FORM 10-Q

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2014

TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

For the transition period from____________ to _____________

Commission file number 000-31385

GLOBAL FOOD TECHNOLOGIES, INC.

(Exact name of registrant as specified in charter)

	Delaware	52-2257546
	(State incorporation)	(IRS Employer
		Identification No.)

	802 N Douty Street, Hanford, California	93230
	(Address of principal executive offices)	(zip code)

559-589-0100

(Issuer’s telephone number)

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

Yes x No ¨

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 (§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 ¨ No x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, non-accelerated filer, or a smaller reporting company.

Large accelerated filer ¨ accelerated filer ¨ non accelerated filer ¨ smaller reporting company x

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

Indicate the number of shares outstanding of each issuer’s classes of common equity, as of the last practicable date:

Class		Outstanding as of October 31, 2014
Common stock, par value $0.0001		33,167,701

GLOBAL FOOD TECHNOLOGIES, INC.

QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 2014

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION	3
ITEM 1. FINANCIAL STATEMENTS	3
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	12
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	17
ITEM 4. CONTROLS AND PROCEDURES	17

PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS	17
ITEM 1A. RISK FACTORS	17
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	20
ITEM 3. DEFAULTS UPON SENIOR SECURITIES	20
ITEM 4. MINE SAFETY DISCLOSURES	20
ITEM 5. OTHER INFORMATION	20
ITEM 6. EXHIBITS	21

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Contrary to the rules of the SEC, the Company's condensed consolidated financial statements included in this filing have not been reviewed by an independent public accountant in accordance with professional standards for conducting such reviews.

GLOBAL FOOD TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

ASSETS	September 30, 2014 (Unaudited)			December 31, 2013
Current Assets
Cash	$	11,830		$	78,468
Prepaid expenses		-			10,245
Total Current Assets		11,830			88,713

Property and Equipment, net		-			258,214

Other Assets		5,482			8,782

TOTAL ASSETS	$	17,312		$	355,709

LIABILITIES AND STOCKHOLDERS’ DEFICIT

Current Liabilities
Accounts payable	$	59,101		$	142,082
Accrued liabilities		1,071,316			896,350
Notes payable – related parties		250,000			250,000
Convertible notes payable		2,396,000			1,546,000
Trade finance notes payable		689,423			689,423
Note payable		1,690,000			1,690,000
Total Current Liabilities		6,155,840			5,213,855



Stockholders’ Deficit:
Convertible Series C Preferred stock, $0.0001 par value, 1,500,000 shares authorized, 399,613 shares issued and outstanding, liquidation preference of $4.50 per share		40			40
Common stock, $0.0001 par value, 100,000,000 shares authorized, 33,167,701 and 33,115,701 shares issued and outstanding at September 30, 2014 and December 31, 2013, respectively		3,317			3,312
Additional paid-in capital		69,190,832			69,073,837
Accumulated deficit		(75,332,717	)		(73,935,335	)
Total Stockholders’ Deficit		(6,138,528	)		(4,858,146	)

TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	17,312		$	355,709

See accompanying notes to condensed consolidated financial statements

GLOBAL FOOD TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
		2014			2013			2014			2013
Revenues	$	-		$	-		$	-		$	830,031
Cost of goods sold		-			-			-			770,305
Gross profit		-			-			-			59,726

Expenses
Marketing		47,730			102,891			239,731			701,753
General and administrative		165,455			185,164			494,746			514,960
Research and development		49,755			71,155			202,269			319,404
Depreciation		-			35,584			34,584			104,752
Interest		78,219			71,271			288,422			279,021
Impairment of iPura system		223,630			231,653			223,630			231,653
Total expenses		564,789			697,718			1,483,382			2,151,543

Gain on legal settlement		-			-			86,000			-

NET LOSS	$	(564,789	)	$	(697,718	)	$	(1,397,382	)	$	(2,091,817	)

Undeclared dividends on Preferred Stock		35,965			35,965			107,895			107,895

Net loss attributable to Common Stockholders		(600,754	)		(733,683	)		(1,505,277	)		(2,199,712	)

Loss per common share, basic and diluted	$	(0.02	)	$	(0.02	)	$	(0.05	)	$	(0.07	)

Weighted average common shares outstanding, basic and diluted		33,167,701			33,023,374			33,141,701			32,961,572

See accompanying notes to condensed consolidated financial statements

GLOBAL FOOD TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

For the Nine Months Ended September 30, 2014

(Unaudited)

	Preferred Stock Shares Amount			Common Stock Shares Amount				Additional Paid-in Capital		Accumulated Deficit			Total Stockholders’ Deficit
Balance, December 31, 2013		399,613	40		33,115,701	$	3,312	$	69,073,837	$	(73,935,335	)	$	(4,858,146	)
Common stock issued for accrued liabilities					52,000		5		116,995					117,000
Net loss		-	-		-		-		-		(1,397,382	)		(1,397,382	)
Balance, September 30, 2014		399,613	40		33,167,701	$	3,317	$	69,190,832	$	(75,332,717	)	$	(6,138,528	)

See accompanying notes to condensed consolidated financial statements

GLOBAL FOOD TECHNOLOGIES, INC.

CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)

	For the Nine Months Ended September 30,
		2014			2013
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(1,397,382	)	$	(2,091,817	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		34,584			104,752
Impairment of iPura systems		223,630			231,653
Changes in operating assets and liabilities:
Accounts receivable		-			29,780
Inventory		-			364,320
Prepaid expenses		10,245			(12,821	)
Other assets		3,300			(3,082	)
Accounts payable		(82,981	)		54,690
Accrued liabilities		291,966			230,332
Net cash used in operating activities		(916,638	)		(1,092,193	)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from convertible notes payable		850,000			50,000
Proceeds trade finance from notes payable		-			(553,000	)
Principal payments on trade finance notes payable		-			850,000
Sale of common stock and warrants, net		-			442,700
Net cash provided by financing activities		850,000			789,700

NET DECREASE IN CASH		(66,638	)		(302,493	)

CASH – BEGINNING OF PERIOD		78,468			411,265

CASH – END OF PERIOD	$	11,830		$	108,772

SUPPLEMENTAL DISCLOSURES
Interest paid in cash	$	79,120		$	106,498
Non-cash financing transactions:
Issuance of common stock for accrued liabilities	$	117,000		$	117,000

See accompanying notes to condensed consolidated financial statements

GLOBAL FOOD TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2014

1. Description and nature of the business, organization and basis of presentation.

Global Food Technologies, Inc., a Delaware corporation, (“GFT”, “we”, “our” or the “Company”) is a life sciences company focusing on (1) the commercialization of food safety applications for our proprietary scientific food processing technologies, which are designed to make certain products safer for human consumption by reducing disease-causing bacteria; (2) our iPura^®Food Safety and Quality Assurance Service Program (“The iPura^® Program”), which is a comprehensive food safety and quality assurance program focused on the execution of extraordinary food safety measures at the source of food production to increase the safety and quality of the food; (3) the promotion and sales of food products that have been treated under the iPura^®Program and bear our iPura^® consumer food safety seal; and (4) licensing of the iPura^® seal.

The Company is a registrant under rules and regulations of the United States Securities and Exchange Commission (“SEC”) but has not obtained a listing on any stock exchange.

Going concern

The accompanying condensed consolidated financial statements have been prepared on the basis that the Company will continue as a going concern, which assumes the realization of assets and the satisfaction of liabilities in the normal course of business. At September 30, 2014, the Company has an accumulated deficit approximating $75,300,000, and for the nine months ended September 30, 2014, negative cash flows from operations of approximately $917,000. Additionally, the Company has negative working capital at September 30, 2014 of approximately $6,100,000. The Company’s ability to continue as a going concern is predicated on its ability to raise additional capital, increase sales and margins, and ultimately achieve sustained profitable operations. The uncertainty related to these conditions raises substantial doubt about the Company’s ability to continue as a going concern. The accompanying condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Based on the Company’s cash balance at September 30, 2014, management estimates that it will need to raise additional capital in the amount of approximately $100,000 per month to cover operating and capital requirements for the remainder of the 2014 fiscal year and subsequent periods until such time that the Company is able to resume generating revenues. Management plans on raising the additional needed capital through issuing additional shares of common stock or other equity securities, or obtaining debt financing. In addition, management will explore commercial and joint venture financing opportunities if and when they arise. Although management has been successful to date in raising necessary funding, there can be no assurance that required future financing can be successfully completed on a timely basis, or on terms acceptable to the Company. Any capital raised may involve issuing additional shares of common stock or other equity securities, or obtaining debt financing.

Basis of presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America for interim financial information and pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments considered necessary in order to make the financial statements not misleading, have been included. These financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K and 10-K/A for the year ended December 31, 2013, filed with the SEC on March 28, 2014 and April 11, 2014, respectively. The results of operations for the quarter ended September 30, 2014 are not necessarily indicative of the results expected for a full year or for any future period. The condensed consolidated balance sheet as of December 31, 2013 and any related disclosures have been derived from the December 31, 2013 audited financial statements filed in the Company’s 2013 Form 10-K and 10-K/A.

Principles of consolidation

The accompanying consolidated financial statements include the accounts of Global Food Technologies, Inc. and its wholly owned subsidiary, iPura Food Distribution Company, Inc. All significant intercompany balances and transactions have been eliminated in consolidation.

Accounting policies

Use of Estimates

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

Revenue Recognition

The Company recognizes revenues when all of the following conditions exist: a) persuasive evidence of an arrangement exists in the form of an accepted purchase order; b) delivery has occurred, based on shipping terms, or services have been rendered; c) the Company’s price to the buyer is fixed or determinable, as documented on the accepted purchase order; and d) collectability is reasonably assured.

Inventory

The Company records inventory at the lower of cost (first-in, first-out) or market. Market is determined by comparison with recent sales or net realizable value. Management reviews the carrying value of inventory in relation to its sales history and industry trends to determine an estimated net realizable value. Changes in economic conditions or customer demand could result in obsolete or slow moving inventory that cannot be sold or must be sold at reduced prices and could result in an inventory reserve. The Company did not have any inventory or inventory reserves at September 30, 2014 or December 31, 2013.

Property and Equipment

Property and equipment was stated at cost and consisted of our iPura systems equipment. 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. The two operational equipment systems are located in China and are considered impaired as of September 30, 2014, as there are no definitive plans to restore them to operational status. The two systems in China were capitalized at an installed cost of $691,664 with related accumulated depreciation of $468,034 and $433,450, respectively, as of September 30, 2014 and December 31, 2013, which were offset resulting in an impairment charge of $223,630 as of September 30, 2014. Two other systems that have not been placed in service have previously been fully impaired as of September 30, 2014 and December 31, 2013.

Long-lived Assets

We review long lived assets for events or changes in circumstances that indicate that their carrying value may not be recoverable. An impairment loss is recognized when the carrying amount of the long-lived asset is not recoverable and exceeds its fair value. The carrying amount of a long-lived asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. Any required impairment loss is measured as the amount by which the carrying amount of a long-lived asset exceeds its fair value and is recorded as a reduction in the carrying value of the related asset and a charge to operating results.

Loss per Common Share

Basic and fully diluted cost per common shares for the three months ended September 30, 2014 were the same as potential common shares, consisting of 399,613 common shares underlying outstanding convertible Series C preferred stock, 9,707,821 common shares underlying outstanding warrants and 1,345,000 common shares underlying outstanding stock options have been excluded from the loss per share calculation, as their inclusion would be antidilutive.

Subsequent Events

Management has evaluated events subsequent to September 30, 2014 through the date that the accompanying condensed consolidated financial statements were filed with the Securities and Exchange Commission for transactions and other events which may require adjustment of and/or disclosure in such financial statements.

Reclassifications

Certain reclassifications have been made to the December 31, 2013 condensed consolidated financial statements to conform to the September 30, 2014 presentation.

2. Trade Finance Notes Payable

As an alternative to commercial trade financing and factoring, the Company instituted a program of issuing one year promissory notes, at the time secured by inventory or iPura equipment systems, with annual interest rates from 8.2% to 9.0%. The funds are received and controlled by a third party custodian. The notes are unsecured. At September 30, 2014 and December 31, 2013, the Company owed $689,423 in trade financing debt. Individual notes mature on their anniversaries throughout 2015 and based on past renewal activity the Company expects that the majority will be renewed upon maturity. Currently, the Company does not have the ability or resources to repay such loans if the debt is not renewed or a demand is made for repayment in full when due.

3. Convertible Notes Payable

In 2010, the Company borrowed $126,000 from a third party. The note had a one year term and was renewed at its maturity. The note is now due in July 2015, bears annual interest of 9%, is unsecured, and is convertible into common stock at any time at a fixed price of $4.50 per share. An additional $120,000 was borrowed from the same third party in 2010 and 2011 in the form of two one year notes bearing interest of 9% one of these notes was renewed at maturity and are now due in June 2015. The original note included 14,000 warrants, with an exercise price of $7.00 per share and a term of 2 years. Currently, the Company does not have the ability or resources to repay such loans along with accrued interest if a demand is made for repayment upon maturity.

In August 2013, a debt financing facility for a total commitment of $1.6 million was finalized with an existing shareholder. All of the commitment has been received and the balance owed at September 30, 2014 is $1,600,000. The debt carries simple interest at 3% payable at maturity. The facility had a term of one year and was renewed for one additional year at the option of the Company. Both principal and interest, all or in part, are convertible into shares of the Company’s Common Stock, at any time at the election of the lender, at the rate of $2.39 per share. Currently, the Company does not have the ability or resources to repay such loan along with accrued interest, if a demand is made for repayment in full at the maturity date of August 2015.

On May 1, 2014, an additional debt financing facility for a total commitment of $550,000 was finalized with an existing shareholder. Upon signing, the Company received initial loan proceeds of $230,000. The commitment includes loans for an additional $310,000 in four tranches of $80,000 each due on the first of each subsequent month, beginning on June 1, 2014. As of September 30, 2014, the balance owed on this debt was $550,000. The debt carries simple interest at 3% payable in Common Stock at maturity. The facility has a term of one year and is annually renewable for an additional year at the option of the Company. The principal is convertible into shares of the Company’s Common Stock, at any time at the election of the lender, at the rate of $2.39 per share. Currently, the Company does not have the ability or resources to repay such loan along with accrued interest, if a demand is made for repayment in full at the maturity date of May 2015.

4. Notes Payable - Related Parties

In 2006, we arranged a 30 day bridge loan in the amount of $350,000 from a non-principal shareholder. The loan bears interest at 8% and is secured by all Company assets, including any intellectual property assets. Additional consideration included the issuance of warrants to purchase 35,000 shares of our common stock. The warrants are exercisable at $4.50 per share for two years from the date of repayment. In July 2006, $100,000 of principal was repaid. The remaining balance of $250,000 is due on demand. The loan is guaranteed by the President of the Company. Currently, the Company does not have the ability or resources to repay such loan along with accrued interest, if a demand is made for repayment in full.

5. Note Payable

In November 2010, a stockholder resident in the United Kingdom loaned the Company $1,300,000 on a six month note bearing interest at 18% per year. The note was extended for an additional six months and has been renewed at each maturity for an additional six months. The May, 2014 renewal involved issuing a renewal bonus of $58,500, charged to interest expense and paid in shares of common stock at $2.25 per share, to reduce the interest rate to 9% per year. The first six month renewal bonus was paid in November 2011 with the issuance of 26,000 shares. Additional 26,000 share issuances were made at each subsequent renewal in May and November. Interest is payable at maturity in shares of Company common stock at the rate of $2.25 per share and is recorded as interest expense ratably as incurred. At the sole option of the lender, the principal may also be converted into shares of Company common stock at the fixed rate of $2.25 per share. The Note is secured by all of the assets of the Company and is subordinate to the 2006 shareholder note of $250,000. The note has been renewed with a new maturity date of November 22, 2014. Currently, the Company does not have the ability or resources to repay such loan along with accrued interest, if a demand is made for repayment in full at the maturity date of November 22, 2014.

In 2006, we arranged for three loans aggregating $290,000 from a Director of the Company. Two of the loans aggregating $190,000 are demand loans and bear interest of 8%. The third loan for $100,000 matured July 18, 2006, and was repaid on its due date. Additional consideration for the three loans was approved by the Company’s Board of Directors in August 2006, in the form of warrants to purchase 29,000 shares of common stock. The warrants are exercisable at $4.50 per share for two years from the date of repayment. In August 2006, we arranged for a fourth loan, a six month bridge loan, for $100,000 from the Director bearing interest at 8%. The loan was renewed each subsequent maturity for an additional six months and now matures in November 2014. In November 2010, for the same 12% interest rate, the Company borrowed an additional $100,000 from such director, due on demand. The current indebtedness to the Director is $390,000, all of which is unsecured. The Director resigned his position in 2013 and is no longer affiliated with the Company. Currently, the Company does not have the ability or resources to repay such loan along with accrued interest of approximately $204,000, if a demand is made for repayment in full.

6. Stockholders’ Deficit

Common Stock Issuances

We have been selling stock to fund operations since inception and expect to continue to sell stock to fund continued operations.

In the three month period ended September 30, 2014, there were no issuances of common stock or warrants to purchase common stock for cash.

7. Commitments and Contingencies

On May 15, 2014, we settled the litigation involving a property lease in Hanford for a commitment to pay $50,000 cash on or before November 15, 2014. The lawsuit was the culmination of a 3 year dispute over various aspects of the lease and occurred with the change of ownership of the property. An amount of $136,000 was previously accrued in this matter. Accordingly, the Company recorded a gain on settlement of $86,000 during the quarter ended September 30, 2014.

On July 10, 2014, we negotiated a payment arrangement on an existing trade payable liability with a seafood supplier in China totalling $116,996. This represents inventory purchases early in 2013 and subsequently sold to Safeway. Safeway required relabeling of most of this inventory involving significant added costs and therefore payment was delayed both from Safeway and to the supplier resulting in this residual amount owing to the supplier. We agreed to pay finite amounts each month and the balance on January 31, 2015. The unpaid balance accrues interest at 3% which increases to 10% upon default. The October payment was not made and the agreement is in default.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Company Overview

The iPura® brand and 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.

The iPura® Food Safety Program is the constitution of the iPura® food safety brand, which includes:

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 is designed to help the food distribution 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.

From the commencement of our research and development activities in 2001, we have raised substantial equity capital to fund the development of our iPura® Program. The market application chosen for the Program was imported seafood. 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. The collapse of the Chilean salmon industry shifted our focus to China produced tilapia and Vietnamese produced swai (catfish), for which production systems were installed. In 2009, we completed the installation of our first iPura^® System in China at Tongwei (Hainan) Aquatic Products Co., and began producing our first order of inventory and selling it in the United States. We installed at another processor in China, the “Evergreen Aquatic facility” that was operational for production for Safeway Inc. through 2013. Another system is in storage at Caseamex in Vietnam and has never been operational.

The Company executed its marketing strategy, within the constraints of our limited capital resources, by promoting the iPura® brand to food processors and industry associations as the world’s first food safety label. In addition to selling to retail chains on a wholesale basis, we promoted a private label program to large retailers and now to importers, to exclusively source iPura labeled products to protect their own brand. In our vision, an established leader would enthusiastically “champion” the iPura® brand by promoting the iPura® logo next to its name on their product packaging, with the iPura® seal also displayed on the individually wrapped fillets inside the package (“iPura® inside”). This would communicate to customers that the retailer is doing everything possible to improve food safety, food quality and sustainability of natural resources. Our value proposition to retailers and importers was that sourcing iPura® products will allow the them to increase control & trust of foreign suppliers, protect their brand and company image, and increase sales with repeat purchases due to superior products. We refined our marketing target to large volume retailers such as Safeway, Inc. and developed a private label program with a cost plus price model, earning a gross profit per pound with full transparency on cost of raw materials, the iPura® Program, logistics and a gross profit for the Company. Safeway promoted the product in its western division and embraced the iPura Program. In late 2013, Safeway hired an investment bank to take it private. Pursuant to these plans, we believe that Safeway shifted its focus to commodity pricing to maximize short term results and therefore discontinued the iPura Program in its infancy. Losing Safeway as a customer negatively impacted our credibility in the seafood marketplace along with our plans to increase consumer awareness of our brand through sales with a major grocery store chain. Due to a lack of resources and revenue, we had to abandon the importer role and with limited financing, directed our efforts to brokering the iPura product to other importers for distribution to our customers, since our “importer” model requires significant working capital and inventory financing.

Faced with these significant setbacks, and having been unable to find new customers to replace the lost seafood sales to Safeway, we decided our best approach would be to (1) create strategic alliances with Companies that share our common objectives and synergies, and (2) tell our story to the media in an effort to regain public support for our food safety solution, thereby putting pressure on retailers to source cleaner and safer products for consumers. We also decided to explore licensing technology from other companies so that we could have the potential to move more quickly into other markets without the need for the large research and development costs that we have incurred in the past. Our goal is to have strategic partners work together under the iPura Program umbrella and branding to create common success.

As a result of our discussions and collaborations with these potential strategic partners, we have plans to add new food safety weapons to attack a key market – poultry. Poultry is on the front line due to the food safety failures that are well publicized by the media. We are working with Force Technology of Denmark, who has invented a food sanitation method (www.sonosteam.com) that we believe has the potential to change how poultry is processed.

We have developed the iPura Poultry Program for domestic poultry production. As contemplated, this system would incorporate the technology from Force Technology. We have had productive discussions with Force Technology, but have not yet executed any definitive licenses or other agreements with them.

Concurrently with our ongoing discussions with Force Technology, we have submitted a proposal to the Food Safety Inspection Service (FSIS) of the United States Department of Agriculture (USDA) for an in-plant trial of the iPura Poultry Program. The success of this program could create a service revenue for GFT on a cents-per-pound charge. If successful, GFT intends to operate this model as a service model which will avoid the cost of purchasing, marketing and distributing the product. We believe that, if successful, the interventions created under the poultry program will be the basis of the creation of future iPura programs for meat, pork and turkey. In addition, if we can successfully brand and promote our iPura Poultry Program and gain retailer acceptance, we believe this will provide us with the credibility and market opportunity with retailers to possibly resume sales of iPura branded seafood.

In conjunction with Force Technology, our new poultry model envisions other strong established companies will contribute their expertise and experience in antimicrobial solutions and the related application equipment, electrostatic spray systems, sanitation protocols and plant engineering. Other companies will participate as “vendors” as opposed to revenue sharing partners. Science and research partners in government and academia have already contributed with more formal relationships with institutions expected to be formalized into programs and studies.

If we can successfully provide a clean high-tech solution to the poultry industry, we have the potential to capture the largest single market in the food industry and open doors for seafood and other iPura programs. With the expert support of our strategic partners, we hope to create a novel and simple platform for the highest standards in food safety for poultry and seafood. If we can successfully finalize negotiations for exclusive U.S. licenses, then the addition of SonoSteam to the iPura Program, as well as electrostatic delivery of organic chemicals, would allow GFT to potentially control clean and powerful technology combinations that would be only available through the iPura Program.

Liquidity and Capital Resources

At September 30, 2014, the Company has an accumulated deficit approximating $75,300,000, and for the nine months ended September 30, 2014, negative cash flows from operations of approximately $917,000. Additionally, the Company has negative working capital at September 30, 2014 of approximately $6,100,000. The Company’s ability to continue as a going concern is predicated on its ability to raise additional capital, increase sales and margins, and ultimately achieve sustained profitable operations. The uncertainty related to these conditions raises substantial doubt about the Company’s ability to continue as a going concern. The accompanying condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Historically, our primary source of cash has been the sale of equity instruments to investors, as well as loans and debt instruments. At times, debt instruments have been a larger source of financing than stock sales. Although we are continuing to pursue sales opportunities and hope to resume generating revenue within the next 12 months, there can be no assurances that these sales efforts will be successful. In addition, if we are able to resume sales in the next twelve months, any such revenues that are generated are not expected to cover our operating expenses.

Based on our cash balance as of September 30, 2014, we are in need of immediate additional financing to fund our current operating and working capital requirements. Furthermore, we believe that we will need approximately $100,000 per month to cover operating expenses and capital requirements for the remainder of the 2014 fiscal year and subsequent periods until such time that the Company is able to resume generating revenues. If we are unable to reach an agreement with an importer to cover seafood inventory costs, then we would also need a financing vehicle or a line of credit to finance the inventory of iPura® product. The amount of capital required will vary depending on a variety of factors, many of which are beyond our control. We cannot provide assurance that funds from our future operations or funds provided by our current financing activities will meet our capital requirements, and in that event, we will continue to seek additional sources of financing to maintain liquidity. Any additional capital we raise will likely involve issuing additional shares of common stock or other equity securities, or obtaining debt financing, which could be convertible into equity securities. However, at this point, we have not specifically identified the type or sources of this required funding.

As of September 30, 2014, we had trade indebtedness in the ordinary course of business as well as other debt in the form of continuing short term loans due on demand of $250,000 from a non-principal shareholder, which is secured by all Company assets, including any intellectual property assets. Currently, the Company does not have the ability or resources to repay such loan along with accrued interest, if a demand is made for repayment in full.

In August 2013, a convertible debt financing facility for a total commitment of $1.6 million was finalized with an existing shareholder. The last of the commitment was received in February 2014 and the principal balance on the one year note is $1,600,000 at September 30, 2014. Such debt financing facility has been renewed through August 2015. An additional convertible debt facility was established in May 2014 in the amount of $550,000 with all proceeds received as of September 30, 2014.

We also have other convertible notes payable totaling $246,000 payable to a third party. The notes mature in July 2015. Currently, the Company does not have the ability or resources to repay such loans along with accrued interest if a demand is made for repayment.

We had implemented a trade financing program for individual accredited investors as an alternative to traditional commercial inventory financing and factoring. This financing program issued one year promissory notes, secured by inventory and equipment, with annual interest rates from 8.2% to 9.2%. The notes are currently unsecured. At September 30, 2014, the Company had $689,423 of these one year notes. They mature on their anniversaries throughout 2015 and, based on past renewal activity we expect that the majority will be renewed upon maturity.

In 2010, a stockholder resident in the United Kingdom loaned the Company $1,300,000 on a six month note bearing interest at 9% per year. The note has been extended for an additional six months at each maturity date and now matures in November 2014. Pursuant to a security agreement, the note is secured by all of the assets of the Company and is subordinate to a 2006 related party note of $250,000. We also have other short term notes payable totaling $390,000 from a former Director of the Company, of which $290,000 is due on demand and $100,000 is due on November 22, 2014.

Currently, we do not have the ability or resources to repay any of such loans a) when due or b) if a demand is made for repayment. In such event, the secured lenders could foreclose on all of our assets as part of its security interest.

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 provide assurance 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. We have from time to time also explored commercial and joint venture financing opportunities and relationships with potential processor/customers, and expect to continue to seek out such potential arrangements.

We believe that we have adequate plant capabilities and capacity and sufficient qualified personnel to achieve our planned operations over the next 12 months. Historically, the fabrication of major components of our iPura® System have been outsourced. We will likely continue this practice, and may also elect to outsource the integration and installation of any equipment. We plan to add non-technical support personnel to manage any increase in administrative requirements based on the availability of funding.

Results of Operations

Sales:

The Company had no sales revenue in the quarters ended September 30, 2014 and 2013 due to lapse in the long term relationship with Safeway, described in more detail below.

In 2012, we negotiated with Safeway, Inc. to expand our product offering to a co-branded two pound bag. Raw product pricing mandated that we should have a dual source for the tilapia product for Safeway, which required the installation of an iPura processing system in the Evergreen Aquatic processor. After successfully dual sourcing tilapia product, we anticipated an increase in volume from Safeway and applied a transparent pricing model of “cost plus,” which is computed on a 25 cent per pound gross profit margin. While sales did resume and continued for the first six months of 2013, Safeway rescinded acceptance of this “cost plus” model and focused on commodity pricing and the Company had to bear the actual costs, which reflected extended expensive cold storage warehousing, non-optimum delivery quantities and special labeling. After segregating special labeling as a branding cost, gross margins for Safeway became uneconomical and pricing agreements could not be reached. Communication has ceased with Safeway as a result of the resignation of key Safeway management in 2013 and the subsequent privatization of Safeway in 2014. This represents a significant setback to our sales and marketing efforts.

Expenses:

Our net loss for the quarter ended September 30, 2014 was $564,789, compared to $697,718 for the comparable period in 2013, a decrease of 19%. Operating expenses decreased significantly between the periods giving rise to the reduction in net loss. Marketing costs decreased 54% in the three months ended September 2014 compared to the same period in 2013; general and administrative costs decreased 11% and research and development costs decreased 30% in the comparable three month periods. The operating cost savings of 27% or $96,270 is solely due to scaling back activity, discretionary costs and personnel costs in a strategy refocusing.

The operating cost reduction of 39%, from $1,536,117 to $936,746 for the comparable nine month periods ended September 30, 2014 and 2013 respectively, represents 66% for marketing, 4% for general and administrative and 37% for research and development, are similarly due to the causation of the three month periods of scaling back activity, discretionary costs and personnel costs in a strategy refocusing.

Interest expense increased 10% between both the three months 2014 and 2013 periods reflecting the addition of full amount of the new debt facilities of $1,600,000 and $550,000. The smaller 3% increase for the nine month 2014 and 2013 periods reflects the addition of the $1,600,000 debt facility offset by the $688,000 reduction of trade finance debt.

Depreciation expense for the three month 2014 period was reduced to zero due to the final impairment of all of the iPura systems. The decrease of 67% between the nine month periods of 2014 and 2013 was a result of the impairment of the iPura system in Vietnam which was removed from service leaving one iPura system in China in service until it too was impaired in July 2014.

The cash used in operations decreased by approximately $176,000 or 16% between the comparable nine month periods, resulting from the reduced level of activity represented by the lower net loss and the timing of cash payments to vendors.

Off Balance Sheet Arrangements

We have no off-balance sheet arrangements.

Customer and Supplier Concentration

Our revenue for the nine months ended September 30, 2013 was primarily derived from Safeway, Inc. After the failure of negotiations over the appropriate pricing model, we ceased all sales to Safeway in the third quarter of 2013, which has had a material, negative impact on our revenue. We cannot currently estimate anticipated future customer concentration levels, given the current lack of sales.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

A smaller reporting company is not required to provide the information required by this Item.

ITEM 4. CONTROLS AND PROCEDURES

We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Securities Exchange Act of 1934, as amended, which we refer to as the Exchange Act) that are designed to ensure that information required to be disclosed in our periodic reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and that this information is accumulated and communicated to our management, including our principal executive/financial officer, to allow timely decisions regarding required disclosure.

Our management, with the participation and supervision of our Chief Executive Officer and Chief Financial Officer (“Certifying Officers”), evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Quarterly Report on Form 10-Q. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Based upon that evaluation, our Certifying Officers concluded that as of the end of the period covered by this Quarterly Report, our disclosure controls and procedures were not effective. Our primary material weakness has been due to our limited number of personnel and, therefore, segregation of duties.

Changes in Internal Control Over Financial Reporting

There was no change in our internal control over financial reporting that occurred during the period covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

On May 15, 2014, we settled the litigation involving a property lease in Hanford for a commitment to pay $50,000 cash on November 15, 2014. Each party will pay its own attorneys’ fees. An amount of $160,000 was previously accrued in this matter. The lawsuit was the culmination of a 3 year dispute over various aspects of the lease and occurred with the change of ownership of the property. An amount of $136,000 was previously accrued in this matter. Accordingly, the Company recorded a gain on settlement of $86,000 during the quarter ended September 30, 2014.

ITEM 1A. RISK FACTORS

A smaller reporting company is not required to provide the information required by this Item. However, please note the following about forward-looking statements and the following brief description of certain risks that could have a material, adverse impact on the Company and its operations.

Cautionary Information Regarding “Forward-Looking Statements”

This Quarterly Report on Form 10-Q 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:

our ability to resume sales, and generate revenue;

our ability to successfully enter into new strategic relationships and licensing agreements to enter into the poultry market;

whether we can successfully partner with a distributor/importer to allow us to generate sales with lower capital and financing costs;

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

whether we will be able to charge a premium for our products and generate adequate gross margins on our sales;

our ability to obtain any commercial financing to allow us to purchase seafood inventory for processing in our iPura™ System, and to obtain such financing in amounts required and on commercially reasonable terms;

our dependence on a small number of customers and suppliers

our ability to timely replace the loss of sales to Safeway, Inc.;

our ability to negotiate contracts and purchase orders with distributors and retailers;

our ability to obtain brand related premium pricing to yield an acceptable sales margin;

risks related to inventory costs, shipping and handling and spoilage;

our ability to obtain one or more third-party manufacturers for our system components and other products;

the cost at which we will be able to have our system components and other products manufactured, if at all, and the time it will take to have our system components and other products manufactured;

our ability to obtain all required components for our systems on a timely basis and at the prices we anticipate;

whether our systems and products are viewed as providing the benefits we claim and whether these benefits are marketable by any customers we may seek to obtain;

our ability to enter into additional contracts with food processors, the time it takes for us to enter into any of these contracts and the licensing or pricing models we are able to implement;

our systems and products performing in the manner we expect in customer applications and without any material modifications;

our ability to obtain all necessary governmental approvals for our systems and other products, including all required import-exporter licenses and permits;

whether the introduction of the iPura™ brand will succeed in creating preferences with the consuming public;

whether we will be able to apply our technology to products other than fish or use our technology in any other fields;

the pace at which we will utilize our existing working capital and whether our existing working capital will be sufficient for us to continue to develop our systems and products to the extent we anticipate;

our ability to protect our intellectual property and obtain and maintain patents and other protections for our intellectual property.

the possible impact from competing products or technologies;

possible reductions in consumer demand for fish and poultry, including as a result of any outbreaks of disease, including avian flu, or negative reports regarding the health benefits of fish and poultry;

our ability to hire, train and retain a consistent supply of reliable and effective employees, both domestically and in any countries in which we might be able to install one of our processing system;

the risk of non-payment by, and/or insolvency or bankruptcy of, our customers and others with indebtedness to us;

the costs of complying with applicable labor laws and requirements, including, without limitation, with respect to health care;

economic and political instability in foreign countries or restrictive actions by the governments of foreign countries in which we may seek to conduct our business or obtain customers;

changes in tax laws or the laws and regulations governing food processing and on income generated outside the United States;

general economic, business and social conditions in the United States and in foreign countries where we may conduct our business;

fluctuation in interest rates, insurance, shipping, energy, fuel and other business utilities in any countries in which we conduct business;

the stability of and fluctuations in currencies in which we conduct business;

threats or acts of terrorism or war; strikes, work stoppages or slow downs by labor organizations in any countries in which we conduct business; and

natural or man-made disasters that could adversely impact the industries or countries in which we conduct business.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Sales of Unregistered Securities

During the period covered by this Quarterly Report, we did not issue or sell any equity securities.

Purchases of Equity Securities

We are required by the Securities Act of 1933 to disclose, in tabular format, any repurchases of our securities during this reporting period. We did not repurchase any of our securities during this reporting period, and accordingly, we have eliminated such table.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

As of September 30, 2014, no long term debt is in default. However, subsequent to end of the quarter, we defaulted on a payment owed to a seafood supplier in China. On July 10, 2014, we negotiated a payment arrangement on an existing trade payable liability with a seafood supplier in China totaling $116,996. We agreed to pay finite amounts each month and the balance on January 31, 2015 The October payment was not made and the agreement is in default.

Additionally, as noted above under “Liquidity and Capital Resources” in Part I, Item 2, we have certain notes that are due upon demand. We do not currently have the resources to repay such notes if demands for immediate payment in full were made.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

(a) Information Required To Be Disclosed In A Report On Form 8-K, But Not Reported

None.

(b) Item 407(c)(3) of Regulation S-K

During our fiscal quarter covered by this Quarterly Report on Form 10-Q, there has not been any material change to the procedures by which our security holders may recommend nominees to our Board of Directors.

ITEM 6. EXHIBITS

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.

3.3 (2)	Certificate of Designation of Rights, Preferences and Privileges – Series B Preferred Stock

3.4 (3)	Certificate of Designation of Rights, Preferences and Privileges – Series C Preferred Stock

4.1 (4)	Debt Facility for $1,600,000 dated August 1, 2013

4.2 (5)	Debt Facility for $550,000 dated May 1, 2014

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

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

* 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 15, 2009, as an exhibit to our Report on Form 8-K and incorporated herein by reference.

(3)

Filed on December 11, 2009, as an exhibit to our Report on Form 8-K and incorporated herein by reference.

(4)

Filed on November 14, 2013 as an exhibit to our Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2013 and incorporated herein by reference

(5)

Filed on May 14, 2014 as an exhibit to our Quarterly Report on Form 10-Q for the quarterly period ended March 30, 2014 and incorporated herein by reference

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	GLOBAL FOOD TECHNOLOGIES, INC.


Dated: November 13, 2014	By:	/s/ Keith Meeks
		Keith Meeks, President and
		Chief Executive Officer
		(PRINCIPAL EXECUTIVE OFFICER)


Dated: November 13, 2014	By:	/s/ Marshall F. Sparks
		Marshall F. Sparks, Chief Financial Officer
		(PRINCIPAL ACCOUNTING OFFICER)

GLOBAL FOOD TECHNOLOGIES, INC. 10-Q