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 March 31, 2002
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: March 31, 2002 - 52,707,524 shares.
Transitional Small Business Disclosure Format (check one): YES NO X
--- ---
Safetek International, Inc.
And Subsidiaries
Consolidated Financial Statements
March 31, 2002 and 2001
SAFETEK INTERNATIONAL, INC.
AND SUBSIDIARIES
Financial Statements For The Quarter Ended March 31, 2002
Table of Contents
Financial Information
- ---------------------
Financial Statements 3
Management's Discussion and Analysis of Plan of Operation 8
Other Information
- -----------------
Legal Proceedings 9
Changes in Securities 9
Defaults Upon Senior Securities 9
Other Information 9
Exhibits and Reports on Form 8-K 9
3
SAFETEK INTERNATIONAL, INC.
AND SUBSIDIARIES
Consolidated Balance Sheets
Assets
------
March 31, December 31,
2002 2001
(Unaudited)
------------ ------------
Current Assets
Cash $ 748 $ 1,745
Accounts receivable 1,585 1,670
Investment in Joint Venture 200,000 --
------------ ------------
Total assets $ 202,333 $ 3,415
============ ============
(Continued)
See accompanying notes to consolidated financial statements
4
SAFETEK INTERNATIONAL, INC.
AND SUBSIDIARIES
Consolidated Balance Sheets
Liabilities and Stockholders' Deficit
-------------------------------------
March 31, December 31,
2002 2001
(Unaudited)
------------ ------------
Current Liabilities:
Accounts payable $ 176,179 $ 177,394
Due to stockholders 39,819 41,444
------------ ------------
Total current liabilities 215,998 218,838
Subordinated convertible redeemable debenture 449,185 350,542
------------ ------------
Total liabilities 665,183 569,380
------------ ------------
Redeemable convertible preferred shares (4,648 shares
, par value $.0001, redeemable prior to February 21, 2002
at $50 per share, 1,000,000 shares authorized) 124,171 124,171
------------ ------------
Stockholders' deficit:
Common stock, $.0001 par value authorized 500,000,000 shares,
issued and outstanding 55,212,792 and 94,403 shares
at March 31, 2002 and 2001 respectively 5,520 4,065
Additional paid-in capital 2,717,152 2,557,225
Accumulated deficit (3,309,693) (3,251,426)
------------ ------------
Total stockholders' deficit (587,021) (690,136)
------------ ------------
Total liabilities and stockholders' deficit $ 202,333 $ 3,415
============ ============
See accompanying notes to financial statements.
5
SAFETEK INTERNATIONAL, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
For the three months ended March 31. 2002 and 2001
(Unaudited)
2002 2001
------------ ------------
Net sales $ -- $ 376
Cost of Sales -- _ -
------------ ------------
Gross profit -- 376
------------ ------------
Expenses
General and administrative 58,267 5,926
------------ ------------
Total expenses 58,267 5,926
------------ ------------
Net operating loss (58,267) (5,550)
Other income (expense):
Other income -- 19,643
------------ ------------
Net income (loss) $ (58,267) $ 14,093
============ ============
Basic earnings per share $ (.001) $ (0.15)
============ ============
Weighted average numbers of shares outstanding 47,936,056 93,548
============ ============
See accompanying notes to financial statements.
6
SAFETEK INTERNATIONAL, INC.
AND SUBSIDIARIES
Consolidated Statements of Cash Flows
For the three months ended March 31. 2002 and 2001
(Unaudited)
2002 2001
--------- ---------
Cash flows from operating activities:
Net income (loss) $ (58,267) $ 14,093
Adjustments to reconcile net loss to net cash
used by operating activities:
Cash provided by (used for) changes in:
Accounts receivable 85 --
Accounts payable (1,215) (23,617)
Advanced to/from stockholders (1,625) 8,000
--------- ---------
Net cash used in operating activities (61,022) (1,524)
--------- ---------
Cash flows from investing activities:
Investment in joint venture (200,000) --
--------- ---------
Net cash used in investing activities (200,000) --
--------- ---------
Cash flows from financing activities:
Proceeds from issuance of preferred stock 260,000 --
Proceeds from conversion of debentures and stock option 25 --
--------- ---------
Net cash provided by financing activities 260,025 _
--------- ---------
Net decrease in cash (997) (1,524)
Cash at beginning of year 1,745 1,883
--------- ---------
Cash at end of year $ 748 $ 359
========= =========
Supplemental disclosures:
Cash paid during the year for:
Interest -- --
========= =========
Income taxes -- --
========= =========
See accompanying notes to financial statements.
7
SAFETEK INTERNATIONAL, INC.
AND SUBSIDIARIES
Notes to consolidated Financial Statements
March 31, 2002
(Unaudited)
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 March 31, 2002 and results of
operations and cash flows for the three months ended March 31, 2002 and
2001. 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 the 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 and actual proof of concepts and working prototypes, in
order to bring these products to fruition.
On January 5, 2002, the Company entered into an agreement with Evotech Inc.
to develop a wireless Internet access product hereafter called the Wireless
Multi-Service Access System (WMAS). The Company will provide capital funds
for the WMAS product to Evotech Inc with an estimated budget of
approximately $500,000, which $200,000 was paid during the quarter ended
March 31, 2002. After developing this product, the Company will pay Evotech
Inc. commissions of 50% of any sales that are made of this product.
8
SAFETEK INTERNATIONAL, INC.
AND SUBSIDIARIES
Notes to consolidated Financial Statements (Continued)
March 31, 2002
(Unaudited)
3. Results of Operation, Liquidity and Capital Resources
For the Quarter ended March 31, 2002, the Company had no revenues. The
investment referred to in note 2 above is virtually the only asset of the
Company. The liabilities of the Company are mainly 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
------------
Additional
Number of Paid in
f Shares Par Value capital
---------- ---------- ----------
Balance at December 31, 2001 40,659,319 4,065 2,557,225
Debentures Converted 14,304,473 1,430 159,927
Options Exercised 249,000 25 --
---------- ---------- ----------
Balance at March 31, 2002 55,212,792 5,520 2,717,152
========== ========== ==========
During the quarter ended March 31, 2002 and additional stock option was
exercised and 249,000 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
9
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: May 20, 2002
------------------------------- ------------
Shmuel M. Shneibalg