================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
Annual Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the Fiscal Year Ended November 30, 1997
Commission File Number 0-17746
SAFE TECHNOLOGIES INTERNATIONAL, INC.
f/k/a/ SAFE AID PRODUCTS INCORPORATED
(Exact Name of Registrant as Specified in Charter)
Delaware 22-2824492
----------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer ID. Number
incorporation or organization)
249 Peruvian Avenue
Palm Beach, Florida 33480
---------------------------------- -----------------------------------
(Address of principal (Zip Code)
executive offices)
Registrant's telephone no., including area code (561) 832-2700
Securities registered pursuant to Section 12(g) of the Act:
None
- -------------------------------------------------------------------------------
(Title of class)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 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____ .
Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B contained in this form, and if no disclosure will be
contained, to the best of Registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-KSB. __ X__
Issuer's revenues for the most recent fiscal year were $9,801.
The aggregate market value of the voting stock held by non-affiliates
of the Registrant was approximately $35,273,860 on November 30, 1997 based upon
the latest published average bid price ($.05) at the close of the market on
February 20, 1998, the most recently available bid date for the Registrant's
Common Stock.
The approximate number of shares outstanding of the Registrant's common
stock on November 30, 1997 was 705,477,200. The approximate number of "A"
Warrants outstanding as of November 30, 1997 was 72,272,800 convertible into
72,272,800 shares of common stock at $.02 per share. Each outstanding A Warrant,
upon exercise, will result in the issuance of one redeemable "B" Warrant. As of
November 30, 1997 there were approximately 2,727,200 B Warrants outstanding
exercisable into 2,727,200 shares of common stock at $.05 per share.
Transitional Small Business Disclosure Format (check one):
Yes __ X__ No____
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PART I (Alternative 2)
Business
The Company was incorporated under Delaware law on May 21, 1987 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.
During the past several years, the Company has been relatively inactive
with nominal sales and operations and has remained in its development stage.
During the past year, the Company's principal business objective has been to
find and merge with an operating company that management believes could increase
shareholder value.
During the previous fiscal year, the Company maintained an arrangement
to use space at 225 Old Country Road, Melville, New York 11747 and its telephone
number was (516) 364-3887. As of February 9, 1998, the Company maintained
executive offices at 249 Peruvian Avenue, Palm Beach, Florida 33480.
The Company has been unsuccessful in effecting its original business
purpose and had virtually no active operations for the past several years. In
addition, the Company has no capital available to renew active operations. As a
result, during the past several years, management adopted a strategy of either
finding a business partner to exploit the Company's technology or located an
operating company to engage in a business combination with the Company. Numerous
opportunities with third parties were reviewed and evaluated by the
<PAGE>
Company (most related to operating businesses looking to acquire a public
company through a reverse merger), but prior to 1997 none was found to be
acceptable.
In February 1997, Safe Aid entered into a joint venture agreement with
CC Plus, a Spanish corporation, to establish the worldwide development,
production and marketing of a nasally administered aspirin. However, the joint
venture terminated in June 1997 over a contractual dispute regarding CC Plus'
obligation to expend $500,000 toward the development and marketing of the
nasally administered aspirin.
Thereafter, the Company focused its search on a non-public operating
companies that would be interested in acquiring the Company's status as a public
company. Management did not limit its search to any particular industry. Rather,
it sought out a company in a high growth industry that could increase
shareholder value. Management determined that due to the Company's (i)
exhaustion of all funds and inability to pay amounts necessary for its
continuation, (ii) inability to raise capital, and (iii) inability to find a
viable business partner to exploit the Company's patents, the Company would
completely cease all operating and dissolve if it did not locate an acquisition
candidate by the end of the 1997.
Merger
In August, 1997 the Company entered into a merger agreement with
Intelligence Network International, Inc. ("INI") pursuant to which INI would
merge with and into the Company (the "Merger"). Safe Aid will be the corporation
surviving the Merger. The obligations of the Company and INI to effect the
Merger were subject to certain conditions including:
approval and adoption by the Company's stockholders of proposals to
amend the Company's Certificate of Incorporation to (i) increase the Company's
authorized common stock to 999,999,000 shares of common stock; (ii) change the
name of the Company to "Safe Technologies International, Inc."; and (iii)
effectuate a one-for-ten reverse stock split of the Company's common stock; and
(iv) approval and adoption of the Merger Agreement by the Company's
stockholders.
On January 30, 1998, a special meeting of the Board of Directors and
Stockholders of the Company was held at the offices of Lazer, Aptheker, Feldman,
Rosella & Yedid, LLP, 225 Old Country Road, Melville, New York. At the special
meeting, 57.16% of the voting stock of the Company was voted in favor of the
Merger and all matters referred to in subparagraphs (i) through (iv) above.
<PAGE>
WHERE RELEVANT MATTERS ARE REPORTED HEREIN ON A POST-MERGER BASIS
Effective February 9, 1998, the following individuals resigned as
officers and directors of the Company:
Stanley Snyder President and Director
Barney Melsky Secretary/Treasurer and Director
Melvin Mr. Fritz Director
Effective February 9, 1998, the following individuals were elected to
the following positions:
Barbara L. Tolley Chief Executive Officer, Chairman and
Director
Michael Bhathena Vice President and Chief Information
Officer
Bradford L. Tolley Secretary and Treasurer
Charles N. Martus Director
Jack W. Tolley Director
Franklin L. Frank Director
Robert L. Alexander Director
Security Ownership of Management and Certain Securityholders
- ------------------------------------------------------------
Security Ownership of Certain Beneficial Owners:
The following table contains information as to the beneficial ownership
of shares of Common Stock of the Registrant of all officers and directors of the
Registrant, each person who to the knowledge of the Registrant, post-merger, was
the beneficial owner of 10% or more of the outstanding shares, and all officers
and directors of the Registrant as a group:
Amount and Nature
Name of Beneficial of Beneficial Percent
Title of Class Owner Ownership of Class
- -------------- ------------------ ----------------- --------
Common Stock Barbara L. Tolley 267,755,650 38.0%
$.00001 par value Chairman and CEO
Common Stock Ruth Deutsch 209,595,535 29.7%
$.00001 par value Shareholder
Common Stock Franklin L. Frank 243,595,536 34.5%
$.00001 par value Director
<PAGE>
Common Stock Bradford L. Tolley 25,000,000 3.5%
$.00001 par value Treasurer and
Secretary
Common Stock Jack W. Tolley 267,755,650 38.0%
$.00001 par value Director
Common Stock Michael Bhathena 11,740,000 1.7%
$.00001 par value Vice President and
Chief Information Officer
Common Stock Charles N. Martus 200,000 Less
$.00001 par value Director than
1%
Common Stock Robert L. Alexander 200,000 Less
$.00001 par value Director than
1%
Common Stock All Officers and 548,491,186 77.7%
$.00001 par value Directors as a group
PART II
Item 1. Market Price of and Dividends on the Registrant's Common Equity
and Other Shareholder Matters
(a) The Registrant's Common Stock is traded in the over-the-
counter market.
(b) The following table sets forth the high and low stock closing
bid, as reported by the National Quotation Bureau, Inc., for
the Registrant's Common Stock, Warrants and Units for the
calendar periods indicated:
Common Stock Units
Period Bid Asked Bid Asked
High/Low High/Low High/Low High/Low
-------- -------- -------- --------
1996
- ----
1st Quarter .002/.0015 .003/.003 U N P R I C E D
2nd Quarter .06/.002 .07/.003 U N P R I C E D
3rd Quarter .025/.0075 .026/.0081 U N P R I C E D
4th Quarter .021/.008 .024/.0085 U N P R I C E D
1997
- ----
1st Quarter .0136/.0070 .0137/.0073 U N P R I C E D
2nd Quarter .016/.0045 .0163/.005 U N P R I C E D
<PAGE>
3rd Quarter .0121/.0053 .013/.006 U N P R I C E D
4th Quarter .026/.008 .016/.005 U N P R I C E D
"A" Warrants Units
Period Bid Asked Bid Asked
High/Low High/Low High/Low High/Low
-------- -------- -------- --------
1996
- ----
1st Quarter U N P R I C E D U N P R I C E D
2nd Quarter U N P R I C E D U N P R I C E D
3rd Quarter U N P R I C E D U N P R I C E D
4th Quarter U N P R I C E D U N P R I C E D
1997
- ----
1st Quarter U N P R I C E D U N P R I C E D
2nd Quarter U N P R I C E D U N P R I C E D
3rd Quarter U N P R I C E D U N P R I C E D
4th Quarter U N P R I C E D U N P R I C E D
The bid quotation of the Common Stock in the over-the-counter market as
of the most recent available date, February 20, 1998 was $.05. The above
quotation does not include retail mark-ups, mark-downs or commissions and
represents prices between dealers and not necessarily actual transactions. The
past performance of the Registrant's securities is not necessarily indicative of
future performance.
(b) The approximate number of common stockholders of record of the
Registrant as of November 17, 1997 was 1,207.
(c) The Registrant has never paid cash dividends on its Common
Stock. Payment of dividends will be within the sole
discretion of the Registrant's Board of Directors and will
depend, among other factors, upon earnings, capital
requirements and the operating and financial condition of the
Registrant. At the present time, the Registrant's anticipated
financial capital requirements are such that it intends to
follow a policy of retaining earnings in order to finance the
development of its business.
Item 2. Legal Proceedings
There are no legal proceedings pending to which the Registrant is
subject, nor to the knowledge of the Registrant are any such legal proceedings
threatened.
<PAGE>
Item 3. Changes in and Disagreements with Accountants
There have been no changes in or disagreements with the Registrant's
accountants, Scott & Guilfoyle.
Item 4. Submission of Matters to a Vote of Security Holders
On January 30, 1998, the Company approved a merger with INI, Florida
corporation engaged in various internet services and products. The merger was
subject to certain conditions including increasing the authorized common stock
to 999,999,999, changing the name to "Safe Technologies International, Inc." and
effectuating a one-for-ten reserve stock split. As a result of the merger, INI
shareholders own approximately eighty-three percent of Safe Aid's common stock.
Item 5. Compliance with Section 16(a) of the Exchange Act
Nothing to report
Item 6. Reports on Form 8-K
A Form 8-K dated January, 1998 was filed in order to report the
extension of the time period, until January 8, 1999, during which the Company's
warrants may be exercised.
A Form 8-K dated February, 1998 was filed in order to report the merger
with INI.
PART F/S
See pages F1 - F11
Financial Statements and Supplementary Data
SAFE AID PRODUCTS INCORPORATED
Index to Financial Statements
-----------------------------
Page
Reports of Independent Certified Public Accountants F-1
Financial Statements:
Balance Sheets as of November 30, 1996 and 1997 F-2
Statement of Stockholders' Equity for the period F-3 - F-4
from inception (May 21, 1987) to November 30, 1997
<PAGE>
Statements of Operations for each of the two years F-5
in the period ended November 30, 1997 and cumulative from
inception (May 21, 1987) to November 30, 1997
Statements of Cash Flows for each of the two years F-6
in the period ended November 30, 1997 and cumulative from
inception (May 21, 1987) to November 30, 1997
Notes to Financial Statements F-7 - F-10
Financial Data Schedule F-11
All schedules have been omitted because they are inapplicable, not required, or
the information is included elsewhere in the financial statements or notes
thereto.
PART III
Item 1. Index to Exhibits
Exhibit No.: Description Filing
3.1 Certificate of Incorporation (1)
3.1 Amendment to Certificate of Incorporation (1)
3.2 By-Laws (1)
4.1 Amended form of Underwriters' Unit (2)
Purchase Warrant
4.2 Form of Class A Common Stock Purchase (1)
Warrant
4.3 Amended Form of Class A and B Common (2)
Stock Purchase Warrant
4.4 Amended Form of Warrant Agreement (2)
4.5 Specimen Stock Certificate (1)
10.1 License Agreement with Pettibone (1)
Laboratories, Inc.
10.2 Grant Agreement with UKRF (1)
10.3 Grant Agreement with UKRF regarding grant (1)
10.4 Letter of Intent with Sunshine (1)
Chemical Corp.
10.5 License Agreement with UKRF regarding
Aspiring Patents (1)
10.6 Aspirin Patent - 4,242,330 and 4,241,055 (1)
10.7 Cryocide Patent - 4,073,888 (1)
10.8 Amended License Agreement with Pettibone (3)
Laboratories, Inc.
10.9 License Agreement with UKRF regarding
New Patent Application No. 028750-063 (3)
10.10 License Agreement with CMR Group, Inc.
regarding U.S. Patent No. 5,000,869 (4)
<PAGE>
(1) Form S-18 filed 2/18/88
(2) Amendment No. 2 to Form S-18 filed 4/11/88
(3) Form 8-K dated 1/25/89
(4) Form 8-K dated 7/30/94
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunder duly authorized.
SAFE TECHNOLOGIES INTERNATIONAL, INC.
Dated: February 26, 1998 By: /s/ Barbara Tolley
--------------------
Barbara Tolley,
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1934, this report
has been signed by the following persons on behalf of the Registrant and in the
capacities and on the date indicated.
Signature Title Date
- --------- ----- ----
Vice President/
/s/ Michael Bhathena Chief Information February 26, 1998
- ------------------------ Officer
Michael Bhathena
/s/ Bradford Tolley Secretary/Treasurer February 26, 1998
- ------------------------
Bradford Tolley
/s/ Charles N. Martus Director February 26, 1998
- ------------------------
Charles N. Martus
/s/ Jack W. Tolley Director February 26, 1998
- ------------------------
Jack W. Tolley
/s/ Franklin L. Frank Director February 26, 1998
- ------------------------
Franklin L. Frank
/s/ Robert L. Alexander Director February 26, 1998
- ------------------------
Robert L. Alexander
<PAGE>
Scott & Guilfoyle
Certified Public Accountants
5 Dakota Drive - Suite 206
Lake Success, New York 11042
Paul J. Scott. C.P.A. (516) 775-9600
Richard T. Guilfoyle. C.P.A. Fax (516) 328-6638
INDEPENDENT AUDITOR'S REPORT
The Board of Directors of
Safe Aid Products Incorporated
We have audited the accompanying balance sheets of Safe Aid Products
Incorporated (a development stage company) as of November 30, 1997 and 1996 and
the related statements of operations, stockholders' equity and cash flows for
the years then ended and for the period May 21, 1987 (inception) through
November 30, 1997. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits. The financial statements for the
period May 21, 1987 (inception) through November 30, 1994, were audited by other
auditors whose report dated February 14, 1995 expressed an unqualified opinion
on those statements. The financial statements for the period May 21, 1987
(inception) through November 30, 1994 include total revenue and net loss of
$338,215 and ($1,546,700) respectively. Our opinion on the statements of
operations, shareholders' equity, and cash flows for the period May 21, 1987
(inception) through November 30, 1997 insofar as it relates to amounts for prior
periods through November 30, 1994, is based solely on the report of other
auditors.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall balance sheet presentation. We
believe that our audits and the report of the other auditors provide a
reasonable basis for our opinion.
In our opinion, based on our audit and the report of other auditors, the
financial statements referred to above present fairly, in all material respects,
the financial position Safe Aid Products Incorporated (a development stage
company) as of November 30, 1997 and 1996, and the results of its operations and
its cash flows for the years then ended, and the period from May 21, 1987
(inception) to November 30, 1997 in conformity with generally accepted
accounting principles.
/s/ Scott & Guilfoyle
Lake Success, New York
February 9, 1998
<PAGE>
<TABLE>
SAFE AID PRODUCTS INCORPORATED
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
NOVEMBER 30
<CAPTION>
1997 1996
ASSETS
CURRENT ASSETS
<S> <C> <C>
Cash $ 417 $ 4,034
-------------- -------------
TOTAL CURRENT ASSETS 417 4,034
MACHINERY AND EQUIPMENT
Net of accumulated depreciation of $4,258 0 0
-------------- -------------
TOTAL ASSETS $ 417 $ 4,034
============== =============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Shareholder loans $ 19,000 $ 13,500
Accrued expenses 4,112 5,293
-------------- -------------
TOTAL CURRENT LIABILITIES 23,112 18,793
-------------- -----------
STOCKHOLDERS' EQUITY
Common stock $.00001 par value
950,000,000 shares authorized; 705,477,200
and 702,977,200 issued and outstanding respectively 7,055 7,030
Additional paid in capital 1,572,194 1,548,969
Deficit accumulated during development stage (1,601,944) (1,570,758)
-------------- -------------
TOTAL ( 23,695) ( 14,759)
-------------- -------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 417 $ 4,034
============== =============
The accompanying notes are an integral part of the financial statements.
</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 Developmet Stockholders'
Shares Amount Capital Stage Equity
<S> <C> <C> <C> <C> <C>
Date of inception - May 21, 1987 0 $0 $0 $0 $0
Issuance of common stock for cash to founders
($.0001 per share) 100,000,000 1,000 9,000 0 10,000
Issuance of common stock for cash to outside
investors from December 1, 1987 through
February 11, 1988 ($.00044 per share) 350,000,000 3,500 152,014 0 155,514
Public issuance of shares for cash, net of
expenses, during the period April 11, 1988
to June 30, 1988 ($.0081 per share) 150,000,000 1,500 1,212,341 0 1,213,841
Issuance of common stock for consulting services
based on Board of Directors assessment of value of
services rendered during August 1988 ($.02 per share) 4,050,000 40 80,960 0 81,000
Issuance of common stock for cash in connection
with exercise of warrants during
November 1988 ($.02 per share) 675,000 7 13,493 0 13,500
Net loss for the year ended November 30, 1988 0 0 0 (414,054) (414,054)
Issuance of common stock for license agreement based
on Board of Directors assessment of value of agreement
during December 1988 ($.02 per share) 750,000 8 14,992 0 15,000
Issuance of common stock for public relations services
based on Board of Directors assessment of value of
services during March 1989 ($.02 per share) 200,000 2 3,998 0 4,000
Issuance of common stock for consulting, research &
development based on Board of Directors assessment of
value during October 1989 ($.01 per share) 750,000 8 7,492 0 7,500
Issuance of common stock for cash in connection
with exercise of warrants during the year ended
November 30, 1989 ($.02 per share) 2,027,200 20 40,524 0 40,544
Net loss for the year ended November 30, 1989 0 0 0 (561,463) (561,463)
----------- ------ --------- -------- --------
Balance, November 30, 1989 608,452,200 6,085 1,534,814 (975,517) 565,382
(continued)
The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE>
<TABLE>
SAFE AID PRODUCTS INCORPORATED
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' EQUITY
(continued)
<CAPTION>
Deficit
Accumulated
Additional During Total
Common Stock Paid-in Development Stockholders'
Shares Amount Capital Stage Equity
<S> <C> <C> <C> <C> <C>
Issuance of common stock for cash in connection
with exercise of warrants during the year ended
November 30, 1990 ($.02 per share) 25,000 0 500 0 500
Net loss for the year ended November 30, 1990 0 0 0 (353,012) (353,012)
----------- ------- --------- ---------- ----------
Balance, November 30, 1990 608,477,200 6,085 1,535,314 (1,328,529) 212,870
Net loss for the year ended November 30, 1991 0 0 0 (108,242) (108,242)
Net loss for the year ended November 30, 1992 0 0 0 (58,009) (58,009)
Issuance of common stock for consulting services
based on Board of Directors assessment of value
of services rendered for the year ended
November 30, 1993 ($.001 per share) 500,000 5 495 0 500
Net loss for the year ended November 30, 1993 0 0 0 (44,479) (44,479)
Issuance of common stock for legal & consulting
services based on Board of Directors assessment
of value of services rendered for the year ended
November 30, 1994 ($.00015 per share) 94,000,000 940 13,160 0 14,100
Net loss for the year ended November 30, 1994 0 0 0 (7,441) (7,441)
Net loss for the year ended November 30, 1995 0 0 0 (19,049) (19,049)
----------- ------- --------- ---------- ----------
Balance, November 30, 1995 702,977,200 7,030 1,548,969 (1,565,749) (9,750)
Net loss for the year ended November 30, 1996 0 0 0 (5,009) (5,009)
----------- ------- --------- ---------- ----------
Balance, November 30, 1996 702,977,200 7,030 1,548,969 (1,570,758) (14,759)
Issuance of common stock for consulting services
based on Board of Directors assessment of value
of services rendered for the period ended
April, 1997 ($.0093 per share) 2,500,000 25 23,225 0 23,250
Net loss for the year ended November 30, 1997 0 0 0 (31,186) (31,186)
----------- ------- --------- ---------- ----------
Balance, November 30, 1997 705,477,200 $ 7,055 $1,572,194 $(1,601,944) $(22,695)
=========== ====== ========= ========== ==========
The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE>
<TABLE>
SAFE AID PRODUCTS INCORPORATED
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
<CAPTION>
For The Years From Inception
Ended (May 21, 1987) to
November 30 November 30
1997 1996 1997
REVENUE
<S> <C> <C> <C>
Net sales $ 9,801 $ 19,647 $ 246,831
License fees 0 0 10,000
Interest income 0 0 120,676
------------- ------------- -------------
TOTAL REVENUES 9,801 19,647 377,507
------------- ------------- -------------
EXPENSES
Cost of sales 7,569 15,187 211,032
Selling, general and administrative 33,418 9,469 953,797
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 40,987 24,656 1,979,451
------------- ------------- -------------
NET LOSS $ (31,186) $ (5,009) $ (1,601,944)
============= ============= =============
LOSS PER SHARE:
Net loss per share NIL NIL NIL
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 705,477,200 702,977,200 704,545,693
============= ============= =============
The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE>
<TABLE>
SAFE AID PRODUCTS INCORPORATED
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
<CAPTION>
For The Years From Inception
Ended (May 21, 1987) to
November 30 November 30
1997 1996 1997
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C> <C>
Net loss $ (31,186) $ (5,009) $(1,601,944)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 0 0 29,443
Issuance of common stock for services 23,250 0 145,350
Loss on abandonment of assets 0 0 11,018
Changes in operating assets and liabilities:
(Increase) decrease in assets:
Organization costs 0 0 (1,350)
Increase (decrease) in liabilities:
Accounts payable and accrued expenses (1,181) (1,648) 4,112
----------- ----------- -----------
NET CASH USED BY OPERATING ACTIVITIES (9,117) (6,657) (1,413,371)
----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property and equipment 0 0 (39,111)
----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock 0 1,433,899
Loans from stockholders 5,500 8,500 29,000
Repayment of stockholders' loans 0 0 (10,000)
----------- ----------- -----------
NET CASH PROVIDED BY FINANCING ACTIVITIES 5,500 8,500 1,452,899
----------- ----------- -----------
INCREASE (DECREASE) IN CASH (3,617) 1,843 417
BEGINNING CASH BALANCE 4,034 2,191 0
----------- ----------- -----------
ENDING CASH BALANCE $ 417 $ 4,034 $ 417
=========== =========== ===========
The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE>
SAFE AID PRODUCTS INCORPORATED
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 1997
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 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 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.
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, 1996, the Company has approximately $1,553,000 of operating loss
carryforwards for financial reporting and income tax purposes that expire
through the year 2011. 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.
<PAGE>
SAFE AID PRODUCTS INCORPORATED
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 1997
NOTE 3: STOCKHOLDERS' EQUITY (continued)
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 Class "A: and Class "B" warrants have been extended by the Board of
Directors through January 9, 1999. At November 30, 1997, 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.
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 $.01 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.
<PAGE>
SAFE AID PRODUCTS INCORPORATED
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 1997
NOTE 3: STOCKHOLDERS' EQUITY (continued)
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.
On April 15, 1997, the Company authorized the issuance of 2,500,000 shares of
the Company's common stock in consideration of consulting services. The services
were valued at $23,250 or .0093 per share.
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, 1997 and 1996.
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, 1997 and 1996.
<PAGE>
SAFE AID PRODUCTS INCORPORATED
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 1997
NOTE 4 - COMMITMENTS AND CONTINGENCIES (continued)
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, 1997 and 1996.
NOTE 5: SUBSEQUENT EVENTS - MERGER
On January 30, 1998 the Company approved a merger with Intelliigence Network
International, Inc. ("INI") a Florida corporation engaged in various internet
services and products. The merger was subject to certain conditions including
increasing the authorized common stock to 999,999,000, changing the name to
"Safe Technologies International, Inc." and effectuating a one-for-ten reverse
stock split. As a result of the merger INI shareholders own approximately
eighty-three percent of Safe Aid's common stock. These financial statements do
not reflect any adjustments as a result of the merger.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Safe Aid
Products Incorporated financial statements for the year ended November 30, 1997
and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<PERIOD-START> DEC-01-1996
<PERIOD-END> NOV-30-1997
<FISCAL-YEAR-END> NOV-30-1997
<CASH> 417
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 417
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 417
<CURRENT-LIABILITIES> 23,112
<BONDS> 0
<COMMON> 7,055
0
0
<OTHER-SE> (29,750)
<TOTAL-LIABILITY-AND-EQUITY> 417
<SALES> 9,801
<TOTAL-REVENUES> 9,801
<CGS> 7,569
<TOTAL-COSTS> 7,569
<OTHER-EXPENSES> 33,418
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (31,186)
<INCOME-TAX> 0
<INCOME-CONTINUING> (31,186)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (31,186)
<EPS-PRIMARY> 0.00
<EPS-DILUTED> 0.00
</TABLE>
