U.S.SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] 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 000-21627
Safe Alternatives Corporation of America, Inc.
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(Name of small business issuer in its charter)
Florida 06-1413994
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification No.)
440 Main Street, Ridgefield, Connecticut 06877
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(Current Principal Executive Offices) (Zip Code)
Issuer's Telephone Number: (203) 438-4918
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 report(s), and (2) has been
subject to such filing requirements for the past 90 days. Yes X No
--- ---
As of September 30, 2001, there were 54,580,960 shares of Common Stock issued
and outstanding.
Transitional Small Business Disclosure Format (check one): Yes No X
--- ---
SAFE ALTERNATIVES CORPORATION OF AMERICA, INC.
UNAUDITED FINANCIAL STATEMENTS
SEPTEMBER 30, 2001 AND 2000
PART I: FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS:
SAFE ALTERNATIVES CORPORATION OF AMERICA, INC
TABLE OF CONTENTS
Balance Sheets,
September 30, 2001 and 2000 1
Statements of Operations,
For the Nine Months Ended September 30, 2001 and 2000 2
Statements of Operations,
For the Three Months Ended September 30, 2001 and 2000 3
Statements of Cash Flows,
For the Six Months Ended June 30, 2001 and 2000 4
Notes to Financial Statements 5 - 7
SAFE ALTERNATIVES CORPORATION OF AMERICA, INC.
Balance Sheets
SEPTEMBER 30, 2001 AND 2000
2001 2000
------------ ------------
ASSETS
Current Assets:
Cash $ 215 $ 2,382
Accounts receivable - net of allowance
of $5,000 and $0 for 2001 and 2000 4,509 28,639
------------ ------------
Total current assets 4,724 31,021
------------ ------------
Property and Equipment, Net 26,010 33,592
------------ ------------
Loan Restructuring Costs 0 273,649
------------ ------------
$ 30,734 $ 338,262
============ ============
Liabilities and Stockholders' Deficit
Current Liabilities:
Accounts payable and other accrued expenses $ 504,253 $ 401,114
Current maturities of stockholders' loans 926,900 926,900
Convertible debentures 726,500 726,500
------------ ------------
Total current liabilities 2,157,653 2,054,514
------------ ------------
Other Liabilities:
Loss contingency 140,000 26,000
------------ ------------
Total other liabilities 140,000 26,000
------------ ------------
Stockholder's Deficit:
Common stock, $.0001 par value,
200,000,000 shares authorized;
issued(including shares in treasury)
54,580,960 shares in 2001 and 2000 110,747 110,747
Additional paid-in capital 15,528,674 15,528,674
Accumulated deficit (17,908,499) (17,383,832)
Subscriptions issuable 2,160 2,160
------------ ------------
(2,266,918) (1,742,251)
Treasury stock (1) (1)
------------ ------------
Total stockholders' deficit (2,266,919) (1,742,252)
------------ ------------
$ 30,734 $ 338,262
============ ============
1
SAFE ALTERNATIVES CORPORATION OF AMERICA, INC.
Statements of Operations
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000
2001 2000
------------ ------------
Sales $ 57,002 $ 68,792
Cost of Goods Sold 21,255 29,760
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Gross Profit 35,747 39,032
------------ ------------
Operating Costs:
Selling, general and administrative 48,591 59,410
Research and development -- --
Depreciation and amortization 5,687 5,687
------------ ------------
Total operating costs 54,278 65,097
------------ ------------
Loss from Operations (18,531) (26,065)
------------ ------------
Other Expenses:
Interest expense - stockholders' loan (55,614) (55,614)
Interest expense - convertible notes (32,694) (32,694)
------------ ------------
Total other expenses (88,308) (88,308)
------------ ------------
Net loss before extraordinary item (106,839) (114,373)
Extraordinary Item (273,649) --
------------ ------------
Net Loss $ (380,488) $ (114,373)
============ ============
Net Loss per Common Share $ (.0070) $ (.0025)
============ ============
Weighted Average Number of Common Shares 54,580,960 45,762,778
============ ============
2
SAFE ALTERNATIVES CORPORATION OF AMERICA, INC.
Statements of Operations
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000
2001 2000
------------ ------------
Sales $ 14,510 $ 33,245
Cost of Goods Sold 6,299 14,093
------------ ------------
Gross Profit 8,211 19,152
------------ ------------
Operating Costs:
Selling, general and administrative 10,571 15,761
Research and development -- --
Depreciation and amortization 1,895 1,895
------------ ------------
Total operating costs 12,466 17,656
------------ ------------
Income (Loss) from Operations (4,255) 1,496
------------ ------------
Other Expenses:
Interest expense - stockholders' loan (18,538) (18,538)
Interest expense - convertible notes (10,898) (10,898)
------------ ------------
Total other expenses (29,436) (29,436)
------------ ------------
Net Loss $ (33,691) $ (27,940)
============ ============
Net Loss per Common Share $ (.0006) $ (.0006)
============ ============
Weighted Average Number of Common Shares 54,580,960 45,762,778
============ ============
3
SAFE ALTERNATIVES CORPORATION OF AMERICA, INC.
StatementS of Cash Flows
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000
2001 2000
--------- ---------
Cash Flows from Operating Activities:
Net Loss $(380,488) $(114,373)
Adjustments to reconcile net loss to
net cash provided (used) in operating
activities:
Depreciation and amortization 5,687 5,687
Extraordinary item 273,649 --
Changes in assets and liabilities:
Decrease in accounts receivable 7,486 4,984
Increase in accounts payable and
accrued expenses 86,643 67,118
--------- ---------
Net Cash Used in Operating Activities (7,023) (36,584)
--------- ---------
Net Cash Flows from Financing Activities:
Net proceeds from issuance of common
stock and subscriptions -- 37,500
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Net Cash Provided by Financing Activities -- 37,500
--------- ---------
Net Increase (Decrease) in Cash (7,023) 916
Cash, Beginning of Year 7,238 1,466
--------- ---------
Cash, End of Period $ 215 $ 2,382
========= =========
4
SAFE ALTERNATIVES CORPORATION OF AMERICA, INC.
NOTES TO FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000
1. Basis of Presentation
- ------------------------
The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for the interim financial
information. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management of the management, all
adjustments of a normal recurring nature necessary for a fair statement have
been included.
The financial statements and notes are condensed as permitted by Form 10-QSB and
do not contain certain information included in the annual financial statements
and notes of the Company.
Method of Accounting
- --------------------
The financial statements are prepared using the accrual basis of accounting.
Generally accepted accounting principles requires management, under certain
circumstances, to make estimates and assumptions that affect the amounts
reported in the financial statements and accompanying notes. Actual results
could differ from those estimates.
Earnings Per Share
- ------------------
The following data show the amounts used in computing earnings per share for the
nine months ended September 30, 2001 and 2000, respectively.
2001 2000
------------ ------------
Loss used in basic EPS $ (380,488) $ (114,373)
============ ============
Weighted average number of common
shares used in basic EPS 54,580,960 45,762,778
============ ============
Net loss per common share $ (.0070) $ (.0025)
============ ============
Property, Plant and Equipment
- -----------------------------
Property, plant and equipment are recorded at cost. Depreciation is provided on
a straight-line basis over estimated useful lives of the respective assets.
Leasehold improvements are depreciated over the shorter of the lease term or
economic life of the related improvement. Maintenance and repairs are charged to
expense as incurred; major renewals and betterments are capitalized. When items
of property, plant and equipment are sold or retired, the related cost and
accumulated depreciation are removed from the accounts and any gain or loss is
included in the results of operations.
5
SAFE ALTERNATIVES CORPORATION OF AMERICA, INC.
NOTES TO FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000
2. Property and Equipment
- -------------------------
As of September 30, 2001 and 2000 property and equipment consisted of the
following:
2001 2000
--------- ---------
Equipment $ 29,288 $ 29,288
Furniture & Fixtures 10,008 10,008
Leasehold Improvements 11,468 11,468
--------- ---------
50,764 50,764
Less: Accumulated depreciation 24,754 17,172
--------- ---------
Property and Equipment - Net $ 26,010 $ 33,592
========= =========
Depreciation expense was $5,687 for the nine months ended September 30, 2001 and
2000, respectively.
3. Stockholders' Deficit
- ------------------------
Shares Issued as Compensation and Commission
During the three months ended September 30, 2001 and 2000, respectively, there
were 0 fully vested shares of the Company's common stock issued to outside
consultants for services rendered.
During the nine months ended September 30, 2001 and 2000, respectively, there
were 250,000 and 0 fully vested shares of the Company's common stock issued to
outside consultants for services rendered. The fair value of shares awarded,
based upon the value of Common Stock sold during these periods, were $0 for 2001
and 2000, respectively.
During the three months ended September 30, 2001 and 2000, respectively, 0 fully
vested shares of the Company's Common Stock were issued to officers of the
Company.
During the nine months ended June 30, 2001 and 2000, respectively, 0 and
18,500,000 fully vested shares of the Company's Common Stock were issued to
officers of the Company. The fair value of shares awarded, based upon the value
of Common Stock sold during these periods, were $0 for 2001 and 2000,
respectively.
During the nine months ended September 30, 2000, an officer of the Company
purchased 5,750,000 shares of the Company's restricted Common Stock for a
purchase price of $37,500.
4. Extraordinary Item
- ---------------------
During the first quarter of 2001 there was a change in the treatment of the debt
restructuring that had occurred in 1998 that originally result the
capitalization of intangible costs. As per FAS 15 these intangible costs
associated with this debt restructuring should be classified as "Loss on
Troubled Debt Restructuring" and charged against income. As a result, to reflect
this change, the capitalized "Loan Restructuring Costs" of $273,649 have been
charged against income as of September 30, 2001.
6
SAFE ALTERNATIVES CORPORATION OF AMERICA, INC.
NOTES TO FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000
5. Cash Flow Information
- ------------------------
The Company considers all short-term investments with an original maturity of
three months or less to be cash equivalents.
Cash paid for interest and income taxes for the six months ended September 30,
2001 and 2000 were zero.
Non Cash Transaction
- --------------------
In 2001 a loss due to restructuring troubled debt of $273,649 was charged
against income, as referred to in Note 4.
6. Subsequent Events
- --------------------
In 2001 the Company entered into a settlement agreement with the Trustee for the
Bankruptcy Estate of Samuel L. Beinstein, whereby the Company will receive a
Satisfaction of Judgement in exchange for $10,000 to be paid on behalf of the
Company. This settlement was approved by the Bankruptcy Court and is expected to
be completed in February 2002.
In October 2001 the Company issued 4,000,000 shares of restricted common stock
to the remaining shareholders in the Investor Group. These shares were issued in
consideration of a waiver by the members of the Investor Group of all money owed
to them and the waiver of all rights to or under any stock, options, warrants or
other rights to additional stock in the Company.
As of December 31, 2001, six (6) holders of the foregoing Convertible Notes
(totaling $450,000) agreed to release all obligations under or as a result of
the Convertible Notes in exchange for the issuance of a total of 16,624,236
shares of the Company's restricted Common Stock.. In addition, two (2) holders
of the foregoing Convertible Notes (totaling $50,000) have informed the Company
that they have written off the obligations under the foregoing Convertible Notes
and are therefore not interested in any settlement. Therefore, as of January 10,
2002, the Company was in default in the amounts of 226,500 in principal and
$54,360 in interest for a total of $280,860 in arrearages.
7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS:
Overview:
- --------
The following discussion and analysis should be read in conjunction with
the Company's Financial Statements and notes and the other financial information
elsewhere in this filing. This report contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and Sections 21E of the
Securities Exchange Act of 1934. Actual results could differ materially from
those projected in the forward-looking statements as a result of the risk
factors set forth below and elsewhere in this report. The Company's future
operating results may be affected by a number of factors, including general
economic conditions, cyclical factors affecting the Company's industry, lack of
growth in the Company's end-markets, and the Company's ability to settle its
debts and manufacture and sell its products at a profitable, yet competitive
price.
The industry in which the Company competes is highly competitive and the
Company expects such competition to continue in the future. Most of the
Company's competitors are larger than the Company and have substantially greater
financial, technical, marketing and manufacturing resources.
Our operations are concentrated in a single facility in Derby, Vermont. Our
operations could be interrupted by fire or other events beyond our control. We
do not have a detailed disaster plan. In addition, we do not carry business
interruption insurance to compensate us for losses that may occur and any losses
or damages incurred by us could have a material adverse effect on our business.
Results of Operations for the Three Months Ending September 30, 2001 and 2000.
- ------------------------------------------------------------------------------
Sales; Gross Margins; Net Losses:
For the three months ended September 30, 2001, sales decreased to $14,510
from $33,245 for the three months ended September 30, 2000, representing a 56%
decrease.
The Company's gross margin on sales decreased from (57%) for the third
quarter of 2000 to (56 %) for the third quarter of 2001.
For the three months ended September 30, 2001, the Company reported a net
loss of $(33,691), or $(.0006) per share, as compared with $(27,940) or $(.0006)
per share in the same period in the previous year, an increased loss of $5,751,
or 21%. The loss for the third quarter of 2001 included accrued interest of
$29,436, which includes $10,898 and $18,538 for the convertible note and
stockholder loans payable, respectively. The Company may continue to incur net
losses. There was no change in the net loss per share in the third three months
of 2001 from the same period in 2000 due to an increase in the number of shares
outstanding for each period.
Selling, General and Administrative Expenses. For the three months ending
September 30, 2001, the Company incurred selling, general and administrative
expenses of $10,571, as compared to $15,761 in the same period in the previous
year. Calculations with respect to the percentage of selling, general and
administrative expenses to sales are not meaningful.
Research and Development. For the quarters ending September 30, 2001 and
2000, the Company did not have any research and development expenses. The
research and development of the Company's product lines were terminated in 1998
due to the Company's financial condition. The research facility in Brookfield,
CT was also closed in 1998. Calculations with respect to the percentage of
research and development expenses relative to sales are not meaningful.
Results of Operations for the Nine Months Ending September 30, 2001.
- -------------------------------------------------------------------
Sales; Gross Margins; Net Losses:
For the nine months ending September 30, 2001, sales decreased to $57,002
from $68,792 for the nine months ending September 30, 2000, representing a 17%
decrease. This was due to decrease in customer orders.
The Company's gross margin on sales increased from (57%) for the first nine
months of 2000 to (63%) for the first nine months of 2001.
For the nine months ended September 30, 2001 and before the extraordinary
item discussed below, the Company had a net loss of $(106,839), or $(.0020) per
share, as compared with $(114,373) or $(.0025) per share in the same period in
the previous year. For the nine months ended September 30, 2001 and including
the extraordinary item that is discussed below, the Company had a net loss of
$(380,488), or $(.0070) per share, as compared with $(114,373) or $(.0025) per
share in the same period in the previous year. The Company may continue to incur
net losses. The decrease of $.0005 in the net loss per share in the first nine
months of 2001 from the same period in 2000 is due to a larger number of shares
outstanding.
8
Selling, General and Administrative Expenses. For the nine months ending
September 30, 2001, the Company incurred selling, general and administrative
expenses of $48,591, as compared to $59,410 in the same period in the previous
year. Calculations with respect to the percentage of selling, general and
administrative expenses to sales are not meaningful.
Research and Development. For the nine months ending September 30, 2001 and
2000, the Company did not have any research and development expenses. The
research and development of the Company's product lines were terminated in 1998
due to the Company's financial condition. The research facility in Brookfield,
CT was also closed in 1998. Calculations with respect to the percentage of
research and development expenses relative to sales are not meaningful.
Liquidity and Capital Resources. The Company has never generated sufficient
revenues to finance its operations and has been able to remain in business
solely as a result of raising capital and settling its debt. At September 30,
2001, the Company had current assets of $4,724 and current liabilities of
$2,157,653. As of September 30, 2001, the Company was able to operate at a near
breakeven level based upon the reduction of costs associated with sales. The
Company's ability to continue as a going concern in the near term is dependent
upon obtaining additional financing and continuing to settle its debt.
Extraordinary Item. During the first quarter of 2001, there was a change in
the treatment of the debt restructuring that had occurred in 1998 that
originally resulted the capitalization of intangible costs. As per FAS 15 these
intangible costs associated with this debt restructuring will be classified as
"Loss on Troubled Debt Restructuring" and charged against income. As a result,
to reflect this change, the capitalized "Loan Restructuring Costs" of $273,649
have been charged against income as of March 31, 2001.
PART II: OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS:
(a) Pending Legal Proceedings: An adversary proceeding was brought against
the Company in July 1997, in U.S. Bankruptcy Court for the District of
Connecticut, by Richard Coan, Trustee for the Bankruptcy Estate of Samuel E.
Bernstein (U.S. Bankruptcy Court, Dist. Conn. Adversary Proceedings File No.
97-5078). The suit seeks a judgment to recover accrued but unpaid wages totaling
approximately $100,000 for 1995. Judgment against the Company and in favor of
the Trustee was entered in this matter on or about April 5, 2000 in the total
amount of $140,000. On or about October 23, 2001, the Bankruptcy court approved
a settlement agreement whereby a Satisfaction of Judgment will be entered in
this matter upon the Trustee's receipt of $10,000 to be paid on behalf of the
Company. This agreement terminates if not completed on or before February 15,
2002, unless extended in writing.
In October 2000, Seaco Insurance Company filed an action entitled Seaco
Insurance Company v. Safe Alternatives o f America, Inc. (Vermont Orleans County
Court Docket No. 274-10-000SCV) alleging non-payment of insurance premiums.
Default judgment was entered against the Company on November 21, 2000 in the
total amount of $10,792.36. Interest shall accrue on this judgment at a rate of
12% per annum and was in the amount of $971 as of September 30, 2001.
(b) Pending Governmental Proceedings: The Company is not party to any
pending action involving a governmental agency and is not aware of any
contemplated action by a governmental agency against the Company.
9
ITEM 2. CHANGES IN SECURITIES:
During the three months ending on September 30, 2001, settlements were
reached with three trade creditors to release $1,823.58 of debt in exchange for
the issuance of 1,824 shares of the Company's restricted common stock... It is
anticipated that this stock will be issued during the first quarter of 2002.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES:
(a) Defaults In Debt Obligations: During 1997 and the first half of 1998,
Messrs. Sean McNamara, Nicky Hunt and Richard Hill (hereinafter "the Investor
Group"), who are current shareholders and who were Directors of the Company for
part of 1997 and 1998, advanced working capital loans and committed to make
loans to the Company in the aggregate amount of approximately $1.0 million.
During the first quarter of 1998, in consideration for, among other things, not
demanding immediate repayment of the loans, the Company and the Investor Group
agreed to exchange all of such outstanding indebtedness for a convertible
promissory note (the "Investor Note"), 2,000,000 shares of the Company's Common
Stock with piggyback registrations rights (but which may not be traded until the
$1,300,000 note is converted) and stock options. The Investor Note is in the
aggregate principal amount of $1.3 million, and accrues interest at a rate of 8%
per annum beginning January 1, 1998. The Board authorized the issuance of
warrants in connection with the Investor Note that are exercisable for a period
of five years to acquire 1,500,000 shares of Common Stock at $.25 per share and
1,500,000 shares of Common Stock at $.50 per share. In connection with the
Investor Note, the Company also issued options to acquire Common Stock as
follows: options to purchase 2.6 million shares at an exercise price of $.01 per
share, 1.95 million shares at an exercise price of $.25 per share, and 1.95
million shares at an exercise price of $.50, all of which may be exercised at
any time between June 30, 1999 and June 30, 2003, the expiration date of the
options. The Investor Note is repayable as follows: $433,333 in principal
amount, plus interest, was due and payable on or before September 9, 1998; an
additional $433,333 in principal amount, plus interest, was due on or before
January 9, 1999; and any unpaid principal balance, plus interest, was due on or
before March 9, 1999. In addition to any other remedies they may have if the
Company fails to make the principal payment on the shareholder loans on
September 9, 1998, the Company will be obligated to issue to the lender options
to acquire an additional 75,000 shares of Common Stock, exercisable at a price
of $.01 per share, for each 30 days that the principal payments are in default.
The Company did not make any of the payments required under these Investor Notes
and was in default.
On May 29, 1999, in exchange for the issuance of 1,000,000 shares of the
Company's restricted Common Stock, Nicky Hunt released the Company from: (1)
paying any sums due to him, including amounts due to him under the foregoing
$1.3 million Note; (2) issuing any additional stock then due or becoming due to
him; and (3) any and all rights he had, including any right under any option or
warrant, to receive any additional Common Stock from the Company that arose as a
result of his association with the Company. Messrs. McNamara and Hill released
10
the same obligations in October 2001 in exchange for the issuance of 4,000,000
shares of the Company's restricted Common Stock. Therefore, as of the date of
the filing of this report, there were no arrearages outstanding.
In March and April, 1998, the Company issued its 6% Convertible Notes (the
"Notes") in the aggregate principal amount of $726,500 in a private placement
under Rule 505 of Regulation D. Interest on the Notes is payable semi-annually.
The principal amount of the Notes, together with unpaid interest thereon, is due
and payable, if not earlier converted, on March 3, 1999. The Notes are
convertible into shares of Common Stock at the option of the holder at any time
following the earlier of (i) 90 days after the filing of a registration
statement with the SEC covering the shares to be received upon conversion or
(ii) the date the SEC declares such registration statement effective. The
conversion price per share is the lesser of (i) 70% of the average closing bid
price per share of Common Stock for the five trading days prior to the
conversion date or (ii) $0.25. Upon conversion, any accrued and unpaid interest
is waived by the holder. The Company has the option to repurchase the Notes from
the holder prior to registration of the underlying shares at a premium of 10%
over the purchase price of the Notes. The Company agreed to file with the SEC
not later than June 3, 1998, and use its best efforts to have declared effective
not later than July 3, 1998, a registration statement registering for resale the
shares that would be issued upon conversion of the Notes. The Company has made
no payments on these notes; has not repurchased these Notes, and is in default
with regard to its registration obligation.
As of December 31, 2001, six (6) holders of the foregoing Convertible Notes
(totaling $450,000) agreed to release all obligations under or as a result of
the Convertible Notes in exchange for the issuance of a total of 16,624,236
shares of the Company's restricted Common Stock... In addition, two (2) holders
of the foregoing Convertible Notes (totaling $50,000) have informed the Company
that they have written off the obligations under the foregoing Convertible Notes
and are therefore not interested in any settlement. Therefore, as of February
13, 2002, the Company was in default in the amounts of $226,500 in principal and
$54,360 in interest for a total of $280,860 in arrearages.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS:
No matters were submitted to a vote of the shareholders.
ITEM 5. OTHER INFORMATION:
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K:
(a) Exhibits. None
(b) Reports on Form 8-K. None.
11
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Dated this 11th day of February, 2002
SAFE ALTERNATIVES CORPORATION OF AMERICA, INC.
By /s/ Richard J. Fricke
----------------------------------
Richard J. Fricke
President, Chief Executive Officer
And Chief Financial Officer