FORM 10KSB

                  Annual Report Pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934

                   For the Fiscal Year Ended December 31, 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
                                                     -------------------

         Indicate by check mark whether the registrant(l) 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 [  ]

         Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B contained in this form, and if no disclosure will be
contained, to the best of Registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-KSB. X

         Issuer's revenues for the most recent fiscal year were $829,825.


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         The aggregate market value of the voting stock held by non-affiliates
of the Registrant was approximately $19,392,306 on December 31, 1999 based upon
the latest published average bid and ask price on such date.

         The approximate number of shares outstanding of the Registrant's common
stock on December 31, 1999 was 746,200,414. The approximate number of "A"
Warrants outstanding as of December 31, 1999 was 7,227,280 convertible into
7,227,280 shares of common stock at $.20 per share. Each outstanding "A"
Warrant, upon exercise, will result in the issuance of one redeemable "B"
Warrant. As of December 31, 1999 there were approximately 272,720 "B" Warrants
outstanding exercisable into 272,720 shares of common stock at $.50 per share.

         Transitional Small Business Disclosure Format (check one): Yes   No: X

PART I

         THE FOLLOWING INFORMATION HAS BEEN DERIVED FROM OUR FINANCIAL
STATEMENTS AND SHOULD BE READ IN CONJUNCTION WITH OUR FINANCIAL STATEMENTS AND
RELATED NOTES THERETO INCLUDED IN PART 1- ITEM 1 OF THIS 10-KSB. THE DISCUSSION
FOLLOWING CONTAINS FORWARD LOOKING STATEMENTS THAT INVOLVE RISKS AND
UNCERTAINTIES. OUR ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE EXPRESSED OR
IMPLIED IN THESE FORWARD-LOOKING STATEMENTS AS A RESULT OF VARIOUS FACTORS,
INCLUDING THOSE SET FORTH UNDER "RISK FACTORS" IN THIS FORM 10-KSB.

Item 1.  Business

Overview

         Safe Technologies International, Inc., a Delaware corporation (the
"Company") is a multi-faceted e-commerce company. As of March 31, 2000, the
Company has three active subsidiaries: Internet Commerce, Inc., a Florida
corporation ("Internet Commerce" or "ICI"), Internet Associates International,
Inc, a Nevada corporation ("Internet Associates" or "IAI") and Connect.Ad, Inc.
a Florida corporation ("Connect.ad"). Unless the context otherwise requires, the
term "Company" shall refer to the Company, ICI, IAI and Connect.ad.

         The Internet is dramatically changing the way that consumers and
businesses communicate, share information and buy and sell goods and services.
The Internet reduces inefficiencies characteristic of traditional market models
through the disintermediation of functions between the provider of the good or
service and the ultimate consumer. Characteristic in our business to business
market model ("B2B") of providing value added functions to brick- and-mortar
retailers targeting upmarket consumers in a business to consumer ("B2C") market
model through utilization of our specialized electronic shopping mall, is the
presence of a large

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number of geographically dispersed buyers and sellers and purchase decisions
involving large amounts of information from multiple sources. We believe that
our market concept of microtargeting a demographically and psychographically
appealing affluent, well-educated consumer for the providers of goods and
services catering to those tastes, positions us well to benefit from the
evolution of the Internet platform and e-commerce model through the value- added
function our Company provides.

         The Internet has also emerged as an attractive new medium for
advertisers due to the rapid growth in the number of web users, the amount of
time such users spend on the web, the increase in electronic commerce, the
interactive nature of the web, the web's global reach and a variety of other
factors. We believe that the number of U.S. online households will grow from
approximately 40 million in 1999 to over 60 million in 2004 and consumer
e-commerce will reach nearly 110 billion in 2003. Consequently, we believe that
U.S. online advertising spending will grow from approximately $3 billion in 1999
to over $20 billion in 2004. In addition, we believe that markets outside the
U.S. will become an increasingly important component of Internet advertising,
growing from approximately $500 million in 1999 to over $10 billion in 2004,
accounting for approximately 33% of worldwide Internet advertising. We believe
that this large market opportunity positions us well to capitalize upon our
recently added online advertising franchising model.

         Our core competencies in the design, development and implementation of
business to business information technology solutions affords us a unique
advantage in executing our business to business marketing model through the
provision of value added functions to various business customers.

         We now have put into place what we believe are three of the four most
critical value- added elements for success in the e-commerce economy. Those are:
(1) the capacity to provide Internet technology services, such as the design,
development and implementation of systems and sites, hosting and consultancy;
(2) the function as Internet intermediary for the provision of advertising to
our B2B customers and well as a franchisor of electronic advertising agencies
for others' B2B advertising applications; and (3) as a direct e-commerce
retailer and marketer operating under a B2C market model, to enhance brand
recognition. The forth element which we have identified as key in the e-commerce
paradigm is that of technology infrastructure provider, which management
recognizes is a key component of the Internet commerce platform. We will
continue to pursue all opportunities which would create synergies and enhance
brand recognition, including additional strategic alliances with those whose
core competencies complement our own, especially in the area of information
technology infrastructure.

ICI

         Our Internet Commerce subsidiary specializes in developing, managing
and promoting Internet commerce web sites for small and medium sized businesses
wanting to launch or expand

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their Internet operations. More specifically, ICI helps design web sites for
small and medium sized businesses and provides hosting services for such web
sites.

         Internet Commerce, Inc. also owns "INCyberMall.com", an Internet
commerce mall and marketer. With INCyberMall.com, we hope to fill the needs in
the e-retail marketplace, in specialized categories where no other Internet
malls have concentrated before, promoting and selling exclusively upmarket
products.

         One of the most unique features of the mall, which we expect to attract
a great deal of worldwide interest is the section called 'Famous Shopping
Streets of the World'. Some of the Famous Shop Streets are Worth Avenue, Palm
Beach; Fifth Avenue, New York; Rodeo Drive, Beverly Hills and Bond Street,
London. We opened famous shopping street Worth Avenue in Palm Beach, Florida.
The Worth Avenue street is presented graphically with photography, maps and a
merchant directory. As of March 31, 1999, the Company had completed two other
streets: Fifth Avenue, New York and Rodeo Drive, Beverly Hills.

         We are in the process of contacting stores on Worth Avenue and some of
the other famous shopping streets to ascertain their interest in being
graphically represented on their street in the mall with their own exterior
store front, product photography and option for virtual tours of these premises.
Stores with existing web sites will be offered the opportunity to have their
sites linked in for a monthly fee. We offer a flexible tenant package that
should accommodate important retailers' needs and be cohesive with their
marketing plans. Mall tenants will be able to select from a number of options
for participation in the mall, i.e. revenue sharing or partnering of revenue
sales, banner advertising, leasing space in the mall, hosting web sites, web
site construction, or comprehensive Internet commerce fulfillment services.

         In addition to the specific shopping streets, shoppers are also be able
to browse and shop for upmarket products at the 'CyberMalls Castle Store'.
CyberMalls Castle Store contains upmarket products for the 'Rich and Famous',
and will offer, when completed, a complete line of luxury goods which will allow
the shopper to select from a worldwide range of unique, exclusive products. Each
product will be displayed in its appropriate environment. For example, the
finest wines of the world will be displayed in the Wine Cellar; prints, antiques
and statuary will be displayed in the Gallery and books, cd's and videos will be
displayed in the Library.

         During our last fiscal year, we entered into agreements with five
companies to display their products in the Castle Store. These companies and
their respective products are Amazon.Com - books, cd's and all other product
lines carried by Amazon.Com; J.C. Harris & Co. - men's clothiers; Frozen Pelican
Gallery - art exhibits and Fran Murphy Interiors - interior decorating and fine
furnishings; and The Sharper Image - watches, cameras, clocks, fitness equipment
and interesting electronic gadgets.

         On October 13, 1999 we announced our entry into the online food sales
business with the ICI's launching of the site TheGlobalDeli.com. Through this
site, we plan to forge partnerships

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with global food suppliers, national and regional Delivery Grocers and to pursue
other strategic alliances which are consistent with our plan to exploit this
market. We have initially established partnerships for this site with Great
Coffee, Liquour by Wire, Smoke Shop and Omaha Steaks, which provide browers the
opportunity to shop for and purchase quality food items, beverages and tobacco
products. We plan to pursue business partnerships with other recognizable food
industry providers such as Hickory Farms, Fulton Street and Giftpaks.

         Food, beverage and tobacco items purchased from TheGlobalDeli.com are
drop-shipped within a few days of order with the food content of such orders
temperature controlled. We intend to develop a comprehensive line of specialty
food targeted to discriminating pallets.

Internet Associates

         Internet Associates is an Internet marketing and web site development
firm involved in the development, marketing, and hosting of web sites, as well
as the training of web developers. IAI owns and maintains five Internet servers,
on location in Boca Raton, Florida, with direct redundant T-1 connections to the
Internet. The Internet servers are equipped with secure commerce, Ecommerce
applications, shopping cart facilities and database driven applications.

         IAI specializes in designing and developing quality "market-driven" web
sites to allow business customers to tap into the e-commerce platform, combining
innovative web design and programming with traditional marketing and advertising
elements especially designed to promote interactivity and volume response to
each customer web site. IAI works with a variety of clients in providing web
design services. The web design work that we provide through IAI for each client
is customized; hence, the contract price varies depending upon the nature and
scope of the engagement. We also provide web marketing services through IAI.
IAI's web marketing services consist of search engine submissions, banner
advertising placement and promotion through alternative media.

         IAI offers web hosting services to over 1,500 customers nationally. Web
hosting contracts are typically structured to provide an initial term of six
months, to be renewed quarterly thereafter. Web site hosting fees start at as
low as $50 per month depending upon content. Certain web hosting subscribers
under some arrangements can also build their own web sites and upload their web
pages to our servers directly.

         IAI also offers a training program for Web Master Certificates, to Ft.
Lauderdale Art Institute graduates.

Connect.ad

         We completed the acquisition of Connect.ad on September 30, 1999, an
Internet marketing franchisor. We will market Internet advertising franchises to
marketing oriented types who want to take advantage of the imminent advertising
bonanza that Internet commerce

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promises. The Connect.ad franchisee will own and operate an electronic
advertising agency, specializing in providing advertisers with full service
electronic advertising, web site development and hosting, customer affinity
functions and technical support. Having our core technological competencies in
place, allows us to provide such value added support services to such customers
which effectively cross markets our technical arm. In addition, franchisees will
cross market our ICI business customers from our CyberMallsCastles.com,
TheGlobalDeli.com and FamousShoppingStreets.com sites to viewers of their sites,
thereby propagating traffic flow and enhancing brand recognition.

Proprietary Rights

         The Company regards its copyrights, trade names, web sites and domain
names as valuable intellectual property. The Company relies upon copyright law,
trade secret protection and confidentiality or license agreements with its
employees, customers, partners and others to protect its proprietary rights.
Effective copyright and trade secret protection may not be available in every
country in which its products and media properties are distributed or made
available through the Internet.

         During 1999, Barbara Tolley, the Company's CEO, copyrighted the four
Internet domain names, CybermallsCastle.com, TheGlobalDeli.com, DejaVu.com and
FamousShoppingStreets.com. The Company will have the exclusive right to the
marketing use of such web sites without fee for so long as Ms. Tolley is the CEO
of the Company. At such time as Ms. Tolley is no longer the CEO, and if the
Company desires to retain the exclusive use of such sites, the Company will be
obligated to pay her royalties, quarterly, at the rate of 1% of revenues
generated through those sites, up to $10 million, and at total sales volumes
over $10 million, at the rate of one-half of 1%. If Ms. Tolley is no longer CEO
of the Company and if the Company does not exercise its exclusive rights to use
of such domain names, the rights to usage of those names will revert exclusively
to Ms. Tolley.

Competition

         The market for Internet products and services is highly competitive.
There are no substantial barriers to entry in these markets, and the Company
expects that competition will continue to intensify.

         We believe that the principal competitive factors for companies seeking
to create shopping malls on the Internet are brand recognition, customer
affinity and loyalty, demographic focus and open access for visitors. Internet
Commerce competes for customers and advertisers with other content providers,
advertisers and traditional brick and mortar merchants, as well as with
thousands of web sites operated by individuals, the government and educational
institutions.

         We believe that our ability to compete successfully in the Internet
services market depends on a number of factors, including market presence; the
adequacy of our design team and customer and technical support services; the
capacity, reliability and security of our network infrastructure; our pricing
policy for services, our competitors and suppliers; our ability to support
existing and emerging industry standards; and industry and general economic
trends.

Employees

         As of March 15, 2000, the Company employed 15 persons full time. Of the
full-time employees, 3 are engaged in management position, 3 in administrative
positions, an 9 of which positions are in ICI's and IAI's operations.

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History and Summary of Activity during Fiscal 1999 and 1998

         The Company was incorporated in Delaware on August 1, 1987 as Safe Aid
Products Incorporated. Our initial business purpose was to engage in research
and development regarding nasal and transdermal delivery of aspirin and other
drugs. However, due to insufficient capital and insufficient market acceptance,
we were unsuccessful at effectuating this original business plan and remained in
the development stage. From 1993-1998, our principal business objective was to
find and merge with an operating company that would increase shareholder value.

         On February 9, 1998, we completed a reverse merger with Intelligence
Network International, Inc., a Florida corporation ("INI"). Pursuant to the
terms of the merger agreement, we changed our name to Safe Technologies
International, Inc. As a result of the merger, we moved from the development
stage status to being a fully operating business. Our business as it existed
then consisted of a broad range of Internet and technology based services and
products. We had two subsidiaries, Total Micro Computers, Inc. ("TMC") and GMG
Computers Consultants, Inc. d.b.a. Precision Imaging ("GMG"). TMC was a
wholesaler and retailer of custom designed and assembled computer systems and
related products and GMG was a digital pre-press company. In May 1998, we also
formed a new subsidiary, Internet Commerce, Inc., a Florida company to house our
various Internet related activities.

         During fiscal 1998, management searched for companies to grow our core
operations. We entered into letters of intent to acquire two (2) companies:
Toddlers Learning Center, a child care and education Center in Stuart, Florida
and V-Prime Computers, Inc., a specialist in computer repairs, upgrades,
networking and installation of custom computer systems and service for small
business in Boca Raton, Florida. However, for reasons discussed herein, we did
not complete either of the proposed acquisitions.

         In July 1998, the Board of Directors decided to move TMC's operations
from Tampa to South Florida. During fiscal 1998, TMC's financial performance had
deteriorated and management believed that it could better oversee TMC's
operations if they were located in South Florida. The former TMC shareholders
were not issued the 1,062,500 shares of the Company's common stock that they
were due to have received pursuant to their acquisition agreement with the
Company for their failure to have achieved targeted performance benchmarks.

         On July 21, 1998, we entered into a letter of intent for the
acquisition of Toddler's Learning Center, Inc. ("TLC"), a child care and
education center in Stuart, Florida. The Company had planned to operate TLC as a
subsidiary of its Health and Wellness Division. However, in August after the
Company completed its due diligence of TLC, it decided that this acquisition was
not in our best interest.


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         Shortly after entering into the letter of intent with TLC, we entered
into a letter of intent with V-Prime on July 26, 1998. Six months later in
January 1999, we planned on closing the acquisition of V-Prime and issued a
press release to that effect on January 6, 1999. However, we ultimately decided
not to close the deal because we discovered certain adverse information about
V-Prime prior to the closing.

         On October 6, 1998, we entered into a license agreement with Hangzhou
Jiuyuan Gene Engineering Co., Ltd., for the field testing and production and
distribution of the Company's nasal aspirin patent. Hangzhou completed field
testing for the nasal aspirin patent. Although we have been in negotiations with
various biotechnology groups in the interest of acquiring additional nasal
delivery drug applications, do to the amount of time and required capital to
pursue this opportunity, we have determined to pursue our core Internet business
platform.

         In December 1998, the Board of Directors decided that it would reverse
our acquisition of GMG. GMG's financial statements for the third quarter of 1998
were below expectations. On December 17, 1998, the Company, GMG and the former
GMG shareholders entered into a reversion agreement and mutual general release
agreements in order to effectuate the reversal of the GMG acquisition. As part
of the reversion agreement, the former GMG shareholders returned their
14,000,000 shares of the Company's common stock to the transfer agent to be
canceled.

         February 5, 1999, we completed an acquisition of IAI, an Internet
marketing and web site development firm, involved in the development, marketing
and hosting of web sites, as well as the training of web developers. The
acquisition was structured as a stock for stock transaction, wherein the IAI
former shareholders entered into three year share lock-up agreements after the
closing. The acquisition price was based on a formula of IAI net profits for
fiscal 1999, which ultimately resulted in the exchange of all IAI shares for
25,000,000 of SFAD shares.

         We closed on the acquisition of another Internet company, Connect.ad
and its affiliated group of companies, as of September 30, 1999. We issued
4,285,714 shares of SFAD in consideration for the purchase. Connect.ad is an
Internet marketing company franchisor.

Item 2.  Property

         The Company's principal executive office is located at 249 Peruvian
Avenue, Palm Beach, Florida where the Company leases office space comprising
approximately 1,000 square feet. The lease is on a month-to month basis and the
monthly rental is $914.

         IAI leases 1,500 feet of office space in Boca Raton, Florida. The lease
is structure as a six month lease, with options to renew for six months terms
with a monthly rental is


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$2,200. Connect.ad currently leases of approximately 1,000 square feet of office
space in Pompano Beach, Florida, which lease expires as of the end of March
2000. This lease is an annual lease with a monthly rental of $1,200. We are
currently in the process of relocating all of the ICI personnel (currently
sharing 249 Peruvian Ave. Palm Beach with the Company) and most of the
Connect.ad personnel into the IAI space in Boca Raton, with an additional 700
square foot space for some of the Connect.ad personnel to be located in the same
building in Boca Raton. This new space shall be leased for annual periods, which
lease provides for a $600 monthly rental.

Item 3.  Legal Proceedings

         There are no legal proceedings pending to which the Company is subject,
nor to the knowledge of the Company are any such legal proceedings threatened.

Item 4.  Submission of Matters to a Vote of Security Holders

         There were no matter submitted to vote of security holders during the
last quarter of the period covered by this report.

PART II

Item 5.  Market for Common Equity and Related Stockholder Matters.

         Our common stock is traded in the over-the-counter market under the
symbol "SFAD". The following table sets forth the high and low bid and ask
prices, as reported by the National Quotation Bureau, Inc., for our common stock
for the calendar periods indicated.

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                                  Common Stock
                                  ------------
                                         Bid                      Asked
         Period                     High/Low                   High/Low
         ------                     --------                   --------
         1998

         lst Quarter                .06/.0038                  .07/.0039
         2nd Quarter                .202/.024                  .205/.026
         3rd Quarter                .12/.0375                  .125/.04
         4th Quarter                .21/.015                   .24/.015

         1999

         lst Quarter                .48/.039                   .265/.029
         2nd Quarter                .182/.03                   .087/.03125
         3rd Quarter                .06/.016                   .05/.017
         4th Quarter                .07935/.013                .11/.0049

         The average of the bid and ask price of our common stock in the
over-the-counter market as of the most recent available date, March 29, 2000 was
$.26 per share. The above quotations do not include retail mark-ups, mark-downs
or commissions and represents prices between dealers and not necessarily actual
transactions. The past performance of our securities is not necessarily
indicative of future performance.

Common Stock and Warrants

         As of December 31, 1999, we had issued and outstanding 746,200,414
shares of our common stock, 7,227,280 Class A Warrants and 272,720 Class B
Warrants. Upon exercise, each Class A Warrant entitles the holder to purchase
one share of common stock for $.20 per share and to receive one redeemable Class
B Warrant. Upon exercise, each Class B Warrant entitles the holder to purchase
one share of common stock for $.50 per share. The exercise periods of the Class
A and Class B Warrants have been extended by the Board of Directors through
January 9, 2001. All of these numbers are adjusted to reflect the Company's
ten-for-one reverse stock split effected as of February 9, 1998.

Holders of Record

         As of December 31, 1999, there were approximately 1,282 shareholders of
record of our common stock. Such number does not include beneficial owners
holding shares through nominee name.


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Dividend Policy

         We have never paid cash dividends on our Common Stock. Payment of
dividends will be within the sole discretion of our Board of Directors and will
depend, among other factors, upon earnings, capital requirements and the
operating and financial condition of the Company. At the present time, our
anticipated financial capital requirements are such that we intend to continue
to follow a policy of retaining earnings in order to finance the development of
our business.

Item 6.  Management's Discussion and Analysis or Plan of Operations.

RESULTS OF OPERATION

         Comparison of the years ended December 31, 1999 ("fiscal 1999") and
December 31, 1998 ("fiscal 1998").

         Revenues were $829,825 for fiscal 1999 and were $427,552 for fiscal
1998, representing a increase of 94%. Approximately, $6,200 of the 1999 revenues
were derived from ICI and $800,032 were derived from IAI. The balance of the
1999 revenues were from Connect.ad.

         Connect.ad revenues in the amount of $20,393 are included in fourth
quarter earnings pursuant to generally accepted accounting principles since
Connect.ad was acquired as of September 30, 1999.

         Cost of Sales were $63,989 in fiscal 1999 compared to $281,263 in
fiscal 1998. This decrease is attributable to efficiencies gained in
streamlining our direct cost structure. Cost of Sales in 1999 were $0 for ICI,
$60,949 for IAI and $3,040 for Connect.ad.

         Selling, general, and administrative expenses were $1,674,187 for
fiscal 1999 compared to $718,908 for fiscal 1998. This is attributable to the
ramping up of operations in terms of personnel, additional depreciation on
equipment and systems, and amounts paid to outside consultants in upgrading and
placing online infrastructure for our continued growth. Approximately $800,000
of consulting fees included in total selling, general and administrative
expenses of $1,674,187 for fiscal 1999 is attributable to the Company's issuance
of approximately 18,245,000 SFAD shares in lieu of cash compensation to various
service providers.

RISK FACTORS

         The Company is engaged in the pursuit of commerce on the Internet
platform. This form of commerce involves many opportunities, as well as
significant threats, many of which are out of our control. Some of the risks
which we face are as follows:

         Consumers, suppliers and advertisers may not accept our web site as a
valuable commercial tool, which would impair the growth of our business.

         For us to achieve the level of growth that we have projected,
consumers, suppliers, merchants and advertisers must accept our web site model
as a valuable commercial tool.


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Consumers who have historically purchased the various product offering found on
our web sites using traditional commercial channels must change that paradigm
and purchase instead through our site. Consumers frequently "surf" sites like
our sites in search of the various products offered therein and then ultimately
revert to the traditional purchase channel. If this paradigm is not shifted, we
may never achieve our anticipated growth.

         Similarly, suppliers, advertisers and merchants will also need to
accept and use our web site. In order for this to occur, suppliers, advertisers
and merchants will need to perceive our site as efficient and profitable
channels of distribution for their products, for expenditure of their
advertising budgets and for their merchandise.

         In order to achieve the acceptance of consumers, suppliers, advertisers
and merchants contemplated by our business plan, we will need to make
substantial investments in technology and brand. We can not, however, assure you
that these investments will be successful. Our failure to make succeed in these
areas will hamper the opportunities to achieve our business plan.

         We expect there to be operating losses and negative cash flows.

         We expect to continue to incur net losses and negative cash flows for
the foreseeable future and there can be no assurance that we will ever achieve
profitability or generate positive cash flows. As we enhance our existing sites
on continue to launch new sites and deploy our business plan, we expect to incur
significant operating expenses particularly in the sales, marketing and
operations areas. These types of expenses will grow as we expand the scope and
reach of our operations. If our revenues do not grow as expected, or if our
actual expenses exceed our budgeted expenses, there could be a material adverse
effect on our business, operating results and financial condition. We will need
to raise additional funds through the issuance of equity, equity-related or debt
securities. If we are unable to obtain additional financing on reasonable terms
to enable the development of our business plan, we may never be able to
completely implement our on-line strategy.

         The success of our business will depend on continued growth of online
commerce and the Internet.

         Because we do not intend to provide our services through any commercial
medium other than the Internet, our future revenues and profits depend upon the
widespread acceptance and use of the Internet and online services as a medium
for commerce. Rapid growth in the use of the Internet and online services is a
recent phenomenon. This growth may not continue. A sufficiently broad base of
consumers may not accept, or continue to use, the Internet as a medium of
commerce. Demand for and market acceptance of recently introduced products and
services over the Internet involve a high level of uncertainty.

         The Internet has experienced, and is expected to continue to
experience, significant growth in the number of users and amount of traffic. Our
success will depend upon the


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development and maintenance of the Internet's infrastructure to cope with this
increased traffic. This will require a reliable network backbone with the
necessary speed, data capacity and security and the timely development of
complementary products for providing reliable Internet access and services .
Major online service providers and the Internet itself have experienced outages
and other delays as a result of software and hardware failures and could face
such outages and delays in the future. Outages and delays are likely to affect
the level of Internet usage and the processing of transactions on our web sites.
In addition, the Internet could lose its viability because of delays in the
development or adoption of new standards to handle increased levels of activity
or of increased government regulation. The adoption of new standards or
government regulation may require us to incur substantial compliance costs.

         Interruptions in service from third parties could impair the quality of
our service.

         We will rely upon third-party computer systems and third party service
providers, including Internet Bandwidth Providers. Any interruption in these
third-party services or a deterioration in their performance could impair the
quality of our service. If our arrangement with any of these third party were to
be terminated, we may not be able to find an alternative source of systems
support on a timely basis or on commercially reasonable terms.

         Our success depends upon the development and maintenance of superior
technology systems and infrastructure.

         In order to be successful, we must provide reliable, real-time access
to our systems for our customers and suppliers. As our operations grow in both
size and scope, domestically and internationally, we will need to continually
upgrade our systems and infrastructure to offer our customers and suppliers
enhanced products, services, features, and functionality. The expansion of our
systems will require additional financial, operational and technical resource
expenditures before business volume may reach levels sufficient to yield
profitability, with no assurance that the volume of business will increase or
that profitability will be achieved. Consumers and suppliers will not tolerate a
service hampered by slow delivery times, unreliable service levels or
insufficient capacity, any of which could have a material adverse effect on our
business, operating results and financial condition.

         Our business is exposed to risks associated with online commerce
security and credit card fraud.

         Consumer concerns over the security of transactions conducted on the
Internet or the privacy of users may inhibit the growth of the Internet and
online commerce. To transmit confidential information such as customer credit
card numbers securely, we will rely upon encryption and authentication
technology. Unanticipated events or developments could result in a compromise or
breach of integrity of our consumer transaction data. Our servers could also be
vulnerable to viruses transmitted over the Internet, which if not detected,
could create a service interruption.


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<PAGE>


         Our success depends in large part upon the efforts of a few individuals
and our ability to attract, retain and motivate highly skilled employees.

         We depend substantially on the services and performance of our senior
management, particularly Barbara L. Tolley our Chief Executive Officer, Michael
Bhethana, our Chief Information Officer and Bradford L. Tolley our Secretary,
Treasurer and Vice President of Investor Relations. These individuals may not be
able to fulfill their responsibilities adequately and may not remain with us.
The loss of the services any executive officer or other key employees could hurt
our business.

Year 2000

         During the first week of calendar 2000, we completed the transition
from calendar 1999 to calendar 2000 with no material adverse impact on our
services, business systems and operations. During the first quarter of 2000, we
continued to monitor our services, business systems and infrastructure to ensure
that latent defects do not manifest themselves. We have not experienced a
material adverse impact on our operations during this period.

FUTURE BUSINESS STRATEGY

         Management believes that the Company's is now well positioned to
exploit market opportunities in the e-commerce economy. We are fortunate to have
an active Board of Directors, functioning as our "think tank" in formulating and
developing innovative, yet realistic achievable business objectives as we grow
our company as a cutting edge technology and electronic commerce business. We
believe that SFAD is poised for growth in 2000 and years beyond.

         Management's focus will be upon further enhancing our market position
and increasing shareholder value in the e-commerce economy through the
development of our existing competencies. We will also continue to consider
pursuit of any and all new opportunities which would create synergies and
enhance brand recognition, including additional strategic alliances with
Internet companies whose core competencies complement our own, with particular
emphasis in the area of information technology infrastructure.

         We have determined to abandon our nasal aspirin spray technology as of
this time, as an area which does not currently fit with our business plan of
evolving into a premier Internet service company..


                                       14


<PAGE>


Item 7.  Financial Statements.
<TABLE>
<CAPTION>

                                                       INDEX

                                                                                                               Page
                                                                                                               ----
<S>                                                                                                             <C>
         Independent Auditors' Report...........................................................................F-2

         Consolidated Balance Sheets -
         December 31, 1999 and December 31, 1998................................................................F-3

         Consolidated Statements of Operations -
         December 31, 1999 and December 31, 1998................................................................F-5

         Statements of Changes in Stockholders' Equity..........................................................F-6

         Consolidated Statements of Cash Flows -
         December 31, 1998 and December 31, 1997. (Unaudited-Restated)..........................................F-10

         Notes to Consolidated Financial Statements.............................................................F-12
</TABLE>


Item 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure

         None.

PART III

Item 9.  Directors, Executive Officers and Significant Employees

         The executive officers and directors of the Company during fiscal 1999
were as follows:
<TABLE>
<CAPTION>

         Name                   Age     Position Held with Registrant
         ----                   ---     -----------------------------
<S>                              <C>    <C>
         Barbara L. Tolley       62     CEO and Chairman of the Board
         Charles N. Martus       76     Director
         Jack W. Tolley          76     Director
         Robert L. Alexander     56     Director
         Bradford L. Tolley      35     Secretary and Treasurer
         Michael Bhathena        32     Vice President and Chief Information Officer
</TABLE>


                                       15


<PAGE>


         Barbara L. Tolley has served as Chief Executive Officer and Chairman of
the Company since February 9, 1998. Ms. Tolley received her BA from Ohio State
University in 1959. In 1975, she founded Westchester Ltd., Inc., a privately
held company specializing in international marketing and advertising in which
she held the office of President until 1989. In 1990, Ms. Tolley founded one of
the Internet companies, Property Intelligence International, Inc. (PII), an
international consulting and online real estate business service currently on
the Internet. Since 1996, Ms. Tolley has been one of the majority stockholders
in Villas International Realty, Inc., an international holiday rental agency.
Ms. Tolley is the wife of Jack W. Tolley and the mother of Bradford L. Tolley.

         Charles N. Martus has served as a Director of the Company since
February 9, 1998. Mr. Martus is a graduate of Dartmouth College, Hanover, New
Hampshire in 1944, and attended Amos Tuck School. Mr. Martus was a principal in
a gourmet food operation in Manhattan from 1946 until 1990. During the past five
years, Mr. Martus has been retired.

         Jack W. Tolley has served as a Director of the Company since February
9, 1998. Mr. Tolley is a graduate of Dartmouth College, Hanover, New Hampshire
in 1947, and attended Cornell University in Ithaca, New York. Mr. Tolley founded
J.W. Tolley & Associates in 1953, a national marketing and advertising agency
and served as President until 1975. Mr. Tolley was a Director and consultant to
Westchester Ltd., Inc. until 1982. Mr. Tolley has been pursuing a career as an
artist and painter of Southwestern American art and as an author of several
books on Florida and immigration for foreign nationals. Mr. Tolley is the
husband of Barbara L. Tolley and the father of Bradford L. Tolley.

         Robert L. Alexander has served as a Director of the Company since
February 9, 1998. Mr. Alexander has been in management with Fortune 500
companies, and has had start up responsibility with privately held corporations
during his career. Mr. Alexander was President of International Communications
Systems (ICS) from 1991 to 1993. He was President of United Communications
Systems (USC) from 1993-1994, a telephone reseller company in select markets.
Mr. Alexander founded his own company, Comstar International, Inc., master
distributor contracts with GE Capital Communications Services in 1994. He was
recruited by Systems Communications, Inc. as CEO, responsible for operations of
communications companies acquired and merged into the public company. Since
April 1997, Mr. Alexander has been President of International Teledata
Corporation, responsible for its transition from a privately held company to a
public company.

         Bradford L. Tolley has been the Secretary and Treasurer of the Company
since February 9, 1998. Mr. Tolley is a graduate of Phillips Academy in Andover,
Massachusetts in 1982, and attended Rollins College in Winter Park, Florida. He
was employed by Westchester Ltd., Inc., as an account executive from 1984 to
1989. From 1990-1992, Mr. Tolley was employed by Bilfinger & Berger's American
subsidiary, Fru-Con Corporation, both subsidiaries of Dresdner Bank in Germany.
From 1992-1995, Mr. Tolley was Vice President of PII, one of


                                       16


<PAGE>


the Internet Companies. Mr. Tolley is currently President of Tolley Investments,
Inc., a privately held company. Mr. Tolley is the son of Jack W. Tolley and
Barbara L. Tolley.

         Michael Bhathena has served as the Chief Information Officer of the
Company since February 9, 1998. Mr. Bhathena holds a B.A. in Computing &
Statistics and a masters degree in computing science, from the University of
Kent in Great Britain. Mr. Bhathena served as an assistant trader and then in
the finance department at the Hong Kong & Shanghai Banking Corporation's (HSBC)
City of London Offices from 1986-1988. Mr. Bhathena served as a voice and data
communications executive for the Infocheck Group, Ltd. from 1992-93, a pioneer
in providing on-line credit information to British companies. Mr. Bhathena was
employed and served as President of PII Ltd., United Kingdom, which is an
affiliate of PII, one of the Internet Companies, from 1993-1995.

Item 10.  Executive Compensation

Summary Compensation Table

         The following table sets forth the aggregate compensation paid to
Barbara L. Tolley, the Company's Chief Executive Officer and Chairman (the
"Named Executive Officer") by the Company. None of the other executive officers
of the Company received compensation in excess of $100,000 during the fiscal
years ended December 31, 1999, 1998 or 1997. Except as set forth in the table
below, no bonuses or other compensation were paid during the fiscal year ended
December 31, 1999.
<TABLE>
<CAPTION>
                                               Annual Compensation

         Name of Principal          Fiscal           Salary            Bonus             Other Annual
                 Position            Year                                                Compensation
<S>                                 <C>              <C>                   <C>            <C>
Barbara L. Tolley, Chief            1999             0(1)                  0              $495,000(2)
Executive Officer and
Chairman

Barbara L. Tolley, Chief            1998             0(1)                  0              $111,900(3)

                                    1997             0(1)                  0                    --
</TABLE>



(1) Ms. Tolley joined the Company as its Chief Executive Officer on February 9,
1998. Under her employment agreement, Ms. Tolley was entitled to receive an
annual salary of $120,000 in both 1998 and 1999. However, due to the Company's
financial condition Ms. Tolley elected not to receive her salary in fiscal 1999
and 1998.


                                       17


<PAGE>



(2) The Board of Directors granted Ms. Tolley an aggregate of 11,000,000 stock
awards pursuant to the Company's 1998 Incentive Stock Plan and the Year 2000
Stock Award Plan. The awards were granted as of December 31, 1999 at a value of
$.045.

(3) The Board of Directors granted Ms. Tolley an aggregate of 4,200,000 stock
awards pursuant to the Company's 1998 Incentive Stock Plan. The dates in 1998,
number of stock awards and market price on the date of grant were as follows:
September 15 - 200,000 stock awards at $.017; September 29 - 500,000 at $.017;
December 4 - 500,000 stock awards at $.02 and December 18 - 3,000,000 at $.03.

Options Granted to the Named Executive Officer During Fiscal 1999

         The Company did not grant any options to the Named Executive Officer
during the fiscal year ended December 31, 1999. However, as noted in the Summary
Compensation Table, the Named Executive Officer has received stock awards, in
lieu of compensation.

Aggregated Option Exercises and Fiscal Year-End Option Value Tables

         As of December 31, 1999, Ms. Tolley did not own any options to purchase
shares of the Company's common stock. However, as noted in the Summary
Compensation Table, the Named Executive Officer has received stock awards, in
lieu of compensation.

Employment Agreement

         The Company entered into an employment agreement with Barbara Tolley,
its Chief Executive Officer and Chairman, effective as of February 9, 1998. The
term of the agreement is for two years, with an option exercisable by Ms. Tolley
to extend the employment agreement for an additional year. Ms. Tolley elected to
renew her contract through February 9, 2001. Ms. Tolley's compensation is
$120,000 per year under the base contract. At Ms. Tolley's option, this sum can
be paid with half cash and half stock, all cash or on an accrual basis. Ms.
Tolley is entitled to bonus compensation based on a percentage of the annual net
pre-tax profits of Safe Aid. As an officer of Safe Aid, she will be entitled to
participate in an overall group insurance plan providing health, life and
disability insurance benefits for employees of Safe Aid. The employment
agreement will also provide for the use of an automobile and/or a monthly
automobile allowance, payment of club dues and other fringe benefits
commensurate with her duties and responsibilities.



                                       18


<PAGE>

         As disclosed in the Summary Compensation Table, Ms. Tolley did not
receive her annual salary or any of the other benefits (1) to which she was
entitled to under the employment agreement in fiscal 1999 and 1998. However, Ms.
Tolley did receive stock awards.

1998 Incentive Stock Plan and Year 2000 Stock Award Plan

         In April 1998, the Company adopted a stock option plan called the "Safe
Technologies International, Inc. -1998 Incentive Stock Plan". (the "Incentive
Stock Plan"). The Incentive Stock Plan is intended to provide incentives to, and
awards for, certain eligible employees, officers, directors and consultants who
have contributed and will continue to contribute to the success of the Company.

         The Incentive Stock Plan provides for the granting of nonstatutory
stock options, restricted stock grants and stock awards. The Company has
reserved up to 30,000,000 shares of common stock under the Incentive Stock Plan,
consisting of a maximum of 15,000,000 restricted stock grants and 15,000,000
stock awards. The 1998 Stock Plan is administered by the Compensation Committee
of the Board of Directors.

         In December 1999, we adopted a stock option plan called the "Safe
Technologies International, Inc. - Year 2000 Stock Award Plan " (the "Year 2000
Stock Award Plan"). The Year 2000 Stock Award Plan is intended to provide
incentives to, and awards for, certain eligible employees, officers, directors
and consultants who have contributed and will continue to contribute to the
success of the Company.

         The Year 2000 Stock Plan provides for the granting of up to 30 million
stock awards. The Year 2000 Stock Award Plan is administered by the Compensation
Committee of the Board of Directors. The Company granted 18,770,764 stock awards
to its officers, directors and consultants under both plans in 1999 and had
granted 7,325,000 shares under the 1998 Stock Plan in fiscal 1998.

Director Compensation

         Directors who are full-time employees of the Company received no
additional compensation for services rendered as members of the Company's Board
of Directors. Directors who are not full-time employees of the Company also do
not receive any compensation for


                                       19


<PAGE>


services rendered as members of the Company's Board of Directors. However, three
directors who provided consulting services to the Company outside of the scope
of their duties as directors received stock awards. The Company awarded stock
awards to these directors on December 31, 1999 and the average of the high and
low bid price of the Company's common stock was $.077 on such date. The names of
the directors and the amount of stock awards received are as follows: Robert
Alexander 200,000 stock awards, Charles Martus 400,000 stock awards and
Jack Tolley 200,000 stock awards.

Item 11.  Security Ownership of Certain Beneficial Owners and Management

         The following table sets forth information with respect to the number
of shares of the Company's Common Stock that will be beneficially owned by (i)
each executive officer of the Company, (ii) each director of the Company and
(iii) each shareholder of the Company who owns more than 5% of the Company's
Common Stock as of December 31, 1999. An asterisk indicates beneficial ownership
of less than 1% of the outstanding Safe Aid Common Stock after the Merger.
Except as otherwise indicated, each of the shareholders listed below has voting
and investment power over the shares beneficial owned and the address of each
beneficial owner is c/o the Company, 249 Peruvian Avenue, Palm Beach, Florida
33480. As of December 31, 1999, there were issued and outstanding 746,200,414
shares of the Company's common stock.
<TABLE>
<CAPTION>

     Name of                                                                        Percent of Class
Beneficial Owner                            Amount and Nature                   of Beneficial Ownership
<S>               <C>                       <C>                                         <C>
Barbara L. Tolley (1)                       241,370,536                                 32.3
Chairman and Chief
  Executive Officer

Ruth Deutsch (2)                            244,444,201                                 32.8
Shareholder

Franklin Frank (3)                          244,444,201                                 32.8
Shareholder

Jack W. Tolley (4)                          241,370,536                                 32.3
Director

Bradford L. Tolley(5)                         7,937,552                                  1.1
Secretary, Treasurer

Charles N. Martus                               400,000                                   *
Director
</TABLE>


                                       20


<PAGE>

<TABLE>
<CAPTION>

     Name of                                                                           Percent of Class
Beneficial Owner                            Amount and Nature                   of Beneficial Ownership
<S>               <C>                       <C>                                         <C>
Robert L. Alexander                             200,000                                    *
Director

All Officers and Directors                  494,352,289                                  66.2
and 5% beneficial owners
as a group (6)
</TABLE>

         (1) Includes 241,370,536 shares held by the Lang Family Trust. Ms.
Tolley is the settler and trustee of the trust.

         (2) Includes 34,000,000 shares held by LVDB, Inc., a corporation
controlled by Franklin Frank, Ms. Deutsch's husband. Ms. Deutsch disclaims any
beneficial interest in the shares held by her husband.

         (3) Includes 34,000,000 shares held by LVDB, Inc., a corporation
controlled by Mr. Frank. Includes 210,444,201 shares held by Ruth Deutsch, Mr.
Frank's wife. Mr. Frank disclaims any beneficial interest in the shares held by
his wife.

         (4) Includes 241,370,536 shares beneficially owned by Barbara Tolley,
Mr. Tolley's wife, through the Lang Family Trust. Mr. Tolley disclaims any
beneficial interest in the shares owned by his wife.

         (5) Includes 4,937,552 shares held by the Tolley Investments, Inc. Mr.
Tolley is the President of Tolley Investments, Inc.

         (6) The 241,370,536 shares of common stock owned by Barbara L. Tolley
and Jack W. Tolley referred to in footnotes 1 and 4 and the 244,444,201 shares
of common stock owned by Ruth Deutsch and Franklin Frank referred to in
footnotes 2 and 3 are counted only once to avoid a misleading total.

Item 12.  Certain Relationships and Related Party Transactions

         During 1999, 25,000,000 shares of SFAD enured to the benefit of
Franklin Frank as a finders fee for his role in sourcing the origination of the
Company's acquisition of IAI.

         Other than the foregoing during fiscal 1999 and 1998, there were not
any transactions.

         During fiscal 1999 and 1998, there were not any transactions or series
of similar transactions to which the Company was or is a party in which the
amount involved exceeds $60,000 and in which any current director, executive
officer or holder of more than 5% of any class of the Company's voting
securities, or members of such persons' immediate family had or will have a
direct or indirect material interest.

                                       21


<PAGE>


Item 13.  Exhibits and Reports on Form 8-K

         (a)      Exhibit Index

         2.1 Merger Agreement dated August 29, 1997 between Safe Aid Products
Incorporated, Inc. and Intelligence Network International, Inc. (filed as an
Exhibit to the Company's definitive proxy statement filed December 31, 1997 and
incorporated herein by this reference).

         2.2 Extension Agreement dated between Safe Aid Products Incorporated,
Inc. and Intelligence Network International, Inc. (filed as an Exhibit to the
Company's Annual Report on Form 10-KSB for 1998 filed March 31, 1999 and
incorporated herein by this reference).

         2.3 Acquisition Agreement dated February 5, 1998 by and between the
Company and Randi Swatt, John Reinbergs and David Fox, as the sole shareholders
of Internet Associates International, Inc (filed as an Exhibit to the Company's
Annual Report on Form 10-KSB for 1998 filed March 31, 1999 and incorporated
herein by this reference).

         2.4 Reversion Agreement, dated as of December 17, 1998, by and among
the Company, GMG, Gary Bart, Gail Bart and Dean Constantine (filed as Exhibit
2.1 to the Company's Form 8-K dated December 31, 1998 and incorporated herein by
this reference).

         3.1 Certificate of Incorporation and Amendment to the Company's
Certificate of Incorporation (filed as an Exhibit to the Company's Registration
Statement on Form S-18 filed February 18, 1988 and incorporated herein by this
reference).

         3.2 Amendment to the Company's Certificate of Incorporation filed with
the Delaware Secretary of State on February 6, 1998 (filed as an Exhibit to the
Company's definitive proxy statement filed December 31, 1997 and incorporated
herein by this reference).

         3.3 Bylaws (filed as an Exhibit to Company's registration statement on
Form S-18 filed February 18, 1988).

         4.1 Amended Form of Underwriters' Unit Purchase Warrant (filed as an
Exhibit to the Amendment No. 2 to the Company's Registration Statement on Form
S-18 filed April 11, 1988 and incorporated herein by this reference).

         4.2 Amended Form of Class A and Class B Common Stock Purchase Warrant
(filed as an Exhibit to Amendment No. 2 to the Company's Registration Statement
on Form S-18 filed April 11, 1988 and incorporated herein by this reference).


                                       22


<PAGE>


         4.3 Amended Form of Warrant Agreement (filed as an Exhibit to Amendment
No. 2 to the Company's Registration Statement on Form S-18 filed on April 11,
1988 and incorporated herein by this reference).

         4.4 Specimen Stock Certificate (filed as an Exhibit to Amendment No. 2
to the Company's Registration Statement on Form S-18 filed on April 11, 1988 and
incorporated herein by this reference).

         10.1 Employment Agreement dated February 9, 1997 between the Company
and Ms. Tolley (filed as an Exhibit to the Company's Annual Report on Form
10-KSB for 1997 and incorporated herein by this reference).

         10.2 Employment Agreement dated February 5, 1998 between the Company
and Randi Swatt (filed as an Exhibit to the Company's Annual Report on Form
10-KSB for 1998 filed March 31, 1999 and incorporated herein by this reference).

         10.3 Employment Agreement dated February 5, 1998 between the Company
and John Reinsberg (filed as an Exhibit to the Company's Annual Report on Form
10-KSB for 1998 filed March 31, 1999 and incorporated herein by this reference).

         10.4 Mutual General Release Agreement dated December 17,1998 by and
among GMG, Gary Bart, Gail Bart, Dean Constantine and the Company (filed as
Exhibit 2.2 to the Company's Form 8-K dated December 31, 1998 and filed as an
Exhibit to the Company's Annual Report on Form 10-KSB for 1998 filed March 31,
1999 and incorporated herein by this reference).

         10.5 Safe Technologies International, Inc. - 1998 Stock Incentive Plan
(filed as Exhibit 10.1 to the Company's Quarterly Report on Form 10-QSB for the
quarter ended June 30, 1998 and filed as an Exhibit to the Company's Annual
Report on Form 10-KSB for 1998 filed March 31, 1999).

         10.6 Acquisition Agreement dated September 30, 1999 by and between the
Company and John D. Colodny and Ruth Ann Saunders (filed electronically
herewith).

         10.7 Year 2000 Stock Award Plan (filed as an Exhibit 10 to the
Company's Registration Statement of Form S-8 filed on December 7, 1999 and
incorporated herein by this reference).

         16.1 Letter on Change in Certifying Accountant (filed as Exhibit 99.1
to the Company's Report on Form 8-K dated March 9, 1999 and filed as an Exhibit
to the Company's Annual Report on Form 10-KSB for 1998 filed March 31, 1999).

         21.1 Subsidiaries of the Company (filed herewith electronically).

         23.1 Consent of Sewell and Company, P.A. (filed herewith
electronically).


                                       23


<PAGE>


         27.1     Financial Data Schedules (filed herewith electronically).

                  (b)      Reports on Form 8-K.

The Company filed five reports on Form 8-K during the fourth quarter ended
December 31, 1999.

         (i) The Company filed a report on Form 8-K dated October 5, 1999 which
reported information under Item 5 - Other Events.

         (ii) The Company filed a report on Form 8-K dated October 13, 1999
which reported information under Item 5 - Other Events.

         (iii) The Company filed a report on Form 8-K dated November 4, 1999
which reported information under Item 5 - Other Events.

         (iv) The Company filed a report on Form 8-K dated December 2, 1999
which reported information under Item 5 - Other Events.

SIGNATURES

         In accordance with Section 13 or 15(d) of the Exchange Act of 1934, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.


                                       24


<PAGE>


SAFE TECHNOLOGIES INTERNATIONALS, INC.


Date:    March 30, 2000          By:  /s/ Barbara L. Tolley
                                      -----------------------------------------
                                      Barbara L. Tolley
                                      Chief Executive and Officer and Chairman

In accordance with the Exchange Act of 1934, this report has been signed by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.


Date:    March 30, 2000           By: /s/ Barbara L. Tolley
                                      ------------------------------------------
                                      Barbara L. Tolley
                                      Chief Executive and Officer and Chairman


Date:    March 30, 2000           By: /s/ Bradford Tolley
                                      ------------------------------------------
                                      Bradford Tolley
                                      Chief Financial Officer


                                       25




<PAGE>

                      SAFE TECHNOLOGIES INTERNATIONAL, INC.
                                AND SUBSIDIARIES

                              FINANCIAL STATEMENTS

                           DECEMBER 31, 1999 AND 1998

<PAGE>

                      SAFE TECHNOLOGIES INTERNATIONAL, INC.
                                AND SUBSIDIARIES
                              FINANCIAL STATEMENTS
                           DECEMBER 31, 1999 AND 1998


                                    CONTENTS

                                                                            Page
                                                                            ----

Independent Auditors' Report                                                 2

Balance Sheets                                                               3

Statements of Income and Expenses                                            5

Statements of Changes in Stockholders' Equity                                6

Statements of Cash Flows                                                    10

Notes to Financial Statements                                               12


<PAGE>

                          INDEPENDENT AUDITORS' REPORT
                          ----------------------------

To the Stockholders
Safe Technologies International, Inc. and Subsidiaries
Palm Beach, Florida

We have audited the accompanying balance sheets of Safe Technologies
International, Inc. and Subsidiaries (a corporation) as of December 31, 1999 and
1998, and the related statements of income and expenses, changes in
stockholders' equity, and cash flows for the years then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Safe Technologies
International, Inc. and Subsidiaries as of December 31, 1999 and 1998, and the
results of its operations, and its cash flows for the years then ended in
conformity with generally accepted accounting principles.

SEWELL AND COMPANY, PA


Hollywood, Florida
March 22, 2000


<PAGE>

                      SAFE TECHNOLOGIES INTERNATIONAL, INC.
                                AND SUBSIDIARIES
                                 BALANCE SHEETS
                        DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>

                                                                     1999            1998
<S>                                                               <C>             <C>
Current assets
  Cash                                                            $  16,372       $  66,473
  Accounts receivable (net of allowance for
     doubtful accounts $ 2,755 and $ 0)                             126,331             500
  Other current assets                                                1,327
                                                                  ---------       ---------

Total current assets                                                144,030          66,973

Fixed assets (net of accumulated depreciation
     of $ 21,294 and $ 326)                                         174,705           4,233

Other assets
  Deposits                                                           15,974
  Goodwill and trademarks (net of accumulated
    amortization  $ 48,483 and $ 20,575)                            587,026         324,968
  Other assets                                                       25,000          37,500
                                                                  ---------       ---------

                                                                    628,000         362,468
                                                                  ---------       ---------

                                                                  $ 946,735       $ 433,674
                                                                  =========       =========

</TABLE>


             See auditors' report and notes to financial statements.

                                      -3-

<PAGE>


                      SAFE TECHNOLOGIES INTERNATIONAL, INC.
                                AND SUBSIDIARIES
                                 BALANCE SHEETS
                           DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>

                                                                     1999            1998
<S>                                                              <C>             <C>
Current liabilities
  Accounts payable                                               $    65,214     $    57,776
  Accrued expenses                                                   158,846          37,452
   Notes payable                                                     267,571         123,590
   Deferred income                                                    33,388
   Lease payable, current portion                                      1,393               -
                                                                 -----------     -----------

Total current liabilities                                            526,412         218,818

Long term liabilities
   Lease payable                                                       1,014

Shareholders' equity
  Common stock $.00001 par value, authorized
    999,999,000 shares; issued and outstanding:
    760,200,414 and 712,489,700  shares respectively                   7,602           7,125
  Capital subscribed                                                  40,000          40,000
      Less: subscription receivables                                       -          (1,000)
  Additional paid in capital                                       3,714,449       2,591,531
  Retained earnings (deficit)                                     (3,342,742)     (2,422,800)
                                                                 -----------     -----------

                                                                     419,309         214,856
                                                                 -----------     -----------

                                                                 $   946,735     $   433,674
                                                                 ===========     ===========
</TABLE>



             See auditors' report and notes to financial statements.

                                       -4-

<PAGE>


                      SAFE TECHNOLOGIES INTERNATIONAL, INC.
                                AND SUBSIDIARIES
                        STATEMENTS OF INCOME AND EXPENSES
                 FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998


<TABLE>
<CAPTION>
                                                       1999                1998
<S>                                               <C>                  <C>
Income
  Sales net of returns                            $   829,825          $  427,552
  Cost of sales                                        63,989             281,263
                                                  -----------          ----------
Gross profit                                          765,836             146,289

Expenses
   General and administrative expenses                259,448             151,788
   Salaries                                           427,559             206,870
   Consulting fees                                    807,250             133,184
   Proxy and brokers services                           3,574             101,795
   Accounting and legal                                95,819              91,870
   Depreciation and amortization                       48,876              20,901
   Advertising & promotions                            19,161
   Management expenses                                 12,500              12,500
                                                  -----------          ----------

                                                    1,674,187             718,908
                                                  -----------          ----------

   Loss from operations                              (908,351)           (572,619)

Other income (expenses)
   Interest income                                        178               2,995
   Interest expense                                   (11,769)            (12,140
   Theft (loss) of inventory                                             (114,640)
   Forgiveness of debt                                                     19,000
                                                  -----------          ----------

Net loss                                          $  (919,942)         $ (677,404)
                                                  ===========          ==========

Earning per share

   Net loss per share                             $    (0.001)         $   (0.003)
                                                  ===========          ==========
</TABLE>

             See auditors' report and notes to financial statements.

                                      -5-

<PAGE>

                                    SAFE TECHNOLOGIES INTERNATIONAL, INC.
                                             AND SUBSIDIARIES
                               STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                               FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998

<TABLE>
<CAPTION>
                                                         Common Stock            Capital       Paid in      Accumulated
                                                   Shares            Amount    Subscribed      Capital        Deficit        TOTAL
                                                  ----------------------------------------------------------------------------------
<S>                                                 <C>             <C>        <C>          <C>          <C>              <C>
Balance December 31, 1997                           705,477,200     $ 7,055    $       -    $1,781,327   $ (1,745,396)    $  42,986

Correction of error INI                                                                         11,086                       11,086

Internet Commerce, Inc.                                                                            100                          100

Ten for one reverse stock split
   (reduction of shares as of closing
   date with no change to par value
   of the common stock), February 9, 1998          (634,929,480)     (6,349)                     6,349                            -

Total Micro Computers, Inc. -  Acquisition                                                     196,088                      196,088

Merge INI and Safe Aid                              585,819,936       5,858                     (5,858)                           -
Less: shares of INI not issued                       (1,062,500)        (11)                        11                            -

Issuance of common stock for consultant
   services after the merger (February 9, 1998)      49,109,544         491                       (491)                           -

Issuance of common stock for stock sale
   DLSK Trust August 3, 1998                            500,000           5                     19,995                       20,000

Issuance of common stock for services
   Ruth Deutsch (Franklin L Frank) August 3, 1998       250,000           3                    289,997                      290,000
                                                  ----------------------------------------------------------------------------------

                                   Sub-total        705,164,700     $ 7,052                 $2,298,604   $ (1,745,396)    $ 560,260
</TABLE>

             See auditors' report and notes to financial statements.

                                       -6-

<PAGE>


                                    SAFE TECHNOLOGIES INTERNATIONAL, INC.
                                             AND SUBSIDIARIES
                               STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                               FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
                                                         Common Stock            Capital       Paid in      Accumulated
                                                   Shares            Amount    Subscribed      Capital        Deficit        TOTAL
                                                  ----------------------------------------------------------------------------------
<S>                                                 <C>             <C>        <C>          <C>          <C>              <C>
                                   Sub-total        705,164,700     $ 7,052                 $2,298,604   $ (1,745,396)    $ 560,260

Issuance of common stock for legal services
   to English McCaughan & O'Brien November 1998       1,000,000          10                     39,990                       40,000

Capital subscribed - agreement November 1998                                   40,000                                        40,000
Less: subscription receivable                                                  (1,000)

Issuance of common stock for Public Relations
   services for the year ending December 31, 1998     1,325,000          13                     52,987                       53,000

Issuance of common stock for consulting services
   for the year ending December 31, 1998                800,000           8                     31,992                       32,000

Issuance of common stock for employee compensation
   in lieu of cash payment                            4,200,000          42                    167,958                      168,000
Net loss December 31, 1998                                                                                   (677,404)     (677,404)
                                                   ---------------------------------------------------------------------------------
Balance December 31, 1998                           712,489,700     $ 7,125  $ 39,000       $2,591,531   $ (2,422,800)    $ 215,856
Less adjustments in 1999                                                        1,000          (19,995)                     (18,995)
Internet Associates International acquisition
   (January 29, 1999)                                25,000,000         250        --           24,750                       25,000

                                                   ---------------------------------------------------------------------------------
                                   Sub-total        737,489,700     $ 7,375  $ 40,000       $2,596,286   $ (2,422,800)    $ 221,861

</TABLE>

             See auditors' report and notes to financial statements.

                                       -7-

<PAGE>


                                    SAFE TECHNOLOGIES INTERNATIONAL, INC.
                                             AND SUBSIDIARIES
                               STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                               FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
                                                         Common Stock            Capital       Paid in      Accumulated
                                                   Shares            Amount    Subscribed      Capital        Deficit        TOTAL
                                                  ----------------------------------------------------------------------------------
<S>                                                 <C>             <C>        <C>          <C>          <C>              <C>
                                   Sub-total        737,489,700     $ 7,375    $ 40,000     $ 2,596,286  $ (2,422,800)    $ 221,861

Issuance of shares common stock to unrelated
   party in exchange for accounting services
   valued at $6,890 on March 2, 1999.                   125,000           1                       6,889                       6,890

Issuance of shares of common stock to unrelated
   party in exchange for accounting services
   valued at $ 15,000, on March 10, 1999.               300,000           3                      14,997                      15,000

Issuance of shares of common stock on
   March 22, 1999 to a member of Board of
   Directors for consultant services
   valued at $ 0.045 per share                          200,000           2                       7,998                       8,000

Issuance of shares of common stock on
   May 3, 1999 in exchange for cash                     600,000           6                      14,994                      15,000

Issuance of shares of common stock to an
   unrelated party in compensation for
   accounting services valued at $ 0.04
   per share on June 1, 1999.                           100,000           1                       3,999                       4,000

Connect.ad, Inc., Connect.ad Services, Inc.
   and Connect.ad of South Florida,
   Inc - acquisition                                  4,285,714          43                     299,957                     300,000
                                                  ----------------------------------------------------------------------------------

                                   Sub-total        743,100,414     $ 7,431   $ 40,000       $2,945,120  $ (2,422,800)    $ 570,751

</TABLE>

             See auditors' report and notes to financial statements.

                                       -8-

<PAGE>



                                    SAFE TECHNOLOGIES INTERNATIONAL, INC.
                                             AND SUBSIDIARIES
                               STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                               FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
                                                         Common Stock            Capital       Paid in      Accumulated
                                                   Shares            Amount    Subscribed      Capital        Deficit        TOTAL
                                                  ----------------------------------------------------------------------------------
<S>                                                 <C>             <C>        <C>          <C>          <C>              <C>
                                   Sub-total        743,100,414     $ 7,431    $ 40,000     $2,945,120   $ (2,422,800)    $ 570,751

Issuance of shares of common stock to
   the members of Board of Directors valued
   at $ 0.045 per share on December 8, 1999.            600,000           6                     26,994                       27,000

Issuance of shares of common stock to an
   unrelated party in compensation for
   accounting services valued at $ 0.045
   per share on December 30, 1999.                       50,000           1                      2,249                        2,250

Issuance of common stock for consulting
   services for the year ending December 31, 1999       550,000           5                     24,745                       24,750

Issuance of common stock for Public Relations
   services for the year ending December 31, 1999.    4,900,000          49                    220,451                      220,500

Issuance of common stock for employee
   compensation in lieu of cash payment              11,000,000         110                    494,890                      495,000

Net loss December 31, 1999                                                                                   (919,942)     (919,942)
                                                  ----------------------------------------------------------------------------------

Balance December 31, 1999                           760,200,414     $ 7,602    $ 40,000     $3,714,449   $ (3,342,742)    $ 420,309
                                                  ==================================================================================


</TABLE>

             See auditors' report and notes to financial statements.

                                       -9-


<PAGE>


                      SAFE TECHNOLOGIES INTERNATIONAL, INC.
                                AND SUBSIDIARIES
                            STATEMENTS OF CASH FLOWS
                 FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
                                                                      1999                  1998
<S>                                                               <C>                     <C>
Cash flows from operating activities:
  Net loss                                                        $ (919,942)             (677,404)
                                                                  ----------              --------
  Adjustments to reconcile net loss to net
    cash provided by operating activities:
      Depreciation and amortization                                   48,876                13,270
      Allowance for doubtful accounts                                  2,755                (5,000)
      (Gain) loss on disposal of property                                                   58,605
      (Increase) decrease in accounts receivable                    (125,831)               95,026
      (Increase) decrease in inventories                                                    14,151
      (Increase) decrease in prepaid expense                                                 2,494
      (Increase) decrease in notes receivables                                              35,188
      (Increase) decrease in other assets                             (4,801)               12,500
      Increase (decrease) in accounts payable                          7,438               (44,084)
      Increase (decrease) in accrued liabilities                     121,394                15,722
      Increase (decrease) in other payables                           57,550
      Increase (decrease) in deferred income                          33,388
      Increase (decrease) in shareholders' loan                       88,838                44,740
                                                                  ----------            ----------

      Total adjustments                                              229,607               242,612
                                                                  ----------            ----------

  Net cash used by operating activities                             (690,335)             (434,792)

Cash flows from investing activities:
  Cash payment for purchase of intangibles                                                (199,455)
  Cash payments for the purchase of property                              --                (4,559)
                                                                  ----------            ----------

  Net cash used by investing activities                                   --              (204,014)
                                                                  ----------            ----------



</TABLE>

             See auditors' report and notes to financial statements.

                                      -10-


<PAGE>

                      SAFE TECHNOLOGIES INTERNATIONAL, INC.
                                AND SUBSIDIARIES
                            STATEMENTS OF CASH FLOWS
                 FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998

<TABLE>
<CAPTION>
                                                                      1999                    1998
<S>                                                                <C>                    <C>
Cash flows from financing activities:
  Proceeds from issuance of common stock                           $ 639,234              $   613,188
  Proceeds form capital subscribed                                     1,000                   40,000
                                                                   ---------              -----------

  Net cash provided by financing activities                          640,234                  653,188
                                                                   ---------              -----------

Net increase in cash and cash equivalents                            (50,101)                  14,382

Cash and cash equivalents, beginning of year                          66,473                   52,091
                                                                   ---------              -----------

Cash and cash equivalents, end of year                             $  16,372              $    66,473
                                                                   ---------              -----------

Supplemental disclosures of cash flow information:
  Cash paid during the period for:

    Interest expense                                               $  11,769              $ 12,140.00
                                                                   ---------              -----------
</TABLE>


Shareholders' equity note:
Approximately 18,240,000 shares have been awarded to various service providers
in lieu of cash consideration. On January 29, 1999 the Company issued 25,000,000
shares of its common stock in connection with the acquisitions of all the shares
of common stock of Internet Associates International, Inc. The company acquired
assets with a fair value of $ 291,700 and assumed liabilities for $ 266,700.


On September 28, 1999 the Company issued 4,285,714 shares of its common stock in
connection with the acquisitions of all the shares of common stock of
Connect.ad, Inc., Connect.ad Services, Inc. and Connect.ad of South Florida,
Inc., for $300,000. The company acquired assets with a fair value of $ 304,530
and assumed liabilities for $ 4,530.



             See auditors' report and notes to financial statements.

                                      -11-

<PAGE>

                      SAFE TECHNOLOGIES INTERNATIONAL, INC.
                                AND SUBSIDIARIES
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 1999 AND 1998

NOTE 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.

           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.

           Basis of Consolidation
           ----------------------
           The consolidated financial statements include the accounts of Safe
           Technologies International Inc. and its subsidiaries, Internet
           Commerce, Inc., Total Microcomputers, Inc. (inactive), Connect.Ad,
           Inc., Connect.Ad Services, Inc., Connect.Ad of South Florida, Inc.
           and Internet Associates International, Inc. All material intercompany
           transactions and balances have been eliminated in the consolidated
           financial statements.

           Cash and Cash Equivalents
           -------------------------
           For purposes of the statements of cash flows, the Company treats all
           short-term investments with maturities 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.

           Advertising
           -----------
           Advertising costs are charged to operations when incurred.
           Advertising costs of $19,161 and $0 were incurred during the years
           ending December 31, 1999, and 1998, respectively.

                                     - 12 -
<PAGE>

                      SAFE TECHNOLOGIES INTERNATIONAL, INC.
                                AND SUBSIDIARIES
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 1999 AND 1998

NOTE 1     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

           Revenue Recognition
           -------------------
           Revenues of Safe Tech, Internet Commerce, Inc., Connect.Ad, Inc.,
           Connect.Ad Services, Inc., Connect.Ad of South Florida, Inc. and
           Internet Associates International, Inc. 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.

           Accounts Receivable
           -------------------
           It is the policy of management to review the outstanding accounts at
           year-end, as well as review bad debts, and establish an allowance for
           doubtful accounts and uncollectible amounts.

           Intangible Assets
           -----------------
           The Company continually evaluates the carrying value of goodwill and
           other intangible assets to determine whether there are any impairment
           losses. If indicators of impairment are present in intangible assets
           used in operations, and future cash flows are not expected to be
           sufficient to recover the assets' carrying amount, an impairment loss
           would be charged to expense in the period identified.

           No reduction for impairment of intangible assets was necessary at
           December 31, 1999 or 1998.

           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 between 5 to 7 years.

           Credit Risk
           -----------
           Financial instruments that potentially subject the Company to credit
           risk include cash on deposit with five financial institutions
           amounting to $16,372 and $ 66,473 at December 31, 1999 and 1998,
           which was insured for up to $500,000 by the U.S. Federal Deposit
           Insurance Corporation (FDIC).

                                     - 13 -

<PAGE>

                      SAFE TECHNOLOGIES INTERNATIONAL, INC.
                                AND SUBSIDIARIES
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 1999 AND 1998

NOTE 1     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

           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

           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.

           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:

                                               1999                  1998
                                            -----------           -----------

                         Basic              737,592,498           652,071,619


                                     - 14 -
<PAGE>

                      SAFE TECHNOLOGIES INTERNATIONAL, INC.
                                AND SUBSIDIARIES
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 1999 AND 1998

NOTE 1     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

           Basic Loss per Share and Diluted Loss per Share
           -----------------------------------------------
           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.

NOTE 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 $.20 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 $.50 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, 1999, 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, 1999.

           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.

                                     - 15 -
<PAGE>

                      SAFE TECHNOLOGIES INTERNATIONAL, INC.
                                AND SUBSIDIARIES
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 1999 AND 1998

NOTE 2     CAPITAL STOCK TRANSACTIONS (CONTINUED)

           On February 9, 1998, per terms of the merger, 49,109,544 shares of
           common stock were issued for consultant services to prior management
           of Safe Tech.

           On August 3, 1998, 500,000 shares of common stock were issued to an
           unrelated party as part of a private placement, for an investment of
           $20,000 (2 units).

           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.

           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. The Company has valued these shares
           at $0.04 per share, and recorded them 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. The Company has valued these shares at $0.04 per share and
           recorded them 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 January 29, 1999, 25,000,000 shares of common stock were issued in
           connection with the acquisition of Internet Associates International,
           Inc. (see Note 11).

           On March 2, 1999, 125,000 shares of common stock were issued in
           exchange for accounting services in the amount of $6,890.

           On March 10, 1999, 300,000 shares of common stock were issued in
           exchange for accounting services in the amount of $15,000.

                                     - 16 -
<PAGE>

                      SAFE TECHNOLOGIES INTERNATIONAL, INC.
                                AND SUBSIDIARIES
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 1999 AND 1998

NOTE 2     CAPITAL STOCK TRANSACTIONS (CONTINUED)

           On March 22, 1999, 200,000 shares of common stock were issued to the
           Board of Directors of Safe Tech as compensation for their services.
           The Company has valued these shares at $0.045 per share, and recorded
           them as consultant fees.

           On May 3, 1999, 600,000 shares of common stock were issued to an
           unrelated party for $15,000 in cash.

           On June 1, 1999, 100,000 shares of common stock were issued in
           exchange for accounting services. The Company has valued these shares
           at $0.04 per share, and recorded them as accounting services.

           On September 28, 1999, 4,285,714 shares of common stock were issued
           in connection with the acquisition of Connect.Ad, Inc., Connect.Ad
           Services, Inc., and Connect.Ad of South Florida, Inc. (see Note 11).

           On December 8, 1999, 600,000 shares of common stock were issued to
           the Board of Directors of Safe Tech as compensation for their
           services. The Company has valued these shares at $0.045 per share,
           and recorded them as consultant fees.

           On December 30, 1999, 50,000 shares of common stock were issued in
           exchange for accounting services. The Company has valued these shares
           at $0.045 per share, and recorded them as accounting services.

           On December 31, 1999, 4,900,000 shares of common stock were issued as
           compensation for public relation services. The Company has valued
           these shares at $0.045 per share, and recorded them as consultant
           services.

           On December 31, 1999, 550,000 shares of common stock were issued to
           certain consultants of the Company in exchange for their services
           rendered to the Company. The Company has valued these shares at
           $0.045 per share, and recorded them as consultant fees.

           On December 31, 1999, 11,000,000 shares of common stock were issued
           to employees as compensation in lieu of cash payment. The Company has
           valued these shares at $0.045per share, and recorded them as
           salaries.

                                     - 17 -
<PAGE>

                      SAFE TECHNOLOGIES INTERNATIONAL, INC.
                                AND SUBSIDIARIES
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 1999 AND 1998

NOTE 2     CAPITAL STOCK TRANSACTIONS (CONTINUED)

           The Company's common stock as of December 31, 1999 and 1998 consisted
           of the following:

                                                        1999           1998
                                                        ----           ----
                  999,999,000 shares authorized;
                  746,200,414 shares in 1999 and
                  712,489,700 in 1998, issued and
                  outstanding $0.00001 par value.      $7,602         $7,125
                                                       ======         ======

NOTE 3     SUBSCRIPTIONS

           The Company entered into a subscription agreement for the purchase of
           4,405,882 shares common stock for $40,000 on November 4, 1998. At
           December 31, 1999, the Company had received payments amounting to
           $40,000. No stock has been issued relating to this subscription.

NOTE 4     PROPERTY AND EQUIPMENT AND DEPRECIATION

           Property and equipment at December 31, 1999 and 1998 consisted of the
           following:

                                                        1999           1998
                                                        ----           ----

                    Computer equipment                 $129,025
                    Computer software                    24,175
                    Telephone equipment                   4,559        $4,559
                    Furniture and fixtures               38,240
                                                       --------        ------
                                                        195,999         4,559
                    Less: Accumulated depreciation      (21,294)         (326)
                                                       --------        ------
                                                       $174,705        $4,233
                                                       ========        ======

           Depreciation expense for the years ended December 31, 1999 and 1998
           was $20,968 and $326, respectively.

                                     - 18 -
<PAGE>

                      SAFE TECHNOLOGIES INTERNATIONAL, INC.
                                AND SUBSIDIARIES
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 1999 AND 1998

NOTE 5     INTANGIBLE ASSETS

           At December 31, 1999 and 1998, intangible assets were summarized by
           major classification as follows:

                                                        1999            1998
                                                        ----            ----

                    Copyrights and trademarks          $199,455       $199,455
                    Goodwill                            436,054        146,088
                                                       --------       --------
                                                        635,509        345,543
                    Less: Accumulated amortization      (48,483)       (20,575)
                                                       --------       --------
                                                       $587,026       $324,968
                                                       ========       ========

           Amortization expense for the years ended December 31, 1999 and 1998
           were $27,908 and $20,575, respectively.

NOTE 6     LEASES

           The Company rents office space in Palm Beach and Boca Raton, Florida
           on a month to month basis. There is no lease in force. The monthly
           total rent is currently $3,514. 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 years ended December 31, 1999 and 1998 was
           $36,448 and $22,471, respectively.

NOTE 7     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 December 31, 1998, the Company had
           $2,422,800 of operating loss carryforwards for financial reporting
           and income tax purposes available to offset future income taxes
           expiring through the year 2018. Net operating losses of $919,942 for
           the year ended December 31, 1999 will expire in 2019. 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.

                                     - 19 -
<PAGE>

                      SAFE TECHNOLOGIES INTERNATIONAL, INC.
                                AND SUBSIDIARIES
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 1999 AND 1998

NOTE 8     SHORT-TERM DEBT

           At December 31, 1999 and 1998, short-term debt consisted of the
           following:
<TABLE>
<CAPTION>
                                                                                         1999            1998
                                                                                         ----            ----
                    <S>                                                                 <C>             <C>
                  8% note payable to an officer,  unsecured, due on
                  demand.  Upon any  default,  the note becomes due
                  immediately at an interest rate of 18% per annum.                     $152,293        $ 97,240

                  Note payable to a shareholder,  unsecured, due on
                  demand, no interest rate specified.                                     58,785          25,000

                  Note payable to an individual,  unsecured, due on
                  demand, with an interest rate of 5.5%.                                  35,143           --

                  Note payable to DLSK Trust, unsecured, due on February 10,
                  2000, with a 12% interest rate specified.                               20,000          --

                  Note  payable to an  officer,  unsecured,  due on
                  demand, no interest rate specified.                                      1,350           1,350
                                                                                        --------        --------

                  Total short-term debt                                                 $267,571        $123,590
                                                                                        ========        ========
</TABLE>


           Interest expense for the years ended December 31, 1999 and 1998 was
           $11,769 and $12,140, respectively.

                                     - 20 -
<PAGE>

                      SAFE TECHNOLOGIES INTERNATIONAL, INC.
                                AND SUBSIDIARIES
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 1999 AND 1998

NOTE 9     STOCK AWARDS

           The Company has an Incentive Stock Award Plan 2000 for selected
           employees, officers, directors and key consultants to the Company and
           its subsidiaries. The number of shares and grant dates are determined
           at the discretion of a committee, consisting of not less than two
           members of the Board of Directors of the Company. A maximum of
           30,000,000 shares of common stock may be issued under the plan. An
           accumulation of 15,000,000 shares from the prior plan has been added
           to the current plan for a total of 45,000,000 shares under the stock
           award plan.

           At December 31, 1999, there were 26,495,764 shares granted under the
           stock award plan.

NOTE 10    EMPLOYMENT AGREEMENTS

           The Company entered into an employment agreement dated January 30,
           1998 with Barbara Tolley, its president and CEO. The term of the
           agreement is for a period of two (2) years, commencing on February 9,
           1998 and ending on February 9, 2000.

           On February 9, 2000, the contract was renewed for one (1) year with
           the same terms.

           In consideration of the services performed, the Company will pay a
           monthly salary of $10,000, payable in all cash, or half cash/half
           stock, all stock, or partial accrual, at the option of the employee.

           In addition, the agreement calls for the Company to provide
           additional employment benefits, which include automobile, insurance,
           telephone, dues and vacation.

           In March, 2000, the Company entered into an employment agreement with
           Randy Swatt, President, and a member of the Board of Directors of
           Internet Associates International, Inc. The term is for a period of
           one (1) year with a monthly salary of $5,000, payable semi-monthly.

                                     - 21 -
<PAGE>

                      SAFE TECHNOLOGIES INTERNATIONAL, INC.
                                AND SUBSIDIARIES
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 1999 AND 1998

NOTE 11    ACQUISITIONS

           During 1999, the Company acquired the following businesses:

           Internet Associates International, Inc.
           ---------------------------------------
           On January 29, 1999, the Company acquired Internet Associates
           International, Inc., a Nevada corporation. In March, 2000, an
           amendment to the acquisition agreement was settled for 100% of
           Internet Associates International, Inc. common stock in exchange for
           25,000,000 shares of common stock of Safe Tech. The acquisition has
           been accounted for by the purchase method of accounting and
           accordingly, their results have been included in the consolidated
           financial statements from their respective dates of acquisition. Had
           the results of these businesses been included in operations
           commencing with 1998, the reported results would not have been
           materially affected.

           As part of the transaction, Franklin L. Frank, a past director, will
           receive 1,500,000 shares of common stock as a finder's fee. As of the
           date of these financial statements, none of the shares have been
           issued.

           Connect.Ad., Inc.; Connect.Ad, Services, Inc.; Connect.Ad of South
           Florida, Inc.
           ------------------------------------------------------------------
           On September 30, 1999, the Company acquired three (3) Florida
           corporations engaged in Internet services and products. The
           acquisitions have been accounted for by the purchase method of
           accounting and, accordingly, their results have been included in the
           consolidated financial statements from their respective dates of
           acquisition. Had the results of these businesses been included in
           operations commencing with 1998, the reported results would not have
           been materially affected.

           The total purchase price of $300,000 was allocated as follows:

                    Cash - Banks                                $   2,932
                    Accounts receivable                             6,080
                    Fixed assets                                    4,784
                    Security deposit                                  768
                    Accounts payable                               (4,530)
                    Goodwill                                      289,966
                                                                 --------

                    4,285,714 shares of common stock
                        at a fair value of $.0.07                $300,000
                                                                 ========

                                     - 22 -