UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
(Mark one)
XX QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
- ---------- EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2001
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
- ---------- OF 1934
For the transition period from ____________ to ___________
Commission File Number: 33-22175
SAFETEK INTERNATIONAL, INC.
(Exact name of small business issuer as specified in its charter)
Delaware 75-2226896
- ---------------------------- ----------------------------
(State of incorporation) (IRS Employer ID Number)
5509 11th Avenue, Brookly, NY 11219
(Address of principal executive offices)
718-436-8246
(Issuer's telephone number)
(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. YES NO X
--- ---
State the number of shares outstanding of each of the issuer's classes of common
equity as of the latest practicable date: November 13, 2001 - 25,659,701 shares.
Transitional Small Business Disclosure Format (check one): YES NO X
--- ---
SAFETEK INTERNATIONAL, INC.
Financial Statements For The Quarter Ended September 30, 2001
Table of Contents
Page
----
Financial Information
Financial Statements 1 - 3
Management's Discussion and Analysis of Plan of Operation 4 - 5
Other Information
- -----------------
Legal Proceedings 5
Changes in Securities 5
Defaults Upon Senior Securities 5
Other Information 5
Exhibits and Reports on Form 8-K 5
SAFETEK INTERNATIONAL, INC.
AND SUBSIDIARIES
Consolidated Balance Sheets
ASSETS
------
September 30,
2001 December 31,
(Unaudited) 2000
----------- -----------
Current assets:
Cash and cash equivalents $ 28 $ 1,883
----------- -----------
Total current assets 28 1,883
----------- -----------
Intangible asset 450,000 --
----------- -----------
Total assets $ 450,028 $ 1,883
----------- -----------
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
Accounts Payable and accrued expenses $ 125,076 $ 23,617
Due to affiliate 30,760 --
----------- -----------
Total current liabilities 155,836 23,617
Debenture Payable 339,583 --
----------- -----------
Total liabilities 495,419 23,617
----------- -----------
Redeemable Preferred Stock - 4,648 and 4,688 shares 124,171 125,239
----------- -----------
Stockholders' equity:
Common stock -14,881,348 and 93,548 shares 1,488 9
Additional paid in capital 2,482,187 2,441,181
Accumulated deficit (2,653,237) (2,588,163)
----------- -----------
Total stockholders' deficit (169,562) (146,973)
----------- -----------
Total liabilities and stockholders' equity $ 450,028 $ 1,883
----------- -----------
See accompanying notes to financial statements
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SAFETEK INTERNATIONAL, INC.
AND SUBSIDIARIES
Consolidated Statements of Operations
Nine Months Ended Three Months ended
September 30, September 30,
(unaudited) (unaudited)
----------- -----------
Revenues: 2001 2000 2001 2000
Net Sales $ 516 $ 16,855 $ 140 $ --
----------- ----------- ----------- -----------
Costs and expenses:
Cost of good sold 30 11,910 30 --
Selling, general and administrative 85,203 104,066 25,918 1,483
----------- ----------- ----------- -----------
85,233 115,976 25,948 1,483
----------- ----------- ----------- -----------
Operating Loss (84,717) (99,121) (25,808) (1,483)
Other income (expense) 19,643 797,627 -- 816,329
----------- ----------- ----------- -----------
Net income(loss) $ (65,074) $ 698,506 $ (25,808) $ 814,846
----------- ----------- ----------- -----------
Basic and diluted income(loss)per share $ (.023) $ .019 $ (.003) $ .016
----------- ----------- ----------- -----------
Weighted average
number of shares outstanding 2,787,398 73,843 6,991,657 72,291
----------- ----------- ----------- -----------
See accompanying notes to financial statements
2
SAFETEK INTERNATIONAL, INC.
AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Nine Months Ended
September 30,
2001 2000
(unaudited) (unaudited)
----------- -----------
Cash flows from operating activities:
Net income(loss) $ (65,074) $ 698,506
Adjustments to reconcile Net income (loss) to net
Cash provided by (used in) operating activities:
Preferred stock issued for services -- 5,000
Other current assets -- 3,300
Due to stockholders -- 148,832
Accounts payable and accrued expenses 101,459 31,204
Due to affiliate 30,760 (883,314)
--------- ---------
Net cash provided by operating activities 67,145 3,528
--------- ---------
Cash Flows from investing activities:
Purchase of intangible asset (450,000) --
--------- ---------
Net cash used in investing activities (450,000) --
--------- ---------
Cash Flows from financing activities:
Proceeds from issuance of stock 2,350 --
Debenture payable 378,650 --
--------- ---------
Net Cash provided by financing activities 381,000 --
--------- ---------
Increase (decrease) in cash and cash equivalents (1,855) 3,528
Cash and cash equivalents - beginning of period 1,883 --
--------- ---------
Cash and cash equivalents - end of period $ 28 $ 3,528
--------- ---------
Supplemental schedule of non-cash financing activities:
Stock issued to reduce debenture payable $ 39,067 --
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See accompanying notes to financial statements
3
SAFETEK INTERNATIONAL, INC.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
September 30, 2001
Part I
1. Presentation of Unaudited Consolidated Financial Statements
-----------------------------------------------------------
The unaudited consolidated financial statements have been prepared in
accordance with rules of the Securities and Exchange Commission and,
therefore, do not include all information and footnotes necessary for a
fair presentation of financial position, results of operations and cash
flows, in conformity with generally accepted accounting principles. The
information furnished, in the opinion of management, reflects all
adjustments (consisting only of normal recurring accruals) necessary to
present fairly the financial position as of September 30, 2001, and
results of operations and cash flows for the three months and nine
months ended September 30, 2001 and 2000. The results of operations are
not necessarily indicative of results, which may be expected for any
other interim period, or for the year as a whole.
Management's Discussion and Analysis of Financial Condition and Results
of Operations
Caution Regarding Forward-Looking Information
This quarterly report contains certain forward-looking statements and
information relating to the company that are based on the beliefs of
the company or management as well as assumptions made by and
information currently available to the company or management. When used
in this document, the words "anticipate," "believe," "estimate,"
"expect" and "intend" and similar expressions, as they relate to the
company or its management, are intended to identify forward-looking
statements. Such statements reflect the current view of the company
regarding future events and are subject to certain risks, uncertainties
and assumptions, including the risks and uncertainties noted. Should
one or more of these risks or uncertainties materialize, or should
underlying assumptions prove incorrect, actual results may vary
materially from those described herein as anticipated, believed,
estimated, expected or intended. In each instance, forward-looking
information should be considered in light of the accompanying
meaningful cautionary statements herein.
2. Financial Condition and Plan of Operations
------------------------------------------
Safetek was reorganized in May 2001 for the purpose of providing
embryonic companies with good concepts and promising patented ideas,
presented to them by inventors with actual proof of concepts and
working prototypes, in order to bring these products to fruition.
As of June 2001, for the sum of $450,000 the company acquired the
contractual rights of Argo, Ltd. who has contracts with Evo.Tech, Inc.
("Evo Tech") and Altira Capital Consulting LLC. ("Altira").
4
SAFETEK INTERNATIONAL, INC.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
September 30, 2001
It is the belief of management that Evo Tech and Altira are well
established consultants in the field of evaluating the commercial
potential of newly evolving intellectual property, and that these two
firms also have the capability of building the sort of sophisticated
prototypes which enable the potential strengths and weaknesses of the
final product to be evaluated before actual production begins, and the
cost of commitment associated therewith is made.
3. Results of operation, Liquidity and Capital Resources
-----------------------------------------------------
For the Quarter ended September 30, 2001, the Company had virtually no
revenues. The contract referred to in note 2 above is the only asset of
the company. The liabilities of the company are mainly amounts due on
this contract and monies received from 8% series A Senior subordinated
convertible redeemable debentures to pay for this contract as well as
other expenses.
Part II. Other Information
1. Legal Proceedings - None
2. Changes in Securities:
Common Stock
------------
Number of Additional
Shares Par Value paid in capital
---------- ---------- ---------------
Balance at December 31, 2000 93,548 9 2,441,181
Shares issued - June 2001 5,045,000 505 2,413
Shares issued - July - September 2001 9,742,800 974 38,593
---------- ---------- ----------
Balance at September 30, 2001 14,881,348 1,488 2,482,187
---------- ---------- ----------
On June 11, 2001 a stock option plan was exercised and 5,000,000 shares
of common stock were sold at the par value.
In September 2001 an additional stock option was exercised and
5,000,000 shares of restricted common stock were sold at par value.
3. Defaults on Senior Securities - None
4. Submission of Matters to a Vote of Security Holders
The company has held no regularly scheduled meetings during the
reporting period.
5. Other information - None
6. Exhibits and Reports on Form 8-K - None
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Shmuel M. Shneibalg, President and Director
By: /s/ Shmuel M. Shneibalg Dated: November 13, 2001
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Russell Machover, Vice President and Director
By: /s/ Russell Machover Dated: November 13, 2001
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