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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10QSB
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarterly period ended September 30, 1999
Commission File No. 000-17746
SAFE TECHNOLOGIES INTERNATIONAL INCORPORATED
(Formerly Safe Aid Products Incorporated)
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(Exact name of Registrant as specified in its Charter)
Delaware 22-2824492
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(State or other jurisdiction of (IRS Employer ID No.)
incorporation or organization)
249 Peruvian Avenue
Suite F2
Palm Beach, Florida 33480
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(Address of principal executive (Zip Code)
offices)
Registrant's telephone number,
including area code: (561) 832-2700
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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 90 days.
YES [X] NO [ ]
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practical
date:
Common Stock, $0.00001 Par Value - 706,277,200 shares as of
October 28, 1999.
<PAGE>
INDEX
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Page
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PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets -
September 30, 1999 (Unaudited) and December 31, 1998..........3
Consolidated Statements of Operations (Unaudited) -
Three Months Ended September 30, 1999 and September 30, 1998..4
Consolidated Statements of Operations (Unaudited) -
Nine Months Ended September 30, 1999 and September 30, 1998...5
Consolidated Statements of Cash Flows (Unaudited) -
Three Months Ended September 30, 1999 and September 30, 1998..6
Consolidated Statements of Cash Flows (Unaudited) -
Nine Months Ended September 30, 1999 and September 30, 1998...7
Notes to Unaudited Consolidated Financial Statements..........8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations..........................14
PART II OTHER INFORMATION
Item 1. Legal Proceedings............................................18
Item 2. Changes in Securities........................................18
Item 3. Defaults Upon Senior Securities..............................18
Item 4. Submission of Matters to a Vote of Security Holders..........18
Item 5. Other Information............................................18
Item 6. Exhibits and Reports on Form 8-K.............................18
Signature.............................................................19
<PAGE>
PART 1 - FINANCIAL STATEMENT PRESENTATION
<TABLE>
SAFE TECHNOLOGIES INTERNATIONAL INCORPORATED
CONSOLIDATED BALANCE SHEETS
<CAPTION>
<S> <C> <C>
September 30, December 31,
1999 1998
(UNAUDITED)
ASSETS
CURRENT ASSETS
Cash $ 10,041 $ 66,473
Accounts receivable - principally trade 102,885 500
Loans receivable, stockholders 10,500 0
Prepaid expenses 5,300 0
Management Agreements, net 375,00 0
-------------- -------------
TOTAL CURRENT ASSETS 166,226 66,973
MACHINERY AND EQUIPMENT
Net of accumulated depreciation 209,547 4,233
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TOTAL MACHINERY AND EQUIPMENT 209,547 4,233
OTHER ASSETS
Deposits 12,409 0
Intangible assets, net 617,067 324,968
Other assets 0 37,500
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TOTAL OTHER ASSETS 629,476 362,468
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TOTAL ASSETS $ 1,005,249 $ 433,674
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Line of credit, payable bank $ 2,792 $ 0
Payroll taxes 9,344 0
Accounts payable, trade 99,534 57,776
Accrued expenses 255,962 37,452
Notes payable, related party 19,062 0
Shareholder loans 139,027 123,590
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TOTAL CURRENT LIABILITIES 525,720 218,818
STOCKHOLDERS' EQUITY
Common stock $.00001 par value
999,000,000 shares authorized; 706,277,200 issued and outstanding 33,840 7,125
Capital subscribed 40,000 40,000
Less: subscription receivables (1,000)
Additional paid in capital 3,094,879 2,591,531
Accumulated deficit (2,689,191) (2,422,800)
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TOTAL STOCKHOLDERS' EQUITY 479,528 214,856
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,005,429 $ 433,674
============= ============
</TABLE>
<PAGE>
<TABLE>
SAFE TECHNOLOGIES INTERNATIONAL INCORPORATED
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
<CAPTION>
<S> <C> <C>
For Three For Three
Months Ended Months Ended
September 30, September 30,
1999 1998
REVENUES $ 201,919 $ 39,082
COST OF REVENUE $ 11,768 $ 6,277
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GROSS PROFIT $ 190,151 $ 32,805
EXPENSES
Promotion 4,622 15,877
Bank charges 3,822 166
Interest 0 418
Depreciation 0 145,624
Equipment lease 270 7,121
Insurance 0 10,279
Office expenses 54,687 34,528
Officers' salary 30,000 35,077
Wages 92,027 0
Payroll taxes 5,265 2,683
Commissions paid 9,744 0
Subcontract labor 4,156 0
Legal & professional fees 25,352 76,431
Travel 7,415 4,071
Internet Access 4,353 0
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TOTAL EXPENSES $ 241,714 $ 332,275
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OTHER INCOME
Interest on Deposit 12 319
Income Before Income Taxes (51,551) (299,151)
Provision For Income Taxes 0 0
NET LOSS $ (51,551) $ (299,151)
LOSS PER SHARE:
Net loss per share NIL NIL
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 706,277,200
</TABLE>
<PAGE>
<TABLE>
SAFE TECHNOLOGIES INTERNATIONAL INCORPORATED
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
<CAPTION>
<S> <C> <C>
For Nine For Nine
Months Ended Months Ended
September 30, September 30,
1999 1998
REVENUES $ 619,043 $ 588,899
COST OF REVENUE $ 32,708 $ 313,776
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GROSS PROFIT $ 586,335 $ 275,123
EXPENSES
Promotion 18,283 35,665
Bank charges 7,997 4,187
Interest 0 1,907
Depreciation 0 445,503
Equipment lease 723 25,625
Insurance 0 16,845
Office expenses 139,137 108,767
Officers' salary 90,000 123,323
Wages 284,146 15,517
Payroll taxes 29,397 7,948
Commissions paid 16,652 2,590
Subcontract labor 31,894 14,845
Legal & professional fees 89,563 223,420
Travel 35,627 15,201
Merger Expense 0 122,774
Internet Access 11,943 0
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TOTAL EXPENSES $ 754,384 $ 1,164,117
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OTHER INCOME
Interest on Deposit 178 2,788
Subsidiary Income 25,726 0
Income Before Income Taxes (142,144) (886,206)
Provision For Income Taxes 0 0
NET LOSS $ (142,144) $ (886,206)
LOSS PER SHARE:
Net loss per share NIL NIL
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 705,704,276
</TABLE>
<PAGE>
<TABLE>
SAFE TECHNOLOGIES INTERNATIONAL INCORPORATED
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
<CAPTION>
<S> <C> <C>
For Three For Three
Months Ended Months Ended
September 30, September 30,
1999 1998
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) $ (51,551) $ (299,151)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 0 145,624
Changes in account balances:
Accounts receivable 9,045 15,537
Loans/Notes Receivable (14,227) 0
Deposits 0 0
Accounts payable 5,161 47,272
Accrued expenses 36,493 0
Payroll taxes payable (56) 5,104
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TOTAL ADJUSTMENTS 32,787 213,537
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NET CASH USED BY OPERATING ACTIVITIES (18,764) (85,614)
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CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment (5,198) 0
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NET CASH USED BY INVESTING ACTIVITIES (5,198) 0
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CASH FLOWS FROM FINANCING ACTIVITIES
Equipment lease (385) 0
Loans from stockholders 515 29,000
Repayment of loans from stockholders (3,500)
Paid in Capital (2,500) 0
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NET CASH (USED) BY FINANCING ACTIVITIES (2,370) 25,500
INCREASE (DECREASE) IN CASH (26,332) (60,114)
BEGINNING CASH BALANCE 36,373 119,075
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ENDING CASH BALANCE $ 10,041 $ 58,961
========= =========
SUPPLEMENTAL DISCLOSURES
Cash paid during the period for interest $ 418
</TABLE>
<PAGE>
<TABLE>
SAFE TECHNOLOGIES INTERNATIONAL INCORPORATED
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
<CAPTION>
<S> <C> <C>
For Nine For Nine
Months Ended Months Ended
September 30, September 30,
1999 1998
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) $ (142,144) $ (886,206)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 0 445,503
Changes in account balances:
Accounts receivable (77,029) 14,217
Inventory 0 1,367
Loans/Notes Receivable 936 0
Deposits 0 214,802
Accounts payable 41,711 70,535
Accrued expenses 217,873 0
Payroll taxes payable 4,208 4,208
Sales taxes payable 7,958 0
Issuance of common stock for services 0 0
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TOTAL ADJUSTMENTS 191,449 750,632
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NET CASH USED BY OPERATING ACTIVITIES 49,305 (135,574)
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CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property and equipment 184,822 (9,024)
Note receivable from stockholders 0 (1,471)
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NET CASH USED BY INVESTING ACTIVITIES (10,495) (10,495)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Payment on line of credit - bank 0 14
Equipment lease (1,032) 0
Paid in Capital 50,080 0
Issuance of common stock 25,000 122,774
Repayment of Loan from stockholders 0 (3,500)
Loans from Stockholders 0 29,000
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NET CASH PROVIDED BY FINANCING ACTIVITIES 74,048 148,288
INCREASE (DECREASE) IN CASH (60,954) 2,219
BEGINNING CASH BALANCE 70,995 56,742
--------- ---------
ENDING CASH BALANCE $ 10,041 $ 58,961
========= =========
SUPPLEMENTAL DISCLOSURES
Cash paid during the period for interest $ 1,244
</TABLE>
<PAGE>
SAFE TECHNOLOGIES INTERNATIONAL INCORPORATED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
(UNAUDITED)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Business Description:
Safe Technologies International, Inc. ("Safe Tech") and its subsidiaries is a
multi-faceted company specializing in Internet products and services.
Organization:
The Company was incorporated under the laws of the state of Delaware on May 21,
1987 as Safe Aid Products, Incorporated. On February 9, 1998, the Company
changed its name to Safe Technologies International, Inc.
The Company was considered to be in the development stage through December 31,
1997.
Basis of Consolidation:
The consolidated financial statements include the accounts of Safe Technologies
International Inc. and its subsidiaries. All material intercompany transactions
and balances have been eliminated in the consolidated financial statements.
Wholly Owned Subsidiaries:
On June 16, 1997, Intelligence Network International, Inc. (INI) entered into an
agreement to acquire Total Micro Computers, Inc. (TMC) in Tampa, Florida in
exchange for 100% of the issued and outstanding common stock. TMC was to have
received 1,062,500 shares of the company which was valued at $.40 per share or
$425,000. Acquired assets were accounted as a purchase, and are being carried
on the balance sheet. After a theft loss incurred by TMC, the former
stockholders abandoned the business in June 1998. The Company intends to resume
business in 1999.
On May 21, 1998, Internet Commerce, Inc. (ICI) was incorporated under the laws
of the state of Florida. ICI was formed by the Company to engage in the
business of Internet services and products, and to develop the copyrights and
trademarks acquired by the Company.
On February 5, 1999, The Company entered into an agreement to acquire Internet
Associates International, Inc., (IAI) in Boca Raton, Florida in exchange for
100% of the issued and outstanding common stock. IAI former shareholders will
receive the Company common stock on February 5, 2000, at a formula of 10 times
the net profit which IAI can produce within the year 1999.
<PAGE>
SAFE TECHNOLOGIES INTERNATIONAL INCORPORATED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
(UNAUDITED)
Cash and Cash Equivalents:
For purposes of the statements of cash flows, the Company treats all short-term
investments with maturates of three months or less at acquisition to be cash
equivalents.
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 period.
Actual results could differ from those estimates.
Change of Fiscal Year:
On February 9, 1998, the new management of Safe Tech decided to change Safe
Tech's fiscal year end from November 30th to December 31st.
Revenue Recognition:
Revenues of Safe Tech, and its subsidiaries are recognized at the time the
services are rendered to customers. Services are rendered when the Company's
representatives receive the customer's requests and completes the customer's
orders.
Financial Instruments:
Cash and cash equivalents, accounts receivable and accounts payable are short-
term in nature and the net values at which they are recorded are considered to
be reasonable estimates at their fair values. The carrying values of notes
payable are deemed to be reasonable estimates of their fair values.
Property and Equipment:
Property and equipment are stated at cost. Depreciation of depreciable assets
is computed using the straight-line method of depreciation over the estimated
useful lives of the assets. The estimated useful life is 7 years.
Amortization:
Amortization of trademarks and copyrights, and goodwill is determined utilizing
the straight-line method based generally on the estimated useful lives of the
intangibles as follows:
Trademarks and copyrights 15 years
Goodwill 15 years
<PAGE>
SAFE TECHNOLOGIES INTERNATIONAL INCORPORATED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
(UNAUDITED)
Accounting Pronouncements:
In June 1997, the Financial Accounting Standards Board issued Statement of
Accounting Standards No. 131, Disclosures About Segments of an Enterprise and
Related Information (SFAS No. 131) which established presentation of financial
date based on the "management approach". SFAS No. 131 is applicable for fiscal
years beginning after December 15, 1997. For the current fiscal year we are not
going to present segment reporting because it is immaterial.
Basic Loss per Share and Diluted Loss per Share:
In February 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 128, Earnings Per Share (SFAS No. 128), which
specifies the computation, presentation and disclosure requirements for earnings
per share. SFAS No. 128 supercedes Accounting Principle Board Opinion No. 15
entitled Earnings Per Share. Basic earnings per share are computed by dividing
income available to common stockholders (the numerator) by the weighted-average
number of common shares (the denominator) for the period. The computation of
diluted earnings per share is similar to basic earnings per share, except that
the denominator is increased to include the number of additional common shares
that would have been outstanding if the potentially dilutive common shares had
been issued.
Basic Loss per Share and Diluted Loss per Share:
The numerator in calculating basic earnings per share is reported net loss. The
denominator is based on the following weighted-average number of common shares:
1998 1997
Basic 652,071,619 612,933,835
The 14,727,280 shares of common stock, reserved in connection with warrants are
not included in the diluted earnings per share calculation since the exercise
price is greater than the average market price.
<PAGE>
SAFE TECHNOLOGIES INTERNATIONAL INCORPORATED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
(UNAUDITED)
2. CAPITAL STOCK TRANSACTIONS
The Articles of Incorporation provide for the authorization of 950,000,000
shares of common stock at $.00001 par value. On January 30, 1999, the
stockholders approved increasing the authorized number of shares to 999,999,000.
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, 2000, after giving effect to the ten for one
reverse split on February 9, 1998. At December 31, 1998, 14,727,280 shares of
common stock, reserved in connection with such warrants remain outstanding.
There was no market activity for these warrants through December 31, 1998.
On February 9, 1998, INI merged with and into Safe Aid Products, Inc. The Board
of Directors of the Company authorized a ten for one reverse stock split
pursuant to which its outstanding common stock will be reduced to 70,547,720
shares with no change to the par value of the common stock. At the same time,
according to the merge, 585,819,936 shares of common stock were issued to INI
stockholders. A remaining 1,062,500 shares of TMC stock were not issued.
On February 9, 1998, per terms of the merger, 49,109,544 shares of common stock
were issued for consultant services of which 35,000,000 were paid to the former
President and Chief Operating Officer.
On August 3, 1998, 500,000 shares of common stock were issued to an unrelated
party as repayment of a loan. The shares were valued at $0.04 per share.
On August 3, 1998, 250,000 shares of common stock were issued to a stockholder
in addition to previously issued shares (259,595,536) in exchange for $290,000.
In November 1998, 1,000,000 shares of common stock were issued to an unrelated
company as compensation for legal services rendered to the Company. These
shares have been valued by the Company at $0.04 per share.
<PAGE>
SAFE TECHNOLOGIES INTERNATIONAL INCORPORATED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
(UNAUDITED)
On December 31, 1998, 800,000 shares of common stock were issued to certain
officers and consultants of the Company in exchange for their services rendered
to the Company. These shares have been valued by the Company at $0.04 per
share. The Company recorded these shares as consultant fees.
On December 31, 1998, 1,325,000 shares of common stock were issued as
compensation for public relation services to an officer of the Company. These
shares have been valued by the Company at $0.04 per share. The Company recorded
these shares as consultant fees.
On December 31, 1998, 4,200,000 shares of common stock were issued to an
employee as compensation in lieu of cash payment. The Company has valued these
shares at $0.04 per share, and recorded them as salaries.
On February 2, 1999, 14,000,000 shares were cancelled and returned to the
Company Transfer Agent representing the unraveling of the GMG acquisition,
thereby reducing the company's issued stock by 14,000,000.
3. LEASES
The Company rents office space in Palm Beach, Florida on a month to month basis.
There is no lease in force. The monthly rent is currently $914. The Company
also rents office furniture and equipment on a month to month basis for $1,000
per month from the president.
The Company leases telephone equipment through a capital lease. The term of
the lease is for 36 months, commencing July 22, 1998, in the amount of $119.48
plus sales tax per month. There is a $1.00 purchase option at the end of the
lease.
Rental expense for the year ended December 31, 1998 was $22,471. Future
anticipated minimum annual rental expense for subsequent years are as follows:
1999 $ 24,398
2000 24,398
2001 23,800
2002 22,964
2003 22,964
Thereafter 0
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Total $ 118,524
<PAGE>
SAFE TECHNOLOGIES INTERNATIONAL INCORPORATED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
(UNAUDITED)
4. INCOME TAXES
The Company and its subsidiaries file consolidated income tax returns. 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 30,1997, the Company has $1,590,710 of operating loss carryforwards for
financial reporting and income tax purposes that expire through the year 2012.
Net operating loss of $666,206 from the year ended December 31, 1998 will expire
in 2018. Additionally, the Company has approximately $44,000 of research and
development credits available to offset future income taxes through the year
2005. There can, however, be no assurance that the Company will have future
operating profits.
<PAGE>
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Safe Technologies International, Inc., formerly known as Safe Aid Products,
Inc., (the 'Company') made substantial progress during the third quarter.
Pursuant to the Company's Business Plan and Critical Path, Management focused
major attention on further developing Internet Revenues and controlling
expenses. The third quarter financials reflect these efforts, showing a 517%
increase in Revenues over third quarter in 1998 and a 83% decrease in losses
compared to third quarter in 1998.
Although, negotiations between Safe Technologies and a Biotech group continued
during most of the quarter, in the interest of acquiring additional Nasal
Delivery Drug Applications, nothing was concluded in relation to acceptable
acquisition terms. Not only Management's time is, at issue, in continuing to
pursue this direction, but the rather sizable capital investment that would be
required to develop such Patents. Reference the Nasal Aspirin Patent., whereby
in ten years, the former SFAD Management had not been able to secure either a
joint venturer for product manufacturer nor the needed venture capital to
complete its FDA process. Consequently, Management believes that the Company
should concentrate on our core business, the Internet, in order to ensure that
SFAD become ensconced as a significant participant in the E-Commerce growth,
early in the Millennium. As other Biotech opportunities should develop,
individual reviews would be undertaken for potential profitability.
The Company's first quarter Acquisition, Internet Associates International,
Inc., (IAI), succeeded in partially stabilizing their eroding customer base of
Internet Hosting clients. From the severe losses sustained earlier this year,
they were able to show a small profit for the third quarter. No Dividends were
sent upstream to the Company.
Internet Commerce, Inc., (ICI) opened their second E-Commerce mall,
TheGlobalDeli.com, marking the Company's entrance into online sales of food and
beverages,. The new site generated modest opening site interest. ICI continued
its planning and coordination meetings with major mall suppliers, regarding the
Suppliers' Holiday Promotional and Advertising Budgets for their malls'
products, i.e. CybermallsCastle.com and FamousShoppingStreets.com.
The Company closed another Internet Acquisition Company, connect.ad Companies
Et. Al., an Internet Marketing Franchisor, on September 30, 1999. The
franchise (UFOC) will be modified during the last quarter, in order to add
additional Internet services to the Franchisee package. A soft opening for
connect.ad Franchise sales will occur, during the last quarter, as important
state registrations, New York, California, and Texas are completed.
<PAGE>
The Company is currently in talks and negotiations with several Internet
Marketing and Public Relations companies, which upon securing a successful
acquisition candidate, will round out the Company's capability in offering a
'full service', including Web Site Hosting, ISP, Web Site Creation and
Maintenance, Electronic Marketing and Advertising, E-Commerce, a comprehensive
Net economy for Millennium clients and customers.
Unless the context otherwise requires, the term "Company" as used herein refers
to the Company and its subsidiaries.
Financial Statements and Change in Fiscal Year End
Prior to the reverse merger, the Company's fiscal year end was November 30.
After the reverse merger was completed, the new management of the Company
changed the Company's fiscal year end to December 31.
<PAGE>
Results of Operations
Revenues were $201,919 for the third quarter of 1999 and were $39,082 for the
third quarter of 1998, representing an increase of 517%.
Revenues during the third quarter of 1999 were greater than the third quarter of
1998, due to acquisitions and growth of the Company's subsidiaries.
Approximately $152,000 of these revenues were from IAI or 75% of revenues and
$50,000 or 25% of these revenues were from other subsidiaries.
Cost of revenues were $11,768 for the third quarter of 1999 and $6,277 for the
third quarter of 1998. The increase of 87% is attributed to the increase sales
generated by the Company's subsidiaries.
Selling, general and administrative expenses were $241,714 for the second
quarter of 1999 and were $332,275 for the third quarter of 1998, representing a
decrease of 27%.
As a result of the foregoing, the Company's operating loss for the second
quarter of 1999 was $51,551 compared to $299,151 for the third quarter of 1998.
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
As of September 30,1999, the Company had working capital deficit of $359,494
compared with a working capital surplus of $600,068 on September 30,1998.
Net cash used in operating activities was $18,764 during the third quarter of
1999 compared to $85,614 for the third quarter of 1998. The Company used $5,198
in investing activities in the third quarter of 1999 and $0 in the third quarter
of 1998. Net cash used in financing activities was $2,370 during the third
quarter of 1999 compared with net cash provided of $25,500 in the third quarter
of 1998. In the third quarter the company obtained financing from its C.E.O. who
made several loans to the company in this quarter. As of September 30,1999, the
Company did not have any material commitments for capital expenditures.
Management is continually in the process of raising capital from interested
parties. The Company believes that it has adequate resources for operations for
the next 6 months.
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. CHANGES IN SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibit 27
Financial Data Schedule (filed herewith electronically)
(b) Reports on Form 8-K
The Company filed four reports on Form 8-K during the three
months ended September 30,1999.
(i) The Company filed a report on Form 8-K dated July 1,
1999 which reported information under Item 5 - Other
Information.
(ii) The Company filed a report on Form 8-K dated July 16,
1999 which reported information under Item 5 - Other
Information.
(iii) The Company filed a report on Form 8-K dated August 11,
1999 which reported information under Item 5 - Other
Information.
(iv) The Company filed a report on Form 8-K dated August 24,
1999 which reported information under Item 5 - Other
Information.
<PAGE>
Safe Technologies International, Inc.
In accordance with the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Safe Technologies International, Inc., Registrant
Date: October 29, 1999 By: /s/Barbara Tolley
- ---------------------- ---------------------
Date President
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
FORM 10QSB - CONSOLIDATED BALANCE SHEET AS OF SEPTEMBER 30, 1999 AND
CONSOLIDATED STATEMENT OF EARNINGS (LOSS) FOR THE THREE MONTH PERIOD
ENDED SEPTEMBER 30, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
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0
0
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