 1		27	%		30	%		31	%		31	%
Customer 2		20	%		24	%		22	%		29	%
Total		47	%		54	%		53	%		60	%

The Company’s cash and accounts receivable are subject to potential credit risk. Management continuously monitors the credit standing of the financial institutions and customers with which the Company deals. A provision has been made for doubtful accounts which historically have not been significant.

The Company’s supplier of Cobalt 60 is Nordion (Canada) Inc. In the event it is unavailable from Nordion the Company can obtain Cobalt 60 from one other source.

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Concentration and Credit Risk (Tables)

9 Months Ended

Sep. 30, 2013

Risks And Uncertainties [Abstract]

Company's Customer Base

Although the Company continues to diversify its customer base it does a significant amount of its total business with the following customers.

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2013			2012			2013			2012
Customer 1		27	%		30	%		31	%		31	%
Customer 2		20	%		24	%		22	%		29	%
Total		47	%		54	%		53	%		60	%

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Stock Options (Tables)

9 Months Ended

Sep. 30, 2013

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock Options Granted and Outstanding

2009 Plan is 125,000 shares. Options granted and outstanding under this plan are as follows:

Year	Granted		Outstanding
Before 2011		23,000		17,000
2011		10,000		10,000
2012		10,000		10,000
		43,000		37,000

Company's Stock Options

A summary of the status of the Company’s stock options is as follows:

	Number of Shares			Wtd. Avg. Exercise Price		Wtd. Avg. Remaining Contractual Life (Yrs)
Outstanding At December 31, 2012		105,500		$	2.10		4.50
Granted		—		$	—
Exercised		(3,000	)	$	2.18
Expired/Forfeited		(5,500	)	$	2.18
Outstanding At September 30, 2013		97,000		$	2.09		4.11
Vested/Exercisable At September 30, 2013		85,000		$	2.25		3.95

Company's Nonvested Stock Options

A summary of the status of the Company’s nonvested stock options is as follows:

	Number of Shares		Wtd. Avg. Grant Date Fair Value
Nonvested, At December 31, 2012		12,000	$	0.28
Granted		—	$	—
Vested		—	$	—
Nonvested, At September 30, 2013		12,000	$	0.28
Expired/Forfeited During Period		5,500	$	0.75

Estimated Fair Value Using Black Scholes Option Valuation Model

The Company estimated the fair value at the date of grant using the Black Scholes option valuation model with the following assumptions:

	Nine Months Ended September 30,
	2013	2012
Risk Free Interest Rate	—	0.62-1.04%
Expected Volatility	—	80.06-80.25%
Expected Life	—	5 years
Dividend Yield	—	0.00%

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Document and Entity Information	9 Months Ended
	Sep. 30, 2013	Oct. 31, 2013
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2013
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q3
Entity Registrant Name	FOOD TECHNOLOGY SERVICE INC
Entity Central Index Key	0000868267
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		2,837,133

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Earnings Per Share (Tables)

9 Months Ended

Sep. 30, 2013

Earnings Per Share [Abstract]

Computation of Basic and Diluted Per Share

The following table sets forth the computation of basic and diluted per share information:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2013		2012		2013		2012
Numerator:
Net Income	$	218,630	$	206,487	$	763,753	$	739,671
Denominator:
Wtd. Avg. Common Shares Outstanding		2,837,133		2,827,042		2,836,344		2,817,790
Dilutive Effect of Stock Options		87,000		110,500		87,000		110,500
Wtd. Avg. Common Shares Outstanding, Assuming Dilution		2,924,133		2,937,542		2,923,344		2,928,290

Out of Money Stock Options Excluded from Computation of Diluted EPS

Out of the money options excluded from the computation of diluted EPS:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2013		2012		2013		2012
Stock option with exercise price of $6.26		10,000		—		10,000		—