SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended August 31, 1996 Commission File No. 33-
- --------------------------------- -----------------------
20064-NY
SAFE AID PRODUCTS INCORPORATED
--------------------------------------------------------------
(Exact Name of Small Business Issuer as Specified in Charter)
Delaware 22-2824492
- ------------------------------- ---------------------------
(State or other jurisdiction of (I.R.S. Employer ID. Number)
incorporation or organization)
c/o Lazer, Aptheker, Feldman, Rosella & Yedid, LLP
35 Pinelawn Road, Suite 203W
Melville, New York 11747-3105
-----------------------------
(Address of Principal executive offices)
(516) 364-3887
-------------------------
(Issuer's telephone number)
Check whether the Issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the Registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past ninety (90) days.
Yes___X___ No______
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practible date.
Common Stock $.00001 Par Value 702,977,200 shares
as of May 31, 1996
- ------------------------------------------------------------------------------
Transitional Small Business Disclosure Format (check one):
Yes___X___ No______
<PAGE>
INDEX
SAFE AID PRODUCTS INCORPORATED
Page No.
PART I. FINANCIAL INFORMATION --------
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Item 1. Financial Statements
Balance Sheets - August 31, 1996
(unaudited) and November 30, 1995 3
Statement of Stockholders' Equity
date of inception (May 21, 1987)
through August 31, 1996 4-5
Statement of Operations - three months
ended August 31, 1996 and 1995 (unaudited);
nine months ended August 31, 1996 and 1995
(unaudited); and from inception (May 21, 1987)
through August 31, 1996 (unaudited) 6-7
Statement of Cash Flows - nine months ended
August 31, 1996 and 1995 (unaudited) 8
Notes to Financial Statements
August 31, 1996 (unaudited) 9-12
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 13
<PAGE>
SAFE AID PRODUCTS INCORPORATED
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
ASSETS
August 31 NOVEMBER 30
1996 1995
(UNAUDITED)
CURRENT ASSETS
Cash $2,753 $2,191
------ ------
Total Current Assets 2,753 2,191
MACHINERY AND EQUIPMENT
Net of accumulated depreciation
of $4,258 -0- -0-
------ ------
TOTAL ASSETS $2,753 $2,191
====== ======
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Shareholder loans $11,000 $5,000
Accrued expenses 7,039 6,941
------ ------
TOTAL CURRENT LIABILITIES 18,039 11,941
------ ------
STOCKHOLDERS' EQUITY
Common stock $.00001 par value
950,000,000 shares authorized;
702,977,200 issued and outstanding 7,030 7,030
Additional paid in capital 1,548,969 1,548,969
Deficit accumulated during
development stage (1,571,285) (1,565,749)
---------- ----------
TOTAL (15,286) (9,750)
---------- ----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $2,753 $2,191
====== ======
<PAGE>
<TABLE>
SAFE AID PRODUCTS INCORPORATED
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' EQUITY
<CAPTION>
Deficit
Accumulated
Additional During Total
Common Stock Paid-in Development Stockholders'
Shares Amount Capital Stage Equity
------ ------ ------- ----- ------
<S> <C> <C> <C> <C> <C>
Date of inception - May 21, 1987 $ $ $ $
Issuance of common stock
for cash to founders 100,000,000 1,000 9,000 10,000
----------- ----- ----- -------- ------
Balance, November 30, 1987 100,000,000 1,000 9,000 10,000
Issuance of common stock for
cash to outside investors
from December 1, 1987 through
February 11, 1988 350,000,000 3,500 152,014 155,514
Public issuance of shares for
cash, net of expenses, during
the period April 11, 1988
through June 30, 1988 150,000,000 1,500 1,212,341 1,213,841
Issuance of common stock for
services during August 1988 4,050,000 40 80,960 81,000
Issuance of common stock for
cash in connection with
exercise of warrants during
November 1988 675,000 7 13,493 13,500
Net loss for the year ended
November 30, 1988 (414,054) (414,054)
----------- ----- --------- -------- ---------
Balance, November 30, 1988, 604,725,000 6,047 1,467,808 (414,054) 1,059,801
Issuance of common stock for
services from December 1988
to October 1989 1,700,000 18 26,482 26,500
Issuance of common stock for
cash in connection with
exercise of warrants during the
year ended November 30, 1989 2,027,200 20 40,524 40,544
Net loss for the year ended
November 30, 1989 (561,463) (561,463)
----------- ----- --------- -------- ---------
Balance, November 30, 1989 608,452,200 6,085 1,534,814 (975,517) 565,382
Issuance of common stock for
cash in connection with
exercise of warrants during the
year ended November 30, 1990 25,000 - 500 500
Net loss for the year ended
November 30, 1990 (353,012) (353,012)
----------- ----- --------- -------- ---------
Balance, November 30, 1990 608,477,200 6,085 1,535,314 (1,328,529) 212,870
(Continued)
</TABLE>
<PAGE>
<TABLE>
SAFE AID PRODUCTS INCORPORATED
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' EQUITY
<CAPTION>
Deficit
Accumulated
Additional During Total
Common Stock Paid-in Development Stockholders'
Shares Amount Capital Stage Equity
------ ------ ------- ----- ------
<S> <C> <C> <C> <C> <C>
Net loss for the year ended
November 30, 1991 (108,242) (108,242)
----------- ----- ---------- ---------- -------
Balance, November 30, 1991 608,477,200 6,085 1,535,314 (1,436,771) 104,628
Net loss for the year ended
November 30, 1992 (58,009) (58,009)
----------- ----- ---------- ---------- -------
Balance, November 30, 1992 608,477,200 6,085 $1,535,314 (1,494,780) 46,619
Issuance of common stock for
services for the year ended
November 30, 1993 500,000 5 495 500
Net loss for the year ended
November 30, 1993 (44,479) (44,479)
----------- ----- ---------- ---------- -------
Balance, November 30, 1993 608,977,200 6,090 1,535,809 (1,539,259) 2,640
Issuance of common stock for
services for the year ended
November 30, 1994 94,000,000 940 13,160 14,100
Net loss for the year ended
November 30, 1994 (7,441) (7,441)
----------- ----- ---------- ---------- -------
Balance, November 30, 1994 702,977,200 7,030 1,548,969 (1,546,700) 9,299
Net loss for the year ended
November 30, 1995 (19,049) (19,049)
----------- ----- ---------- ---------- -------
Balance, November 30, 1995 702,977,200 7,030 1,548,969 (1,565,749) (9,750)
Net loss for the nine months
ended August 31, 1996
(unaudited) (5,536) (5,536)
----------- ----- ---------- ---------- -------
Balance, August 31, 1996
(unaudited) 702,977,200 $7,030 $1,548,969 $(1,571,285) $(15,286)
=========== ====== ========== =========== ========
</TABLE>
<PAGE>
SAFE AID PRODUCTS INCORPORATED
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
UNAUDITED
For The Three
Months Ended
August 31
1996 1995
REVENUE
Net sales $ -0- $
---------- -----------
TOTAL REVENUES -0-
---------- -----------
EXPENSES
Selling, general and
administrative 2,290 7,236
---------- -----------
TOTAL 2,290 7,236
---------- -----------
NET INCOME (LOSS) $ (2,290) $ (7,236)
---------- -----------
LOSS PER SHARE:
Net loss per share $ (NIL) $ (NIL)
---------- -----------
Weighted average number of
common shares outstanding 702,977,200 702,977,200
=========== ===========
<PAGE>
<TABLE>
SAFE AID PRODUCTS INCORPORATED
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
UNAUDITED
<CAPTION>
For the Nine From Inception
Months Ended (May 21, 1987)
August 31 to August 31,
1996 1995 1996
REVENUE
<S> <C> <C> <C>
Net sales $9,828 $9,819 $227,211
License fees -0- -0- 10,000
Interest income -0- 25 120,676
------- -------- -----------
TOTAL REVENUES 9,828 9,844 357,887
------- -------- -----------
EXPENSES
Cost of sales 7,599 7,589 195,875
Selling, general and administrative 7,765 18,152 918,675
Research and development -0- -0- 594,618
Selling expenses -0- -0- 65,642
Depreciation and amortization -0- -0- 29,443
Loss - inventory obsolescence -0- -0- 124,919
------- -------- -----------
TOTAL 15,364 25,741 1,929,172
------- -------- -----------
NET LOSS $(5,536) $(15,897) $(1,571,285)
======= ======== ===========
LOSS PER SHARE:
Net loss per share $ (NIL) $ (NIL) $ (NIL)
======= ======== ==========
Weighted average number of
common shares outstanding 702,977,200 702,977,200 634,303,556
=========== =========== ===========
</TABLE>
<PAGE>
<TABLE>
SAFE AID PRODUCTS INCORPORATED
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
UNAUDITED
<CAPTION>
For The Nine
Months Ended
August 31
1996 1995
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(5,536) $(15,897)
------- --------
Changes in operating assets and liabilities:
Increase (decrease) in liabilities:
Accounts payable and accrued expenses 98 6,407
------- --------
TOTAL ADJUSTMENTS 98 6,407
------- --------
NET CASH USED BY OPERATING ACTIVITIES (5,438) (9,490)
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of stockholders loans (400)
Loans from stockholders 6,000 5,400
------- --------
NET CASH PROVIDED BY FINANCING ACTIVITIES 6,000 5,000
------- --------
INCREASE (DECREASE) IN CASH 562 (4,490)
BEGINNING CASH BALANCE 2,191 9,221
------- --------
ENDING CASH BALANCE $ 2,753 $ 4,731
======= ========
</TABLE>
<PAGE>
SAFE AID PRODUCTS INCORPORATED
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 1996
(UNAUDITED)
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
Safe Aid Products Incorporated ("the Company") was incorporated on May 21,
1987 in the State of Delaware to engage in manufacturing and marketing of a
disinfectant product for sale in dental and medical offices and hotel and
motel markets, as well as in the retail over-the-counter market, and to engage
in research and development regarding nasal and transdermal delivery of
aspirin and other drugs. At present, the Company remains in its development
stage. Its activities to date consist of limited sales of disinfectant
products and the investigation of the nasal and transdermal delivery of
aspirin and other drugs.
The Company's financial statements have been prepared on a going concern basis
which contemplates the realization of assets and the satisfaction of
liabilities and commitments in the normal course of business. The Company
reported net losses of $19,049 and $7,441 for the fiscal years ended November
30, 1995 and 1994, respectively. The continuation of the Company is dependent
upon obtaining additional capital or financing and the eventual achievement of
sustained profitable operations. To obtain these objectives, management is
pursuing a number of options, including continued efforts towards the
licensing of patents related to the nasal and transdermal delivery of aspirin
and other drugs. The financial statements do not include any adjustments that
might result from the outcome of this uncertainty.
The financial data for the nine and three months ended August 31, 1996 and
1995 is unaudited, but includes all adjustments (consisting only of normal
recurring adjustments) which are, in the opinion of the management, necessary
for a fair presentation of the results of operations for such periods.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts and disclosures. Actual results could differ
from those estimates and assumptions.
Depreciation
Depreciation of machinery and equipment is computed under an accelerated method
over five year estimated useful lives of the related assets.
Net Loss Per Share
Net loss per average common and common equivalent share has been computed on
the basis of the weighted average number of common shares and equivalents
outstanding during the respective periods. The effects on loss per share
resulting from the assumed issuance of reserved shares and the assumed
exercise of warrants in all periods presented are antidilutive and, therefore,
not included in the calculations.
<PAGE>
SAFE AID PRODUCTS INCORPORATED
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 1996
(UNAUDITED)
NOTE 2 - INCOME TAXES
No provision has been made in the accompanying financial statements for income
taxes payable because of the Company's operating loss from operations. At
November 30, 1995, the Company has approximately $1,552,900 of operating loss
carryforwards for financial reporting and income tax purposes that expire
through the year 2010. Additionally, the Company has approximately $44,000 of
research and development credits available to offset future income taxes
through the year 2005.
NOTE 3: STOCKHOLDERS' EQUITY
The Articles of Incorporation provide for the authorization of 950,000,000
shares of common stock at $.00001 par value. Original capital contributed was
$10,000 in payment for the issuance of 100,000,000 shares of common stock.
During the period from December 1, 1987 through February 11, 1988, an additional
350,000,000 shares were issued for an aggregate consideration of $155,514.
In June of 1988, the Company completed a sale of 150,000 units to the public
at a price of $10 per unit. The Company received proceeds in the amount of
$1,213,841, net of commissions and expenses to the underwriter, legal,
accounting and other expenses related to the public offering in the amount of
$286,159. Each unit consisted of 1,000 shares of common stock, $.00001 par
value, and 500 redeemable common stock warrants designated redeemable Warrant
"A". Each redeemable Warrant "A" would upon exercise, entitle the holder to
purchase one share of common stock for $.02 per share and to receive one
redeemable Class "B" Common Stock purchase warrant. Each redeemable Class "B"
Common Stock purchase warrant would, upon exercise, entitle the holder to
purchase one share of common stock for $.05 per share. These exercise periods
of both the Class "A" and Class "B" warrants have been extended by the Board
of Directors through January 11, 1997. At November 30, 1995, 147,272,800
shares of common stock are reserved in connection with such warrants.
The shares of common stock and common stock purchase warrants were immediately
detachable from the units upon closing of the public offering and are, to the
extent a market exists, therefore, traded separately from the common stock.
In August 1988, 4,050,000 shares of common stock were issued to certain
consultants of the Company as compensation for their services rendered. These
shares have been valued by the Company at $.02 per share. The Company
recorded these shares as research and development expense.
During November 1988, 675,000 redeemable Class "A" Common Stock purchase
warrants were exercised at a price of $.02 per share. The Company received
proceeds of $13,500 upon the exercise of these warrants.
<PAGE>
SAFE AID PRODUCTS INCORPORATED
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 1996
(UNAUDITED)
NOTE 3: STOCKHOLDERS' EQUITY - continued
In December 1988, 750,000 shares of common stock were issued to an unrelated
company as an inducement to enter into a license agreement at $.02 per share.
The Company recorded these shares as research and development expense.
In March 1989, 200,000 shares of common stock were issued to an unrelated
party as compensation for services rendered to the Company. These shares have
been valued by the Company at $.02 per share. The Company recorded these
shares as public relations expense.
In October 1989, 750,000 shares of common stock were issued to unrelated
parties as compensation for services rendered to the Company. These shares
have been valued by the Company at $.Ol per share. The Company recorded these
shares as consulting and research and development expense.
During the years ended November 30, 1989 and 1990, 2,027,200 and 25,000
redeemable Class "A" Common Stock purchase warrants were exercised at a price
of $.02 per share, respectively. The Company received proceeds of $ 40,544
and $500 upon the exercise of these warrants, respectively.
On January 8, 1993, the Company issued 500,000 shares of the Company's
common stock in consideration of consulting services. The shares were
valued at $.001 per share.
In January and February of 1994, 94,000,000 shares of common stock were issued
to certain officers and consultants of the Company and to one of the Company's
law firms as compensation for their services rendered and to induce them to
continue to provide their services to the Company. These shares have been
valued by the Company at $.00015 per share and the Company recorded these
shares as general and administrative expenses during the year ended November
30, 1994.
NOTE 4 - COMMITMENTS AND CONTINGENCIES
On July 25, 1994, the Company entered into a license agreement with CMR Group,
Inc. ("CMR") in which the Company granted to CMR an exclusive license to
develop and market the Company's patent rights relating to TCGU or bleaching
products. In consideration for granting CMR this license, the Company
received a license fee of $10,000 in 1994 and will receive royalties of 10% of
the net revenue from all sales of products containing TCGU until the Company
receives $1,000,000, and 7% of the net revenue from such sales thereafter.
There were no royalties earned pursuant to this agreement during the years
ended November 30, 1995 and 1994 and for the nine months ended August 31,
1996.
<PAGE>
SAFE AID PRODUCTS INCORPORATED
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 1996
(UNAUDITED)
NOTE 4 - COMMITMENTS AND CONTINGENCIES - continued
On January 25, 1988, the Company entered into a research agreement with the
University of Kentucky Research Foundation (UKRF). Pursuant to the terms of
the agreement, the Company offered a grant in the amount of $100,000 per year,
in exchange for specific research to be performed by UKRF. The Company paid
$100,000 for the year ended November 30, 1988 and $75,000 for the year ended
November 30, 1989. No grants were offered subsequent to 1989. All inventions
or discoveries pursuant to the research agreement shall be owned by UKRF.
UKRF has granted an option to the Company for the exclusive license of any
such invention or discoveries. Upon exercising its option, the Company shall
pay a license fee up to $10,000. Certain members of the Company's Advisory
Board are professors at the University of Kentucky. On August 30,1988 the
Company exercised its option with respect to certain patent rights.
Additionally, the Company shall pay annual royalties during the term of the
agreement based upon annual direct and indirect net sales as follows:
i. 2.0% royalty on all direct sales.
ii. For all indirect sales for which the Company receives a royalty, 1/3 of
such royalty is to be paid to UKRF. This royalty payment cannot be less
than 1% or more than 2% of such indirect sales.
iii. For all indirect sales for which the Company receives a license fee, 20% of
such license fee is to be paid to UKRF.
There has been no activity with respect to this agreement during the years
ended November 30, 1995 and 1994 and for the nine months ended August 31,
1996.
On January 25, 1988, the Company entered into a license agreement with UKRF in
connection with the right to use certain information and patents concerning
the derivation of aspirin. The agreement also required a non-refundable
license issue fee of $5,000 upon execution. Additionally, the Company shall
pay a royalty in an amount equal to 2% of the net sales of the licensed
product as defined in the agreement. There has been no activity with respect
to this agreement during the years ended November 30, 1995 and 1994 and for
the nine months ended August 31, 1996.
The Company leased operating facilities located in Hauppauge, New York on a
month-to-month basis at an approximate monthly rental of $150. The Company
also leased storage space in warehouses on a month-to-month basis at an
aggregate current monthly rental of $436. All leases were terminated during
the year ended November 30, 1995. Rent expense under all leases for the years
ended November 30, 1995 and 1994 was $2,958 and $7,002 respectively.
NOTE 5 - SALES TO MAJOR CUSTOMER
Sales to one major customer aggregated 100% of the Company's net sales for the
years ended November 30, 1995 and for the nine months ended August 31, 1996.
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
None
(b) Reports
A Form 8-K dated June 12, 1996 was filed in order
to report the increase in the trading volume of the Company's common stock on
the OTC Bulletin Board.
<PAGE>
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SAFE AID PRODUCTS INCORPORATED
/s/ Stanley Snyder
------------------
Stanley Snyder, President
Dated: October 15, 1996
