==========================================================================
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 June 30, 1999
Commission File No. 000-17746
SAFE TECHNOLOGIES INTERNATIONAL INCORPORATED
(Formerly Safe Aid Products Incorporated)
----------------------------------------------------
(Exact name of Registrant as specified in its Charter)
Delaware 22-2824492
------------------------------- ---------------------
(State or other jurisdiction of (IRS Employer ID No.)
incorporation or organization)
249 Peruvian Avenue
Suite F2
Palm Beach, Florida 33480
------------------------------- ----------
(Address of principal executive (Zip Code)
offices)
Registrant's telephone number,
including area code: (561) 832-2700
--------------
* On February 9, 1998, Safe Aid Products Incorporated merged with and into
Intelligence Network International and was renamed Safe Technologies
International Incorporated.
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
August 11, 1999.
<PAGE>
INDEX
- -----
Page
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PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets -
June 30, 1999 (Unaudited) and December 30, 1998...............3
Consolidated Statements of Operations (Unaudited) -
Three Months Ended June 30, 1999 and June 30,1998.............4
Consolidated Statements of Operations (Unaudited) -
Six Months Ended June 30, 1999 and June 30,1998...............5
Consolidated Statements of Cash Flows (Unaudited) -
Three Months Ended June 30, 1999 and June 30,1998.............6
Consolidated Statements of Cash Flows (Unaudited) -
Six Months Ended June 30, 1999 and June 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............................................17
Item 2. Changes in Securities........................................17
Item 3. Defaults Upon Senior Securities..............................17
Item 4. Submission of Matters to a Vote of Security Holders..........17
Item 5. Other Information............................................17
Item 6. Exhibits and Reports on Form 8-K.............................17
Signature.............................................................18
<PAGE>
PART 1 - FINANCIAL STATEMENT PRESENTATION
<TABLE>
SAFE TECHNOLOGIES INTERNATIONAL INCORPORATED
CONSOLIDATED BALANCE SHEETS
<CAPTION>
<S> <C> <C>
June 30, December 31,
1999 1998
(UNAUDITED)
ASSETS
CURRENT ASSETS
Cash $ 29,018 $ 66,473
Accounts receivable - principally trade 74,221 500
Inventory 0 0
Loans receivable 4,000 0
Notes receivable, stockholders 0 0
Prepaid expenses 0 0
Management Agreements, net 37,500 37,500
-------------- -------------
TOTAL CURRENT ASSETS 144,739 104,473
MACHINERY AND EQUIPMENT
Net of accumulated depreciation 180,561 4,233
-------------- -------------
TOTAL MACHINERY AND EQUIPMENT 180,561 4,233
INTANGIBLE ASSETS
Net of accumulated amortization 333,667 324,968
-------------- -------------
TOTAL INTANGIBLE ASSETS 333,667 324,968
------------- -------------
TOTAL ASSETS $ 658,967 $ 433,674
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Equipment lease $ 3,177 $ 0
Payroll taxes 15,615 0
Accounts payable, trade 102,266 57,776
Accrued expenses 129,452 37,452
Accrued income taxes 0 0
Notes payable, related party 6,000 0
Shareholder loans 119,027 123,590
-------------- -------------
TOTAL CURRENT LIABILITIES 375,538 218,818
STOCKHOLDERS' EQUITY
Common stock $.00001 par value999,000,000 shares
authorized; 706,277,200 issued and outstanding 32,740 7,125
Capital subscribed 40,000 40,000
less: subscription receivables (1,000)
Additional paid in capital 2,783,932 2,591,531
Retained earnings (deficit) (2,573,243) (2,422,800)
-------------- ------------
TOTAL STOCKHOLDERS' EQUITY 283,429 214,856
-------------- ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 658,967 $ 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
June 30, June 30,
1999 1998
REVENUES $ 115,407 $ 203,096
COST OF REVENUE $ 10,100 $ 96,626
------------ ------------
GROSS PROFIT $ 105,307 $ 106,470
EXPENSES
Promotion 3,331 10,239
Bank charges 752 1,695
Interest 0 1,082
Depreciation 0 143,927
Equipment lease 5,350 9,012
Insurance 4,879 4,771
Office expenses 34,563 30,191
Officers' salary 52,000 33,638
Wages 48,038 10,837
Payroll taxes 5,396 3,514
Commissions paid 208 925
Subcontract labor 4,500 1,540
Legal & professional fees 14,800 78,015
Travel 19,115 5,225
Internet access 13,060 0
------------ ------------
TOTAL EXPENSES $ 205,993 $ 334,611
------------ ------------
OTHER INCOME
Interest on Deposit 56 1,432
Income Before Income Taxes ( 100,630) ( 226,709)
Provision For Income Taxes 0 0
NET LOSS $ ( 100,630) $ ( 226,709)
LOSS PER SHARE:
Net loss per share NIL NIL
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 705,877,200 705,477,200
</TABLE>
<PAGE>
<TABLE>
SAFE TECHNOLOGIES INTERNATIONAL INCORPORATED
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
<CAPTION>
<S> <C> <C>
For Six For Six
Months Ended Months Ended
June 30, June 30,
1999 1998
REVENUES $ 341,744 $ 549,817
COST OF REVENUE $ 19,990 $ 307,499
------------ ------------
GROSS PROFIT $ 321,754 $ 242,318
EXPENSES
Promotion 13,996 19,788
Bank charges 2,807 4,021
Interest 0 1,489
Depreciation 0 299,879
Equipment lease 5,965 18,504
Insurance 4,879 10,770
Office expenses 79,179 73,389
Officers' salary 155,492 88,246
Wages 48,038 15,517
Payroll taxes 10,472 5,209
Commissions paid 3,267 2,590
Subcontract labor 21,054 14,845
Legal & professional fees 59,926 142,937
Travel 29,156 11,129
Merger Expense 0 122,774
Taxes, other 5,550 0
Internet access 19,310 0
------------ ------------
TOTAL EXPENSES $ 459,092 $ 831,087
------------ ------------
OTHER INCOME
Interest on Deposit 166 2,469
Income Before Income Taxes ( 137,172) ( 586,300)
Provision For Income Taxes 0 0
NET LOSS $ ( 137,172) $ ( 586,300)
LOSS PER SHARE:
Net loss per share NIL NIL
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 705,677,200 705,477,200
</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
June 30, June 30,
1999 1998
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) $ ( 100,630) $( 226,709)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 0 143,927
Changes in account balances:
Accounts receivable (5,426) 20,911
Loans/Notes receivable (5,500) 0
Inventory 0 1,367
Deposits 0 0
Accounts payable 9,391 3,744
Accrued expenses 64,000 0
Payroll taxes payable (2,419) (2,066)
Sales taxes payable 0 (4)
--------- ---------
TOTAL ADJUSTMENTS 60,047 167,879
--------- ---------
NET CASH USED BY OPERATING ACTIVITIES (40,583) (58,830)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property and equipment 0 (9,024)
Note receivable from stockholders 0 (1,471)
--------- ---------
NET CASH USED BY INVESTING ACTIVITIES 0 (10,495)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Payment on line of credit - bank 0 294
Equipment lease (257) 0
Paid in capital 38,382 0
--------- ---------
NET CASH (USED) BY FINANCING ACTIVITIES 38,125 294
INCREASE (DECREASE) IN CASH ( 2,458) (69,031)
BEGINNING CASH BALANCE 31,476 188,106
--------- ---------
ENDING CASH BALANCE $ 29,018 $ 119,075
========= =========
SUPPLEMENTAL DISCLOSURES
Cash paid during the period for interest $ 0 418
</TABLE>
<PAGE>
<TABLE>
SAFE TECHNOLOGIES INTERNATIONAL INCORPORATED
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
<CAPTION>
<S> <C> <C>
For Six For Six
Months Ended Months Ended
June 30, June 30,
1999 1998
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) $ (137,172) $ (586,300)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 0 299,879
Changes in account balances:
Accounts receivable (72,721) (1,320)
Loans/Notes receivable (9,545) 0
Inventory 0 1,367
Deposits 0 214,802
Accounts payable 35,630 22,508
Accrued expenses 98,000 0
Payroll taxes payable 10,065 (896)
Federal/Sales taxes payable 5,550 0
--------- ---------
TOTAL ADJUSTMENTS 66,979 536,340
--------- ---------
NET CASH USED BY OPERATING ACTIVITIES (70,192) (49,960)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property and equipment (176,327) (9,024)
Note receivable from stockholders 0 (1,471)
Loans from stockholders 5,000 0
--------- ---------
NET CASH USED BY INVESTING ACTIVITIES (171,327) (10,495)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Payment on line of credit - bank 0 14
Issuance of common stock 25,000 122,774
Equipment lease (649) 0
Paid in capital 179,715 0
--------- ---------
NET CASH PROVIDED BY FINANCING ACTIVITIES 204,715 122,788
INCREASE (DECREASE) IN CASH (37,453) (62,333)
BEGINNING CASH BALANCE 66,471 56,742
--------- ---------
ENDING CASH BALANCE $ 29,018 $ 119,075
========= =========
SUPPLEMENTAL DISCLOSURES
Cash paid during the period for interest $ 0 826
</TABLE>
<PAGE>
SAFE TECHNOLOGIES INTERNATIONAL INCORPORATED
AND SUBSIDIARIES
Formerly known as
SAFE AID PRODUCTS INCORPORATED
NOTES TO FINANCIAL STATEMENTS
June 30, 1999
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 services and products and in
the development of a nasal aspirin patent for which the Company has perpetual
worldwide rights.
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, IAI, ICI and TMC. 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
AND SUBSIDIARIES
Formerly known as
SAFE AID PRODUCTS INCORPORATED
NOTES TO FINANCIAL STATEMENTS
June 30, 1999
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, ICI, IAI, and TMC 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
AND SUBSIDIARIES
Formerly known as
SAFE AID PRODUCTS INCORPORATED
NOTES TO FINANCIAL STATEMENTS
June 30, 1999
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
AND SUBSIDIARIES
Formerly known as
SAFE AID PRODUCTS INCORPORATED
NOTES TO FINANCIAL STATEMENTS
June 30, 1999
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 merge, 49,109,544 shares of common stock
were issued for consultant services.
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
AND SUBSIDIARIES
Formerly known as
SAFE AID PRODUCTS INCORPORATED
NOTES TO FINANCIAL STATEMENTS
June 30, 1999
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
---------
Total $ 118,524
<PAGE>
SAFE TECHNOLOGIES INTERNATIONAL INCORPORATED
AND SUBSIDIARIES
Formerly known as
SAFE AID PRODUCTS INCORPORATED
NOTES TO FINANCIAL STATEMENTS
June 30, 1999
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
Overview
Safe Technologies International, Inc., formerly known as Safe Aid Products,
In, (the 'Company') concentrated on a variety of issues during the second
quarter.
In addition to Management's filing the first 10-K Annual Report for the
Company in its first year as an operational company, requiring extensive
financial reporting versus its prior eleven year status as a development
company, as well as completing an additional 10-QSB Quarter Filling in the
same quarter, Management concentrated on developing a business plan which
should lead the Company forward into the next century. Management also intends
to raise additional capital for acquisitions and to expand its internet
operations. At this time, Management does not intend to raise money for the
development of our nasal aspirin patent. However, this decision could change
rapidly, pending the development of Management's current talks with a Biotech
group, having other medical patents for which our nasal delivery system
application, for whom the nasal application is of interest.
The Company's new acquisition, Internet Associates International, Inc., (IAI),
based in Boca Raton, achieved some progress during the quarter in regard to
familiarizing and integrating the Company's policies and procedures into their
operations. At the end of the June Quarter, the IAI's Revenues and Net Profit
projections, made by IAI's former stockholders, does not meet their original
projections. Dividends, sent upstream to the Company, have also not met
projections. IAI has been hard hit, due to fierce competition, offering
similar services for less money. IAI's Management is addressing the problem
by costs cutting and addressing new ways of packaging their Internet services.
Internet Commerce, Inc., the Company's E-Commerce subsidiary pushed forward in
adding new retail product items which will be offered for sale through the
Company's online malls. Additional content is being added and the formation
of two new malls DejaVuFashions.com and TheGlobalDeli.com These malls will
operate under the banner of the Company's INCybermall.com, which will
ultimately be a group of many different product malls offering specialty
products for sale. As time consuming as these web construction activities and
searching for appropriate products is, it is a vital step in building a
viable, exciting, and profitable super mall operations.
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 $115,407 for the second quarter of 1999 and were $203,096 for
the second quarter of 1998, representing a decrease of 76%.
Revenues during the second quarter of 1999 were lower than the second quarter
of 1998, due to changes in the Company's subsidiaries and revenue recognition
policies. The Company's subsidiary, Total Micro Computers, Inc., whose
revenues were reflected in the second quarter of 1998, are not reflected in
the second quarter of 1999, due to the inactive status of TMC.
Cost of revenues were $96,626 for the second quarter of 1998 and $10,100 for
the second quarter of 1999. The decrease of 89.5% is attributed to the lack of
TMC's revenues and cost of sales.
Selling, general and administrative expenses were $205,993 for the second
quarter of 1999 and were $334,411 for the second quarter of 1998, representing
a decrease of 63%. The decrease is due to the lack of TMC's expenses.
As a result of the foregoing, the Company's operating loss for the second
quarter of 1999 was $100,630 compared to $226,709 for the second quarter of
1998.
LIQUIDITY AND CAPITAL RESOURCES
As of June 30,1999, the Company had working capital deficit of $230,799
compared with a working capital surplus of $1,148,600 on June 30,1998.
Net cash used in operating activities was $40,583 during the second quarter of
1999 compared to $58,830 for the second quarter of 1998. The Company used $0
in investing activities in the second quarter of 1999 and $10,495 in the
second quarter of 1998. Net cash provided in financing activities was $38,125
during the second quarter of 1999 compared with $294 in the second quarter of
1998. In the 2nd quarter the company obtained financing from its C.E.O. who
made several loans to the company in this quarter. As of June 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 ten reports on Form 8-K and two reports
on form 8-K/A during the three months ended June 30,1999.
(i) The Company filed a report on Form 8-K dated April 13,
1999 which reported information under Item 5 - Other
Information.
(ii) The Company filed a report on Form 8-K/A dated June 2,
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: August 13, 1999 By: /s/Barbara Tolley
- --------------------- ---------------------
Date President
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
FORM 10QSB - CONSOLIDATED BALANCE SHEET AS OF JUNE 30, 1999 AND
CONSOLIDATED STATEMENT OF EARNINGS (LOSS) FOR THE THREE MONTH PERIOD
ENDED JUNE 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
<PERIOD-START> APR-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 29,018
<SECURITIES> 0
<RECEIVABLES> 74,221
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 144,739
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0
0
<OTHER-SE> 283,429
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<TOTAL-REVENUES> 115,407
<CGS> 10,100
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<INCOME-CONTINUING> (100,630)
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<NET-INCOME> (100,630)
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</TABLE>
